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STATE OF THE UNION WITH JOHN KING

State of the Union: Best Political Team on Television

Aired July 5, 2009 - 11:00   ET

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


KING: A startling admission this Sunday from Vice President Joe Biden. As Republicans say the president's prescription to create new jobs isn't working, the vice president concedes the administration underestimated the depths of the recession.

(BEGIN VIDEO CLIP)

JOE BIDEN, VICE PRESIDENT: The truth is there was a misreading of just how bad an economy we inherited. I'm not laying -- it's now our responsibility. So the second question becomes, did the economic package we put in place, including the recovery act, is it the right package given the circumstances we're in?

(END VIDEO CLIP)

KING: The vice president says it's too soon to say whether the economy needs a second stimulus package, but a top Republican who voted Democrat for president last year told me here on "State of the Union" he's already worried President Obama is trying to do too much and running up way too much debt.

(BEGIN VIDEO CLIP)

POWELL: Yeah, I'm a little concerned, concerned. I'm concerned at the number of programs that are being presented, the bills associated with these programs and the additional government that will be needed to execute them.

(END VIDEO CLIP)

KING: Another big topic of Sunday conversation, Sarah Palin's abrupt decision to quit as Alaska's governor. The man replacing her says he doesn't know if Palin wants to run for president, but he predicts she'll remain in the headlines and on the public stage.

(BEGIN VIDEO CLIP)

LT. GOV. SEAN PARNELL (R), ALASKA: She has plenty of time now within which to define how she will further her core of values. But I have to tell you, when she went to Kosovo and visited our guard members and the wounded soldiers there and in Germany, she saw that she doesn't need a title to affect change and bring some hope to people who need it.

(END VIDEO CLIP) KING: As you can see, as always, we watch all the Sunday shows so maybe you don't have to. Let's bring in part of the best political team on television as we do every Sunday at this hour and break down the pressing issues.

In Washington, two CNN contributors, Democratic strategist Donna Brazile and host of "Morning in America," Bill Bennett. And in New York, Republican strategist and CNN contributor Ed Rollins. Two Republicans this day, not to outnumber Donna, maybe it takes two Republicans to debate Donna. But two Republicans because there's so much Republican news in the news.

And let's start ladies and gentlemen with Sarah Palin's abrupt announcement, surprise announcement that not only would she not run for re-election next year, Bill Bennett, but that she is quitting at the end of the month, quitting her job as Alaska's governor. You're in touch with the base, Bill, every day on your radio program and in your travels. Is she going to run for president?

BILL BENNETT, CNN CONTRIBUTOR: I don't know. Two Republican gentlemen, I might add, John, so Donna can be reassured. I think she is. I don't know. I'll find out tomorrow what the base thing. I'm looking forward to my radio show, three hours of this.

We'll find out soon whether she means to focus a lot more on home and family or whether she is seeking to advance those core values on the stage as you said.

But once she gets on that stage, if she comes and spends a lot of time in the lower 48 giving speeches, doing Lincoln Day dinners, et cetera, et cetera, we still won't know whether that's part of the plan for the next presidential run or a way to capitalize on her popularity and the fact that she is so well-known and so -- gets such strong reaction.

My guess is this, very simply. I think a part of the party, the conservative base of the party likes her very much. She appeals to conservative values. On the other hand, conservative means something else apart from conservative values. We're a conservative party in another sense. She is spunky, she is energetic, she is very attractive. But will she reassure enough of the party if she decides to run? That's the other side of being conservative.

KING: Well I think that's one of the great questions, so I want everyone to listen to a little bit of Sarah Palin, because there are some people who listen to her speak and they find it incredibly charming. I can tell you from traveling to last year's campaign, some people are riveted by her speaking style. Others look at her and they find her a little bit rambling and a little scattershot. Listen to this little snippet.

(BEGIN VIDEO CLIP)

SARAH PALIN (R), FORMER GOVERNOR: Life is too short to compromise time and resources. And though it may be tempting and more comfortable to just kind of keep your head down and plod along and appease those who are demanding, hey just sit down and shut up, but that's a worthless, easy pass out. That's a quitter's way out. And I think a problem in our country today is apathy. It would be apathetic to just kind of hunker down and go with the flow. We know that only dead fish --

(END VIDEO CLIP)

KING: Only dead fish go with the flow, she finished there. Donna Brazile, when you listened to her the other day, did you see someone who was stepping out of the spotlight to disappear and be with her family or somebody who was preparing to come back in a different way?

DONNA BRAZILE, CNN CONTRIBUTOR: I think Governor Palin has made a very risky decision, John, in deciding to quit before her term ends at the end of 2010. Look, she's jumping out of the frying pan into the hot glare of the media spotlight into the fire. And she has the potential of flaming out before 2012. Therefore, she needs to do something that she did not do well once becoming a national, you know, hero to the conservatives, and that is she needs to manage her next 15 minutes of fame a lot better than she has done over the last, you know, year of being on the national spotlight. She needs to really focus on getting her ground game together. Not just with the base of the party but with the American people themselves. And so perhaps writing this book, she will have time to write her book, she will have time to select states and venues in which to go out and give public speeches and also she'll have an opportunity to learn a little bit more about foreign policy.

KING: Flaming out. Ed Rollins, do you agree she's flaming out?

ED ROLLINS, CNN CONTRIBUTOR: I think yesterday was a disaster, Friday was a disaster for her both in the sense that she was very incoherent in articulating why she was quitting and what she wanted to do with it.

And as I always say, you call press conferences to answer questions, not to basically raise questions. I think the serious thing here is 311 days ago, very few people in America, very few Republicans outside of Alaska knew who this woman was. She had a tremendous first few weeks as a campaigner, but she got super imposed on top of the Republican establishment. It's sort of like taking a helicopter and putting her on top of Mt. Everest, which John McCain was flying it.

Everybody else climbed up that ladder, and all of the sudden she's on top of the mountain. She didn't like it -- or she did like the top of the mountain. What she didn't like was coming back to Earth, flying back to Alaska to her job as governor.

I think the reality here is her biggest mistake is walking away from the job as governor. She would have at least had a record to run on. She is going to have a partial record today that's going to be very incomplete. I found her very insulting to other governors. We have 22 other Republican governors, 19 of whom are basically going to be out of this office after running in two years. Nine are term limited and many others have to run. And she basically said in the last year you run around and do all kinds of things, and I would predict to you every single Republican governor like most Democratic governors are at their desk trying to figure out how to get through the economic crisis. I think she insulted them. I think to a certain extent it showed a naivete and I think she basically left a big, big void in her resume.

KING: Bill Bennett, I see you shaking your head, jump in.

BENNETT: Two Republicans and one Democrat. OK, well, I understand what Ed is saying. Ed of course ran the Huckabee campaign and Huckabee slugged through all of those primaries and one can understand this. And I yield to very skillful, smart campaign managers, but I saw all these comments about leaving the governorship early.

I think to political pros this may be a problem. To the base, I'm not sure it's going to be a problem at all. Remember, there was another criticism of Sarah Palin or doubt about Sarah Palin, that she couldn't run a presidential campaign from Alaska. It's just too remote, it's too far away from the rest of the states. Well she won't have that problem now.

Look, I'm not saying she's odds on to win the nomination by any stretch of the imagination, nor am I saying she doesn't have some serious questions about her, but she is, in fact, leading the pack when you do these informal polls.

All I'm saying at this point is I don't think it will change those numbers, and I expect there will be a lot of excitement about the base. Will there be questions? Tons of questions, but the flame- out disaster, I think it's too early to say that.

KING: Let's bring on that point. Hold on one second, Donna. On that point, I think we have in the control room we can bring up on our screen, the most recent CNN poll when it came to Republicans running for president, shows essentially a three-way tie between three people we knew from the last campaign.

KING: Governor Huckabee, former Massachusetts Governor Mitt Romney, and Sarah Palin, all in the 20 percent.

When it comes to that, Donna, you have been in Democratic primaries. If you're running in a campaign with a crowded field, she might not need 35 percent, 20-something -- and there you see the graphic up there, 22 for Huckabee, 21 for Palin, 21 for Romney. It is very, very, very -- and I could throw in a few more very earlys.

But with that committed base, Donna Brazile, you can do some business and some damage in a primary without going that much higher if the field is crowded, right?

BRAZILE: Yes, but look at the primary schedule. First of all, she will probably do very well in the Iowa Caucuses, but New Hampshire, where you have to appeal to independents and then the other early states, I don't know if she has the kind of staying power that will give her an opportunity to, say, beat someone like a Mitt Romney or a Newt Gingrich.

These are men that really come to the table with much more than just their resume. They come with ideas and they come with a serious portfolio. So I think, once again, she will face a unique set of challenges not only because she's no longer governor, but she's also a female.

And we all know that women candidates face unique hurdles in national politics. And again, I don't know if Sarah Palin is prepared for this next round of media scrutiny that she will receive now as an author, as a lecturer, and maybe as a leader of the conservative base.

ROLLINS: Primaries are also very, very different than general elections. She had a very brief period in a general election. Primaries are long, hard processes. Ask Hillary Clinton, ask Barack Obama, ask Rudy Giuliani who had all of the name ID, all of the poll approvals, all of the resources in the world, and did not get one single delegate.

So it's a long, hard battle here. She has great name ID. She had great potential. I just think she basically is taking herself out of the game.

(CROSSTALK)

KING: On that point, let me jump in, Bill, before you answer, because I want to come to you in a second. I want you to listen to Lisa Murkowski. And this is complicated because Sarah Palin has a very difficult relationship -- confrontational relationship with Lisa Murkowski's dad on occasion, former Senator Murkowski.

But she said this: "I'm deeply disappointed that the governor has decided to abandon the state and her constituents before her term has concluded." Bill Bennett, as we come back to you, that would be the criticism, right? That quitters shouldn't be president?

BENNETT: Sure, sure, sure. And the officials have spoken, some of the pundits have spoken, campaign managers have spoken. And let's see what the people have to say. I agree with Ed, a long vetting process can be difficult. And we shall find out. But that's a good thing about a long vetting process, we'll find out if these arguments about her, you know, that people make, these very negative arguments will hold up or whether she will rise to the occasion.

What I'm saying is, I don't know think she has taken herself out with the base -- with the conservative base. I think they're still very excited about her, and we shall see. Remember too, she still has some money in the bank from the kinds of attacks that were made on her, which were so harsh some people just come reflexively to her defense given what -- the kind of beating she took.

KING: I want to read what she posted on her Facebook site yesterday and get your opinion on this one. Sarah Palin wrote this: "How sad that Washington and the media will never understand, it's about country. And though it's honorable for countless others to leave their positions for a higher calling and without finishing a term, of course, we know by now, for some reason a different standard applies for the decisions I make."

Donna Brazile, is Sarah Palin somehow held to a different standard in our politics?

BRAZILE: No, absolutely not. Look, if she decides to run in 2012 and say Haley Barbour of Mississippi, or Tim Pawlenty of Minnesota, those guys can go out there in the debate and say, look, while Sarah Palin went back to Alaska to go fishing, they had to get down with their legislature and to balance their budgets.

So once again, it's about leadership, not just personality, filling the vacuum in the conservative base. This is about bringing goods and services to the people that elected her. And she -- I agree with the senator, she abandoned them.

KING: I think the happiest guy in Republican circles has to be the South Carolina governor, Mark Sanford, who was bumped off the front pages by Governor Palin's dramatic announcement. He's coming back from Florida. He spent with the weekend with his family trying to repair his relationship with his wife and with his children.

He is coming back to the statehouse in Columbia tomorrow. Bill Bennett, you mentioned your conversations with the base, people who call in every day on the radio show, Governor Sanford, despite many calls for his resignation has said no, he is going to rebuild the trust of the people of South Carolina. Do you suspect he will be able to hold that position, Bill?

BENNETT: No, I don't. You could argue this weekend the wrong governor resigned. You know, it was just -- it should have been Sanford. She should have hung on for number of reasons. No, I don't think he can.

As to his personal life, obviously that's up to Mrs. Sanford more than anyone else. But, no, I heard that the AP interview, John, that he did was something like six hours long. I've never had a confession that long. I don't know about you, John King, Ed Rollins.

ROLLINS: You could have. You could have.

BENNETT: Yes, Ed. Yes, Ed.

(CROSSTALK)

ROLLINS: If you confessed all your sins...

(CROSSTALK)

(LAUGHTER)

BENNETT: Yes. Sunday mornings, thanks very much. But, no, seriously, I don't think he can last. It's just -- we've heard too much. You know, there's a phrase called "indecent exposure," it usually suggests showing too much flesh, he has shown a little too much of what's going on in his soul, and I -- or somewhere, and it's not good. And I think the sooner he leaves the better for the state of South Carolina and for the family.

And I say this as a friend of Mark Sanford's, go, be gone.

KING: Ed Rollins, do you agree with that, the wrong governor resigned?

ROLLINS: Totally. You know, I mean, there was no reason for Sarah Palin to resign other than her own desire to. Governor Sanford has lost any effectiveness in the state. The legislature, which is now majority Republican, are calling for his resignation, every major newspaper.

He wasn't that popular before all of this started for a variety of reasons, some good, some not so good. But at this point in time he is just going to live it out and slug it out and not be very effective. and I think that's not fair to the citizens of that state.

KING: Take a time out here.

BRAZILE: I have to agree with both gentlemen.

KING: Go ahead, Donna. Go ahead.

BRAZILE: And I have to agree with both gentlemen. Look, when he deserted the state to go and fly off to be with his mistress, he made a decision then to step aside from his public duties. So I think it's time for the governor to make this decision on behalf of the people.

KING: Look, I'm sorry, but I'm going to have to -- because you raised that point, I'm going to jump in on this point that I don't remember you calling for President Clinton to resign.

BRAZILE: Well, actually, I wasn't in a position to call for him to resign, but I must tell you, I don't think that what the governor did in South Carolina and what Bill Clinton did are one in the same.

And I'm not a moralist, but I'm just saying that I think that the governor of South Carolina deserted his state and did not tell everybody -- anyone where he was going, and then he turned around and lied. So there you have it.

BENNETT: He's not under oath.

KING: Well, I could go on on this point for a little bit, but in the interest of discussing important issues like the economy, we're going to take a quick time out.

When we come back, nearly 500,000 Americans lost their job last month, and the unemployment rate went up. Much more of our conversation with our panel focusing on economic issues when "State of the Union" returns.

(COMMERCIAL BREAK)

KING: We're back with Donna Brazile, Bill Bennett and Ed Rollins. I want to turn our focus to the economy and how the numbers don't match what the administration had predicted.

And we can show you, up on the screen, here, the Obama administration predicted the unemployment rate would average 8.1 percent this year. It went up to 9.5 percent in June, and some say it will run even higher.

The administration also said its stimulus plan would create or save 3.5 million jobs -- to be clear, they said, over two years. The economy has lost 2.3 million jobs since the stimulus bill passed. And the administration predicted GDP, the growth of the economy, would be negative 1.2 percent this year. It was negative 5.5 percent in the last quarter.

Donna Brazile, as the Democrat in the group, is it time -- because all of those numbers impact tax revenues to the government, how much the government has to spend, what the government has to do to help people who are unemployed. Is it time for the administration to look at its ambitious agenda and say, you know what, the economy's worse than we expected; some of this has to wait?

BRAZILE: John, I think that's what his critics would like him to do. They would like the president to just abandon all of the long- term plans that will put us on a better financial footing for the long haul.

I think the president needs to huddle with his economic advisers when he returns from the G-8 summit to basically say, look, what's working; what's not working? Where are we now with the stimulus money going into the hands of the people and to the states and to other entities?

And he also needs to perhaps recalibrate just what's going to happen with the fiscal 2010 budget, which is still going through the appropriation process.

This should not be a reason to panic. It should be a reason to lead, and I think the president has shown that he's willing to lead.

KING: Well, before I bring the Republican gentlemen into the conversation, I want you to listen to this mix of sound out this morning. The House majority leader, Steny Hoyer -- remember, it was the House Democrats who put the stimulus bill through the Congress first. Steny Hoyer, this morning, saying, you know what, he's disappointed.

(BEGIN VIDEO CLIP)

REP. STENY H. HOYER, D-MD., HOUSE MAJORITY LEADER: I don't think anybody can honestly say that we're satisfied with the results, so far, of the stimulus, but we believe the stimulus was absolutely essential.

Mark Zandi, as you know, who was one of McCain's economic advisers, says it's going to create 2 million jobs by the end of the next year.

(END VIDEO CLIP)

KING: So a leading Democrat says he's not satisfied. Here's the House Republican leader, John Boehner, essentially saying, we told you so.

(BEGIN VIDEO CLIP)

REP. JOHN A. BOEHNER, R-OHIO, HOUSE MINORITY LEADER: This was supposed to be about jobs, jobs, and jobs. And the fact is, it turned into nothing more than spending, spending, and more spending on a lot of big government bureaucracy.

(END VIDEO CLIP)

KING: Ed Rollins, Republicans think they have the upper hand in the political argument about this right now. Is that the way you see it?

ROLLINS: Well, I -- I don't know if they have the upper hand or not. I think the bottom line is the stimulus bill was not the right bill at that particular point in time. It was rushed through. It wasn't even read by most members of Congress. It didn't create the kinds of jobs that we need.

This president needs to focus, and this Congress needs to focus on what is it that we can get Americans back to work.

I promise you, having lived through the last time we reached 9.5 percent, having been in the White House during the Reagan administration, it's going to go to 10 percent. It's going to go to 11 percent.

And the bottom line, when it goes -- those numbers go that direction, you're going to see approval ratings and everything else deteriorate.

The country needs to put people back to work. And anything else that you're wasting your time on is just exactly that, wasting your time on it. We need jobs. Putting more burden on employers, putting more burden on working people and not creating an infrastructure out there that basically can create jobs is -- is foolhardy at this point in time.

KING: Well, let's demonstrate the point Ed Rollins just made about approval ratings. And I'm going to use the governor of Ohio, a Democrat, Ted Strickland, as the example, not to pick on him but to show an important trend, politically, as we go toward 2010.

The Quinnipiac poll asked, "How is Governor Strickland handling his job?"

His approval rating is now 46 percent. That is down 11 points from just two months ago, and his disapproval rate is 42 percent, up from 29 percent.

And then to the key question, "How is Governor Strickland handling the economy," only one-third of his state's residents approve; 53 percent, a majority, now disapprove of Governor Strickland's handling of the economy.

Bill Bennett, if you are a Democrat and, like Governor Strickland, you are on the ballot in 2010, is that proof to you that you can no longer say, "Well, this is George W. Bush's fault; we inherited a mess"?

BENNETT: Yes, well, you notice the way Biden corrected himself this morning on that, when he said what we inherited was worse than we thought. He said, "not that we're blaming it on them. We made mistakes too."

I'll go back to what Donna said. I do think they need to huddle -- re-huddle and say, have we gotten some of this wrong?

Donna said, you know, he shouldn't abandon all plans. Well, how about half the plans -- at least take another look at them?

Because every calculation, every assessment to date has been wrong, has been mistaken; 460,000 people who had jobs in May, this past May, no longer have those jobs.

And when you look for signs in the universe, it's not Republican opposition. I mean, I think Republicans do have a better argument here. That won't surprise you.

(LAUGHTER)

But what's interesting is to hear the kind of demurral that you heard from Colin Powell earlier on your show, John -- earlier on this show -- saying, "I'm very concerned about this." He's a strong Obama supporter.

But probably the biggest problem of all, in terms of testimony, is these numbers that keep coming up on unemployment, jobless -- unemployment, failure of growth, and the Congressional Budget Office numbers, which I think really were staggering, pointing out the cost of some of the things that Barack Obama has proposed.

They got on Bush for the deficits, but George Bush's deficits begin to look like rounding errors compared to Obama.

BRAZILE: Oh, I disagree strongly with that. because...

(CROSSTALK)

BRAZILE: ... how can you say that George Bush's deficits look like rounding errors when we saw -- when we saw...

(CROSSTALK)

BENNETT: Comparatively.

BRAZILE: ... when the deficit doubled under George Bush?

And we know that President Obama came into office with a deficit, this fiscal year, already $1 trillion.

Look, in the last recession, in 2001, it took 42 months before the jobs came back; in the recession in 1991, 32 months.

We've had a very serious credit problem. And what President Obama was trying to do and continues to do is to try to get the credit market unfrozen and to get manufacturing jobs moving again, because that's where we've lost many of these jobs.

The service industries are coming back, but the manufacturing sector still is lagging. So I think we need to give the president time to get these policies to work right.

(CROSSTALK)

ROLLINS: He's going to get the time. The bottom line is, does he have the solutions?

And I think the problem is he's got a bunch of Wall Street bankers around here, many of whom the same types of people that got President Bush in some of the problems he was in.

We haven't solved the mortgage problem. People are losing their homes day by day. We spent an enormous sum of money to try and fix that. General Motors, Chrysler are not any better than they were.

At the end of the day, we're now not going to have funds for a new highway bill which creates jobs.

So I think there's a lot of things that -- we're spending a lot of money, and we now have a big, massive health care plan, in which we're going to add 46 million people to the game, which may be positive, but at the end of the time, we're going to put more taxes on employers, more penalties on employers, most burden on employers.

And the only cuts that I've seen is you're going to take money away from doctors and hospitals that basically are not getting enough today to provide proper health care.

So I think your point, Donna, of re-looking at this thing is important, but you also have got to set priorities. And I don't think the priorities are being set right now.

KING: I need to call a time-out at this point. I'm sorry. I need to call a time-out to keep time, because we want to -- I want to thank Bill. I want to thank Ed. I want to thank Donna.

I need to call a time-out because, in a moment, we're going to take you to a very special place, the Walter Reed Army Medical Center in Washington, D.C., where we sat down for a meal with two service men and discussed both the horrors of war and what the fourth of July means to them. Stay with us.

(COMMERCIAL BREAK)

KING: As you know, every week we sit down for a meal to try to better understand your concerns. And this July 4th weekend, we wanted to focus on service. With a big deadline in Iraq and a new escalation in Afghanistan, we settled on a remarkable place close to home here at the nation's capital and to visit the Walter Reed Army Medical Center. And I want to pull up the campus right here, using our map program. You see the campus right up in here. To visit the Walter Reed Army Medical Center is to see all at once both the horror of war, these veterans in their wheelchairs and the remarkable courage of the men and women who fight the wars overseas.

In Iraq and Afghanistan, more than 10,000 wounded from those battles have come through Walter Reed in the past eight years. It is remarkable to see what happens here. Many have lost their limbs or their eyesight, but never their pride in their service.

So it was an honor for us to hear the reflections of a medic and a chaplain, two men who have seen the worst overseas and are now helping heal their comrades, here at home.

(BEGIN VIDEOTAPE)

KING: Talk me through your experience in terms of deployment before you got here.

SGT. JOSEPH HIGHBERGER, U.S. ARMY MEDIC: I was deployed to East Baghdad with the military police company and we deployed in 2005. During the time of the first election, we had to pull a lot of guards during that time. It was very hectic.

MAJ. BYRON VAUGHN BRIDGES, U.S. ARMY CHAPLAIN: I first deployed in one right after 9/11. A couple of months later I was over in Pakistan we were in Afghanistan also doing some operations, and that was back in 2001-2002. Then I returned -- redeployed at Ft. Campbell and then nine months later, the Iraq invasion, I was there in March with the 101st airborne. And then just this past year, just three months ago, I just returned from Afghanistan.

KING: When you were there around the elections, it was the dicey time, but it was also portrayed by many including the political leadership here as a break-through time.

HIGHBERGER: That's what we all kind of wanted to believe when they said that the elections were going as planned. KING: Does it give you some pause now when we see the troops coming out of the cities and the drawdown? We're at 131,000, supposed to come down steadily now. Do you ever in the back of your mind think, I hope it works this time, but my experience is we better be careful?

HIGHBERGER: Absolutely, absolutely. Whenever we have a chance to end something like this, it's always applauding and uplifting but in the back of your mind, you think it could always go bad. You never know. There's a lot of unknown variables in doing something like this.

KING: In terms of being a chaplain and ministering to people who have had two, three, sometimes four deployments, who have seen and in some cases, experienced horrific trauma and violence, just take me through the difficulties of that, the challenges.

BRIDGES: You do see a lot of trauma, especially this past year. I saw a lot of things I didn't want to see, but it was something I'll never forget. In the chaplaincy, we have this saying "nurture the living, care for the wounded and honor the dead." And basically you do those three things as a chaplain.

KING: We have an all-volunteer military. Do you think the average American who doesn't wear that uniform who hasn't been to Iraq or Afghanistan or hasn't seen what you seen, do you think they have any understanding?

HIGHBERGER: We get into firefights and we get into ambushes, you have this trust with each other. There's a team-building experience. It's so hard to imagine that another civilian job could create such a bond. I don't think so, no, I don't think they can fully understand it.

KING: This is July 4th weekend. We sit down with folks every week but we wanted to come to a place like this where you're going to see flags flying all over the country and all over this town. But you guys wear them every day on your shoulder. What's this weekend mean?

BRIDGES: As you ask that question, I can't help but have a chill going down my spine. I love this country and I love this army that we serve. I've served with many units and I'm proud to wear, you know, these patches and I just -- I'm thankful to God. I'm very thankful that he's given me this opportunity in my lifetime to be able to serve him, god, and country.

HIGHBERGER: Absolutely, it is a privilege and serving here and serving the United States and doing what you can, it's kind of continuing a tradition and just do what's best for your country.

(END VIDEOTAPE)

KING: Two remarkable guys there at a truly remarkable place. And we thank them for their time and their service.

Up next, three of the top CNN reporters open their notebooks as we discuss the stories you'll be talking about all week.

(COMMERCIAL BREAK)

KING: I'm John King, and this is "State of the Union."

Here are stories breaking this Sunday morning. An autopsy is scheduled on the body of former NFL quarterback Steve McNair. He was found shot to death yesterday in a Nashville condominium. Police say he'd been shot multiple times including once in the head. The body of a young woman was found lying nearby with a single gunshot wound. Police say they are not actively looking for suspects.

Two monorail trains crashed at Disneyworld in Orlando, Florida, early this morning. One driver was killed. In a statement, Disney officials say the monorail has been shut down and the company is working with law enforcement officials to determine just what happened. Officials say no Disney guests were seriously injured in that crash.

Michael Jackson fan will soon find out if they're going to the singer's memorial service Tuesday in Los Angeles.

KING: Registration to win tickets ended last night, 1.6 million people signed up. Officials will eliminate all the duplicates and suspect entries and then hold a random drawing -- 8,750 winners will receive an e-mail notification later today.

Vice President Joe Biden says the Obama administration "misread how bad the economy was." He made that admission earlier this morning on ABC's "This Week." But Biden stands by the administration's stimulus package and insists it will create more jobs as the pace of stimulus spending picks up. Biden says it's too early if a second stimulus package will be necessary.

Those are the headlines this hour. A new controversy playing out this morning on whether gays should be able to openly serve in the military. We'll be right back with that right after a quick break.

(COMMERCIAL BREAK)

KING: Welcome back to STATE OF THE UNION. Joining me now, CNN's Pentagon correspondent Barbara Starr in Washington, CNN senior White House correspondent Ed Henry and CNN's foreign affairs correspondent Jill Dougherty, both in Moscow where President Obama will meet this week with his Russian counterpart.

I want to begin with a statement Joe Biden, the vice president, made this morning interviewed on ABC's "This Week." He was asked even in the fallout in the election in Iran, even with the administration's disappointment on crackdown of the protesters in the street, is the president's offer on the table to sit down on a very high level and talk with Iran still on the table? And the vice president said --

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BIDEN: If the Iranians seek to engage, we will engage.

STEPHANOPOULOS: And meanwhile the clock is ticking with --

BIDEN: Let me clear. If Iran responds to the offer of engagement, we will engage.

STEPHANOPOULOS: But the offer is on the table.

BIDEN: The offer is on the table.

(END VIDEO CLIP) KING: So Ed Henry, the vice president saying the offer is on the table and that they're waiting for the Iranians to check in. Is that a political answer, or do they really believe the Iranians at this point are ready at a high level to sit down? ED HENRY, CNN SR. WHITE HOUSE CORRESPONDENT: Well, they're hoping the Iranians will sit down, but obviously, there's really no indication yet that the Iranians coming out of that very much disputed election are ready to come to the table. So I think what's clear is this administration is trying to signal they're still ready to talk. The question is whether the Iranians are.

KING: And Jill, Secretary Clinton in the campaign criticized the president saying she was too willing to sit down at a high level. What is the threshold now? What would the Iranians have to say in an offer to the administration that the administration would say OK, this is worth the risk?

JILL DOUGHERTY, CNN FOREIGN AFFAIRS CORRESPONDENT: I think they'd have to do something on the nuclear side of it, because that's absolutely what the core issue is. And that's what the administration is leaving the door open to. They obviously don't like what happened during the election, but they realize that the overriding issue is whether Iran does have a weapon. And so they're willing to talk to them about that.

KING: I want to bring Barbara Starr into the conversation, and Barbara, I want to start with a different issue. On this program this morning, two startling statements or progress statements you might say from two men who have held the position of chairman of the Joint Chiefs of Staff. One is the former chairman of the Joint Chiefs of Staff, Colin Powell, now retired. I asked him if he still stood by the position he had some years ago that the policy "don't ask don't tell" that prohibits gay and lesbian Americans from serving openly in the military was still a good one. Let's listen.

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POWELL: Well, the policy and the law that came about in 1993, I think, was correct for the time. Sixteen years have now gone by, and I think a lot has changed with respect to attitudes within our country. Therefore, I think this is a policy and a law that should be reviewed.

(END VIDEO CLIP)

KING: And as that review goes forward and the president of the United States has promised to change that policy, the man currently in that job, Admiral Mike Mullen, says he believes the political tide is about to shift.

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MULLEN: We clearly are carrying out both that policy and law, and we'll continue to do that until it changes. Secretary Gates spoke recently about reviewing the policy to see if -- to make sure that we were executing it in the most humane way possible. It's very clear what President Obama's intent here is. He intends to see this law changed.

(END VIDEO CLIP) KING: So Barbara, it's very clear what President Obama's intent is, Admiral Mullen says, but privately is his position still as it was two years ago, that he believes the current policy should stay in place?

BARBARA STARR, CNN PENTAGON CORRESPONDENT: Well you know John, make no mistake, what Admiral Mullen and other top leaders have been saying is, the law needs to be -- if somebody wants to change this, then the law needs to be changed. That they have no flexibility other than to enforce the law as it now exists, which is "don't ask don't tell."

But when Admiral Mullen said this on your show today, it was remarkable. I think this notion of talking about the president's intent, the admiral, really threw the marker down on the table to the rest of the U.S. military. This is what the president wants, the military will support him, the only question now is how to get it all done with Congress, John.

KING: And as the president prepares to come to Moscow where Ed and Jill are standing by, an issue that Barbara has been tracking in recent days is the escalation in Afghanistan. It will be an issue when the president is meeting with his Russian counterpart. But I want all of you to get a chance to listen. Admiral Mullen in addition to discussing "don't ask don't tell" spent some time on our magic map going through the escalation that the military operation now under way in Afghanistan outlying the stakes. Let's take a listen.

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MULLEN: I'll take you up close down into Helmand where the fighting is really going on. You can see specifically in this area of Garmsir as well as Khan Neshin, which is where the Marines are engaged. But what cuts through there is this river, the Helmand River, the whole river valley. And this is really the most concentrated area for opium growing. And we expect significant combat challenge with respect to the Taliban who have been there and we haven't been able to clearly defeat them and clear the area. And it's this extra footprint of marines I think that allows us to not just secure the area for the Afghan people but also hold it.

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KING: So Barbara, empty your notebook for us. Admiral Mullen was relatively optimistic about what's happening in Afghanistan. He sounded a little bit less so when I asked him, what happens if they all just melt across the border into Pakistan.

STARR: You know, that is still the same issue. How many years have we been all been out here talking about that battle or that offensive in Afghanistan.

STARR: This will be the one that will really makes the difference?

Look, they hope so. President Obama's surge, 21,000 extra troops into Afghanistan -- it does give the U.S. military more capability to go in, seize territory and hold territory.

But as long as you have the Taliban drifting away, melting into the hills, into the desert, they're waiting it out. That's what these insurgents do.

So, fundamentally, this is going to be a waiting game. Can they push the Taliban out long enough to establish security, make the people feel that their lives are more secure there, and give the Taliban nowhere to come back to, eventually, or do the Taliban do what they always do, and just wait it out for another day?

KING: And Jill Dougherty, from your reporting in Washington,, then in Moscow, now back in Washington again, you know all too well Russia's checkered history of operations in Afghanistan.

But at this summit with President Obama, we do expect progress on a front that the United States is quite optimistic about.

DOUGHERTY: Right. And that already pretty much is known as one of the deliverables, as they call them, from this summit.

The Russians have agreed that they will allow military equipment to be airlifted -- there may be even more after that -- but at least airlifted across Russia, Russian territory, into Afghanistan.

And it's a good sign that the Russians are, you know, willing to help out. Because they've always been conflicted, John. You know, they wanted to -- they said they wanted to try to defeat the Taliban, help in defeating the Taliban, I should say, but they were also very wary of any presence of the United States in Central Asia.

And so now they seem to have turned that page and they are willing to help out. They did allow non-lethal supplies, et cetera, to go into Afghanistan even before this.

And, John, I have to tell you that President Medvedev, just this afternoon, made a very interesting comment, saying that, essentially, the United States can't win in Afghanistan if it goes in just with a military approach. He almost sounded like Barack Obama, that you have to build up the society and the economy. KING: Ed, as you know, some have criticized the White House. It is the Russians who invaded Georgia last year, and some have said, well, in trying to restart the relationship, is he brushing those concerns aside, maybe being a little bit too soft, as some in Washington have said?

And some in the government of Georgia are watching this warily. How does the administration answer those critics?

HENRY: Well, they've got to walk a fine line there. They have to walk a fine line on missile defense. The shield that former President Bush wanted to build in Eastern Europe, the Russians are very upset about that.

The Obama administration has not committed to moving forward on that. They're, sort of, trying to use it as a chip in these negotiations between President Obama and President Medvedev about whether or not there will be cuts in nuclear arms on both sides.

But let's face it, a whole 'nother issue for President Obama to face. I brought along these nesting dolls, so famous in Russia. You've got President Medvedev in charge, many people believe, but on the other hand, you also have former President Putin, right next to him, who is still the prime minister.

And so you've got President Obama trying to figure out the power structure here. Is Medvedev really in charge or is Putin pulling the strings behind the scenes?

As you know, there was so much -- it started out as a very warm relationship between former President Bush and then-President Putin. It soured in the later part of the Bush years. This is something, now, for President Obama to try to pick up the pieces. He's talked about hitting the reset button. It's going to be easier said than done. There's a lot of tough issues ahead.

KING: And, Ed, as you put those dolls in your bag and prepare to bring them for me as a big gift, as you know, with the president overseas, it's a big week for health care back in the United States.

And some are a bit nervous that they need his help at a time he's going to be out of the country for more than a week.

HENRY: That's right. And top White House aides insist they're still very optimistic that the president can get a health care reform bill out of both the House and the Senate in the next couple of months.

But they are a little nervous about the timing of this trip because, as you know, it's just as Congress comes back to town, all the Democratic power players sitting down to work it all out.

So we've been told that the chief of staff, Rahm Emanuel, as well as Anita Dunn, the communications director, other senior aides in the White House, have decided not to come on this trip. They're staying behind because they're worried about losing momentum, trying to make sure they can keep pushing forward while the president is here in Moscow and then Italy and then Ghana.

So that's very interesting development playing out on the domestic front, John.

KING: And we will watch it as you travel, Ed Henry and Jill Dougherty in Moscow; Barbara Starr for us in Washington, thank you all for coming in on this holiday weekend.

And as President Obama and his supporters press for health care reform, we'll take you to Florida for a look at the health care challenges facing America's fastest growing minority group.

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