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STATE OF THE UNION WITH JOHN KING

Interview with the Joint Chiefs of Staff Chairman Admiral Mike Mullen; Interview with Congressmen Peter Defazio and Tom Price

Aired March 1, 2009 - 20:00   ET

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


JOHN KING, HOST: I'm John King and this is our STATE OF THE UNION report for this Sunday, March 1st.

President Obama says most U.S. troops will exit Iraq by August 31st of next year. But will that heighten the danger for the tens of thousands who will be staying behind? We'll hear from the chairman of the Joint Chiefs of Staff, Admiral Mike Mullen.

Ironically, many Democrats are unhappy with the president's troop withdrawal plan. We'll discuss why with Democratic congressman Neil Abercrombie. He gets "The Last Word."

And the shrinking economy is wiping out jobs, homes and savings for millions of Americans. Suze Orman offers her plans for surviving these tough financial times.

That's all ahead in this hour of STATE OF THE UNION.

Beautiful picture of the White House there on a Sunday morning, the 1st of March here in Washington, D.C. But this past week underscored the enormous challenges facing the United States and its new president. The economy continues to drift from bad to worse, shrinking at the fastest pace in 26 years.

Congress will tackle -- and you see the capitol building right there -- will tackle a $3.6 trillion budget plan.

And the global challenges, well, they're just as daunting, beginning with the divisive debate over what next in Iraq. The president announced Friday he'll withdraw U.S. combat forces from Iraq by the end of August 2010. It's a few months later than he promised during the campaign. And Mr. Obama says he will leave as many as 50,000 troops behind in Iraq, after even declaring combat operations over.

So what are the risks? And is this the right timeline.

Joining us is the highest ranking U.S. military officer, the chairman of the Joint Chiefs of Staff, Admiral Mike Mullen.

Admiral, a pleasure. Thank you for joining us on STATE OF THE UNION.

ADM. MIKE MULLEN, JOINT CHIEFS CHAIRMAN: Good morning, John.

KING: Let's start. America is just getting to know its new commander in chief. He is proposing a timeline and it's about three months later than what he promised during the campaign, and he will leave behind up to 50,000 troops, a residual force or a support force, as he calls it, larger than most Democrats at least thought they would have left in Iraq when they were voting for candidate Barack Obama.

What does that tell us about our new commander this chief and his willingness, I assume, to listen to the men in uniform like yourself?

MULLEN: Well, I'm very comfortable with the decision and strongly support the decision. And the president listened to all of us who are involved in this, General Odierno on the ground in Iraq, General Petraeus who's responsible for the Central Command area, as well as all the Joint Chiefs, myself and Secretary Gates.

And in that listening, we had a very thorough review, discussion, debate and it was their cumulative discussion that got us to the point where we made a recommendation for the 19-month withdrawal plan. And the president accepted that and has made that decision.

KING: You say has accepted that, has made that decision, and you're comfortable with it. But about six months ago, you said you didn't like any time at all. You were on another Sunday television program and you were asked what about a timeline of getting all combat troops out within two years.

What do you think the consequences of setting that kind of a timeline would be? And you said, "I think the consequences could be very dangerous in that regard." So you would -- you say you're comfortable with this timeline but you would prefer no timeline?

MULLEN: Sure, that's exactly what I said and that was last July and conditions have changed fairly dramatically since then. Security has gotten a lot better. We've had a successful election in Iraq. All of the trends continue to move in the right directions.

Also, since that time, we've got a specific timeline. I mean we were required by the -- the SOF agreement to be out of Iraq at the end of 2011. And then the third thing, which I think is probably the most important, we got a president who's made a decision and we're going to carry out the decision. And now that that's made, make sure that we do it in a safe way and on -- in a way that it continue to conserve the gains that have been, in particular, the last couple of years.

KING: As you do that and deal with the decisions to come, I ought to contrast it some might say different communication style of a president who is the commander in chief, but an elected political leader with yourself, a military leader and a man who wears the uniform.

Let's listen first to the president. This is speaking Friday at Camp Lejuene with some clarity about what is next.

(BEGIN VIDEO CLIP)

BARACK OBAMA, PRESIDENT OF THE UNITED STATES: Let me say this as plainly as I can. By August 31st, 2010, our combat mission in Iraq will end.

(END VIDEO CLIP)

KING: A date certain there. You were speaking just after the election and you gave a very different way of characterizing when you would like to come home from Iraq. Let's listen.

(BEGIN VIDEO CLIP)

MULLEN: I do think it's important that it be conditions based. From the military's perspective, I think it's best to be conditions based.

(END VIDEO CLIP)

KING: So the president has set this timeline now and, yes, you mentioned there's an agreement with the Iraqi government but are you convinced, sir, that if you went to him, say, in early 2010 and said, sir, we can't get down to 50,000, we need 75,000 or the Iraqis need a little bit more time, that this president, as he was in accepting this different timeline is open to changing his mind down the road?

MULLEN: If I were to use the process we just went through with respect to making -- his making this decision in Iraq and his willingness to listen at every level in the chain of command, certainly my expectations are in the future that he would continue to do that. And then specifically with respect to this decision in the 19 months, I think it's important to know that at the end of this year, there are elections.

General Odierno's biggest concern was election time frame and what the president has done has given us the flexibility to keep the forces on the ground through that highest risk period and then look at how we pace that coming down to be done to basically have that mission change from where we are right now, which is a combat mission, to a new mission of advising and assisting and training Iraqi security forces at the end of August.

KING: And let's talk about the residual forces, as the president calls them, who would be left over. Up to 50,000, he says maybe 35,000, maybe 50,000. That is a decision you will make down the road a little bit. But from your perspective, when you go to bed at night, those are combat troops, right? They could and likely will be involved in some violent actions.

MULLEN: Well, this transition force has a new mission. It's no longer a combat mission. It is to advise and assist and train the Iraqi security forces who will clearly have the lead. That said, every soldier, sailor, airman, marine, coastguardsman that's in Iraq is in harm's way. And we need to -- we'll need to provide a force protection for them, in addition, force protection for our civilian counterparts who will still be there.

KING: And Admiral, I want to move from Iraq to Afghanistan. Because as troops begin to come home from Iraq, they won't come home and serve troop levels overseas as we have a buildup now in Afghanistan. Afghanistan's interior minister is quoted this morning as saying he believes there are upwards of 15,000 Taliban forces operating within the country right now. Is that number about right in your view? And how dangerous is that?

MULLEN: Well, I think, I mean, General McKiernan, who is our commander on the ground over there, has asked for additional forces up to 30,000. The president recently approved 17,000 of those forces. And I think in recognition of the growing security concerns that we all have with respect to what's going on in Afghanistan, and the need to address that as rapidly as possible.

And the 12,000 of those will flow relatively quickly here in the next few months. We're also undergoing strategic review of the president's directive. And so where we go beyond that in terms of our strategy objectives...

KING: I don't mean to interrupt, but many people are befuddled by that. They say why are you sending more troops in the middle of a strategic review if you're not sure where you're going to end up at the end? Why send more troops now?

MULLEN: Well, I'm very encouraged by the strategic review in the first place, because I think we need to all understand certainly, what are -- you know, what the strategy is and what our objectives are specifically. But very important that we get these security needs net for the growing insurgency and you certainly alluded -- I wouldn't pick a specific number for the Taliban, but certainly the growing insurgency that we have there and also the -- and the need to protect the people.

This is classic counterinsurgency. And we've got to be able to protect and provide security for the Afghan people. In addition, we've got upcoming elections in Afghanistan that we need to provide security for as well. It's to meet the security needs. And I think that, at this point in time, we recognize the need to get them there as soon as possible, because of those needs.

KING: You mentioned the upcoming elections. There are a lot of people if you talk to privately in your business and on Capitol Hill are not happy with President Karzai who has moved up the election timetable. And you mentioned part of getting those additional troops over there was to protect the people of Afghanistan heading into those elections.

MULLEN: Sure. It's true.

KING: Has President Karzai gotten in the way of your plans essentially? Is he undermining the plan of the United States to protect the Afghan people for those elections by speeding them up?

MULLEN: Well, this is a -- this is an area that certainly other people than I will decide how this ends up. The elections were scheduled for August and that was a date that was set by the International Elections Commission. And they are -- as I understand it, they are the final authority in this. Certainly, President Karzai, I think yesterday, asked or has talked about a decree which indicated they should be moved to April or May.

And so I think it's still to be determined. But I'm on a...

KING: But that may not be helpful.

MULLEN: I'm on a pretty timeline right now to get security forces there in order to provide the kind of security for the elections. And so moving those dates to the left certainly generates a higher level of risk with respect to security for those elections which we want to be free and fair as well as secure.

KING: I want you to listen to something Senator McCain said recently about the war in Afghanistan.

(BEGIN VIDEO CLIP)

SEN. JOHN MCCAIN (R), ARIZONA: When you aren't winning in this kind of war, you are losing and in Afghanistan today, we are not winning. Nearly every indicator in Afghanistan is heading in the wrong direction.

(END VIDEO CLIP)

KING: Senator McCain right? Are we losing in Afghanistan?

MULLEN: I said last September in my testimony in Congress that I didn't think we were winning, although I thought we could. And I would also agree that if we're not winning in a counterinsurgency, we are losing.

And that just speaks to the growing security, the need, quite frankly, for a much improved level of governance. Not just at the national level, but at the provincial level, the district level, the local level, in addition to getting the rule of law set and moving forward on their economy. So all those conditions are what brings us, I think, to the situation we're in right now.

KING: Want to move to another challenge facing the new president, that as he has said he would close Guantanamo Bay, the detention facility. You, during the Bush administration, said you wanted it closed because you thought it was a recruiting tool for the enemy, a propaganda tool for the enemy and a potential stain on America.

But I want to ask you not about the location but about the practices. Are you comfortable now with the decision, the new president has made about no more waterboarding, no more what he calls torture? Or do you agree with Vice President Cheney who says that by getting rid of some of those practices, Americans could be less safe?

MULLEN: Well, in fact, on the military side, we comply with Article 3 and, in that regard, we never did and don't conduct any kinds of those activities that you talked about. President Obama has made it very clear what his policies are here and we'll carry out those policies and part of the challenge, you know he said we're going to close Guantanamo in 12 months so we're all working hard in our particular areas to execute that decision.

KING: More than 2,000 days after the 9/11 attacks, where is Osama bin Laden? We'll go to our map with Admiral Mullen for some possible answers. That's next.

(COMMERCIAL BREAK)

KING: We're back now with the chairman of the Joint Chiefs of Staff, Admiral Mike Mullen.

Admiral, I want to talk about this part of the world where you spend a lot of your time. It has been now 2,727 days since the 9/11 attacks. And many people have said since then that they assume Osama bin Laden is somewhere in here.

Is that your assessment and -- it's a simple question, what you don't like and I ask all the time, but the American people say why can't we find him?

MULLEN: I think it is a fair assessment and he's, obviously, a very, very difficult individual to find. I mean, extraordinarily difficult. It's not as if we don't have considerable amount of effort pursuing that and I'm certain that will continue, but he hides pretty well.

KING: He hides pretty well. You have spent a lot of time, including just this past week, talking with military leaders from Pakistan.

MULLEN: Right.

KING: Obviously critical not only to what happens here but to what happens just across the border in Afghanistan. Are you convinced the new administration in Pakistan and the military leaders under that new administration are doing everything they can or are you worried that they're still worried about a potential war some way -- some time down the road with India and not worried about dealing with this in their own country?

MULLEN: Well, this particular area, John, I mean, it's an extraordinarily complex area and it's got a rich history that I study hard and try to understand and engage with leaders from all the countries in trying to improve my understanding and seeing it a little bit from their perspective.

That's one of the reasons I've been to Pakistan. I mean I've met with General Kayani this week. I've met with him 10 times since last February and will continue to do that, have that personal and professional relationship of engagement. And he knows and his leadership knows very specifically they've got a serious threat here.

Not only does it threaten us in terms of al Qaeda leadership but it's also threatening them. They've seen great violence go up dramatically in their own country and he's addressing that. Clearly, they also are concerned about the situation on their other border with India. That's long-standing and I am hopeful that leaders will continue to use the kind of judgment and rhetoric that tamps that down over time.

KING: Let's do a couple of other things quickly before we run out of time.

MULLEN: Sure. KING: If we come down right here, Iran, obviously. The International Atomic International Energy Agency said last week they think that they were wrong in the past, that Iran might now have enough fissile material to make a bomb. Does Iran have enough to make a bomb?

MULLEN: We think they do, quite frankly. And Iran, having a nuclear weapon, I believe, for a long time, is a very, very bad outcome for the region and for the world.

KING: Want to come over in this part of the world. North Korea, we are told, is preparing a missile launch. Do you believe that that missile launch is a long-range missile that could potentially reach Hawaii or Alaska?

MULLEN: Watching North Korea very carefully. They certainly have launched missiles before. There have been no decisions with respect to what America might do. The president has made no decision, Secretary Gates and I have made no recommendations, but it's an area that we watch with great concern. And I would hope that North Korea would not be provocative.

KING: And you say no decisions, no recommendations. You mean you'll try to shoot it down?

MULLEN: There's been no recommendations one way or the other. There are -- obviously, there's a lot of focus on this and then recommendations and certainly policy discussions will come based on the timing and what North Korea does.

KING: Let me ask you, lastly, as I just shrink the world down and we look at it. This is your job. On January 19th, George W. Bush was your boss. On January 20th, Barack Obama is your boss. How are they different in terms of when they come into the room or when you're on those secure video conferences and how they conduct the business of being commander in chief?

MULLEN: What the chairman of the Joint Chiefs, and actually every member of the military, does is serve the president, no matter who the president is. And we did so with President Bush and we are doing so now under President Obama.

KING: Different stylistically, though? Different in how they carry themselves?

MULLEN: Well, I think individuals are always different. But -- you know, I mean, I wouldn't characterize them one way or the other. What I'm, as I've seen President Obama since he's took over, he's listened to us, he is anxious to get the military's input to all his decisions. The discussions have been broad and deep and I've been very comfortable, both with the access and the ability to give that advice.

KING: Admiral Mike Mullen, thanks for joining us on STATE OF THE UNION here today.

MULLEN: Thanks. KING: And when we come back, breathtaking, astonishing, jaw-dropping, all descriptions used in reports on the president's budget. Even Mr. Obama admits it won't pass easily.

Ahead, one of the budget's sticking point, a number so large a member of Congress says it will choke American families. Stay with us.

(COMMERCIAL BREAK)

RANDI KAYE, CNN ANCHOR: I'm Randi Kaye at CNN world headquarters in Atlanta. Back to "STATE OF THE UNION" with John King in a moment. But first, here's what's happening.

Severe winter weather is rumbling up the east coast right now. After a morning start in the south, the system is headed for the mid- Atlantic states and the northeast. Tomorrow's commutes could be a mess. Flying won't be any easier. Delta has canceled at least 300 flights, most to or from Atlanta. Some areas could see as much as a foot of snow.

Jacqui Jeras watching it all in the weather center for us. Jacqui?

JACQUI JERAS, CNN METEOROLOGIST: Hey, Randi.

It's starting to taper off a little bit across parts of the Deep South. But the temperatures are going to be dropping. And so all that wet, slushy snow is going to turn into ice and black ice. So be really careful if you have to travel tonight or tomorrow morning, especially on the bridges and overpasses.

The snow now starting to pick up in the Carolinas. Charlotte reporting light to moderate snowfall. We're also starting to get the snow in the Baltimore and D.C. areas. New York City, you're not far behind, but the heaviest snow will come in the northeastern quarter overnight tonight.

Take a look at some of the updates. Look at that, Greenville, Spartanburg just closed their airport. We'll get more details on that shortly. Looking at ground stops, Atlanta, Charlotte and Chicago, which means people don't take off to a ride there. Not just the snow a problem here, but also the strong, gusting winds which are coming in behind the storm.

The worst of the accumulations are going to be along the I-95 corridor and just to the east of there, we're going to be seeing easily 6 to 10 inches of snowfall, places like Philadelphia and New York City. Boston will likely even higher amounts of that. Somebody in this area is going to get well over a foot, probably closer to 15 to 18 inches when all is said and done.

KAYE: See, winter is never over.

JERAS: It...

(LAUGHTER)

It's March 1. I know. Go figure.

KAYE: All right. Thanks, Jacqui.

I'm Randi Kaye. I'll see you right back here at 10:00 Eastern. Now back to "STATE OF THE UNION" with John King.

KING: Reporters and critics alike agree on this. The president's new budget proposal is bold and ambitious. The bottom line, $3.6 trillion. Allies say it boldly shifts Washington focus to the needs of the middle class. Critics say the boldness is in how much debt the president is passing on to future generations. Their biggest sticking point, a $1.75 trillion deficit.

(BEGIN VIDEO CLIP)

OBAMA: While we must add to our deficit in the short term to provide immediate relief to families and get our economy moving. It is only by restoring fiscal discipline over the long run that we can produce sustained growth and shared prosperity. And that is precisely the purpose of the budget I'm submitting to Congress today.

(END VIDEO CLIP)

KING: The plan calls for big changes to health care and energy and increased taxes on the wealthy. Republicans see it as old tax and spend liberalism and some Democrats have concerns, too.

Joining us now, two very different voices in the United States Congress. Democrat Peter Defazio of Oregon and Republican Tom Price of Georgia.

Congressman, Defazio, I want to start with you because I go to your Web site right now, and I have it right up here on the screen, you have a debt clock, right, at the very top where you say hello to people who visit your page. $10 trillion. $162,805,000,000 and counting as you go through. Your share, every American, $33,876.

If you have that on the top of your Web site, sir, and you look at the president's budget, are you comfortable with those deficit numbers? And I assume the answer is no. So what will you do about it?

REP. PETER DEFAZIO (D), OREGON: Well, I'm not comfortable with them but I'm comfortable with the fact that instead of increasing the deficit off the books like President Bush did, we fought a war off the books. The spending didn't count. We fix the alternative minimum tax every year off the books, never counted. And then he cut taxes for the wealthy at the same time.

So between spending off the books and tax cuts, he doubled our debt in five years. Obama, President Obama is putting us on a path to restore fiscal responsibility but he's starting at a big hole. So I'm going to work with the president to tighten this budget wherever we can.

I would do away with the Bush tax cuts for people over a quarter of a million dollars a year income today. I would tax the guys who run those hedge funds on Wall Street the same as working Americans today. So actually, I would take steps to increase revenues more quickly than he is willing to do but I'm going to work to make this a better budget.

KING: Congressman Price, are deficits more acceptable as long as you're honest and open about them?

REP. TOM PRICE (R), GEORGIA: Well, the era of big government clearly is back, John, and deficits are -- I believe deficits are not acceptable in the level to which this president has put them on the table. The budget that he put out there is going to have the largest debt in the history of the nation over the 10-year period of time.

There's more debt in this budget than there has been in this nation from 1789 until today. That's not the kind of change that the American people are interested in. To have the next 10 years have deficits that are higher than any deficit ever in the history is just not acceptable.

There are positive solutions, though, and I hope that we're able to work together to come forward with those positive solutions that would, in fact, restore economic vitality to our nation.

KING: Well, Congressman Defazio, you said you would work with the president to tighten the budget. Families -- I've been traveling a lot the last week. Families around the country are facing layoffs if they work for GM or Caterpillar. They're sitting around, maybe they make $36,000 a year. They don't know what a $3.6 trillion budget is. But they're making tough choices, canceling vacations, not going out to dinner, all sorts of things to fix the family's budget.

This is the president's blueprint. We'll get the details in April. This is the blueprint of the president's budget. Name for me a tough choice in here that says you know what, I like this program. This program has a good goal but it's a time we need to tighten up.

DEFAZIO: Well, a tough choice in there would be we're going to stop subsidizing the banks and lend money directly to students. That means we can lend money more -- you know, more cheaply to students and the banks are going to have to tighten their belt a little bit. We're going to make the hedge fund managers pay the same rate as taxes as an army captain in Iraq where he's right now they pay half the rate.

So there are some tough choices for...

KING: Is it a tough choice to make...

DEFAZIO: Those aren't really tough. Those are easy for me. So -- but beyond that, we're going to have to look to other areas of the budget. The president has promised to review every department, every program and propose to actually do away with things, something that didn't happen during the Bush era.

Remember, Congressman Price said he is ready for, you know, these tough decisions. Well, I'd like to know what ones he's going to make because during the Bush years, we doubled the national debt in eight years, eight years. Spending off the books and tax cuts and all I hear from the other side is more tax cuts.

We are going to have to increase revenues and the president is just starting to deal with that. I would deal with it more quickly.

KING: Well, Congressman Price, answer that question. Because Republicans under President Bush did commit many of the sins they are now accusing President Obama of making in this budget. So I want to ask you, Congressman Defazio says raise taxes on hedge fund managers. I don't know that that's really a tough choice politically.

But you help me then. And give the president a few ideas to make this blueprint a better document when we get around to the debate in April.

PRICE: Well, what I hear from our friends on the other side of the aisle is that we spent too much when we were in charge and therefore they're going to spend a whole lot more. That's not a solution.

Solutions would result in freeing up the kind of credit that needs to be freed up and you can do that by ensuring programs as opposed to taxing individuals out of the incentivization for creating jobs, providing real tax relief for families all across this nation instead of a tax gimmick which is included in the president's budget, and making certain that we decrease the amount of spending at the federal level, not increase the amount of spending.

This budget that's been put on the table, again, has the largest amount of debt in the history of the nation. This is not the direction in which we need to go. It's not the direction that will result in economic vitality for our nation. And I'm hopeful that we'll be able to have an honest, open, sober, calm, reasonable discussion that will result in the kind of solutions that the American people will, in fact, be able to embrace.

KING: Let's have a sober discussion about the challenge you face this week. The Obama budget will come up in the weeks and months ahead for debate. The government is now operating under what we call in Washington a continuing resolution, meaning you did not appropriate the money for this year's budget last year.

So there's a big, again, Washington term, omnibus spending bill making its way through Congress, has to get to the president by the end of the week to keep the government open. It is loaded with earmarks. The things the president has said he would like to go away.

Congressman Defazio, in your own district, in your own district, you get some $58 million in earmarks for water and transportation and energy, portions of the bill we've looked at.

I want you to listen to something the former speaker, Newt Gingrich, said this weekend about all these earmarks.

(BEGIN VIDEO CLIP)

NEWT GINGRICH, FORMER HOUSE SPEAKER: To suggest to us that he is opposed to earmarks, when the very next day, the Democrats are going to bring up a bill with 8,000 earmarks in it, and then to suggest that that one doesn't count, because they started all the pork before he got here. I was looking for change we can believe in.

(END VIDEO CLIP)

KING: Congressman Defazio, you're shaking your head at the sight and sound of your old friend Newt Gingrich. And I...

DEFAZIO: No, I...

KING: I think I understand why...

DEFAZIO: I sure am.

(CROSSTALK)

KING: Why give him a platform? Why give him a platform? Maybe it's hypocrisy, you're welcome to call it what you will.

(CROSSTALK)

DEFAZIO: Come on.

KING: But why give him a platform by sending the president a bill with all these earmarks in it?

DEFAZIO: I'm happy to defend any and every earmark in my bill. Is all the wisdom in this country in the bureaucrats in Washington, D.C. or the political appointees in Washington, D.C., or in my state capital? No. I represent my district. I know where the needs are. And I put money toward those needs and I put my name next to them and I send out press releases and I stand for election every two years.

That is good spending when you repair a jetty, when you help a city with a water system to meet federal mandates. That's good spending and I'm proud of it. I don't share the president's aversion to earmarks and this is half the amount of earmarks the Republicans had the last year they were in power under George Bush have.

KING: He has a point, Congressman Price, in that you do not have any, we could not find any in your name but many of your leaders, the Republican side in Congress have loaded their share of earmarks in this, too.

PRICE: Well, I believe the whole earmarking process and the budgetary process right now is corrupt right now and it's corrupting. The fact that the president said that he won't sign a bill with any earmarks in it and then he's embracing the bill that's on the floor right now is just disingenuous.

Going back to his budget, the budget that he has put on the table will change the very character of the nation because it will remove the ability to make charitable contributions deductible. That means that churches across this nation and synagogues across this nation and community groups all across this nation will not be receiving the same kind of support from their citizens in their communities.

That's not the kind of change that the American people desire. So what we need to do is to step back, say, in a cooperative fashion, look, there are good ideas on both sides. But let's come together and come up with solutions as opposed to keep throwing these stones on past times.

KING: Gentlemen, we're out of time, unfortunately. We'll invite you back in the weeks and months ahead because this is a discussion worth having. I thank you both for joining us this morning.

It's a safe bet in these tough economic times you have questions about your family budget, maybe your small business budget. Well, on the other side of the break, financial adviser Suze Orman has some advice and some warnings. Stay with us.

(COMMERCIAL BREAK)

KING: While the president and Congress debate spending trillions of dollars here in Washington, most families around the country are cutting corners and shrinking their family budgets.

I spoke to personal financial expert Suze Orman about weathering these tough times.

Suze, I have right here your 2009 action plan. About $3.6 trillion in here, I don't think. I want to get your sense as we start. People see the president's budget out there. They also see another rocky week in Wall Street.

I'm going to start by showing you the front page here of the "Omaha World Herald" this morning. Warren Buffett -- people listen to Suze Orman, they also listen to Warren Buffett -- sees no quick rebound. Ben Bernanke, the chairman of the Fed, as you know, was out this week, he says the recession will be over in 2009, 2010 will be a year of rebound. Do you buy that?

SUZE ORMAN, PERSONAL FINANCE EXPERT: Well, I think that we don't know, actually. I think a lot of times people are saying things right now, John, in the hopes that it's going to work out because, God forbid, we should portray that we feel hopeless or we feel confused or we don't know what to do.

I think the truth of the matter is, is that America, every single person needs to have their own personal financial stimulus program. They can't wait to see, is this going to work? Is it not going to work? They have to cut back and do the hard things that they have to do in their own personal family as President Obama is doing right now in America today.

And so will it work? Will it not? Who knows. I have to tell you, I personally don't think they have a clue really how deep this is, the problems that are out there. Every time we, you know, solve one thing, another thing falls so I think it is a very, very serious situation.

KING: Not a very optimistic take there. As you know, Suze, part of the economic problem is structural. Part of it is some people believe a crisis of confidence. I want you to listen to what the president said to the American people in his big speech Tuesday night.

Yes, he says the stimulus program will help. Yes, he says his budget will redirect the economy. But he also seems to be determined -- after a lot of criticism, he was talking down the economy -- to make people a bit more optimistic. Let's listen.

(BEGIN VIDEO CLIP)

OBAMA: We will rebuild. We will recover and the United States of America will emerge stronger than before.

(END VIDEO CLIP)

KING: So a tad more optimistic from the president there. Will that help? Is psychology alone part of the battle?

ORMAN: I think psychology is a little bit of the battle. But, you know, the thing is, I think my driver, John, here in New York City kind of exemplifies this the best. I got into the car right after the president gave his speech. And I said, John, how did you feel about the president's speech? And he said, hopeful. And I said that's good, John.

He said, but, Suze, I don't want hope. I want relief. I want to know on March 4th when the new housing -- you know, when they come out with the new housing rules that I'm going to know, can I keep my house or not on March 4th. I want relief. I don't want hope.

So I think people can be hopeful for very short periods of time. But unless they actually get financial relief and they see something going down to their bottom line sooner than later, hope turns to despair and then there goes the hope. It's gone.

KING: When you talk about people's bottom lines, last year you said if you hadn't already gotten out of the stock market, you might as well stay in and try to catch it when it comes back up. I want to know if you believe that advice still holds after watching yet another volatile down week on Wall Street. Stay in if you're in?

ORMAN: I think -- at this point, you have to stay in. Look how low we are. But you're only staying in if you have time on your side. I have said it forever, I will always say it forever, that you need at least 10 years or longer, preferably longer that you don't need this money.

Then you can dollar cost average into these markets as long as you are at least getting a dividend, some type of payment to stay in. Otherwise, we are in serious trouble. Do I still think that over this year we could see the Dow go down more or really the S&P?

I'm not sure the Dow Jones Industrial Average is even an indicator if you look at how so many of the stocks are under $10 a share and they're not supposed to be on the Dow Jones Industrial Average if they're under 10. They're supposed to be off that index. So if you look at the Standard & Poor's, I would not be surprised to see it at 660 sometime this year. KING: And help Americans who are sitting around the kitchen table as we speak this morning. Maybe looking at their personal budgets and having a very hard time and then maybe looking over at their credit cards thinking well, here, here's how I'll get by for a few months.

Should Americans be running up credit card debate to buy time through this -- through this tough period?

ORMAN: Here is what's, again, so sad at a time when the credit card companies really could be helping everybody by lowering interest rates, by making it so that people could just get by if they stay current on their payments and just get by, it would be OK. That's not what they're doing. They are literally rescinding your credit limit, revoking your credit cards, increasing your interest rates to 32 percent.

They're making it, John, so that credit cards are no longer a viable option to just get by and, therefore, you have to be very careful, everybody, the key to the future is going to be that you have a stash of cash.

KING: She's a big supporter of President Obama but not his plan to leave as many as 50,000 troops in Iraq. Democratic congressman Neil Abercrombie gets "The Last Word" when STATE OF THE UNION returns.

(COMMERCIAL BREAK)

KING: Thirty-two newsmakers, reporters and analysts were out on this week's Sunday morning talk show. But only one gets to have "The Last Word." That honor this week goes to Democratic congressman Neil Abercrombie of Hawaii.

Thanks for joining us, sir.

REP. NEIL ABERCROMBIE (D), HAWAII: Aloha.

KING: Aloha to you.

This is the front page of one of your newspapers back home, "West Hawaii Today." "What if you were president?" Your friend, Barack Obama is the president.

ABERCROMBIE: Yes.

KING: And he has done something in Iraq that you would complement, trying to get the troops out, but maybe not at the schedule you would like and maybe not leaving a residual force, I suspect, much larger than you would like. I want to talk about -- but first I want you to listen to candidate Obama and President Obama.

ABERCROMBIE: Sure.

KING: You might say then and now.

(BEGIN VIDEO CLIP) OBAMA: I have always believed that our invasion of Iraq was a strategic blunder for all of reasons I've talked about, distracting us from Afghanistan, the enormous cost and blood and treasure.

You're borne an enormous burden for your fellow citizens while extending a precious opportunity to the people of Iraq. Under tough circumstances, the men and women of the United States military have served with honor and succeeded beyond any expectation.

(END VIDEO CLIP)

KING: Quite a different tone there from president to candidate. Is your friend, the president, pulling the troops out fast enough in your view and are you worried he's leaving too many behind, up to 50,000?

ABERCROMBIE: I think you have to concentrate on what he said, the strategic blunder associated with Iraq. If you go to a statement on the 17th of February with regard to Afghanistan, it's all about tactics. This is buying political time.

KING: Afghanistan?

ABERCROMBIE: In Afghanistan, to be able to get to a strategy there which is now lacking. Because of the strategic blunder that he enunciated during the campaign in Iraq, he's very, very wary of committing the same kind of tragic move in Afghanistan.

KING: Let's come back to Iraq for a moment, though. Do you think he's taking too long? 19 months instead of 16 months to get the combat troops out?

ABERCROMBIE: Well, I chair the Air and Land Committee, the army, on the defense committee, the Armed Services Committee. I think it can be done faster. It depends on what our strategic idea is there.

If the idea is to continue to occupy Iraq in order to form some kind of stable democracy, a Muslim version of it or a Mesopotamian version of it, that's one thing. I don't think we can sustain that.

KING: And 50,000. Up to 50,000 residual troops, support troops. We can call them what we will to be polite in politics, but those are American men and women who will be in harm's way in Iraq.

ABERCROMBIE: It will be in...

KING: Are you comfortable with that number?

ABERCROMBIE: No, I'm not comfortable with that number and I don't think it can be done. I think it's a reluctance on the part of some of the senior military to admit that there is no military solution or resolution in Iraq. Any residual troop there, by definition, combat troops because the combat isn't ending.

KING: So I want to listen -- I want you to listen to your own words. This is from back in 2007 at a congressional hearing on then President Bush's plan to implement the surge policy. (BEGIN VIDEO CLIP)

ABERCROMBIE: This is the craziest, dumbest plan I've ever seen or heard of in my life.

(END VIDEO CLIP)

KING: Pretty clear language there.

ABERCROMBIE: Yes.

KING: The craziest, dumbest plan. The president of the United States now, Barack Obama, in that speech at Camp Lejuene seemed to be saying the surge worked.

ABERCROMBIE: No, he didn't say anything of the kind. What we did is we bribed people, we paid people not to kill us. That's all a surge is. It's a surge in money. The biggest earmark that we have in the United States today is the payoff that we're making to people who previously killed us.

The biggest amnesty program that we have right now has nothing to do with the Mexican border. It has to do with all the people who are shooting and killing our soldiers in Iraq. All that surge was, was putting in some troops to observe the fact that we have bribed our way out of the insurgency in Iraq.

KING: So you don't like the number he's leaving behind in Iraq. Let's move back to Afghanistan. You mentioned it off the top. He's sending in 17,000 troops in the short term.

ABERCROMBIE: Yes.

KING: The general in charge says he probably needs 30,000. And the president of the United States, the commander in chief himself, says we don't have a strategy he's comfortable with right now.

ABERCROMBIE: That's right.

KING: So we're doing a strategy review, but even as he has that review under way, he's sending in more troops. Does that make sense to you or should we have the review first and then decide about troops?

ABERCROMBIE: I think that he's trying to buy political time with that.

(CROSSTALK)

KING: Should a commander in chief buy political time? These are young men and women.

ABERCROMBIE: Yes, that's precisely the point, because we're trapped there and there is no strategy, and we're trying to figure out whether we should stay or go. I think we should go. And I think that that's what the conclusion will be. The troops that are going in there is to try to associate ourselves with the elections that were coming up.

The problem was, at the time the president said he was going to put the 17,000 time-buying troops in, the elections are going to be in August. Today we find out that President Karzai wants to move the elections to May. And poor Admiral Mullen was on here just a few moments ago on the show, trying somehow to resolve that in his mind.

I'm sure when he came on today he was figuring how are we going to deal with this? The premises that we had for the infusion of the 17,000 troops, none of whom are there by the way, and so that still can be revised and reviewed, was under entirely different circumstances.

We're now trying to move an election up six months. The snap election of President Karzai is because he has no support in the country. So I think even the 17,000 troops may prove more ephemeral than the numbers might think it -- whether we might not think about the numbers as they're presented right now.

KING: "The Last Word" today to Congressman Neil Abercrombie. An issue worth discussing in the weeks and months ahead. Sir, thank you for coming in today.

ABERCROMBIE: Thank you, John.

KING: And up next, we'll head to Philadelphia where this hope of going green could help erase the city's economic despair.

(COMMERCIAL BREAK)

KING: When we hit the road this week we went up to Pennsylvania, specifically to the Philadelphia area. This is one of the industrial states that is hurting. Manufacturing jobs bleeding out. But there are 150 plus green companies operating in the state right now. And the stimulus package is designed to bring, create or save, 143,000 jobs in the next year.

These green jobs are about the environment. And many of them are in old factories that once produced steel. Old industrial jobs. The question, though, people have, how many jobs and will they come fast enough?

(BEGIN VIDEOTAPE)

KING (voice over): Downtown Philadelphia, its struggles are hardly new. But a punishing recession leads it to despair. Bright Hope Baptist Church, the table cloths and plastic flower mask the grim reality. This spaghetti dinner is a lifeline to 100, maybe 125 people a day. The church relies more and more on donated canned goods but supplies from area food banks aren't keeping up with the growing demand.

Trying times in a city and state wants to find a rugged blue collar legacy.

To some, including the new president, this is the new jobs revolution. Giant wind turbines being built at a plant deserted years ago by U.S. steel.

MICHAEL PECK, GAMESA SPOKESMAN: We're divas in the rust field. We're creating good manufacturing jobs, showing that in America we can make things again and we're rolling back climate change. So it's a three for one.

KING: The Spanish company Gamesa employees 900 people in Pennsylvania. Michael Peck expects more jobs as the company expands, in part, because of new energy investments in the Obama stimulus plan.

PECK: I would definitely say that, people who want jobs should keep their eye on Gamesa.

KING: But how many jobs is the big question. The president sees this new green economy ultimately replacing many of the manufacturing jobs that have disappeared in recent years.

Jim Bauer once had one of those jobs in the very building where he now works for Gamesa. 145 in this building, 300 in all at this location just outside of Philadelphia. The jobs math here was , though, different when U.S. steel was thriving.

JIN BAUER, GAMESA EMPLOYEE: 9,000 to 11,000.

KING (on camera): But those jobs are...

BAUER: Gone.

KING: Gone. And you don't think they'll ever come back?

BAUER: I don't think so.

MAYOR MICHAEL NUTTER (D), PHILADELPHIA: This is the new economy. And it's still manufacturing.

KING (voice over): This new bakery will recycle rain water and have state-of-the-art energy efficiency. But at the outset, Mayor Michael Nutter is told the same 350 workers and an older Tasty Cakes facility across town.

(On camera): To answer the critic out there who say, they keep hearing this, you know, in a blue collar city, talking about these green collar jobs. Answer the critic who says they're great. That's great. We want as many of them as we can get. But it's a tiny piece of the solution.

NUTTER: You know, if you're unemployed, I think you're pretty excited about the opportunity to get one of these jobs. You know, we don't necessarily live in an environment where you can just swing for the fences and you're looking for the -- you know, the 2,000-person job opportunity. I think, you know, singles, doubles, triples, losing folks around the bases as well.

KING (voice over): In time Mayor Nutter echoes the president's view that new green construction and energy jobs will grow at a much faster pace. Though at the moment he isn't sure when the first wave of stimulus money will reach the city.

NUTTER: Maybe summer, into the fall, after, you know, the rates get situated, you know, plants and their applications get reviewed and somebody checks off all the boxes that need to be checked off.

KING: That could test patience in a city where the unemployment rate is more than 8 percent overall, and in double digits among African- Americans and Latinos.

This state career help office is packed all day by people searching online for vacancies, or using the hotline that rings directly to the office that processes unemployment benefits.

The Gamesa plant sent word of a few job openings. For most, the search is beyond frustrating and they can find no evidence it will get better any time soon.

(END VIDEOTAPE)

KING: We'll be here again next Sunday and every Sunday at 9:00 a.m. Eastern for the first and last word in Sunday talk. Until then, I'm John King in Washington. Take care.

"LARRY KING WEEKEND" begins right now.

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