MR. TOM GJELTENThanks for joining us. I'm Tom Gjelten of NPR, sitting in for Diane Rehm. She's on station visits. Lawmakers on Capitol Hill say more personnel involved in the Secret Service Colombian prostitution scandal may be on their way out. U.S. consumer spending rose 0.8 percent in March, but existing home sales fell 2.6 percent. There's more wrangling on taxes. And the Environmental Protection Agency issued new air pollution rules for hydraulic fracturing.

MR. TOM GJELTENJoining me in the studio for the domestic hour of the Friday News Roundup are Ed Luce of the Financial Times, Laura Meckler of The Wall Street Journal, and Michael Scherer of Time magazine. You can join us in talking about this week's news. Our number is 1-800-433-8850, or you can send us an email, drshow@wamu.org, or send us a tweet, or join us on Facebook. Good morning, everyone.

MR. EDWARD LUCEGood morning.

MS. LAURA MECKLERGood morning.

MR. MICHAEL SCHERERGood morning.

GJELTENWell, we have to begin again this morning with scandals, as we often begin here in Washington. The latest on the Secret Service scandal, 11 agents apparently involved in this prostitution scandal in Colombia, and now we learned that 10 military personnel have been involved -- may have been involved as well.

GJELTENBut the new development this morning reported here on the front page of The Washington Post is that one of the Secret Service supervisors who was ousted actually posted shots of himself on duty in dark suit -- in a dark suit and sunglasses, including one that shows him behind Sarah Palin. And he says, along with this post, Ed Luce, "I was really checking her out, if you know what I mean."

LUCEYeah.

GJELTENThis is a Secret Service agent assigned to protect Sarah Palin apparently.

LUCEYeah. I mean, the stupidity involved here is what strikes me the most. I'm a bit like -- I don't -- forget whether it's inspector or Captain Reno in "Casablanca" in terms of not being that shocked about what Secret Service...

GJELTENShocked.

LUCE...or military guys do in a place like Cartagena. But I am shocked a little bit more than by the low morals, by the low IQ that's been displayed here to do this two, three days before the president turns up and to then haggle and argue over price with these prostitutes, involving Colombian police, as an extraordinary display of stupidity. And this Facebook posting, I think, is just emblematic of that. That's what shocking.

GJELTENDo we know if Sarah Palin had any response or anyone associated with Sarah Palin had any response to that?

LUCEYes. I believe she did a Facebook response saying this is typical of, you know, typical of what you expect from government employees.

GJELTENWell, government employees. But the truth is, Laura Meckler, the Secret Service has, until now, had a pretty solid reputation, right? I mean, this really taints the culture of what was a pretty prestigious and unblemished record.

MECKLERAbsolutely. And you -- and that -- because of that, I think you hear some of the response from Capitol Hill as being a little bit muted. There's still support for Mark Sullivan, the director.

GJELTENMm hmm.

MECKLERThere's a lot of statements about confidence in the agency and its ability to carry out its mission. So you then have that up against these, you know, really horrifying allegations. And I think what a lot of people want to know is, you know, how widespread were these sort of, you know, I guess, we could call them morally questionable at the least, you know, actions and attitudes? I mean, is this sort of a widespread view? It's obviously not all Secret Service agents.

GJELTENRight.

MECKLERIs it many? Or is it a substantial minority? Or is it really just a few bad apples? It's -- I think that that's really an unanswered question right now.

GJELTENWell, Michael Scherer, what of this point that Sarah Palin evidently made that this indicates something about government employees generally? And, of course, that would feed right into this kind of anti-government sentiment that is so rampant in the country.

SCHERERThere's a real tension right now in Washington between those who are trying to politicize this issue and those who are resisting politicizing this issue. You have here an apolitical organization, the U.S. Secret Service, that both Republicans and Democrats depend on, have a great respect for, work closely with. And you have the great temptation in election year to turn this into a political football, make it about government employees. And at the same time, you have two other scandals going on.

SCHERERYou have the scandal with the GSA spending obscene amounts of money on a convention in Vegas, and you have these photos the L.A. Times ran of soldiers behaving badly and photographing themselves.

GJELTENMm hmm.

SCHERERAnd there's the real temptation here, I think, by some Republicans -- you haven't seen all of them doing it. A number of the senior Republicans have pointedly resisted doing it, including Mitt Romney who came out with a statement very clearly in support of the Secret Service, to say, look, this is typical of Obama. He can't control his government workforce. This is typical of the government. We want to shrink the size of government. This is why Republicans' ideological goals are correct. In reality, there's not much to connect these two things.

SCHERERI mean, you need people to secure your top-level officials. If they were private employees, you could very well have these same problems. You need people, if we're fighting military operations, to be in the battlefield. You need people, like the GSA, to be doing the buying and selling for the government, whether there, you know, whether we have a large government or a small government. So it's not really that issue, but there is that tension right there.

GJELTENWell, Mark Sullivan, the director of the Secret Service, as you said, Laura, is -- has gotten support. I mean, that's not a political point, I mean, is it? I mean, this is somebody that serves independently of which party is in power.

SCHERERThat's absolutely right. And there have been scandals in the past, and the Secret Service has weathered them. About a decade ago, there were a series of scandals about racial discrimination within the Secret Service. It all -- a lot of investigations. There was some discipline handed out, and then the agency moved on. Presumably, that'll happen again here. I think the real concern, though, is we're (unintelligible) security.

SCHERERI remember when we were in Moscow with the president a couple years ago now, being told by Secret Service that they had been approached in, you know, the line at Starbucks by people they presumed to be prostitutes. And there is a real security issue here, I mean, maybe not in Colombia. But in other governments, in other countries where you go, there are traps. There are attempts...

GJELTENSure.

SCHERER...to lure U.S. government officials who have sensitive information or access into compromising situations, and it's the responsibility of the agency to be aware of those and to protect the president against them.

MECKLERAnd even if it's not a trap, it's a risk because, even if someone didn't start out thinking they were about to sleep with a Secret Service agent and they find out that that's the fact and they want to use that for some sort of, you know, blackmail or coercion, I mean, that potential is there. That's the one thing that everybody has cited as a security risk that was behind this.

GJELTENRight. Ed Luce, it might be a little hard to spin this development, you know, as supporting an anti-government message. But the General Services Administration story is something else entirely. I mean, you talk about something that epitomizes waste and abuse in federal government spending. It's this GSA scandal, isn't it?

LUCEYeah. I mean, that is pretty shocking. I mean, I do appreciate it when I see quite some other federal employees saying, look, this is not typical of, you know, your federal employee conferences outside of Washington that they might feel a little bit, you know, sort of associated unfairly with that. But, you know, clown acts, mind readers, you know, Jacuzzis...

GJELTENThis conference, the expenses were close to $1 million.

LUCEClose to $1 million. And I think there is sort of pre-trips for the organizers. There were eight pre-trips to Vegas. I mean, I think, again -- I hate to bring this up again, but the IQ factor here is, you know, you should know after AIG in early 2009 that what happens in Vegas gets out of Vegas everywhere pretty quickly.

GJELTENRight.

LUCEAnd so this is an extraordinary sort of example of incompetence as well as abuse of taxpayer trust and money. And I think there is probably -- Mike, you know, mentioned that it's not yet taking off as a generalized critique of government. But I think there's a -- the one that has the most juice has to be the GSA scandal, and Jeff Sessions, Darrell Issa, people like that are really, you know, hinting that they're wanting to ramp this up and keep it going.

SCHERERThe great irony here, of course...

GJELTENMichael.

SCHERER...is that General Services Administration's job is to responsibly spend money.

GJELTENYes.

SCHERERThat's the only thing they do. They're...

GJELTENIt's the purchasing agency of the government.

SCHERER...the purchasing agency of the government, and their only job -- the people who work there, what they do every day is spend our taxpayer money in a responsible way. And to have them abusing the taxpayer trust like this...

GJELTENYeah.

SCHERER...is especially appalling.

GJELTENWell, Laura, both in the case of the Secret Service scandal and in the case of the GSA scandal, there are, or will be, hearings scheduled. There will be -- there were actually hearings this week on the GSA scandal, weren't there? And senators were just jumping all over each other trying to...

MECKLERAbsolutely. I think there were four hearings this last week, both the House and the Senate. And it was a -- you know, the outrage and condemnation was bipartisan to be sure. I mean, the Democrats were just as outraged as Republicans were on this. The -- so, I mean, this is just, you know, made to order for Congress to investigate. I mean, it's just the -- it's a big juicy target. Nobody is going to push back on this at all.

MECKLERI mean, this guy Jeff Neely, who was the one in charge of this conference, he showed up, and he invoked his Fifth Amendment rights not to -- against self-incrimination. The people who did speak about it were, you know, extraordinarily apologetic. So I think that what the question on this is going to be, you know, again, how widespread is it?

MECKLERYou know, there was some talk at this hearing about not just this one conference but that this particular region had a policy where they would -- you weren't allowed to have food at a meeting, but you could have food if it was an awards ceremony. So they made up these fake awards.

GJELTENUh huh.

MECKLERWell, now, it's an award ceremony, funniest guy in the office or something like that. So the question is, how widespread is it? Does it go beyond this? And that's something, I think, that's the focus of these hearings.

GJELTENWell, it'll be a miracle, won't it, if these developments coming in an election cycle don't have some political implications, even though, as you all sort of agree, it doesn't seem like it's moving quickly in that direction. But this is also coming as we have debates over tax policy and new polls out, Ed Luce, showing that, actually, President Obama and Mitt Romney are in a pretty tight race.

LUCEYeah, there's everything to play for. I mean, you know, the economic numbers have been bouncing all around over the last few weeks. And you can pick and choose which direction you want from the menu of economic data. But if this continues to be new (word?), if this continues to look like an anemic recovery, then I would be very surprised if this isn't a very close presidential election.

LUCELook at the number of people in the New York Times/CBS poll earlier this week who trust Obama to handle the economy well -- way outnumbered by those who distrust him. That's a terrible number to be at seven months before general election for an incumbent.

GJELTENAnd another thing that poll showed is that the economy is right at the top of voter concerns.

LUCEYeah, it outweighs everything else combined. I mean, next week's employment, the week after next employment numbers are going to be particularly interesting. And the signs are not the initial jobless claims. The signs are that we might have a repeat of March, which is a disappointing month.

GJELTENEd -- it was. Edward Luce is Washington bureau chief of the Financial Times. He's also the author of a new book, "Time to Start Thinking: America in the Age of Descent." This is the domestic hour of the Friday News Roundup. Coming up, more of our discussion. You can join us by calling 1-800-433-8850. Stay with us.

GJELTENWelcome back to the domestic hour of the Friday News Roundup. I'm Tom Gjelten, sitting in today for Diane Rehm with my guests: Edward Luce, The Washington Bureau chief the Financial Times, Laura Meckler, White House correspondent for The Wall Street Journal, and also Michael Scherer, the White House correspondent for Time magazine. Laura, just before the break, we were talking about the New York Times/CBS poll that showed two things: one, that Romney and Obama are very tight, and also that the economy is very close to the top of voter concerns.

GJELTENThere's also a new poll out today in The Wall Street Journal -- NBC/Wall Street Journal poll that shows Obama quite substantially ahead. But it also shows him in a weak position as far as voter's confidence and his management of the economy, correct?

MECKLERMm hmm. We were asked -- we asked voters which of the candidates is -- do you think is better able to handle a variety of things, or who do you think has the advantage on a number of factors? And when asked, you know, who has the best ideas for the economy, Romney was ahead by about six points. The interesting thing was that there were a whole bunch of other measures where Obama was way ahead, such as, you know, is likeable and personable, relates to problems like yours, you know, sort of understands all the sort of personal qualities of being able to relate to the lives of voters.

MECKLERObama was ahead by, you know, in the range of 30 points. But -- so you can see that sort of -- that's also playing its way out in the race. But because the economy is such an important issue, that fairly small but real advantage that you see Mitt Romney have tells you why this is going to be a close race.

GJELTENAnd, Michael Scherer, meanwhile, not surprisingly, the Republicans and Democrats are both trying to play this concern to their advantage. In Congress, we have the Republicans passing a new tax cut for small businesses with the intent of boosting job creation. Meanwhile, the Democrats are harping on Paul Ryan's budget -- proposed budget, which would really hack social spending.

GJELTENAnd they also have come up -- of course, they've tried to pass the Buffett Rule to impose higher taxes on millionaires like Warren Buffett. What's this sort of -- what's going to be the outcome of all these jockeying back and forth to gain advantage of this economic concern?

SCHERERVery little. We are in a year of -- that is going to make the past two or three years of congressional dysfunction look, you know, relatively pleasant. You know, the -- both parties are putting forward bills right now. The Buffett Rule bill, which would basically put an alternative minimum tax and people who make over $1 million, raise about $46 billion to deal with the deficit, relatively small amount that is not going to pass the House.

SCHERERThere's no way it's going to get through Congress. It's a political posturing by the White House to make their fairness narrative this case that the president believes that all people need to chip in more, and the Republicans are on the side of the rich. Something very similar is happening with House Republicans. They just passed the small business tax cut. Ironically, House Republicans have been harping on reducing deficits for years.

SCHERERIt's their number one issue here. They're passing something that is about $47 billion in added deficits. They're not paying for it. They're not talking about it. They don't mind. About half of the benefits will go to small businesses defined as companies with less than 500 employees, who make more than $1 million a year. So it's a tax cut that's going largely to wealthy people. Those small businesses include sports teams, includes lobbying firms, include law firms. I mean, we're not just talking about mom and pop grocery stores.

GJELTENBut that category of firms does account for most of the jobs created in this country.

SCHERERYes, and most of the firms in this country -- I mean, the vast majority of firms in this country. But because it's a tax cut, most of the tax cut is going to the people who are making most of the income. So the very wealthy are going to take the largest chunk of this.

GJELTENWell, speaking of tax cuts, Ed Luce, at the end of this year, we have something developing that the Heritage Foundation calls tax Armageddon or Taxageddon for short, a wide variety of tax cuts that are due to expire. We have this job creation bill that the Republicans have just proposed. But in addition to that, the Bush tax cuts are due to expire $165 billion.

GJELTENThe Social Security payroll tax cut due to expire $124 billion and others that total about a half -- altogether, about a half a trillion dollars in tax cuts, expiring at the end of this year just as Congress is going into an election. What's going to happen?

LUCEYeah, the mother of all lame duck sessions, as they're calling it. Well, it's a fiscal cliff as I think anybody on any side of the spectrum would agree. If you have Congress do nothing, you go a considerable way towards solving the deficit because these spending elements get rescinded and the tax cuts gets reversed.

GJELTENBut that -- what a blow to the economy, a half a trillion dollars.

LUCEThen you go into recession. Then you go into recession, too. And so, of course, no -- even though it's after the election, no turkeys, lame duck or otherwise are going to vote for Thanksgiving. I can't believe that Congress will allow the economy to go back into recession -- and not just a recession. This is a 3.5 percent withdrawal of GDP.

LUCEThis would be a fairly pronounced recession, a self-inflicted goal. So I have to say, without -- you know, without any other evidence other than the self-preserving instincts of lawmakers, that it's hard to imagine them allowing this to happen.

GJELTENLaura Meckler.

MECKLERI think what happens in the lame duck session, all of this stuff expires -- we should be clear -- at the end of the year.

GJELTENJan. 1.

MECKLERExactly.

GJELTENYeah.

MECKLERSo I think what happens will depend on what happens in the election in November. If President Obama is reelected and Republicans can maintain, certainly, control of the House and perhaps even the Senate, then I think there will be a lot of incentive to try to get some sort of an agreement that really deals with these issues, although you never will lose betting against Congress, pushing it off for another day.

MECKLERSo they could always extend all this stuff for another six months or for another year. That would be sort of a typical approach. However, if -- and if President Obama loses, then I think that you're definitely going to see Republicans in no mood to compromise with him. And then there'll be a little bit of a game of chicken to see, are you willing to let this stuff expire? And if they do, then, you know, the first order of business, when they get back in January, is going to be to undo it.

MECKLERSo it could be a very complicated situation because, you know, President Obama is not going to -- I would bet, if he loses reelection, I cannot see him signing an extension of the upper-income Bush tax cuts, which he has vowed not to do. So I think what -- he probably would be willing to see it expire, but -- yet I don't we would see Republicans willing to make a deal with him.

MECKLERSo I think it all depends on what happens in the election. It's going to be a very, very complicated situation, both politically and economically with so many things coming in. One thing you didn't mention was the sequesters set to kick in, which is huge defense cuts and automatic cuts in spending.

GJELTENAutomatic cuts, yeah. Michael Scherer, another thing that these polls have shown is that the Americans genuinely seem to care about the deficit and want to see coordinated action to reduce the deficit. Now, we have a half a trillion dollars in tax cuts expiring, and let's say, like in Laura's case, the Republicans actually feel that they have won the election. That's going to put them in a really difficult dilemma. Do you go with half a trillion dollars in tax cuts? Or do you address the deficit issues that will be right there in front of you?

SCHERERI think the deficit issue with Republicans historically has been one that they use in elections, that they use as a club against Democrats, and that, when push comes to shove, if they have to choose between a tax cut and reducing the deficit, they take the tax cut. And then they argue at that moment like they did with the small business tax, that, oh, the economic growth that we're going to get from this tax cut will more than compensate for it.

SCHERERYou know, what's lost in this debate, I think, is that there is a proper policy approach to this problem, that there needs to be tax reform. There's bipartisan agreement on this. There needs to be a lowering of rates across the board. There needs to be a simplifying of the tax code. There's broad public support for this. And what you see right now happening in Congress is both the Buffett Rule and the small business tax cuts are complicating the tax code further.

SCHERERThe parties are sort of running to their old playbook. And, you know, in an ideal world where you actually had a functional government, both parties would be meeting now -- and there's some signs that that will begin to happen -- to talk about how you could come out, regardless of the election's outcome, to something that is a sensible compromise in the middle here that, you know, that could be weighted one way or the other, depending on the election's outcome, although I'm not counting myself an (unintelligible) here.

MECKLERWell, there have been so many conversations, bipartisan conversations about how to deal with the deficit. To my mind, the issue is not that people don't know what to do or where a compromise might lie. I think everyone kind of knows more or less where it lies. It's a matter of two people have the political will to make it happen.

GJELTENWhat's the politics around this transportation funding extension bill that passed the House? I mean, Congress has been trying to pass transportation funding bills for a long time. Is there anything significant in the passage of this bill?

MECKLERWell, you know, this bill has been extended, you know, many, many times. The House this week just passed its 10th extension, which was essentially a maneuver to get it into the House Senate Conference Committee. It's significant in a lot of ways. Number one, they attached a provision that would mandate approval of the Keystone pipeline, which has been a political hot button for the last several months. Obama doesn't want to approve this right now because he feels he doesn't enough information yet to approve it. There's heavy pressure from the Republicans to go ahead and give it the OK.

MECKLERSo you have that. Suddenly, Keystone's been thrown into the middle of this transportation conversation and negotiation. At the same time, a lot of people view the transportation bill as a jobs bill because this is money for infrastructure spending and something that has traditionally been a bipartisan issue and is something that's been a part of the president's economic program, you know, certainly for a very long time, certainly since last September.

MECKLERSo it's just another moment of Washington showing how it just does not know how to function over what were, for many, many years, decades, routine sorts of legislation. The transportation bill used to be something that members of Congress would rush to vote for...

GJELTENYep.

MECKLER...because it was filled with, you know, filled with goodies for their states, and things have just sort of turned around.

GJELTENWell, we know what Ed Luce thinks of all these developments. His new book is called "Time to Start Thinking: America in the Age of Descent." You actually talk about American decline. And, boy, the developments that we're talking about this morning certainly fit into that story, don't they?

LUCEYeah. I mean, and to pick up what Laura was just saying about the transportation bill, you've got another game of chicken coming up of something that ought to be routine, ought to be core job of the Congress, which is the reauthorization of the Export-Import Bank next month. And Eric Cantor, the Republican majority leader in the House, is threatening either to not raise its credit ceiling or only give it a one-year authorization, have this Damoclean sword hanging over it, as Congress likes to have over so many of its programs.

LUCEAnd, you know, at a time when the rest of the world is really gearing up government support for exporters to difficult markets -- whether commercial markets don't operate, the commercial loan markets don't operate -- this is a potential self-inflicted wound that is, I'm afraid, all too familiar with how Congress operates nowadays, has been operating for several years. And I'm fairly pessimistic as to whether that's going to change over the next few years either. It's self-inflicted damage we're talking about.

GJELTENAnd we are seeing, it seems, every week, new examples of the vitriolic sentiment that has erupted during this election cycle. I mean, last week, we were talking about Hilary Rosen and Ann Romney. This week, it's Ted Nugent, the '70s rocker who says that -- who's calling on opponents of Barack Obama to ride into battlefield next November and chop off the Democrats' heads. I'm paraphrasing, but only slightly, Laura.

GJELTENI mean, of course, you can't say that Ted Nugent is a Republican strategist, like was said about Hilary Rosen, but, still, it's like another embarrassment for a political party. You know, last week, it was the Democrats' turn to be embarrassed by something one of their supporters said. This week, it's Mitt Romney's turn to be embarrassed by something one of his supporters said.

MECKLERRight. And he's somebody who endorsed Mitt Romney, who Mitt Romney said, as the Democrats will tell you over and over, it's been fun getting to know Ted Nugent. You know, this is example both of sort of the horrible coarsening of the political debate, where you have this kind of thing where he -- Ted Nugent also said that if Barack Obama is re-elected, I will either be dead or in jail by this time next year, which prompted the Secret Service to actually interview him and clear him in the end 'cause, clearly, he wasn't actually making a threat.

MECKLERI think people thought -- but they did talk to him and made sure...

LUCEIt's good to see the Secret Service doing their job.

MECKLERAnd Secret Service -- that's the kind of thing the Secret Service is supposed to be in the headlines for. But, you know, the -- and then what you saw after that was the Democrats jumping all over this Ted Nugent remark, using it in emails to -- you know, the more outraged you are, the more you want people to know about it. So they're -- you know, they spread it in videos and emails to supporters.

GJELTENLaura Meckler is White House correspondent for The Wall Street Journal. You're listening to "The Diane Rehm Show." Well, Michael Scherer, where does this all seem to be going in the next few months? I mean, we've got so many polarizing developments, as I just said. And the latest -- you know, the Trayvon Martin case, I don't know if you folks have seen the picture that ABC showed this morning.

GJELTENApparently, there was a cellphone -- here it is -- a cellphone photo of George Zimmerman, the man who admits to having shot and killed Trayvon Martin, and he said it was in self-defense. Actually, a cellphone picture taken right after the incident shows that, in fact, his -- the back of his head is bleeding.

SCHERERRight. Yeah. No. And, in a lot of ways, that's not a surprise. The initial police report said he was bleeding from the back of his head. Really, the only reason this is news is because we had police footage of security cameras showing Zimmerman taken to the police station. It wasn't clearly evident that there was bleeding, and so some speculated that the police report may have exaggerated the bleeding.

SCHERERI think if you ask about the debate and where this is going, again, with Trayvon Martin, unfortunately, the basic currency of this conversation has been outrage.

GJELTENMm hmm.

SCHERERAnd the basic currency of the national conversation is outrage. You get outrage at Ted Nugent. You get outrage at Hilary Rosen. You get outrage that...

GJELTENGeorge Zimmerman.

SCHERERGeorge Zimmerman. It's not to say there's not real need for outrage here, but the outrage becomes its own thing. And it, more often than not, ends up hurting the conversation rather than informing it or -- and -- or actually helping us figure out proper solutions to this. In the case of Zimmerman, we're not going to know until the jury sees this case, sees all the evidence, what really happened.

SCHERERThe idea that the press, through leaks of information here, a cellphone photo here or a videotape there, can figure out what happened in a incident where, as far as we know now, only two people were involved in -- witnessed, and one of those people is dead is just -- is not going to happen. And so you have these little bits that are going to come out that are just going to fuel one side or the other.

GJELTENEd Luce, meanwhile, another big, important policy issue that has the environmental community really wrapped up is hydraulic fracturing, which is the technique of injecting water at very high pressure into shale oil and shale gas rock formations in order to extract that. And the EPA is now -- environmentalists don't like this. The EPA has come out with some new rules on this.

LUCEYeah. The environment -- I've seen some environmental support for this. I think there's disappointment that the rules won't take effect till 2015. They feel that they can be put in place much quicker. I think there's disappointment that the methane emissions from hydraulic fracking aren't being directly regulated 'cause they're intensely contributing to global warming, far more so than carbon dioxide.

LUCEAnd you've seen some disappointment from some of the industry groups. But what's interesting is that on both the environmental and the industry group side, there is division. It's not a unanimity on either side, so that does suggest they might have actually got it right.

GJELTENWell, the Obama administration really was trying to thread a needle here between, as you say, the environmental concerns and also the industry concerns. And they did postpone the implementation of these rules until 2015, largely to give industry the time and the support to purchase the equipment they're going to need in order to come into compliance with these new regulations.

GJELTENSo I think that was one aspect of this that industry groups welcomed. On the other hand, the environmentalists are at least happy that the administration is looking at this issue. All right. We're going to be coming up in a break now. When we come back, we're going to go straight to the calls. This is the Friday News Domestic Roundup. You can join the conversation. Call us at 1-800-433-8850, or send us an email, drshow@wamu.org. Stay with us. We'll be right back.

GJELTENWelcome back to the domestic hour of the Friday News Roundup. I'm Tom Gjelten, sitting in today for Diane Rehm, with my guest Edward Luce. He's the Washington bureau chief of the Financial Times newspaper and the author of the new book "Time to Start Thinking: America in the Age of Descent." Also with me in the studio are Laura Meckler, the White House correspondent for The Wall Street Journal, and Michael Scherer, White House correspondent for Time magazine.

GJELTENAnd we're going to go to the phones now. You can join us, 1-800-433-8850. I'm going to start with Ralph, who's calling us from Battle Creek, Mich. Good morning, Ralph. Thanks for the call.

RALPHYes, hello. Good morning. Yeah, you were talking about the budget or, let's say, the tax issue, the Buffett Rule and, what was it, Cantor's proposal to reduce taxes on business. I have to say I am surprised that more people aren't talking about the fact that even the Ryan budget, which is supposedly the -- I guess, the most aggressive at cutting government spending, is not going to balance the budget for two decades or more.

RALPHAnd that's with rosy -- all kinds of rosy assumptions. So the -- I guess -- and Paul Ryan is sort of the Tea Party favorite on the budget. And I'm reading here the CNN column says that the U.S. budget may never be balanced or that it will be a question of managing the level of the debt. And I'm just -- there's no talk, I guess, no serious talk about how serious the problem is or -- and how we're going to have to deal with this.

RALPHThere's going to have to be sacrifices, I assume, from everyone, from tax increases to cuts. And no one's talking about it serious -- well, what do you call it -- the serious measures that have to be taken to even start to balance the budget.

GJELTENRight. So, Ralph, you're definitely one of those voters who's looking at either or both parties to get serious about reducing the deficit, and you're not happy about what you're seeing.

RALPHRight. Well, I'm trying to follow this.

GJELTENMm hmm.

RALPHAnd I guess I'm supporter -- I was a supporter of the Simpson-Bowles, which calls for tax increases...

GJELTENRight.

RALPH...and spending cuts and reform of the entitlements, et cetera. These are the big, big issues that should be front and center at the campaign...

GJELTENYep.

RALPH...and they aren't. We're talking about little things. OK. Thank you.

GJELTENOK. Let's put this to the panel. Laura Meckler.

MECKLERWell, people are talking about it. Just people aren't doing anything about it. You -- like he said, there was Simpson-Bowles. There was this group that was dubbed the Gang of Six in the Senate last year. They were talking about a very serious proposal. The president and Speaker Boehner talked about a deficit reduction proposal. Could -- neither side evidently was able to pull the trigger at the end, although they each ended up blaming one another.

MECKLERSo now you have a situation where there's such a stalemate around these issues, where the decisions are so tough for each party, for Republicans raising taxes and for Democrats cutting entitlement spending, that it's just so toxic that neither presidential candidate is willing to take on their own orthodoxy inside their party on these issues in a political year.

MECKLERSo sort of the most optimistic scenario is, when we get to the lame duck session and all of these issues are before us as we move into 2013, that maybe there'll be a new opportunity. But you're right. The caller is right. No -- neither of the candidates are talking about these issues.

GJELTENAnd, you know, in 2010, we saw the Republicans throw out Democrats. And if, you know, if incumbents get defeated in this coming election as well, I mean, the one takeaway from this is that voters are really upset with their representatives. Michael.

SCHERERYeah. And it's a pattern that at least we're still seeing the possibility of repeating again, that voters get upset, that both parties appeal to their ideological bases, which drives them further away from compromise or rational discussion, which leads to another wave election, which then repeats the process once more. And we're going to have to reach a point in which cooler heads prevail. And until the economy begins to improve and tempers decrease, it's probably not on the horizon.

GJELTENWell, let's go to some of our cool-headed listeners. Rob, you're on the line from Springfield, Mo. Good morning. Thanks for calling us.

ROBHey, thanks a lot for having me over.

GJELTENYou bet.

ROBAnd, you know, I was going to discuss something that Sarah Palin have said about the perception of government spending, especially when the Senate doesn't bring up any budgetary bills to be passed by the Senate. And then there's this observation that groups like the GSA have no mind about budgetary control either. It leads to public sentiment that these aren't the kind of elected officials that we want in office.

ROBAnd it may lead to a, you know, a senatorial coup where the Democrats are pushed out, and then we'll have a Republican-led Senate and House -- very well have a Democratic president, which might not really be that bad of an idea because then, in the last four years of his presidency, he may feel that he needs to move more to the middle. There seems to be no middle ground right now that anybody wants to stand on because they feel like it just erodes away with the political sentiment.

GJELTENYeah. Well, Rob, thanks for the call. And you mentioned Sarah Palin's assessment of the significance of these scandals. You referred to the GSA scandal at loose. You mentioned her -- what you remembered as her reaction to the Secret Service scandal. Our producer says that she can't find any specific remark she made about government employees, although you are right. She did have a reaction to this particular incident of the Secret Service agent saying that he was checking her out. According to our producers, her reaction was as follows: Well, check this out, buddy. You're fired.

GJELTENSo, you know, and it has to be said...

LUCEMaybe I just sort of -- I expounded that in my head to her view of the whole government sector.

GJELTENWell, I think that she probably relished the opportunity to react like that. Let's go now to Nelson, who's calling us from -- where are you, Nelson? -- Clifton, Ohio. Good morning. You're on "The Diane Rehm Show."

NELSONHello. I...

GJELTENGood morning.

NELSONYes. I would like to address the -- pardon me while I gather -- what the conversation has developed here.

NELSONI experienced great frustration when Jimmy Carter got into office and left all the Republican appointees in place to his detriment -- and the same with Clinton, many of the Republican appointees. And then, of course, the head of the Secret Service is a Republican appointee. And then they left these guys in office.

GJELTENBut not a political appointee. He may...

NELSONAnd also, I would like to say that that is also the fact in the Gulf spill where he left all of the Republican screwballs at the head of that agency, and what happened is these Republicans, when they get away with this, they do what's called joyriding. So the Gulf spill was a joyride, was a really (unintelligible) -- and was it Secret Service? -- really lacks it since it's Democratic president. You know, it will, you know, oops, you know, it didn't quite do our job there.

GJELTENYeah.

NELSONAlso for NPR, for 30 years, senior news analyst Daniel Schorr, CIA agent who was in charge of...

GJELTENWhoa.

GJELTENI'm not so sure about that. Let's just stick with your first comment, Nelson. I mean, he's sort of implying -- Nelson is sort of implying that President Obama made a mistake by leaving Republicans at office. But we've seen screwballs in government appointed by both parties.

SCHERERBy both parties. And I think it's important to distinguish between different types of appointees. There are senior appointees and agencies that do have ideological roles, where they set the direction of the agency. And then there are sort of administrative appointees. In the case of the Secret Service, there's never a -- there's not many ideological questions at play there. It's not like a Democrat runs it separately from a Republican.

SCHERERAnd maybe one runs it more competently than the other. But, in this case, the director of the Secret Service, his integrity, has yet to be called into question by either party. It's really the rank and file that have the problem, and so it's not clear that there's a connection to his party affiliation at all.

GJELTENLet's go now to Peter, who's on the line from Atlanta, Ga. Good morning, Peter. Thanks for calling "The Diane Rehm Show."

PETERGood morning. Thank you for taking my call. I'll just make it quick. I retired from the postal service after 35 years, and the GSA and the Secret Service have got nothing on us -- fraud, waste and abuse.

GJELTENAnd you're speaking from the inside.

SCHEREROh, my goodness.

PETERThere's a bunch of nitwits and nincompoops you will never meet at the higher levels.

GJELTENAt the higher levels of the postal service you're saying?

PETEROh, it's unbelievable. Go to a meeting, and you'll sit there in awe.

SCHERERThis has always actually been a tension in government service because the difference between a government job and a private sector job is the private sector job has certain pressures on it to make sure it's efficient 'cause they want to make money for their investors or their owners. And the government job, you're kind of playing with other people's money. You're going to get paid...

PETERWell, they do more than play.

SCHERERRight.

PETERThey just waste it and then blame other folks down the line.

SCHERERYou know, and the trick here is that -- in Washington, no one has come up with the solution for this because Republicans will say, this is why you have to outsource more jobs to the private sector. But then they don't put in place the contracting structures to actually enforce the contracts to make sure the contractors don't abuse their power.

SCHERERAnd the Democrats will say, no, it's better we have public servants doing this, government employees, unionized employees doing this. And we see these sort of abuses. And there is no -- these problems exist both with abuses on the private sector side and abuses on the public sector side. And as a city, we have not yet figured out how to really wrestle with it.

GJELTENWell, it seems to me that with the budget -- the fiscal issues that we're dealing with, there's going to be hard looks at government spending at all levels in all agencies, right, Ed?

LUCEYeah, there is. Can I pick up with something a caller...

GJELTENYeah.

LUCE...said a couple of calls ago about the best divided government scenario being a Republican-controlled Senate and House and Obama in -- return to the White House?

GJELTENYeah.

LUCEI think it's exact opposite. I mean, if you were going to fantasize about a divided government scenario, I think there's far more scope to imagine a President Romney cooperating with a Democratic Capitol Hill, given his background in Massachusetts, given his famous flexibility, to put it mildly, than there is a Tea Party-dominated Republican Party to change its behavior from the last two years with how it's treated President Obama or, indeed, for him to suddenly develop great skills at wrong-footing them. I don't see that as at all a plausible scenario for changing the way things are happening.

GJELTENWell, Edward, I'm not sure very many people would find it plausible that you would actually get Democrats taking control of Congress...

LUCENo.

GJELTEN...while Romney is being elected president either.

LUCEIt's very, very unlikely, but if you're going to fantasize about divided government...

GJELTENOK. Let's go now to Sue, who's on the line from Silver Spring, Md. Good morning, Sue. Thanks for calling us. Sue, are you there?

SUEYes. I'm here.

GJELTENOK. All right. Well...

SUESorry about that. Thanks for taking my call. So this morning you opened up the show talking about the scandals at the Government (sic) Services Administration and the Secret Service, which is understandable 'cause they're about sex and money and partying. But The Washington Post had a great expose this week on the FBI forensics lab screwing up evidence, and then the Department of Justice doing an investigation and finding that, in about 250 cases, according to The Post, people were convicted and jailed based on this flawed forensic evidence.

SUEAnd they did nothing to notify the defense attorney, so people stayed in jail even after the DOJ understood that the evidence against them was weak, if not totally wrong.

GJELTENAnd, Sue, do you think there are some broader implications of that development? I mean, obviously, DNA evidence, for example, is very important in a lot of trials right now. Are you drawing any sort of lessons from that?

SUEWell, I'm drawing lessons about the public discussions, that I'm sure that -- you know, I can't figure out how much it costs the American taxpayer to keep people in jail who are innocent, but I imagine it was more than that GSA party. And then, also, it's a pattern at the Department of Justice -- you've got the Ted Stevens case. You've got other cases that have broken in more recent years of Department of Justice prosecutors not turning over exculpatory evidence to the defense lawyers. And, therefore, it's -- to me, it is a much broader problem that the Department of Justice is...

GJELTENOK. Yep. All right. Thank you, Sue.

SUEThanks.

GJELTENI'm Tom Gjelten. You're listening to "The Diane Rehm Show." Well, Sue made her point. You probably -- you guys don't cover the Department of Justice. None of us cover the Department of Justice, so we'll let Sue carry the ball on that one. Let's go now to -- let's go to Mark, who's on the phone from Houston, Texas. Good morning, Mark.

MARKHi. Thanks for taking my call. I think we can all agree that part of the problem with the deadlock government or -- is that Congress is split. Let's assume that Obama is re-elected. What do you think -- what does the panel think the chances are that the Democrats will retain the Senate and regain the House so that the government can get the things done?

GJELTENLaura.

MECKLERWell, the betting has been that, for sure, the Republicans are likely to keep control of the House. Because they have such a wide margin, they could lose several seats and still maintain their majority. Most people think that majority will shrink but that the Republicans will indeed maintain control of the House.

MECKLERAnd the Senate, for a long time, there was the so-called smart money was on the fact that Republicans would take the Senate, too, because there are enormous number of Democratic-held seats that are up for re-election this year and only a handful of Republicans as it just worked out this year. However, in the last, you know, few weeks, there have been some sort of positive signs for the Democrats.

MECKLERAnd they're feeling a little bit better about their chances of maybe holding on to the majority, including, for instance, Sen. Olympia Snowe, who was so disgusted by the way Washington works or doesn't work these days that she is retiring. And her seat, which -- obviously, she's a Republican, a very moderate Republican -- is now potentially -- may potentially go to somebody who caucuses with the Democrats. So we've seen a little bit of change in the thinking about the Senate where that is maybe a little more up for grabs, but the Democrats have a hard road to get the majority back.

GJELTENLaura Meckler is White House correspondent for The Wall Street Journal. I want to go now to a couple of emails that we've gotten, first of all, from Jill in Washington, D.C. Jill is wondering why the Republicans and Tea Partiers are so obsessed with cutting the deficit at this particular time. They've convinced everyone it's a huge problem, seems to me they're only rearranging deck chairs on the Titanic with the economy in its current state.

GJELTENAnd, Michael, this was your point as well that for all of the professed concern about the deficit, we don't see evidence yet that either party's come up with practical solutions to really tackle it.

SCHERERWell, and they just passed something out of the House, the same Tea Party crowd, that would add $47 billion to the deficit. So it's not a one-way street here with them. I think, in a lot of our discussion today, one thing we've been leaving out is that the dysfunction in Washington right now is not just between Democrats and Republicans. Within the Republican House, there is a huge division between the sort of Tea Party freshman Republican class and the rest of the Republican body there led by John Boehner.

SCHERERThe transportation bill, the reason it's being punted to the Commerce Committee is because Boehner can't bring his own people along with him. He's unable to do again the sort of things he want -- there's a -- recently, the White House had to put forward a veto threat because the freshman class there is trying to rearrange an agreement that both parties reached last year about what the spending levels would be for this year, that could, if this sort of brinksmanship continues, lead to a government shutdown in September right before an election year.

SCHERERSo it's not just Democrats fighting with Republicans. There's a lot of Republicans fighting with Republicans going on as well.

GJELTENAnd this is going to give us grist for many Friday News Roundups in the weeks and months ahead as we move forward in this election season. Michael Scherer is White House correspondent for Time magazine. Our other guests this morning were Laura Meckler, White House correspondent for The Wall Street Journal, and Edward Luce, Washington bureau chief for the Financial Times and the author of a new book, "Time to Start Thinking: America in the Age of Descent." I'm Tom Gjelten. You're listening to "The Diane Rehm Show."

ANNOUNCER"The Diane Rehm Show" is produced by Sandra Pinkard, Nancy Robertson, Denise Couture, Monique Nazareth, Nikki Jecks, Susan Nabors and Lisa Dunn, and the engineer is Tobey Schreiner. A.C. Valdez answers the phones. Visit drshow.org for audio archives, transcripts, podcasts and CD sales. Call 202-885-1200 for more information.