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STATE OF THE UNION WITH JOHN KING

State of the Union: Best Political Team on Television

Aired February 8, 2009 - 11:00   ET

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.


JOHN KING, HOST: And a busy two hours ahead here as we track new developments in the debate over how to fix the economy and other big stories around the nation and around the world on our STATE OF THE UNION report this Sunday, the 8th of February.

It's been a tough week for President Barack Obama. What happened to all the Kumbaya moments we saw just days ago?

We'll ask three of the best political analysts in the business if it's bye-bye bipartisanship or maybe a return to business as usual in Washington.

Tomorrow, the president will kick it up a gear, the battle for his stimulus plan heading to Indiana for a town hall, holding his first primetime White House news conference.

Are we seeing a return to campaign mode? We'll get a preview from three of the best political team on television. And we'll hit the highway to Indiana ourselves to see how a Republican mayor is fighting to keep his town alive feels about the new Democratic president. That's all ahead in STATE OF THE UNION.

A lot of news made this Sunday morning and it's hardly a surprise that the primary subject, almost the only subject, was the economic debate going on in the U.S. Capitol. You just saw it there and the debate about how to get the economy kick started. Ray LaHood is the new secretary of transportation. He just told us right here that a stimulus bill could mean real jobs real soon.

(BEGIN VIDEO CLIP)

LAHOOD: People will be building roads and bridges and other infrastructure projects this spring, summer and fall, and I believe an enormous number of people, thousands of people, will be going to work in good-paying jobs.

(END VIDEO CLIP)

KING: But on NBC, one of Ray LaHood's former House comrades, Republican Mike Pence of Indiana indicated that in his view, this stimulus bill is way off the mark.

(BEGIN VIDEO CLIP)

REP. MIKE PENCE, R-IND., CHAIR, HOUSE REPUBLICAN CONFERENCE: The centerpiece of any effective stimulus bill that's ever been passed by Congress in the recent past has been tax relief. The center of this stimulus bill is massive unaccountable government spending and the American people are tired of it.

(END VIDEO CLIP)

KING: At least one member of the House Democratic leadership, Chris Van Hollen of Maryland told FOX they weren't happy about what was taken out in the Senate, not happy about it, but not about to go to war over it.

(BEGIN VIDEO CLIP)

REP. CHRIS VAN HOLLEN, D-MD.: There's a lot that that we think in the House bill we should have in the final package. Having said that, we are not in the business of drawing lines in the sand because we believe the overriding priority right now is to get something done.

(END VIDEO CLIP)

KING: Get something done. Chris Van Hollen says we're watching the other Sunday morning shows, as we like to put it, so you don't have to and we'll do that every week.

Let's get beyond the sound bites, behind the headlines and look at what's really going on. Joining me right here in Washington, Republican strategist, Alex Castellanos, Democratic strategist, CNN political contributor, Donna Brazile and CNN senior political analyst Gloria Borger. A lot of titles in that, welcome and good morning.

Let's start with the sound we just heard. The interesting player in the Obama cabinet, the Republicans saying give me the money, give it to me now, I'll get jobs created. But Alex Castellanos, he is the Republican in the Democratic cabinet and the Republicans on Capitol Hill are saying this bill on is not going to do what you say it will.

ALEX CASTELLANOS, REPUBLICAN STRATEGIST: No, I think the Republicans -- Barack Obama has reminded Republicans that they are Republicans. He did something frankly that George Bush didn't do. George Bush spent like a Democrat and we lost our brand. Barack Obama made Republicans, Republicans again on spending and Republicans on the Hill are looking at this thing and going wait a minute, John King, you've just lost your job and I'm a politician.

Here, can you loan me $20? And then you come back and say, by the way, John King, I'm sorry you lost your job, but don't worry, I've got $20 for you. That's what Republicans are seeing in the stimulus plan. They just don't see that it's going to do what we need to get done here.

KING: Is that the coffee kicking in Donna or are you a little unhappy with Alex?

DONNA BRAZILE, CNN POLITICAL CONTRIBUTOR: Oh, I'm not unhappy with Alex but I think bipartisanship is not giving the opposition both the opportunity to veto as well as pass on providing real ideas to the stimulus package. The president has invited the Republicans to help him govern, to help him improve the bill and what the Republicans, at least the majority of them so far has done, is to reject the president's overtures.

I think the president might continue to reach out, but at the same time, the Democrats who control the Congress must improve this bill and let the American people feel the relief.

GLORIA BORGER, CNN SR. POLITICAL ANALYST: You know, this is just a philosophical war we're seeing. In a way, it's a test of ideas, that we're seeing play out in the Congress. It's about whether tax cuts would be more stimulative or spending is going to be more stimulative. In the end, you're going to get what President Obama wants and it's going to be the test of what works, and if Republicans all vote against it, they are going to be on the wrong side of history.

KING: It's also a test of how this new administration in its early days define something that is very important, what is bipartisanship, true bipartisanship to Barack Obama? Let's listen. John Cornyn is a Republican senator from the state of Texas. He was on FOX earlier today and he says this compromise in the Senate, Democrats, the White House are calling it bipartisan, John Cornyn says no.

(BEGIN VIDEO CLIP)

SEN. JOHN CORNYN, R-TEXAS: I think having three Republicans potentially supported in the Senate out of 535 members of Congress is hardly a bipartisan effort. I think it's a disappointment, surely must be for President Obama.

(END VIDEO CLIP)

KING: A disappointment, Gloria, for President Obama? He's going to get the bill he wants. I guess the question is at what price going down the road if he's going to have to do business with two or three Republicans.

BORGER: It is a disappointment, they will say no, but it is a disappointment. Their line out of the White House is we're playing this for the long haul. We may only get three Republicans this time, but we're going to keep talking to Republicans because we know that we're going to have to work with them and we want bipartisanship.

As far as the public is concerned, recent polls show that 80 percent of the American public wants a bipartisan stimulus package. A majority of the public believes that President Obama is being more bipartisan than the Republicans, so it's a long-term strategy here. But, yes, they are disappointed, no mistake about it.

KING: So Donna, how do you get more Republicans on board? You have to give some, don't you?

BRAZILE: Well, he has been willing to give, but we can't water the bill down so much that it looks like the bills of the past that got us in the mess in the first place. I think the president is being very strategic in reaching out. At the same time, he understands that he must keep Democrats on board because without the support of Democrats he won't have the votes necessary to get this bill through the Congress.

CASTELLANOS: Something I think about this bipartisanship is rubbing some people, Democrats and Republicans wrong, and that is, you know, bipartisanship is just a great idea and there's something wonderful about Obama getting elected president.

We all sense that and feel that in terms of race for this country, people who are now part of the country who didn't feel they were before, in terms of what it says about us internationally and about the limitless possibilities in the country, all those are wonderful things that Barack Obama was coming.

BORGER: I sense a "but" coming.

CASTELLANOS: But that doesn't mean that everything Obama does is wonderful. That doesn't mean there shouldn't be any debate about the biggest expansion of government in American history. Republicans have remembered again who they are and that is, it's not about tax cuts. It's about what do you think is the engine of growth in this country, is it people or is it Washington? Nobody thinks Washington is working.

(CROSSTALK)

KING: I was going to say this -- let me jump in one second, Donna. Let me jump in for one second, because I want to frame the debate.

I was going to save this for later, but Alex makes the point that Republicans are finding their voice. This is the cover of "Newsweek" this week. "We're all socialists now." You're going to disagree with that, I think, Donna, but it is a lot of money. You have the government spending nearly $1 trillion on stimulus, $700 billion with more billions to come on the financial bailout.

We don't have this money. It's all deficit spending. Now the administration says necessary deficit spending and that's the debate we're having in the town but do you worry as a leading Democrat, your party once had a horrible time in national elections because it was the party of tax and spend, of fiscal irresponsibility. Are you worried that this big -- more big government could hurt in the long run?

BRAZILE: You know, John, when our party left the White House in 2001, we handed President Bush and Mr. Cheney $280 billion surplus in 2001, over a $5 trillion surplus through this fiscal year so we're not worried that we're going to be tagged with the big spender label.

I hope the Democrats at the end of the day is tagged with helping to take this economy off the brink of collapse and to revive the American economy so that ordinary people can pay their bills, stay in their homes and their neighborhoods. That is at the end of the day what the Democrats will be measured against is did we help the American people, did we help American taxpayers and I think we will be proud of that.

KING: Alex, you're shaking your head but to Donna's point, Democrats say look, we won and you had your chance. Let's listen to Larry Summers, he's on ABC this morning. He's a top economic adviser in the White House. His point to Republicans is we've heard this song before. (BEGIN VIDEO CLIP)

LAWRENCE H. SUMMERS, DIRECTOR, NATIONAL ECONOMIC COUNCIL: Those who presided over the last eight years, the eight years that brought us to the point where we inherit trillions of dollars of deficit, an economy that's collapsing more rapidly than at any time in the last 50 years, don't seem to be in a strong position to lecture about the lessons of history.

(END VIDEO CLIP)

KING: A lecture about lecturing there from Larry Summers, but does he have a point?

CASTELLANOS: Sure, he's absolutely right. Republicans spent like drunks. It was terrible and the American people kicked us out of office in large part because of it. Therefore, what, what have we learned, we should do even more? I mean, this really is like being drunk and saying, no, if you stop drinking you'll have a hangover, drink even more. This is crazy.

No one thinks Washington is working well. The biggest crisis in American financial history and what are we thinking? Well, those people in Washington, they will do better this time. Why don't we give them more money, this is kerosene on a fire.

BORGER: I guess the question really is, didn't George W. Bush, President Bush, get Republicans in this situation in the first place?

CASTELLANOS: Yes.

BORGER: Because the first bank bailout came under -- came under President Bush. And so sort of one of the ironies of history that a president who branded himself as one of the most conservative presidents.

CASTELLANOS: Well, he was, I think that's the key, Gloria.

BORGER: He wasn't.

KING: Is what you're hearing new? Are you hearing something new from Republicans? Larry Summers says it's the same old song. Are they saying something new?

CASTELLANOS: Yes. I think Republicans are remembering who they are. We're going back. Let's spend less, let's take money not to Washington, let's put it in the hands of people with tax cuts.

BORGER: Where's the plan?

CASTELLANOS: Look, when you corrode the economy...

BRAZILE: This is a myth, John. This has been created in the Republican psyche for over 40 years that somehow or another they are the disciples of fiscal discipline.

BRAZILE: This is a moment, that President Obama stated in his inaugural address, for us to change the political climate and to do what's right for the American people.

The Republicans can either join the Democrats and make this right, get it right for the American people, or they can continue with the retro policies of the past that will only give more of them a...

(CROSSTALK)

KING: OK. Quick time-out. Quick time-out.

That's a nice purple tie. That's not retro.

(LAUGHTER)

We're going to continue our discussion, when we come back. And we're not the only ones watching the debate. The cast, the writers of "Saturday Night Live," paying attention to the new administration and having fun with it. That's ahead. We'll have a laugh.

Also, when we come back, we'll take a look at something else. The president is going to go out on the road this week, and so I'm going to head this way.

He'll have a news conference. He'll go out to Indiana and to Florida. He's trying to sell the new stimulus plan, and he's getting some help from the people at the grassroots level who helped get him get elected president. They have tried to stay organized.

So we took a trip all over the country, this week, coffee meetings, house meetings, rallies by Obama supporters to get together and decide, how can we help sell the stimulus plan?

We went about an hour outside of Washington, out here to Fauquier County, Virginia. John McCain carried this county, out here, where a bunch of people sitting around deciding how they could help their president -- "Chili for Change," they called it.

(BEGIN VIDEOTAPE)

(UNKNOWN): Hi, Bob.

(UNKNOWN): This must be the place.

(UNKNOWN): The process is debating the issues and compromising on a position that's going to be great for the whole.

(UNKNOWN): There's no reason for cutting education. There's none -- no good reason.

(UNKNOWN): Spending a stimulus, whether you're spending it on crack cocaine, prostitutes or good works like fixing the mall -- so it's all stimulative. So spending is spending.

(UNKNOWN): Almost $1 trillion. Do we need to spend that much money to stimulate the economy?

You need to put a price on everything and say that's where we're going to be.

(UNKNOWN): This is part of the process of our democracy, when you have people that can debate that, where it doesn't have to be, "I'm right; you're wrong."

(CROSSTALK)

(UNKNOWN): No, we're not. I'm talking about what's happening, right now, down in Washington.

(CROSSTALK)

(UNKNOWN): I got some postcards from the post office, and I have enough for everybody to have one for each of their senators and one for their congressman. They ought to be hearing from us, via this, often.

(UNKNOWN): We voted in November for change, and that's what we're trying to do right now, and we don't want to just do things the way we've been doing it.

(END VIDEOTAPE)

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

SETH MYERS, SATURDAY NIGHT LIVE CAST MEMBER: After two of his top Cabinet nominees withdrew their bids, on Tuesday, because of their failure to pay back taxes, President Obama said, "This was a mistake. I screwed up."

That's your mistake? I don't know if you remember, but the last guy broke the world.

(LAUGHTER)

(APPLAUSE)

(END VIDEO CLIP)

KING: Welcome back here. One of the lighter moments of the week, Seth Myers from "Saturday Night Live," "Weekend Update," last night.

Once again, with me here, Alex Castellanos, Donna Brazile, and Gloria Borger.

You know, we're laughing about that, but, Gloria, how much extra leeway, extra patience does President Obama get because the last president, George W. Bush, left on such a sour note with such low approval ratings?

BORGER: Well, you see, and that's it. He gets -- he gets a little bit of extra patience. His popularity is still quite high, although it's come down a touch.

No new president -- no president ever gets a free ride, and that's the way it should be. And I think President Obama is going to be judged by the results.

And if he gets a stimulus package through and it works, people will applaud. Because I think one thing everyone in this country agrees on, now, is they want this president to succeed, because we're in such a crisis.

KING: All right. Let's listen -- let's turn this a little more serious, before we continue. And I want your voice, Donna and Alex.

Let's actually listen. Seth Myers is making fun of the president saying, "I screwed up."

He said that to our Anderson Cooper and some other television anchors, in an interview. It was, of course, about losing the nomination of Tom Daschle, who had a tax problem. Let's listen to the president in the Oval Office.

(BEGIN VIDEO CLIP)

PRESIDENT BARACK OBAMA: I think this was a mistake. I think I screwed up. And, you know, I take responsibility for it, and we're going to make sure we fix it so it doesn't happen again.

(END VIDEO CLIP)

KING: Now, Donna, he wanted those interviews to be about the economy and the stimulus package. They were dominated by the Tom Daschle screw-up. I think it's a fair word. He used it himself.

How hurtful is it -- he has enormous popularity; he has enormous good will, but that is spending political capital, opening the Oval Office up for TV interviews?

How much did he have to spend?

BRAZILE: Well, John, I think what the president was trying to do was to get back on his message about the economy. The Daschle episode, however distressing, was a distraction, and the president clearly wanted to get back to talking about the economy. Look, he's set the bar pretty high, in this city, right now, for changing the tone and trying to usher in a new era with abandoning lobbyists, and so forth. So any time we practice the politics of the past or the politics as usual, the status quo, the president will have to use a little bit of his political capital to get back on course.

KING: You remember, George W. Bush, many times, was asked, "What mistakes have you made," and he couldn't give a very good answer until late in his presidency.

So does he get points for that? You're paying a price; you are spending some political capital, there, but...

CASTELLANOS: George Bush's biggest mistake was not being able to remember one.

And it's very human to be able to admit your mistakes. You know, our old heroes in our culture were John Wayne, 10 feet tall, pardner, and, you know, perfect, but that's hard to identify with. Perfection is false.

That's very human. That's very accessible, and it's much more heroic, in a way, when regular people stumble, fall, pick yourselves up and try again. Brilliant political communications, very effective.

BORGER: But what was the mistake?

Was the mistake nominating Tom Daschle, or was the mistake not vetting Tom Daschle? I don't...

KING: That is -- I hope that's a question asked at the first prime time news conference. Because that was my question: What is the mistake?

Is the mistake saying, I shouldn't have said we'll be the most honest and ethical administration ever, so that you could have that nomination?

Or was the mistake the nomination?

Was the mistake the lawyers...

(CROSSTALK)

CASTELLANOS: ... era of responsibility.

KING: Yes, we -- we don't know. I would love the answer to that question.

Let's talk about that. Because the president is trying to turn a corner there, move on past Daschle. He gets this compromise at end of the week, tenuous, but it looks like he has the votes.

And now many Democrats, Donna -- and you know this better than any of us at the table -- were saying, get him outside of the White House; don't become trapped in that White House; he's a great communicator; he's in touch with the American people; go, get out.

So he's going to have a prime time news conference at the White House. But first he's going to go to Indiana. This is the Elkhart Truth: "We're ready for our close-up, Mr. President." Unemployment in this county, last time I checked, was at 15.1 percent. The value, Donna Brazile, of getting the president out of the bubble and with the people is?

BRAZILE: Well, first of all, this bill, now, in the Senate, is over 770 pages, and I don't know about you, but I need some more Xerox paper, because...

(LAUGHTER)

... that's a lot of information.

KING: Yes, Al Gore is not happy.

BRAZILE: Absolutely not.

(LAUGHTER)

But, look, what the president will be able to do on Monday is to explain, in real people terms, not this Washington speak, but how this plan will help ordinary Americans who are losing their jobs, who are worried about paying their mortgages.

BRAZILE: And so I think this gets them out of this Washington bubble where they are talking about programs and how much and rather he'll talk about how this will help ordinary citizens.

CASTELLANOS: But what we've seen so far is just the opposite, is that the more we look at this plan, Barack Obama's numbers go up. He's doing great, but the plan seems to be sinking, because it's not very American.

I mean, this thing is just a huge expansion of government and more spending and it just doesn't seem to be -- I mean, this is the Democratic party that elected Richard Nixon, Ronald Reagan, you know, two Bushes. This is the Democratic Party of big spending and fiscal irresponsibility.

BORGER: He's got to go out on the campaign trail, and that's what he's going to do. He's going to go to Indiana. He's going to go to Florida. He's got to sell this plan to the American people, honestly, he knows he's probably going to get the votes for it in the Congress. This isn't about the Congress anymore. This is about bringing the American public on board because the stimulus package, as you said, Alex, is going down and public opinion.

KING: How does he keep the trust? You see these two courses. How does he keep the trust of the American people at a time when they want help?

If you travel the country, most people desperately want help and they want to think their new administration and their new administration in Washington, Congress included is doing things to help them.

But they're sitting around the table and they're saying, we can't go to Disneyland this year because we don't have the money. We might not even be able to go to McDonald's this month because we don't have the money. And in Washington, in the name of helping them, in the name of helping them, $1 trillion in stimulus spending, $700 billion with more to come from financial institutions. How does the president of the United States keep the trust of the American people that deficit spending, money we do not have, is critical at a time when they are having trouble paying their own bills?

BRAZILE: Well, the good news is that President Obama is a great communicator and I think he will be able to talk about all the misleading lies and information that has been cherry picked apart. The American people need to know exactly what's in the bill. John, it's painstaking to go through a bill this long and this difficult, but this bill wasn't just about giving, you know, birth control. And by the way, I said oh, maybe there's some Viagra in it and they need birth control.

But it's beyond just talking about what's bad. But what's good for the American people, 95 percent of the American people will get a tax cut. Businesses, 75 percent of this money will be spent in the next 18 months.

We've had 13 months of job losses. This bill will help create millions of new jobs for the American people and I think what they want to hear is that the president is on their side and that he's going to lead in helping them.

KING: Is part of his challenge, Alex, when he talks to the American people to make sure that they help him in pressuring House Democrats to accept something very close to the Senate deal so we can get this done soon? Because as you know, House Democrats, not your crowd I know, but they want to put more of this money back in. They are mad at the Senate. They say no, it was too small to begin with. We want to spend more. Will the president arm twist his own party?

CASTELLANOS: He's got the resources to do it. He's got the e- mail list, he's got about 20,000, 25,000 supporters on an e-mail list in every congressional district in America.

He can turn up the heat if he wants, you know, but, again, this is just such an unprecedented effort. FDR did something like this, but he didn't do it in the age of the 24/7 communication cycle. You know, he had -- if his program failed, we might find out a couple years later that the farmer didn't get the money somewhere in Arkansas. We're going to know now in 20 seconds.

KING: Is he willing to be tough with his party?

BORGER: I think time will tell, but I believe, and Donna would know better than I would, but I believe in talking with some Democrats in the House, they believe they are in this with him, and so in the end, they are not going to like everything, but they are going to hold their noses and vote for it.

CASTELLANOS: If he was going to be tough, he'd cut some pork and he didn't. BRAZILE: We have a process.

KING: Time out for now, but we'll continue this conversation in the green room and over coffee as we go. I've got to stay here for a while. You guys can keep it going. Alex Castellanos, Donna Brazile, Gloria Borger, thank you. We'll go back to newsmakers in the next hour of STATE OF THE UNION, including the first Sunday interview with a member of the new cabinet and a performance review of President Obama from former top CEO Jack Welch. And straight ahead, our weekly conversation over coffee. They are not happy with President Obama in Carmel, Indiana.

(COMMERCIAL BREAK)

KING: I'm John King and this is STATE OF THE UNION. Here are some stories breaking this Sunday morning. Wildfires in Australia claiming more lives. Officials say 96 people have now died. Many of the victims burned to death inside their cars as they tried to flee the fast-moving flames. Police suspect some of those fires were deliberately set.

Vice President Joe Biden heading back to Washington after his first overseas trip. He laid out the Obama administration's vision of a new foreign policy at a big security conference this weekend in Germany. A top Russian official calls the vice president's stance on major nuclear issues and relations with Moscow very positive.

And what's up with President Obama, a long-time smoker who pledged to quit? Has he had a cigarette since he arrived at the White House? Our Anderson Cooper asks him that and much more ahead on STATE OF THE UNION.

Three of the best political team on television standing by to help us analyze the very busy week in the nation's capital and a very busy week ahead, but remember our promise. Every week we say we will get out of Washington and talk to you about the issues and concerns in your lives. People like we met over coffee this week in Carmel, Indiana. It is out here in Middle America. You see the state of Indiana. Barack Obama surprised many people by narrowly carrying the state 50 percent to 49 percent. We visited first with some blue collar workers here in Indianapolis, that's blue. Obama carried the urban area. But then we went up here to Hamilton County, 3 percent of the state's population, a red county, McCain county. We wanted to get out there to talk to people and we were there having breakfast with them on the morning that the government said the unemployment rate was going back up. More than 600,000 jobs, just shy of 600,000 jobs lost last month. So with all the talk of spending more money in Washington, we sat down here at Mike's to ask people do they trust the new president and all that government spending?

(BEGIN VIDEOTAPE)

ROBIN LUEHRMANN, CARMEL, INDIANA: I'm a realtor, and I see it a lot with trying to resell homes and stuff like that, and people who are needing to get out of their homes because they have lost their jobs, but they are waiting for somebody to buy it, but the person who is buying it probably has to sell their home first, you know, like a mouse in one of those wheel things just going round and round.

(UNKNOWN): I'm at that point where I have another 15 to 20 years to work and I don't know if I'll be able to retire when I planned on it. The economy has eroded. Our savings and our 401(k) and I've got one kid going off to college next year, and I worry about just how we're going to -- we used to have a strong household and now it's been weakened somewhat.

SCOTT DUNWOOD, CARMEL, INDIANA: This is going to turn around. History repeats itself, you know. It's not the greatest time, but as Americans, we've always been resilient type to actually, you know, pick up the pieces after everything has collapsed.

KING: Nobody here voted for Barack Obama? All voted for McCain, and so what do you see now when you watch this debate in Washington where the president says we have to act now and act fast and spend somewhere in the ballpark of $800 billion to $900 billion to stimulate the economy. When you watch the debate, do you think it will help you?

LUEHRMANN: No. It won't help me at all.

KING: It won't create jobs in this community that might get people buying and selling houses again, you don't think so?

LUEHRMANN: No, I really don't think so. I think a lot of it -- especially where he's willing to send a lot of this money to, it's a lot of crazy things he wants to send money to. He approved to have funding sent overseas for abortions.

DUNWOOD: Instead of spending money to patch up issues with the automobile companies and everyone else, let's spend the money wisely and not spend as much but funnel it to smaller businesses to start up. That will stimulate the economy.

KING: You disagreed but he said one of the reasons to vote for him was he was going to change Washington. It's only three weeks, but is he doing that? Does Washington look different from you as you look at it?

LUEHRMANN: No, you hear that every campaign. I see where Barack is jumping in with both feet, most definitely. But I also don't think he's thinking very wisely before he does it. He's hiring on people who can't even pay their own taxes.

KING: Is that a major flaw, or is that a rookie mistake? All presidents make a few mistakes early out of box?

(UNKNOWN): I'd say rookie mistake. I wanted McCain who has the experience to -- has been in the system.

KING: Has he made the case that $700 billion was not enough and to prop up the financial institutions will in the long run help you, and he needs billions of dollars more? KIM RAMIREZ, CARMEL, INDIANA: I don't know how that money is really going to trickle down to us. I don't think people have been responsible with how they have spent the money that has been pumped in.

DUNWOOD: You know, you can't just keep asking someone else for help. You have to do your own issues. You've got to deal with everything that's going on yourself. You can't go downtown and ask for, you know, I lost my job, I need money. Well, go get a job, do something.

(END VIDEOTAPE)

KING: You may agree, may disagree with what you heard from those people at Mike's Diner but remember those voices. Those conservative viewpoints are one of the reasons congressional Republicans feel so free to say no to the Obama stimulus plan and other big issues because when they go home, that's what they hear.

Town halls in Florida and Indiana, his first full-blown primetime press conference this week, President Obama going out in the country and maybe on the attack. Straight ahead a preview of all that and more. And just so we're not all dead serious, another look at the political process from last night's "Saturday Night Live."

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

KING: For auto worker Scott McMillin, the issue is survival.

SCOTT MCMILLIN, INDIANAPOLIS AUTO WORKER: My dad worked for 27 years and retired from the foundry I started in. He never had to worry about any of this. His job was secure from day one. I've been to three different plants now. And nowadays an auto worker is pretty much a modern day gypsy.

KING: He can't afford to take a GM buyout on the table. He may end up with nothing if the company closes this plant.

MCMILLIN: If I did retire now from General Motors, I'd be looking for another job and they are just not out there. So I think it would -- the best move for me would be to stay with GM at this point in time. It's all a crap shoot.

(END VIDEO CLIP)

KING: A crap shoot, Scott McMillin calls it a reminder that the economic debate here in Washington has huge consequences for anxious workers out here in the country.

Joining me now to talk about this discussion, this debate and the big issue, three of CNN's top reporters, senior political correspondent Candy Crowley, senior congressional correspondent Dana Bash and White House correspondent Suzanne Malveaux. Suzanne, let me start with you. This is the president's number one issue. He gets a compromise in the Senate on Friday. Just this morning, you see liberals in the House saying, no, we don't like what the Senate did. We want to put more of this money back in. Will President Obama twist arms in his own party and say it's not the perfect deal, but this is the best we can get?

SUZANNE MALVEAUX, CNN WHITE HOUSE CORRESPONDENT: Well sure John, we're going to see an active president, a lot more active than actually in the last couple of weeks. There's some lessons that he learned. Obviously the first go-round with the House Democrats, not very much involved in the legislation itself. He let them pretty much outline the legislation. He had some broad outlines and he said OK, this is what I want you to do, but very different than President Bush who would essentially go on the Hill and say very specifically, this is what I want. This is what you're going to vote for.

He got a little bit more involved when it came to the Senate side but obviously what you're going to see is chief of staff Rahm Emanuel taking a much more aggressive approach here, a hands-on approach. You saw President Obama pick up the phone. He also talked to some of those key Republicans, Senator Olympia Snowe at the White House. Got a chance to talk to her this week and she seemed quite optimistic that this was going to go through. But it just is not enough and the administration realizes that. So we're going to see him directly involved in the next couple of days.

KING: Directly involved. Candy, you've known the speaker of the House for quite a long time, Nancy Pelosi. She's empowered right now. She's got a bigger majority after the election so she's as happy and as powerful, she might think, as President Obama. And she sees this bill in the Senate, she doesn't like it, she thinks there should be billions more in spending and she sees people in this town, including the Democratic president who says bipartisanship, bipartisanship. She says this, "Washington seems consumed in the process argument of bipartisanship when the rest of the country says they need this bill." She's defying her own president.

CANDY CROWLEY, CNN SR. POLITICAL CORRESPONDENT: Well, absolutely, but, look, in the end, these Democrats need this president to succeed so they will find something. And by the way, conference bills have a way of coming out more expansive than either one of the bills that go in there, so I would -- I would submit that probably the House will be happy, but you're right.

I mean, this is -- from the very beginning, this has been about the balance of power, and Nancy Pelosi has a little more power. Senator Reid has a little more power, Barack Obama obviously has a lot of people behind him. He has the power, so they are -- you know, they are still sort of marking their territories here and I suspect she will get more money in this bill.

KING: And so I guess the question is where do we go? Will there be more money? You broke word Friday that we had this compromise deal in the Senate. It's enough to get through the Senate unless there's a big change before the votes Monday and Tuesday, but then what?

DANA BASH, CNN SR. CONGRESSIONAL CORRESPONDENT: Well then, this is going to be a real negotiation between the House and the Senate. And when you look at the numbers, really what they are going to be fighting over, the overall number is pretty much the same, about $820 billion. But in the Senate, it took about $40 billion out of spending for the states, much of that was intended for education, and they ended tax cuts.

In the House, they say, House speaker was quoted this morning saying wait a minute, that is the wrong approach. So you're going to have Democrat v. Democrat in terms of trying to figure out the right balance of philosophy, what their philosophy is, what the right approach is in stimulus and let's get real.

BASH: How they do this and keep those Republican votes in -- in the Senate? You know, we heard -- there was a lot of talk, this week, about Barack Obama speaking to House Democrats. And it was portrayed, a lot, as a rallying cry.

But you also heard him say, "Don't let the perfect be the enemy of the good."

There is no question that that was a message to his Democrats: this is going to be tough when we have to negotiate; you might have to pull back a little bit.

KING: So let's listen -- as this goes forward, the stimulus bill goes forward, it appears he'll go forward with a few Republicans, two or three in the Senate.

And a lot of Republicans aren't happy about, including the man he just ran against, John McCain, who, after the election, said, "I want to work with you, Mr. President."

Listen to Senator McCain this morning.

(BEGIN VIDEO CLIP)

SEN. JOHN MCCAIN, R-ARIZ.: This agreement is not bipartisan. I've been in bipartisan agreements, many. This is three Republican senators. Every Republican congressman voted against it in the House, plus 11 Democrats. And all but three Republicans stayed together on this. That's not bipartisanship. That's just picking off a couple of senators.

(END VIDEO CLIP)

KING: Candy, here in Washington, that's the processed answer; it's not bipartisanship; two or three votes.

But as we go forward, in this economic debate, but then to things like climate change, things -- to health care, things that matter to the auto worker out there who might get laid off in the next few weeks, in the substance of what Barack Obama wants to do, what price will he pay if he starts off with most Republicans -- all in the House, on this bills, most in the Senate, on this bill, saying, you know what, no?

CROWLEY: Well, I think he's come to, sort of, see the handwriting on the wall here, and he's not going to get that many Republicans.

But they do believe, at the White House that they've kind of gathered some chips here, that he went up there, he said I'm interested in your ideas.

Really, the Republicans in the Senate and the House blame their House and Senate leaders more than they blame President Obama.

So there's still some good will here. And when -- you know, climate change -- that's something John McCain is interested in. He will pick up John McCain, most likely, during that.

So it's -- these are chips that he's gathered, knowing full well that this is a basic Republican premise, here, and that is too much government spending. And he knows he's not going to move them off of that.

KING: And one of the Republicans in the Senate, as we track the policies of all of this, Arlen Specter is one of the quote/unquote "good guys," from the White House perspective. He's on the ballot. He's running in a tough race. What his political calculation, looking forward?

BASH: Well, that's the -- you know, that's one of the main reasons why he is one of the three Republicans who is on this, because he is from a purple-leaning blue state of Pennsylvania, and he knows that it has been going Democrat for the past, you know, several election cycles.

But he admitted to us that he's going to have a problem, because he's going to get challenged from the right, for the reason that Candy was just explaining, because it is not Republican credo to spend this much money, this much government money. It just isn't.

So he -- he's said, so many times to us, in the hallway, this is so incredibly tough for us.

But just to give you a little sense of the horse trading here, the number two Democrat admitted to us that part of the reason why they got him is because they agreed to spend money on NIH, spend money on health care, and this is a man who was suffering from cancer. And because of that, and for other reasons, he has been a big champion of research for health care. That helped pull him along. It gives you a sense of how these things are done.

KING: OK, we've got to sneak in a quick break, here. Everybody stand by. Suzanne, Dana and Candy, stand by. A lot more talk coming up. We'll talk about the administration's plan to end our economic pain with the new secretary of transportation, Ray LaHood. And Democratic Representative Debbie Wasserman Schultz gets the last word in Sunday talk.

"State of the Union," back in a moment.

(COMMERCIAL BREAK)

(MUSIC)

KING: You're listening, there, to Michael Adams, "I Want My Bailout Money," maybe this generation's "Hey Buddy, Can You Spare a Dime?"

Once again, I'm joined by Candy Crowley, Dana Bash and Suzanne Malveaux. Serious subjects, the debate of the economy; some people are trying to carve a little niche by making some music about it.

Let's stop one second and have a laugh.

(BEGIN VIDEO CLIP)

(UNKNOWN): And in the House, we made no concessions, because, thanks to our majority, we don't have to. For eight years, they didn't seem to care much about reaching across the aisle, but now it's boo hoo; what about us? Give me a break.

(LAUGHTER)

(UNKNOWN): Maybe if you didn't put in over $200 million for condoms, you wouldn't have been in such a tough position.

(LAUGHTER)

(UNKNOWN): Now, I know it's a blast to poke fun at San Fran Nancy for her ideas about sex ed, but maybe if we spent money on condoms and education, the next generation won't have so many stupid people running around ruining our economy.

(LAUGHTER)

(END VIDEO CLIP)

KING: Agree or disagree, no matter your position on the stimulus debate here in Washington, a little light moment on "Saturday Night Live" last night.

Back with our panel. Suzanne, the president, as you know, is going to try to learn from his mistakes and ratchet it up this week.

And we've shown this once before. I want to show it again, the Elkhart Truth. He's going out to Indiana. "We're ready for our close-up, Mr. President."

Unemployment in this county is 15 percent. They make RVs. It's big business, but it's hurting at the moment.

You say he's learned from his mistakes. Prime time news conference, Monday night, what is the number one priority?

MALVEAUX: You know, obviously, he's trying to get back control of the bully pulpit, here and get back on message.

I think one thing that he really needs to do that he has not done is he needs to tell the American people, what do we do next? You've been out to Indiana and other places. Obviously, when you talk to ordinary folks and they ,say I'm going to do my part when it comes to the economy, they talk about, oh, I'm not going to get my hair done; I'll do it myself; I'm not going to get my nails done; we're not going to go out to dinner.

Everybody is hunkering down. That is not what the Obama administration wants.

President Obama has teased Bush about it, saying, look, after 9/11, he asked for everybody to go shopping. I think what the Obama administration needs to do is give some guidance to the American people. That's what they're looking for.

And if you're looking for a change if behavior, to actually have some sort of faith in the system, in investments, then that's the kind of message that he needs to convey, tell the American people what should we do.

KING: But to that point, Candy, tell the American people, but, Suzanne, they did mock President Bush. That's not all he said after 9/11, but it was easy for the Democrats to latch on to that.

A lot of Republicans are saying, where's the sacrifice from this president? Families are making those decisions, every day, about spending in their budget. Where's the sacrifice, here, from this president?

CROWLEY: Well, absolutely. And they're saying, look how much he's spending. So, far, it's been give, give, give, and there's, like, where's the sacrifice?

I mean, but the fact of the matter is he's a little stuck, here, because so much of what's wrong with the economy is also about confidence.

So every day he's out there going, it is going to be Armageddon; it's going to be terrible; we need to have this -- because he needs to get this out of Congress.

CROWLEY: On the other hand, you're trying to get people settled down. And I think Suzanne is exactly right. At some point, you have to find that balance in there. And you have to find some way to say it's going to be okay. Which he was much more about during the campaign than he has been, you know, after he was elected when we heard just ratcheting up and ratcheting up.

I think they now know that at some level, you have to say to people we're in control. It's not enough to do symbols. Here is my big guy on the Treasury and here's my big guy at the Commerce Department, whatever it is. He doesn't have a big guy at the Commerce Department.

KING: We'll get there, eventually.

CROWLEY: But you know what I mean. It's not enough to give the symbols. You have to say, listen, we're going to get this under control. So, you know, getting people who actually have money to maybe spend a little of it, frankly.

KING: And Dana, on the Hill, what do they make? We're in this feeling out process not only just internally in the Democratic Party, but everybody. The country is -- what do they make of this president? A few scrapes, the Daschle nomination and a few others, pretty partisan moments at the House Democrats. As they size him up on Capitol Hill, where are we three weeks in?

BASH: I think you know, the point that you made that you got from the people that you were talking to in Indiana is a very astute one in that, you know, you have these particularly in the House, these Republicans who understand that President Obama is incredibly popular, understand that the country wants everybody to succeed and they want people to work across the aisle, big picture.

But the fact of the matter is we are in a very divided country still, and a divided congressional district. So that these Republicans, for the most part, they're hearing from their constituents. Stop him, don't let him spend this money because you people in Washington, you don't know what you're doing.

So I think it's going to be -- and we definitely have seen evidence of this, but so hard for the president to overcome -- I mean democracy at work, basically. And these Republicans, hearing from their constituents, don't do it, don't spend this kind of money.

KING: And we spent a lot of time on the process because it's important. You can't get that bill to the president's desk without the votes in the Senate and all the like.

But let's take a look at what he promised in the campaign and where we are now, again, three weeks in. But he has signed the health insurance program for children. That is something he promised to do. He has done that. He has signed the Lilly Ledbetter equal pay act, something he promised during the campaign he would support. He has done that.

So he has some victories that he can go to the American people and say, promise made, promise kept. But, Candy, the fundamental promise is jobs. The economy, the anxiety, how does he address those people out there that it is coming?

CROWLEY: Well you know, absolutely. First of all, this is all low hanging fruit. Those bills were ready for him. They just needed the right president, the Democrats to get him to sign it. The executive orders, that's all the easy stuff. And you're right.

The tough part is reaching out. But let me tell you something, as you know full well. I still get David Plough e-mails every day. Have a party. Let's talk about the stimulus. I mean it's -- literally they have got this subterranean ability to reach out to people and gather what really is the source of the president's strength. And that's the people that you're out there talking to. It's not, you know, what the Democrats on the Hill owe him. It's what the people out there believe he will do. So he needs to play off that. BASH: And the other side of that, you also have John McCain and Sarah Palin doing the exact same thing. I mean, he had a petition that he had 200,000 people sign in a day, John McCain, saying stop Barack Obama. So we have the same campaign tactics going on on both sides.

MALVEAUX: I get those e-mails as well, Candy, and one thing that I guess is a little bit challenging for the president is he can't use this language that's so dire and that's, you know, the consequence is catastrophic in a way that it starts to sound like it's chicken little and, you know, the house is on fire, the sky is falling.

It's something that President Bush did when it came to national security threats. You don't want to desensitize the American people. You want to give him a sense that there is going to be some confidence. There is going to be kind of success at the end of the plan.

KING: Suzanne Malveaux, Dana Bash, Candy Crowley. The president called this cable chatter when he was down speaking to House Democrats. We like a little cable chatter every now and then. It helps move the process along. Thank you for joining us.

And coming up on STATE OF THE UNION, one of America's best known CEOs, Jack Welch joins us to give President Obama an early performance review. And right after the break, Anderson Cooper sat down with the president for a wide-ranging interview, including some lighter moments. Among Anderson's questions, when will the puppies arrive? Have you smoked in the White House? What do you like about your new car? The president's answers, next on STATE OF THE UNION.

(COMMERCIAL BREAK)

KING: If you are trying to quit smoking, like President Obama is, this was the kind of week that would have you back to a pack a day in no time. So he is lighting up on the South Lawn? Smoking only one of the very personal subjects raised by my colleague Anderson Cooper.

(BEGIN VIDEOTAPE)

ANDERSON COOPER, CNN ANCHOR: What's the latest on the dog search?

OBAMA: We are going to get it in the spring. I think the theory was that the girls might be less inclined to do the walking when it was cold outside.

COOPER: Portuguese Water Dog, or you don't know yet?

OBAMA: You know, we're still experimenting.

COOPER: Coolest thing about your new car?

OBAMA: You know, I thought it was the phones until I realized I didn't know which button to press. That was a little embarrassing. COOPER: Have you had a cigarette since you've been to the White House? OBAMA: No, I haven't had one on these grounds and, I -- you know, I -- sometimes it's hard, but, you know, I'm sticking to it.

COOPER: You said on these grounds. I'll let you pass on that. And final question, you read a lot about Abraham Lincoln. What is the greatest thing you learned from your studies of Lincoln that you're bringing to the office right now?

OBAMA: You know when I think about Abraham Lincoln, what I'm struck by is the fact that he constantly learned on the job. He got better. You know, wasn't defensive. He wasn't arrogant about his tasks. He was very systematic in saying I'm going to master the job and I understand it's going to take some time.

But in his case, obviously, the Civil War was the central issue. And he spent a lot of time learning about military matters even though that wasn't his area of experience. Right now I'm learning an awful lot about the economy. I'm not a trained economist. But I'm spending a lot of time thinking about that so that I can make the very best decisions possible for the American people.

COOPER: Mr. President, thank you very much.

OBAMA: Thank you.

(END VIDEOTAPE)

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