ROBERT COSTA: Democrats debate policy and the Obama record.

I'm Robert Costa.

Welcome to Washington Week.

Democrats spar over ideology and identity, and direct their sharpest jabs at Joe Biden.

SENATOR KAMALA HARRIS (D-CA): (From video.)

You do nothing to hold the insurance companies to task for what they have been doing to American families.

SENATOR CORY BOOKER (D-NJ): (From video.)

Mr. Vice President, there's a saying in my community: you're dipping into the Kool-Aid and you don't even know the flavor.

ROBERT COSTA: But for the former vice president fought back and defended the Obama administration.

FORMER VICE PRESIDENT JOSEPH BIDEN: (From video.)

I must tell you, I was a little surprised at how much incoming there was about Barack.

ROBERT COSTA: And news on the economy as markets respond to an interest rate cut.

And the China trade talks hit a roadblock.

PRESIDENT DONALD TRUMP: (From video.)

If they don't want to trade with us anymore, that would be fine with me.

We'd save a lot of money.

ROBERT COSTA: Next.

ANNOUNCER: This is Washington Week.

Once again, from Washington, moderator Robert Costa.

ROBERT COSTA: Democratic presidential contenders certainly revved up their attacks on each other at the debates in the Motor City this week.

They also had substance-filled exchanges on policy and race.

The debates revealed a party united against President Trump, but at odds over parts of the president's record - that's President Obama - and whether an overhaul of the nation's healthcare system is necessary.

SENATOR BERNIE SANDERS (I-VT): (From video.)

Medicare for All is comprehensive.

It covers all healthcare needs.

For senior citizens, it will finally include dental care, hearing aids, and eyeglasses.

Second of all - REPRESENTATIVE TIM RYAN (D-OH): (From video.)

But you don't - you don't know that, Bernie.

QUESTIONER: (From video.)

We'll come to you in a second, Congressman.

SENATOR BERNIE SANDERS (I-VT): (From video.)

Second of all - I do know it.

I wrote the damn bill.

FORMER COLORADO GOVERNOR JOHN HICKENLOOPER (D): (From video.)

This notion that you're going to take private insurance away from 180 million Americans - SENATOR ELIZABETH WARREN (D-MA): (From video.)

We are the Democrats.

We are not about trying to take away healthcare from anyone.

ROBERT COSTA: Former Vice President Joe Biden fended off rivals, including a former member of the Obama Cabinet.

FORMER VICE PRESIDENT JOSEPH BIDEN: (From video.)

The fact of the matter is, you should be able to - if you cross the border illegally, you should be able to be sent back.

It's a crime.

FORMER HUD SECRETARY JULIAN CASTRO: (From video.)

Well, Mr. Vice President, it looks like one of us has learned the lessons of the past and one of us hasn't.

ROBERT COSTA: The Washington Post's Dan Balz offered this frank analysis.

Quote, "The candidates had done much to make a case against one another as much as they did against the president, and they didn't offer much in the way of an aspirational message or connecting directly with the voters."

Joining me tonight is Dan Balz, chief correspondent for The Washington Post; Hallie Jackson, chief White House correspondent for NBC News; Tarini Parti, national politics reporter for The Wall Street Journal; and our friend Joshua Green, national correspondent for Bloomberg Businessweek.

A frank assessment, Dan.

What did we learn about the Democrats this week?

DAN BALZ: Well, we learned two things and I think two different things.

The first debate or first night of debating I think we saw in bolder colors the ideological divisions that now exist in the party.

You had the two most liberal candidates onstage, Senators Warren and Sanders, and you had a number of moderates on the stage, and the moderates went after the two liberals, and the liberals held their own - more than held their own and I think dominated the debate.

And I think it was symbolic of kind of the ascendance of the progressive wing of the party and the struggles that are now going on.

It was a substantive debate, as you indicated.

It was a very tough debate.

But it was also quite different from what we saw the following night.

The following night we saw some of the same issues discussed, but in general it was into the weeds on policy and it was kind of a circular firing squad, and it left the party and a lot of people who are active Democrats looking for a nominee - a potential nominee concerned that they're not seeing what they hoped to see.

HALLIE JACKSON: And it seemed to whet the appetite for the next debate because there are some key matchups, if you will, that we haven't seen on that stage - notably, for example, Senator Elizabeth Warren and former Vice President Joe Biden, each of whom represent the two wings that Dan is talking about.

There is a lot of anticipation in Democratic circles for those two to be on a stage together, face to face.

I think what you saw this past week solidified the top-tier candidates and the ones who just aren't going to be on that next debate stage come September.

They will not qualify, the debate stage will not be as big, and I think that there are voters who are really eager to see a little bit of a smaller field here.

ROBERT COSTA: Why was there a reckoning on the Obama record?

TARINI PARTI: I think that's an interesting question.

I mean, the issues that came up - immigration, the deportations that happened under the Obama administration, TPP, trade issues - those were - those were things that were - that he was criticized for by the progressive wing even when he was in office.

We're just seeing the progressive wing now take hold of a bigger push, and it seems that the party, there are more - with Elizabeth Warren and Bernie Sanders as top contenders, there are a lot of progressives who are looking to them to sort of espouse those views, and they were critical of the president even then.

So now we're seeing that come up because, obviously, they're running for president and those issues still matter very much to those progressive voters.

ROBERT COSTA: Vice President Biden seems to like the position of being the defender of that legacy.

TARINI PARTI: That's exactly right.

That's what his - what his main message is, you know.

He has - he has been saying this is a chaotic time; I want to return to the normal, to the Obama presidency.

He's kind of bringing up those cozy, comfortable feelings for voters.

And so, you know, one of the ways that Democrats are trying to draw a contrast with him is by going after his record, and his clear defense seems to be I - President Obama selected me to be his vice president, therefore voters like me; you know, what I did was good; the president is - remains popular and, you know, you shouldn't attack President Obama's legacy.

JOSHUA GREEN: Well, I think a lot of it is also a strategic imperative because Joe Biden is still leading the polls.

And if you're one of these candidates and you want to move up, you need him to move down.

The only way to get there is to criticize his record, which by extension is criticizing the president's record.

And we saw, I think, on both nights, but certainly on the second night, what a flashpoint that can be for the Democrats, who are really torn between answering the question of do we want to simply restore the Obama-style Democratic Party to the White House, move beyond Trump - which Joe Biden and others like him are arguing - or, as Warren and Sanders have argued, do Democrats need a much bigger, bolder policy to draw voters to the polls to turn out and dispatch Trump in 2020?

ROBERT COSTA: You're talking to voters, Dan.

What do Democratic voters want when they think about that question?

DAN BALZ: They want - they want somebody who can beat President Trump.

I mean, you know, down deep they want somebody who can beat President Trump, and I think Detroit didn't come close to answer that question for them.

There wasn't anybody who really emerged in Detroit who has, I think, what a lot of people are looking for.

You know, we've been focused on the plans.

I mean, Elizabeth Warren has risen because she has plans for everything, and this notion of "I have a plan."

Everybody else has adopted it.

And I think that the "I have a plan" has come at the expense of I have a vision.

And what we did not see in Detroit were candidates who could come up from the details of their plans and talk about a bigger, broader, and more affirmative vision.

I mean, there was very little humor on that stage.

There was very little lightness.

There was very little hope on that stage.

And I think the Democrats know that you have to have some of that to be a successful candidate against President Trump, or to be a successful candidate for president, period.

ROBERT COSTA: Hallie, you've sat down with many of these moderate candidates in recent weeks.

Governor Hickenlooper, the former Colorado governor.

Tim Ryan, the Ohio congressman.

When they're thinking about that vision challenge that Dan's raising, do they see an opening for themselves for the centrists in this race?

HALLIE JACKSON: They certainly do.

The question is whether voters see that lane, given that you already have a couple of heavy hitters who are trying to stake that out, particularly Joe Biden.

And that's a question that we ask these candidates.

Hey, let's be frank here, gentlemen in this case.

You are running in the same lane as somebody who has a lot more name recognition than you and is already - has a lot more money, which is important for fundraising and organization, and who has a lot more standing in the polls and is going to end up on that next debate stage.

What you hear from people like, for example, Tim Ryan, are things like, hey, we have got to focus on the middle class.

They are looking squarely at these states that Donald Trump won and did well in in 2016 saying: You can't run Elizabeth Warren there.

And I'm paraphrasing here, but that's the message - that a person like Bernie Sanders is not going to be somebody who can necessarily win Michigan, right, over Donald Trump.

When you talk about who Democratic voters want, and how there's no clear frontrunner, President Trump clearly sees some danger zones on that stage, based on what he's been talking about over the last three days or so, since those debates happened.

And it's Elizabeth Warren, Joe Biden, Bernie Sanders, and Kamala Harris.

ROBERT COSTA: Tarini, you wrote in The Wall Street Journal about one key moment, Senator Harris being challenged by Representative Gabbard of Hawaii about Senator Harris' record in California as a prosecutor.

Why did that matter?

TARINI PARTI: That was a key moment.

You know, this is something that a lot of progressives, especially young black voters, have been concerned about - Kamala Harris' record as a prosecutor.

And this is something that she hasn't really been questioned on a national stage on yet.

And so we saw that for the first time.

And Congresswoman Gabbard, who really needed a moment - a breakout moment to stay in this race, really went after her on that.

And we didn't really see Kamala Harris push back that much.

She said she was proud of her work, but she didn't really want to go there.

You know, she said later that she considers herself a frontrunner, and does not consider Congresswoman Gabbard a frontrunner, and so she didn't see the point in engaging directly with her that much.

She just kept saying that she was proud of her work.

ROBERT COSTA: So they're having these debates over policy - who's for Medicare for All, who's not for Medicare for All, how far left should the party go.

But the party's also being confronted by other issues - complicated issues, tough issues.

Because while the Democrats were debating in Detroit, President Trump was engaged in a racially charged feud with Maryland Congressman Elijah Cummings over crime in Baltimore.

In a series of tweets, Mr. Trump called Cummings' district a place where, quote, "no human would want to live."

The president kept up the attacks at a campaign rally in Ohio.

Cummings, you remember, chairs the House Oversight Committee investigating the Trump administration.

And he confirmed on Friday that someone tried to break into his home last weekend.

The president seemed to downplay the attempted burglary in a tweet, writing, quote, "Too bad."

Josh, in your book Devil's Bargain you write about how President Trump at one point wanted to use race to stoke his reality show.

Is he now using race as a strategy for 2020?

JOSHUA GREEN: Yeah, absolutely.

I mean, Trump, when he ran in 2016, ran on a populist platform that really had two components.

There was the immigration/religion side, which obviously he's talked about a great deal as president.

And then there was the economic populism, which he campaigned on but really hasn't delivered on if you look at his tax cut, stripping back regulations, that sort of thing.

What stands out to me about Trump's focus on race is he seems to want to elevate those kind of cultural grievances, I think in part because he really hasn't delivered on the economic populism.

And if you talk to people around him and strategists in the Republican Party, it's clear that this is what he's going to focus on.

These tweets - not just against Elijah Cummings but on members like Ilhan Omar and the so-called squad of minority Democrats in the House - these are all intended to shape the news around the issues that Trump thinks are going to benefit him.

ROBERT COSTA: The AP had a story saying suburban women turned off by the president's approach.

DAN BALZ: Well, that's not a new story.

(Laughter.)

I mean, we saw in 2018 how turned off suburban women were to President Trump.

We've seen that literally from the day after his inauguration when women streamed into the streets all over this country in protest of his presidency.

And this kind of rhetoric only deepens their hostility to him as a president.

And it is - it is a danger to the Republicans and to his reelection.

HALLIE JACKSON: And there are people inside the president's orbit - and, Bob, you know this as well as anybody - who do have concerns about the way that the president is fanning the flames of racial division, partly because of the concerns over what it means for 2020 and his political strategy moving forward.

President Trump today on the White House South Lawn said he wasn't trying to be a wise guy with that tweet that you read about Elijah Cummings.

That - sort of trying to convey that he was sympathetic to Cummings' plight.

But to some, I imagine that would ring hollow given the president has spent the better part of the last six days going after one of the most prominent African American lawmakers.

To Josh's point, immigration was something that he used to stoke his base.

This actually marries that, because for the first time the president explicitly linked Elijah Cummings' comments to his acting Homeland Security Secretary Kevin McAleenan in a hearing earlier this month as the reason why he targeted him.

Now, there are other potential reasons, like the fact that Elijah Cummings is issuing subpoenas to people like his children and top aides inside the White House.

But for the president, this is a way, I think, to talk about a couple of things that he finds helpful to his political strategy - race and immigration.

JOSHUA GREEN: And if you look at the pattern, these are the - you know, these are fights that he's choosing intentionally that then shape the news, that he's then asked to respond to, and this kind of rolls along, and that's what the race becomes about.

And it's worth pointing out, and Trump is obviously aware of this, this also puts pressure on Democrats.

We've seen some of the tension in the Democratic House Caucus between Nancy Pelosi and some of her members.

So I think Trump thinks this has kind of a double benefit for him of exciting his base and driving Democrats to distraction.

ROBERT COSTA: The White House and some people close to the president may think that this has a real benefit to him politically.

But you look at the news today Tarini, Will Hurd, 41 years old, the lone black House Republican.

He decides that he's not going to not seek reelection in 2020.

And he says on the record part of his decision is because of the president's incendiary rhetoric.

Is this the beginning of a cascade of retirements?

TARINI PARTI: I think it really raises questions about the future and the direction of the Republican Party.

You're right, he was the lone black Republican member in Congress.

They have very few women.

There's essentially no diversity in the Republican Caucus right now.

And I think that is a big concern for a lot of members.

The other issue that Will Hurd's retirement raises is recruitment.

It's without him and members like him it's harder to get people like him in Congress.

So it kind of has this domino effect.

We could also see other members announce that they want to retire.

Will Hurd represented a swing district.

And instead of, you know, going through a tough reelection, he decided to retire.

We could see other members make that same calculation.

Hurd was also one of the four members - four Republican members who voted with Democrats to condemn the president's tweets.

There are two others who are still in Congress - Congressman Upton, for example, who's sort of on the retirement watch right now.

So you could see others decide to make that same decision.

HALLIE JACKSON: Let's be clear, though.

I do think that at least through 2020 this is the Republican Party of Donald Trump.

And I think that what you saw in these retirements was less a sort of a reshaping of the Republican Party and more a message that, hey, non-Trumpers, you can go, and that's OK. And I think that that's what is driving some of this.

DAN BALZ: I mean, in 2018 the number - after 2018 the number of women in the Republican conference was cut in half.

And now two of the 13 remaining have announced they're leaving.

HALLIE JACKSON: Yes, of those 13 are leaving, yeah.

ROBERT COSTA: When you step back, Dan, from a historical perspective, you've been in the reporting trenches.

The president's framing this as a reaction to what's happening on Capitol Hill, not a racist endeavor.

Others, Democrats who are critical of President Trump say this is about white identity politics.

What's happening here?

DAN BALZ: Well, I mean, the public has made a judgement on this.

And slightly more than half of the public thinks that the president of the United States is racist.

And he has done things that feed that belief.

And he's clearly done it deliberately.

I mean, these are not accidental, as Josh has said.

They - you know, he picks these fights.

And is it a coincidence that a lot of those fights he happens to pick are with people of color, and particularly African Americans?

So he is stoking that.

There's a - there's a connection between the - kind of the immigration/cultural piece that you talked about and the economic anxiety.

And there's been some work done on that by political scientists who say that that was critical to his election because it was people who followed his views on immigration, but who also felt as though their economic situation was being worsened by immigration or people of color, and that there is a marriage of those two issues.

And I think that that forms the basis of kind of the raw anger that he generates.

ROBERT COSTA: Let's get into that a little bit because we have race, we have immigration, we have a Democratic Party reckoning over all of this and a Republican Party doing the same, and trade is a central part of this discussion - race, immigration, trade - and the trade wars, they intensified this week.

President Trump announced new tariffs on 300 billion (dollars) in Chinese goods following stalled talks in China with U.S. officials.

And amid all this global unease, the Federal Reserve decided to take action this week.

Chairman Jerome Powell announced a quarter-of-a-percent cut in its benchmark interest rate, the first reduction since 2008.

And the Labor Department reports U.S. job growth was solid for a second straight month.

Employers added 164,000 jobs in July, with the unemployment rate unchanged at 3.7 percent.

Josh, how does this trade war affect the economy?

JOSHUA GREEN: Well, it is a huge effect.

I mean, for one thing the reason the Fed cut Jerome Powell made clear in his press conference was concern over trade and the fact that that was slowing down not only U.S. economic growth, but global economic growth.

For the president then to come - less than 24 hours later announced a gigantic new round of tariffs only makes those pressures worse.

And I think what's significant about this is the first three rounds of tariffs were on what are known as intermediate goods, the materials that businesses use.

They didn't directly hit consumers.

This new round hits mainly consumer goods.

It's going to raise prices for American consumers on everything from iPhones and televisions to clothing and toys.

The line I've been telling people is do your - do your back-to-school shopping now before these tariffs kick in on September 1st.

But the more serious concern is two-thirds of the U.S. economy is built on consumer spending, so if you effectively layer a tax over that, as Trump has done, then you put the economy in real economic peril.

And that's you saw the markets getting whipsawed and ultimately plunging this week, concern over what the long-term effects are going to be.

ROBERT COSTA: Based on all of that, what's driving the president's position inside the White House?

You saw the economic numbers.

Why increase the battle on the trade front?

HALLIE JACKSON: He and his advisors are confident that whatever happens in the short term, you could say, or the intermediate term will end up paying off in the long run.

This is a promise - ROBERT COSTA: Politically or economically?

HALLIE JACKSON: Politically, and economically to a degree.

Remember, this is a promise since I was on the campaign trail covering this president that he made at rally after rally when he was running for president, that he would be tough on China.

There are people inside his White House - then in his campaign, now in his White House - who are pushing the president to do just that, who truly believe that you have to be tougher against China.

That in and of itself is not an unpopular position, by the way.

There are Democrats who like seeing somebody be tougher on China.

What is risky for the president is what Josh is talking about.

When I do this trade war story for, for example, Nightly News, we've been talking to farmers - farmers in Iowa who say, well, I'm having some - you know who we have to talk to now?

Literally, anybody who wears clothes or has an iPhone.

The pool of people who are going to feel the impact from this is so much bigger, and if the president doesn't get this sorted out - and by the way, he's giving himself a little bit of wiggle room.

He's talking about how, yeah, September 1st, but there is some time with these ships coming over and the time it'll take.

You almost see a window opening.

But if he doesn't get it worked out, people are going to feel the pain.

ROBERT COSTA: Tarini, what's the Democratic response?

Are they going to be a free-trade party, a protectionist party?

We heard Vice President Biden at the debate say - said he would renegotiate the Trans-Pacific Partnership, a deal he helped push with President Obama, now moving a little bit closer to the labor position.

What's happening with the Democrats on trade?

TARINI PARTI: I think - I think this speaks to the ideological split that we're seeing within the party.

It's, you know, reflected, obviously, in issues like healthcare, but also on trade they are clearly at different points within, you know - on the spectrum.

And at some point I guess voters have to decide which side they like better and what they believe in because the progressives have really been pushing this issue and are more in line, frankly, with President Trump than they were with President Obama on this issue.

JOSHUA GREEN: They really are, and that stood out on the debate stage, too.

A number of Democrats were asked if they supported Trump's tariffs and didn't come out and condemn them they way they do on so many other issues.

ROBERT COSTA: And Senator Warren, you've profiled her for Bloomberg Businessweek.

Where would she take this country on trade?

JOSHUA GREEN: Well, she rolled out a new trade policy, another one of her plans, shortly before the debates, and essentially it's looking for tough penalties against China but - as Trump has done - but really wants to fold in things like environmental protections and worker protections in future trade plans, so along the lines of what progressives have wanted from trade policy.

Remember, she was one of the original critics of Obama's TPP plan, which Biden too walked back during the debates.

So I think it's a sign that not just in the Republican Party, but in the Democratic Party, too, it's becoming more protectionist, more focused on workers.

ROBERT COSTA: Dan, I don't want to forget one of the big pieces of news today: the president signed a budget deal that extends the debt limit into 2021, raises spending limits by hundreds of billions on Capitol Hill.

Any other year, a blockbuster deal like this would be a huge headline; kind of fades into the background - (laughter) - in the Trump era.

But are we seeing a Republican Party that's walking away from deficit reduction?

DAN BALZ: Yes, and you could see it in two places.

You could see it when they passed the tax bill, because that blew up the deficit.

And you could see it in - you know, in allowing this to go through, and the president who runs the party now being a champion of it.

So you know, I think - I think politicians in both parties have come to the conclusion that deficits ultimately don't matter politically to voters.

People talk about the sky will fall if we do this, you know, the hundreds of billions of dollars that are paid constantly in debt service, and the impact that that will ultimately have, but that's always somewhere out in the future.

And it's always easier to give people more money, whether it's through tax cuts or spending, than to take really tough action on the deficit.

ROBERT COSTA: It's a bipartisan deal.

The speaker and the president came together on the budget agreement.

Does that foreshadow a possible agreement this fall on the USMCA, the new version of NAFTA?

HALLIE JACKSON: I think it's going to be very difficult.

I think that there is a strong desire among some in the White House for whom the USMCA is absolutely critical.

It is critical not just for the president politically, but also I think for the prospects of some folks who want to make sure that gets done.

Nancy Pelosi, the House speaker, is going to have to make some serious decisions about incentives for bringing that to a vote and how much she's going to be behind it.

I will say for this budget deal the president, I'm told, made some calls, tried to get some Republicans onboard, but that's about it.

It wasn't - it was a little bit of a tepid push to try to make sure that this thing passed, although of course, ultimately, it did.

ROBERT COSTA: Josh, 22 trillion (dollars), the federal debt has surged to that number; 320 billion (dollars), that's the spending limits that's been increased in Congress.

Rand Paul said in a statement, the Kentucky Republican, the Tea Party's dead.

Is he right?

JOSHUA GREEN: He's absolutely right, and he was one of the leading members of the Tea Party.

But that push for deficit reduction has since fallen away entirely among Republicans as far as I can tell.

And frankly, given the fact that there is no inflation, I don't think politicians feel pressure from voters to do anything about this, at least not in the short term.

ROBERT COSTA: Was this really about the president just trying to avoid something that would rattle the markets?

TARINI PARTI: It seems so.

I mean, we're - also on the - on the deficit point, the one thing I want to point out is that Democrats are noticing that voters don't care so much about this because the proposals that they're coming up with are very expensive, and when they get grilled on it their pushback is the president passed, you know, trillions of dollars in tax cuts.

ROBERT COSTA: Thank you very much, everybody, coming in on a Friday night.

Appreciate your time and I appreciate your time for joining us.

Next, on the Washington Week Extra, we will discuss why President Trump withdrew his latest pick to lead U.S. intelligence just hours ago.

Watch it on our website, Facebook, or YouTube every Friday starting at 8:30 p.m. Eastern.

I'm Robert Costa.

Have a great weekend.