Vacation, we assess the year in the white house, on capitol hill, on the campaign trail and at the fed. Covering the week, peter baker, chief White House Correspondent for the new york times. Dan balz, chief correspondent for the washington post. Amy carter, correspondent for the wall street journal and eamom javers, washington correspondent for cnbc. Covering history as it happens, live from our Nations Capital, this is Washington Week with gwen ifill. Corporate funding for Washington Week is provided by today people are coming out to the Nations Capital to support an important cause that could change the way you live for years to come. How can you help . By giving a little more, to yourself. For my future. People sometimes forget to help themselves. The cause is retirement and today thousands of people pledge to save an additional 1 of their income. If we all do that, we can all win. Prudential. Additional Corporate Funding for Washington Week is provided by boeing. Additional funding is provided by newmans own foundation, donating all profits from newmans own Food Products to charity and nourishing the common good. The corporation for public broadcasting and by contributions to your pbs station from viewers like you. Thank you. Ones again, live from once again, live from washington, model rator gwen ifill. Gwen good evening. Weve reached that part of the year where everyone begins to take stock. At the white house, the president tried for a victory lap. I said at the beginning of this year that interesting stuff happens in the Fourth Quarter and we are only halfway through. Gwen president obama seemed upbeat, perhaps because he was headed to hawaii. He claimed credit for a budget, criminal Justice Reform and insisted he does have a plan to defeat isis. Peter, does the president have a reason to be optimistic . He finished the year better in some ways that you might have expected at the start. Hed just lost the senate and people thought we were heading into a strong lame duck moment but in twivinget he had some things to show for all the. Climate change most recently in paris, an iran agreement on the nuclear program. Hes working on things like sirea and other things. But its been progress to point to. And on the domestic front, not a lot of fireworks but they got trailed authority so he could negotiate a deal with the pacific asian nations. They have a fix on the medicare doctor thing. The budget deal that went without a Government Shutdown or crazy stuff. An agreement on National Security agency surveillance. It hasnt been flashy but he got some things done. Having said that, the isis thing hovers over. Gwen when he talked about squeezing isiss heart. I dont know what he was proposing that was different. He said look, what im doing is work. Were going to do a little more of it but basically my strategy is going too work. Be patient. Its not a satisfying message politically and the small gains hed seen in the polls in the middle of the year have dissipated. Hes back down to 44 in our poll, where he was at the beginning of the year. A year ago at this point we were talking to be shellacking that the democrats had taken and him in particular. What did they take away from that and what adjustments did he make in the way he decided to approach this year . It turns out losing the senate may have been the best thing that ever happened to him because he was no longer tethered to the democrat majority in the upper body and he found it liberated a little bit. He had a partner in Mitch Mcconnell who wanted to show the republicans in the senate were worthy of negotiating and wanted to get some deals done. And they did it on things like trailed and the budget and tax provisions. He didnt go guard with things liberals would like to have gone forward with. Today he talked about the Fourth Quarter of his presidency, the last half of the Fourth Quarter of the presidency. Do you get the sense hes got a different game a plan for the last year when this huge president ial race is going to be out and all the oxygen is going to be sucked out of washington and onto the campaign trail. How does he deal with that kind of con next . Air force one. The president is going to get on the plane a lot. Seven, eight, nine times i think to go overseas. A lot of president s do this in their final year of an eightyear presidency because you have the most lat tude on the International Front when congress is busy and no longer focusing on you. He has some opportunity. Criminal Justice Reform seems to be a possibility. And he wants to pass the trade deal he did negotiate. The pacific trailed deal. There are questions about whether or not he can get that done. Peter, you talked about how the climate agreement in paris was a big success for him and indeed climate is a big legacy issue for the president. In the spending bill that Congress Passed today and obama signed in july, which a lot of environmentalists think goes counter to his talks in paris. How are they handling that . The environmental left, which is theres really no binding name to this in terms of the actual target. Anything that 190something countries agree to you have to wonder if it does all that much. Theres a lot of smoke and mirrors arguably behind it but as he points out, weve never had anybody get to this point and we have to get to this point in order to get to the next point this is part of the persistence strategy he said. Not very satisfying sometimes to his own supporters who would like more drastic action and criticism from the right a lot as well. Coal states feel this is going to be damaging for them. Gwen the president seems to be leaning away for the possibility of failure when he talks about slippery slopes in particular, syria. Thats cautious, right . Very cautious. He had a meeting this week with some of the newspaper columnists. This happen told come out. Gwen that would be pa peter column. Peter ignatius who talked about it. In any case, he said it isnt worth it. The people who want to send Ground Troops there, it isnt worth it. This is where he got criticized. He was he said they were the j. V. Team at one point. Hes had a very measured assessment of isis and that has been controversial. Gwen the obvious backdrop continues to be the fractious president ial campaign. The republicans are fighting and everyone else hoping for a piece of the action. Trump i am totally committed to the Republican Party. I feel very honored to be the frontrunner. For marco to suggest our record is same, its like suggesting the fireman and the arsonist as the same record because theyre both at the scene of the fire. Gwen and tonight, the democrats got in the action as the d. N. C. And the clinton capable accused Bernie Sanders of political dirty tricks. The leadership of the d. N. C. Has used this incident to shut down our ability to access our own information, information which is the lifeblood of this campaign. Gwen what a way to go through the holiday season. That is not holiday spirits. Explain what that fueled was about. Ill try to explain it as simply as i can but its complicated. The Democratic National committee maintains a voter file, a large data base that the campaigns are allowed to use and then add their own propriorityry information to it based on the work theyre doing out in the field. The calls and contacts theyre making, their ratings of different voters. A vendor for the d. N. C. Had a glitch and the firewall thats supposed to keep propriorityry data separate from the other camps opened up for a 40minute period. Bernie Sanders Campaign noticed it and went in and accessed some of the data of the Clinton Campaign. They took propriorityry data. It was discovered. The senior people in the Campaign Said we cant do this. Think fired one of the people. There were four who ax accessed it. But the d. N. C. Said the Sanders Campaign cannot have fully access to this file. When which means theyre now in the middle of a campaign. Five weeks from iowa. Theyre making calls every night. They cant access what theyve had before so theyve come out and sued the d. N. C. To get access to it. Gwen weve come a long way from Bernie Sanders refusing to criticize Hillary Clinton. Now its its the other way. Its been a remarkable turnaround and this somehow what is exploded over the last 24 hours since the news first came out. Part of it is i think the Sanders Campaign feels aggrieved but on the other hand the Clinton Campaign says wait a minute. You guys were in the wrong. You didnt have to get this data. That fight is going to continue. Theres a debate saturday night in manchester, New Hampshire. No doubt this will come up, at least in part but both sides are using it to energize their forces right now. Gwen lets talk about republicans. Whats going on . What do we expect . What did we come out of that debate with . It feels like everything is up in the air again. It is. Weaver at the end of the year and i think there are very few people within the Republican Party or outside the party who have a much better idea of how this is going to turn out than they did six or eight or nine months ago. Donald trump is leading in all the national polls. In fact, in the wake of his controversial statement about bang muslims from coming into the united states, hes gone up in the polls. His margin ahead of the secondplace candidate is bigger than it has ever been and yet you have this feeling still that this is quite an unsettled race. Ted cruz is rising in iowa. Theres a real competition under way in New Hampshire and so we head into a very, very crucial period with everything on the line and nobody sure who to go after. I think the most interesting moment in the detective was ted cruz and marco rubio. Both 44yearold senators, cubanamerican backgrounds. Conservative but very different in anywhere approach and their politics. They seem to be competing the same i think each of those candidates and theyre both very skillful candidates, believes that in the end theyll fails the other in the finals of the nomination battle. Neither can explain what happens to donald trump in that scenario but theyve been pointing at one another for six or eight weeks and it really came out in that detective, particularly over the issue of immigration and then continued for several days. The issue is that senator cruz is trying to keep rubio in the box as having supported a path to citizenship and during that gang of eight battle over the senate bill a couple of years ago, cruz offered an amendment that would have allowed people who are here illegally to gain legal status. Rubio is trying to say you are basically where i was and cruz is trying to say were in totally different places. But this is a fight that had to come and will continue null until we see some resolution of it in iowa, South Carolina and on. Going back to the Hillary Clinton and Bernie Sanders spat, do you think people outside the beltway are really going to care about this . What kind of impact could it have on the voters . Its an inside game. People are not going to get fixed on it but the degree to which one side or the other can us it as an energizing force to rev up their folks you know, that race had kind of settled in and both sides, i think, need something to get it going again, in particularly sanders. Gwen while they were fighting on the campaign trail, republicans and democrats were striking dealings on capitol hill. I dont think this is the way that we should be governing but we are where we are and we have a bipartisan compromise where i think we have some good wins. Look, democrats won some things too. Thats the name of bipartisan compromises. With his leadership weve come a long way. It is a monumental improvement over the special interest bills republicans were offering this year. Gwen even the president was praising the deal. Weve never seen such camaraderie around budget time before. I think we found a sweet spot between a lame duck speaker and 100 moon speaker. Speaker boehner was the one who crafted the budget deal that set the overall spending levels, which took some of the pressure off the new house speaker, paul ryan. He comes in, everybody wanted him to be speaker. He comes in and listens to a lot of the mention a little bit more than some said they were listened to under the boehner term and then you have this deal. I think its a combination of the honeymoon phase that you often see and the lame duck period where boehner was able to get the spending numbers down and that brought on some of the democrats and because he needed the democrats to pass the spending bill, that opened up an area of compromise. Gwen one of the good examples in bunt document is this ail exhort ban, which i didnt export ban, which i didnt know there was one. But the republicans want it lifted and this bill would do that in exchange for some sweeteners for democrats. It was put in place in the 1970s in the aftermath of the oil embargo sent gasoline prices skyrocketing so Congress Passed several bills to do that. Coming back to the spending bill, it was viewed as the glue that held everything together, the big g. O. P. Victory and democrats were willing to entertain it in part because a lot of American Voters dont know about it. So it made it easy to negotiate about it. Its not that common in washington to undo something thats been in place for 40 years. How did we get to the place where smog that was viewed as an absolute sake red cow, you could not raoux that, suddenly its gone. It was a concerted twoyear lobbying campaign on behalf of this big united oil Industry Campaign and key senators and representatives on capitol hill. There were maybe a dozen reports put out in twourment. Most of us dont Pay Attention to reports but they helped build the public debates for the issue. Also, there wasnt a lot of concerted opposition to oil exports. A couple of Oil Refineries were going to lose some profits so they opposed it. They were still focused on the keystone x. L. Pipeline, which of course the president rejected last month. Whats right or wrong about it . It didnt come through in a lot of detective. Congress passed it so quickly it didnt seem like there was a big downside. You see environmental littles who is apose oppose environmentalists who oppose it on environmental grounds. You have some consumers worried about gasoline prices being higher. That was the biggest concern and those reports they referenced. Everybody from harvard to the government concluded that it would not raise gasoline prices. Gwen but politically democrats got something for this. Right. And its funny because both minority leader pelosi and paul ryan both declared this a victory and the democrats secured five years of wind and solar tax celts. A talked to a democrat from new mexico whos pretty liberal on these Clean Energy Issues and he said we would not be able to get these extensions if we did not have the oil export ban. I spoke with steve sca lease, the republican from louisiana and he said we got a temporary permanent policy and they only got a temporary policy so its a victory for us. You mentioned Speaker Paul Ryan being in 100 moon phase. Does he have a longer leash from the conservatives than john boehner did or is this kind of a yearend example of a gift he got he wont be able to replicate . I think time will tell. Capitol hill passed a 1. 5 trillion spending bill. The two members of the howls were relatively quiet. I think thats part of the honeymoon period. I think they felt like they were listened to more than they were under Speaker Boehner but i think time will tell whether or not hes going to be able to continue this and hes going to have to lean more on democrats and i think that could eventual little come back to hurt him even more than it did boehner. Gwen theres nothing like 100 moon. Ill belt the president thinks that from time to time. One of the least surprising but most democratic government actions all year, the Federal Reserve move to raise Interest Rates in nearly a decade. Why this timing . They raised biit by a quarter of a percentage point and at the point where they felt it was inevitable to do it but without doing too much damage to the overall economy. After 2008 they ratcheted Interest Rates down fast. It went straight down like a cliff to near zero. And its been there for years. This was the fed saying finally we think we have the confidence to take the training wheels off. Were worried if we keep it down too low and are too long, inflation could start to tick up. We havent seen that so far. Also, theres a theory that if you keep Interest Rates down low for a long period of time, you create risky behavior and you create other bubbles in the economy going outward. Now is the time where they felt comfortable to take those training wheels off. Im going shopping tomorrow and i have a 10yearold i have to buy for. What does this do nor average americans . Does it change their spending patterns or costs . Not yet. Its a big symbolic turning point in the economy. Now it says weve en