April 19, 2009  -- STEPHANOPOULOS: Good morning and welcome to "This Week."

More change from Obama. On Cuba.

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PRESIDENT BARACK OBAMA: The United States seeks a new beginning with Cuba.

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STEPHANOPOULOS: Terrorist interrogations.

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(UNKNOWN): The president moved swiftly to end that practice.

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STEPHANOPOULOS: And the economy.

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OBAMA: We cannot rebuild this economy on the same pile of sand. We must lay a new foundation for growth and prosperity.

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STEPHANOPOULOS: As the president rounds out his first 100 days and the new Congress returns from its first recess, what's next on the agenda? We'll ask our exclusive headliners, White House Chief of Staff Rahm Emanuel and House Republican Leader John Boehner, only on "This Week."

Then,...

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(UNKNOWN): No more bailouts!

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STEPHANOPOULOS: Tax day tea parties. Boom or bust? That and the rest of the week's politics on our roundtable, with George Will, Cokie Roberts, Sam Donaldson and Peggy Noonan.

And as always, the Sunday funnies.

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(UNKNOWN): Nothing shakes a politician up like a complimentary bag of tea.

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STEPHANOPOULOS: Hello again. Ninety days into his term, President Obama's wrapping up his second overseas mission today and coming home to his next set of challenges in Congress. That sets the table for our exclusive headliners this morning, beginning with the president's chief of staff, Rahm Emanuel. Welcome back.

EMANUEL: Good morning.

STEPHANOPOULOS: So you could not have been happy when you got up and saw the New York Times this morning. Headline talks about the president's softer stance. The first paragraph says he's shown a willingness to capitulate on some early initiatives. Then it goes on to quote Leonard Burman of the Urban Institute, and he says that -- he says, "the thing we still don't know about President Obama is what he's willing to fight for. He likes giving good speeches, he likes the adulation, he likes to make people happy, but it's hard to think of a place where he's taken a really hard position." Your response?

EMANUEL: Well, George, let me approach this from two sides, if I can. As you noted, we're into only 90 days. What have we gotten done in those 90 days? First, we passed the largest recovery act to put Americans back to work. We've gotten in place the financing to help stabilize the credit system throughout the financial system. A housing plan so people can keep their homes, and millions of Americans can refinance. We started the ending -- we started the process to end the war in Iraq, put in place a policy in Afghanistan and Pakistan area that will change that area and take the fight to the terrorists that exist there. We also started the credit flowing to small businesses.

So in the first 90 days, a lot has been done both to get the economy moving again and change America's foreign policy and its objectives...

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STEPHANOPOULOS: Is that the easy part, though?

EMANUEL: Well, if you think that's easy, George, and you've been in the White House, I would suggest in the fist 90 days, it's quite a lot to take on, but the American people asked for us to roll up our sleeves every day and get to work on behalf of them.

Second, let me squeeze it from this side, or address the question from this side. You could not report on the challenges of the fights with the special interests if it wasn't for what we've initiated under President Obama. A, taking on the banking industry as it relates to the student loan. We basically said we're going to cut you out, put $94 billion that we subsidize you with, and we're going to give it directly to the students who are trying to go to college.

In the area of healthcare reform and getting costs under control, we said to the insurance industry, we're eliminating your subsidies and only going to pay you what basically 100 percent on the dollar, but not 115 cents on the dollar, and you're going to compete for that money. And that saves the taxpayers about $170 billion...

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EMANUEL: George, George, finally, on the oil and industry, we eliminated their taxpayer subsidies and put that money into alternative energy. So every one of the fights that you're engaged over the next six to nine months were ones that we initiated in taking on those special interests.

STEPHANOPOULOS: Well, you had two important ones, healthcare and energy. And when you look at those issues, what the president has done in his first 90 days, achieved a lot of his major initiatives, as you pointed out, but with very little Republican support. Only three Republicans on the stimulus package; none for the president's budget.

To get healthcare, energy, regulatory reform, the president is going to need Republican votes. What adjustments is he willing to make to get them?

EMANUEL: Well, you just said adjustments. The first question was we're compromising too much and now are you saying how are you going to compromise to get those done? We set the goals. The goals are getting healthcare costs under control. The goals are having an energy policy in which America is independent of its tie to foreign oil and having a policy in which America basically has an energy policy that frees itself from exporting $700 billion of wealth to the Mideast. Those are the objectives. Now, he's open to different roads to get there, but what he's not open to is compromising on the...

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EMANUEL: ... healthcare costs under control and ridding us of our dependence.

Now, as President Obama said when asked by a congressman at one of the task force on healthcare -- not on healthcare, on fiscal discipline. You know, the Republican congressman said we're being cut out.

EMANUEL: He says, well, you should be included; that's fair, but you have to come constructive.

And when you're the party of no; when you're the party of never; when you're the party of no new ideas, that's not constructive.

So my recommendation is, we'll work with people of all sides' ideology to get things done. And I think you'll see this on Tuesday. The president will sign a landmark legislation for national service.

And the sponsors are President -- Senator Kennedy and Senator Hatch, a Republican.

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EMANUEL: And if you go through the process on kids' health care, national service, as well as getting resources necessary for stabilizing the banks, every one of those votes has been bipartisan.

The challenge will be, will the Republicans come to the table with constructive ideas?

STEPHANOPOULOS: Let's talk about the big issues. On health care, on Republican idea on health care is to tax employer benefits. The president blasted Senator McCain for that idea during the campaign, yet it's now being joined by some Democrats as well.

Is the president willing to consider that as a way to pay for his plans to expand coverage?

EMANUEL: George, the goal -- well, remember, first of all, what's the objective?

The objective is getting...

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STEPHANOPOULOS: ... I want to know if he's willing to consider that as a way to pay for it.

EMANUEL: Well, first of all, what we have to do is squeeze out all the basic costs in the system, before we talk about any other type of revenue. There's a lot that has to be changed.

Unfortunately, I know a little about health care reform from my family. The fact is, we had all the wrong incentives in the health care system. And if you change the incentives toward medical I.T., which we put in place the resources to start basically having a way to control costs there; if we change the way the doctors are paid -- so, rather than fee for service, for outcomes; change the way -- in fact, rewarding people who take care of themselves and get their health together.

All those are what you have to consider...

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STEPHANOPOULOS: But all of that is only going to get you a fraction of the place where you need to be in order to cover everyone as the president has said is the goal as well.

And he laid out a plan, a reserve package of about $600 billion; the plan he laid out to pay for it, shaving deductions for wealthy Americans.

Democrats and Republicans alike on Capitol Hill say, no way, we're not going to do it. So how is the president going to fill the gap?

How is he going to pay for the programs?

EMANUEL: Well, (inaudible) George, it's not just the president. It's what we work with Congress. That process is beginning. I think, in this next five weeks, you'll see tremendous progress at the -- at the committee level, to getting that done.

And he does not believe that's the first step. And what you have to do, as he believes, is make the cuts in the system that we have today because we're overpaying for a lot of things; and second, is change the incentives before you get to immediately going to a default position that you have to raise taxes.

STEPHANOPOULOS: But is he open to taxing employer benefits?

EMANUEL: He -- he has said he opposed that, as he said in the campaign. And that's what he believes, and believes is, before you get there, you have got to address the priorities.

STEPHANOPOULOS: So he won't sign a bill that includes that?

EMANUEL: George, I'm not going to do any absolutes on your show. That's not my right to do that. If there's (inaudible) then we'll try to arrange that...

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STEPHANOPOULOS: Let's move over to energy. The president made a major announcement -- the EPA made a major announcement on Friday, giving the EPA the ability to regulate greenhouse gases.

It drew some sharp opposition from our next guest, Congressman Boehner.

Here's what he had to say. He said, "This decision is nothing more than a back-door attempt to enact a national energy tax that will have a crushing impact on consumers, jobs and our economy. The administration is abusing the regulatory process to establish this tax because it knows there are not enough votes in Congress to force Americans to pay it."

EMANUEL: Well, first of all, let's take a step back. That decision was an outgrowth by the EPA -- went through scientific review, but it was an outgrowth of a Supreme Court decision in 2007.

STEPHANOPOULOS: So it doesn't have much choice?

EMANUEL: Well, the -- what EPA just announced, the EPA had to go where it was. Let me also note -- and I think it's important -- both on that decision, George, as well as on the stem cell rules and regs that were just put out, once again, science is where it should be, giving us all the data we need. Now we have to decide how we're going to handle that information.

And I think, on this case, this EPA has said, here's what we have -- here's what the data says; here's what we think about it.

Now, we have to make the decision, which is what the president's always said, it is better, on an issue of this size and magnitude, and in an effect on the economy, that Congress and the White House come up with a set of policies that deal with greenhouse gas emissions and our energy policy.

We have a bill that's working, right now, dealing with our energy independence.

What would be helpful is if your next speaker, John Boehner, who's a friend, has his ideas put forth on how he wants to deal with greenhouse gases -- emissions, and how he wants to deal with our energy independence...

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EMANUEL: And we're going to have -- the Congress is beginning to work...

STEPHANOPOULOS: I will ask him about that, but meanwhile, the president's plans to cap-and-trade carbon emissions is getting a lot of resistance, not only from Republicans but Democrats as well, who do believe -- who are fearful that this will be a broad-based tax increase.

EMANUEL: I would -- well, I -- of course, when you have something of this magnitude, there's going to be people that raise objections, because it's a big change.

STEPHANOPOULOS: Do you believe it's a broad-based tax increase?

EMANUEL: No, what I believe is we're going to -- we're going to alter how we deal with our energy policy. And what I think is going to happen is that Congress will deal with this part of the energy policy; they'll deal with the resource investments into alternative energy.

They'll also deal with the way we bring more efficiency into the system. And they're going to look at that.

I do know this. At the end of this first year of Congress, there will be an energy bill on the president's desk.

STEPHANOPOULOS: That includes cap-and-trade?

EMANUEL: Our goal is to get that done. We will see. You're asking me right before the legislative process starts to make that prediction.

I do think this, that even those who object to particulars know that we have to deal with this part of our energy policy and that -- the challenge now is, rather than to criticize and rather than say no, rather than to say never, is to provide ideas. And that has yet to happen from the other side.

STEPHANOPOULOS: You believe that both health care, then, and energy will get through the Congress this year? At the same time, are you confident that you can get those through before you have to come back to the Congress and ask for more money for the banks?

We all know these stress tests are coming up at the end of the month. We've seen some positive reports from the banks in recent weeks.

How confident are you that the banks are going to be able to get through this period without having the government come in and temporarily take over?

And will you be able to get through this next period without coming back to Congress for more money?

EMANUEL: George, let me take a step back. I want to address the particular, at the end, on the resources. Remember what the stress test is about. It's very important. You needed a clear demarcation.

For the last year and a half, the credit markets have seized up. It was filled, in the financial system, with fear and confusion. Nobody was lending to each other and, therefore businesses, families that were trying to buy a home, kids who wanted to go to college, people that want to buy a car could not access the resources they need to do that because the banks were filled with fear and confusion between each other and weren't lending.

And then, at the end of the day, the economy and the consumer got effected. The purpose of the stress test was to have a clear demarcation between that confusion and fear with...

STEPHANOPOULOS: And also figure out how much more money they're going to need from the federal government.

Are you confident you will not have to come back to Congress...

EMANUEL: Well, first of all, I haven't seen -- as you know, I haven't seen the stress test yet. What we do know is, in the first quarter, banks and the financial institutions, the major 19, are doing better. And I think we're all pleased that they're reporting profits.

But that doesn't take away that some are going to need resources. We believe we have those resources available in the government as the final backstop to make sure that the 19 are financially viable and effective.

STEPHANOPOULOS: Without coming back to Congress?

EMANUEL: Right. The resources that we have on hand, we believe -- and it's not just that, George, is that we have those resources; we have a facility to buy these troubled assets off their banks. If they need capital, we have that capacity. We have what we're doing on the home front. I'm basically helping homeowners basically access and buy a home and stay in a home and refinance their home.

And we also believe, as you see in April, consumer confidence is up.

STEPHANOPOULOS: So you don't believe you're going to have to come back? Do you believe now...

EMANUEL: I'd say that -- you know, I want to be careful here, George, because you're dealing with stuff -- and a lot of people are waiting in the next three weeks. It's a big issue. I believe we won't, but I haven't seen the stress tests, so it's -- I want to put a cautionary note there. I do think, based on everything, you know, in our discussions...

STEPHANOPOULOS: You are well-informed.

EMANUEL: I understand I'm well-informed. But that doesn't mean I've seen the stress tests. I do believe we have the resources to handle what the results will be.

STEPHANOPOULOS: And you will avoid any kind of temporary nationalization?

EMANUEL: I think we will be able to avoid that. STEPHANOPOULOS: Let me ask you a final question on...

EMANUEL: And again, obviously -- I want to be careful, George, because this is very important, and rightfully so. I believe we have the resources. I believe, -- not only -- I believe we will not have to deal with nationalization, and that's not the goal, nor do we think that's the right policy objectives here.

STEPHANOPOULOS: Fair enough. Final question on the president's decision, this week, to disclose the documents dealing with terrorist interrogations.

A series of officials who served with President Bush have come out and blasted it, including the former homeland security secretary Michael Chertoff, the former CIA director Michael Hayden. Here's what they had to say.

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FORMER SECRETARY OF HOMELAND SECURITY MICHAEL CHERTOFF: One is that you're giving terrorists insights into the things they need to prepare for, and they do prepare. And the second thing is you're sending a message to our allies that we are not reliable in terms of safeguarding confidential information.

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STEPHANOPOULOS: Mr. Hayden added that fully half of the information the government has gotten about Al Qaida came from these interrogations. They say that the president's decision has put the United States at risk.

EMANUEL: A couple things, George. First of all, we've banned these techniques and practices -- banned them. Because we didn't think they were consistent with America's security...

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STEPHANOPOULOS: So you don't believe we got this information that Michael Hayden believes we got?

EMANUEL: First let me address the question, OK? Second is, we've enhanced America's image abroad. These were tools used by terrorists, propaganda tools, to recruit new terrorists. And the fact is, having changed America's image does have an impact on our security and safety and makes us stronger.

STEPHANOPOULOS: How do you answer the argument, though, that (inaudible) that this gives them a roadmap to how to resist?

EMANUEL: It's kind of a -- let me say this. One of the reasons the president was willing to let this information out was that already the information was out. So if they're saying that you basically have exposed something, it's been written. Go get the New York Review of Books. It's there.

So the notion that somehow, we're exposing something -- it's already been out. In fact, President Bush let -- allowed -- let it -- allowed a lot of this information out. So the notion that somehow this all of a sudden is a game changer doesn't take cognizance of the fact that it's already in the system and in the public domain. Therefore, it's not new. So the notion that that is something we've built in -- it's already been there.

Number two, it's one of the key tools Al Qaida has used for recruitment. There has been a net cost to America. By changing the way America is seen in the world, which means banning this technique and practice, we have actually stopped them and prevented them from using it as a rallying cry.

STEPHANOPOULOS: Final quick question. The president has ruled out prosecutions for CIA officials who believed they were following the law. Does he believe that the officials who devised the policies should be immune from prosecution?

EMANUEL: What he believes is, look, as you saw in that statement he wrote, and I would just take a step back. He came up with this and he worked on this for about four weeks, wrote that statement Wednesday night, after he made his decision, and dictated what he wanted to see. And Thursday morning, I saw him in the office, he was still editing it.

He believes that people in good faith were operating with the guidance they were provided. They shouldn't be prosecuted.

STEPHANOPOULOS: What about those who devised policy?

EMANUEL: Yes, but those who devised policy, he believes that they were -- should not be prosecuted either, and that's not the place that we go -- as he said in that letter, and I would really recommend people look at the full statement -- not the letter, the statement -- in that second paragraph, "this is not a time for retribution." It's time for reflection. It's not a time to use our energy and our time in looking back and any sense of anger and retribution.

We have a lot to do to protect America. What people need to know, this practice and technique, we don't use anymore. He banned it.

STEPHANOPOULOS: Rahm Emanuel, thank you very much for joining me.

EMANUEL: Thank you, George.

STEPHANOPOULOS: We turn now to Congressman Boehner. And let me get you right on there, Congressman Boehner. What is your response to the president's decision this week? And also, we just heard from Mr. Emanuel that the president wants to move forward, no prosecution for officials who devised the policy.

BOEHNER: Well, I think that's one area -- area that I can agree with the president on. But I think the release of these memos is dangerous, and I agree with what Leon Panetta had to say, when he made it clear that he thought that this would hamper our ability to get information from terrorists and get other countries to work with us.

STEPHANOPOULOS: And let's look at this more broadly, then, Congressman Boehner. You heard what Mr. Emanuel had to say about the president's approach towards this next set of challenges facing the Congress, especially healthcare and education. And he says the president's willing to work with Republicans, but Republicans have to come to the table with ideas. Let's take each issue in turn.

Are you prepared to come forward with a plan to cover all Americans and control healthcare costs?

BOEHNER: I think we believe, along what Democrats believe, that all Americans should have access to high-quality, affordable health insurance. We're working on a plan that preserves the doctor/patient relationship, rewards quality and rewards innovation. We're not for a plan that puts the government in charge of our healthcare, decides what doctors ought to be paid, or what treatments ought to be prescribed.

STEPHANOPOULOS: So that means -- so that's a no to the president's plan?

BOEHNER: We haven't seen the president's plan as yet. I can tell you what our plan is beginning to look like and the types of things that we will oppose.

STEPHANOPOULOS: Let me ask you then about energy. We showed your statement on the president's decision through the EPA to regulate greenhouse gases. Also, you've come out against the president's proposal to cap-and-trade carbon emissions.

So what is the Republican answer to climate change? Is it a problem? Do you have a plan to address it?

BOEHNER: George, we believe that our -- all of the above energy strategy from last year continues to be the right approach on energy. That we ought to make sure that we have new sources of energy, green energy, but we need nuclear energy, we need other types of alternatives, and, yes, we need American-made oil and gas.

STEPHANOPOULOS: But that doesn't do anything when it comes to emissions, sir.

BOEHNER: When it comes to the issue of climate change, George, it's pretty clear that if we don't work with other industrialized nations around the world, what's going to happen is that we're going to ship millions of American jobs overseas. We have to deal with this in a responsible way.

STEPHANOPOULOS: So what is the responsible way? That's my question. What is the Republican plan to deal with carbon emissions, which every major scientific organization has said is contributing to climate change?

BOEHNER: George, the idea that carbon dioxide is a carcinogen that is harmful to our environment is almost comical. Every time we exhale, we exhale carbon dioxide. Every cow in the world, you know, when they do what they do, you've got more carbon dioxide. And so I think it's clear...

STEPHANOPOULOS: So you don't believe that greenhouse gases are a problem in creating climate change?

BOEHNER: ... we've had climate change over the last 100 years -- listen, it's clear we've had change in our climate. The question is how much does man have to do with it, and what is the proper way to deal with this? We can't do it alone as one nation. If we got India, China and other industrialized countries not working with us, all we're going to do is ship millions of American jobs overseas.

STEPHANOPOULOS: But it sounds like from what you're saying that you don't believe that Republicans need to come up with a plan to control carbon emissions? You're suggesting it's not that big of a problem, even though the scientific consensus is that it has contributed to the climate change.

BOEHNER: I think it is -- I think it is an issue. The question is, what is the proper answer and the responsible answer?

STEPHANOPOULOS: And what is the answer? That's what I'm trying to get at.

BOEHNER: George, I think everyone in America is looking for the proper answer. We don't want to raise taxes, $1.5 to $2 trillion like the administration is proposing, and we don't want to ship millions of American jobs overseas. And so we've got to find ways to work toward this solution to this problem without risking the future for our kids and grandkids.

STEPHANOPOULOS: So you are committed to coming up with a plan?

BOEHNER: I think you'll see a plan from us. Just like you've seen a plan from us on the stimulus bill and a better plan on the budget.

STEPHANOPOULOS: Finally, also this week, we saw these TEA party tax day protests coming out across the country. Yet, one of the organizers of the protests, one of your predecessors, Dick Armey, former Republican leader in the House, said even as he was going forward with the protests, that the taxes of the United States are now at a good level. Do you agree?

BOEHNER: I think the taxes in America continue to be too high, and if you talk to the people I talk to at the taxpayer protests out in Bakersfield, California, they didn't believe their taxes were too low or about right. They thought they were too high.

George, when I talk to people at these rallies, it was pretty clear people are scared to death. And they're scared to death about the future for their kids and their grandkids, and the facts that the American dream may not be alive for their kids and grandkids. That's what really scares them.

STEPHANOPOULOS: But on the issue...

BOEHNER: They understand that you can't borrow and spend your way to prosperity.

STEPHANOPOULOS: But on the issue of taxes, I think it's 43 percent of people who file taxes pay no income tax at all. For the middle fifth of taxpayers, they're paying just about 3 percent in federal income tax this year.

BOEHNER: Well, you want to go out and explain that to the hundreds of thousands of people around America that showed up for these rallies. They understand that they're paying too much in taxes. But they're really concerned about the amount of spending that's going on in Washington and the amount of debt that's being piled up. They know that you can't have trillion-dollar deficits for as far as the eye can see without imprisoning the future for our kids and theirs.

STEPHANOPOULOS: OK, Congressman Boehner, thank you very much for your time this morning.

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