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STATE OF THE UNION WITH JOHN KING

State of the Union: Best Political Team on Television

Aired July 19, 2009 - 11:00   ET

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


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

(BEGIN VIDEOTAPE)

KING (voice over): Twenty-one government officials, politicians and analysts have had their say this morning, the president's budget chief and health secretary, the Republican party's chairman and top senator, and a man who, exactly four decades ago, walked on the moon.

We've watched the Sunday talk shows so you don't have to. We'll break it all down with Bill Bennett, Donna Brazile and the best political team on television.

"State of the Union Sound of Sunday" from July 19th.

The Obama administration's most urgent goal this Sunday is answering a new congressional analysis saying leading Democratic health care proposals would send government costs spiraling. The president's budget director, right here on "State of the Union," says the way to change that is for Congress to embrace a White House proposal it has so far ignored.

(BEGIN VIDEO CLIP)

ORSZAG: The single most important thing that's missing from the legislation, at this point, is our proposal for an independent commission of doctors to help the policymaking process be more flexible, lead to higher quality and lower costs over time. That is a big game changer.

(END VIDEO CLIP)

KING: But the Senate's top Republican says the White House is in such a hurry to pass a bill. Why? He says, before the American people can figure out they can't afford it.

(BEGIN VIDEO CLIP)

SEN. MITCH MCCONNELL, R-KY., SENATE MINORITY LEADER: This is the same kind of rush-and-spend strategy we saw on the stimulus bill. We're going to have a deficit this year, $1.8 trillion, that's bigger than the deficit of the last five years combined.

They passed a budget that puts us on a path to double the national debt for five years, triple it in ten, and here comes health care on top of it. (END VIDEO CLIP)

KING: The Sonia Sotomayor confirmation hearings were relatively calm, even civil. But now, as some Republicans explain their reservations about the president's pick, the Democrat who led the confirmation hearings is getting combative.

(BEGIN VIDEO CLIP)

SEN. PATRICK J. LEAHY, D-VT.: I hope we don't go back to the day when we used to have African-Americans up for -- for confirmation and say, yes, but you belong to the NAACP, so, you know, we're really suspicious of you. Come on, stop the racial politics.

(END VIDEO CLIP)

KING: And 40 years, four decades after a man first stepped on the moon, an Apollo 11 astronaut shares his most precious memory.

(BEGIN VIDEO CLIP)

BUZZ ALDRIN, APOLLO 11 ASTRONAUT: What I want to remember most is the glance between Neil and myself, with the engine shut off, just those seconds after we touched down. Because we had just completed the most critical door-opening for exploration in -- in all of humanity.

(END VIDEO CLIP)

KING: As you can see, as always, we've been watching all the other Sunday shows so maybe you don't have to.

Let's bring in the best in the business to help break it down, as we do every Sunday at this hour. Joining me here in Washington, CNN political contributor and radio talk show host Bill Bennett and CNN political contributor and Democratic strategist Donna Brazile.

Welcome.

We had this very calm, polite Sotomayor confirmation hearing, and then, this morning, when Jeff Sessions was explaining that one of the things he has looked at is her work for the Puerto Rican Legal Defense Fund, and he didn't like some of the things she advocated in that position.

Chairman Leahy, as you just heard, goes back to the Thurgood Marshall confirmation hearings and says, let's stop playing racial politics.

Donna, let me start with you. Was Senator Sessions playing racial politics or was he just citing something that was in her record?

BRAZILE: I think what Senator Leahy was alluding to was some of the extreme statements that clearly were made about the judge before the hearings, that came from people like Mr. Limbaugh and Mr. Gingrich and others. I don't think he was referring to his Senate colleagues, who I believe tried -- and they did a good job -- and raising some of the questions that they had regarding her previous statements.

Overall, I thought it was a very calm and civil exchange of views. There's disagreements, of course, on her record, but this is someone who brings -- will bring more experience than any other nominee to the Supreme Court. And I believe she will be confirmed.

KING: I was struck by -- we had a week of hearings that were pretty calm, and then, all of a sudden, we had a little crackling back and forth.

BENNETT: Yes, I don't know what got under Leahy's skin, there. But, in fairness, I think the context was the hearings. He said we'll go back to Thurgood Marshall's hearings. And that's what made Jeff Sessions jump.

Because those hearings were fine. I agree with Donna. They were -- they were perfectly civil, perfectly reasonable, talked about the record for the most part.

And the most interesting aspect of the hearing -- to me, it was that the whole question of racial politics or racial judging, judging by race, judging by gender, which is what the whole "wise Latina woman" thing was all about, was absolutely off the table as far as she was concerned.

She'd backed off from it completely. And The Washington Post has a big article this morning about how some so-called progressives, or liberals, are very upset with the hearings because she wouldn't make that defense.

This is the kind of thing that goes on at universities all over the country. You know, we judge by race; we just by gender, not by some color-blind standard. She adhered to the color-blind standard, a notion of neutrality, principles, precedent. So she came pretty close to getting my vote, if I had one.

KING: Pretty close. In the Post editorial -- let me (inaudible) in the Post editorial, they endorse her. They say she should be confirmed easily and handily.

But they also say, Donna, that they found her comments about her backing away, as you put it, from the wise Latina could make a better decision -- they said they found it somewhat disingenuous. Did you find her somewhat disingenuous?

BRAZILE: Well, John, you know, if you look at the statement in the context that she was given and the time, she was speaking about diversity.

But in that same speech that she gave, she also said that in no way would her personal background in any way affect her fidelity to the law. So I wish she would have been a little stronger in defending those comments. But, again, I think she did the right thing in -- in the process of stepping away from it so that she could get to the larger issues, and of course, that is the fidelity to the law.

KING: Senator Sessions says he hasn't made up his mind yet. It, sort of, sounded like he was leaning, though, because of the policy prescriptions.

Senator McConnell, the leader of the Republicans in the Senate, announced on Friday that he would oppose her. And today, on another program, he explained himself a little bit. Let's listen.

(BEGIN VIDEO CLIP)

MCCONNELL: What I worry about with regard to Judge Sotomayor is that her personal views, which she's expressed quite frequently, lead me to believe that she's -- lacks the objectivity that you would prefer to have in a member of the Supreme Court.

(END VIDEO CLIP)

KING: So that's the -- that's the tough dilemma facing people. Do you look at her record?

And, Bill, if Republicans found a lot of objection to her record, we would have heard about more than one or two cases.

BENNETT: That's right.

KING: They've looked at the cases. John Cornyn, a conservative from Texas, said it's a mainstream record as a bench. But they see those speeches and they're troubled by what she has said off the bench.

What should you judge her on, her speeches or her record or...

BENNETT: It seems to me you judge her on her record. You ask her about her speeches, but then, when she says about her speeches, it doesn't mean what it seems plainly to mean; look at my record, then I think you have say, OK, fine.

I mean, that exchange with Lindsey Graham, Senator Graham from South Carolina, where he said, you know, if I had said, well, I think a white male might judge better than someone in a minority group, that would be the end of his career, he'd make national news, she said, yes, sir, that's right, and totally backed from it.

Let me make a prediction. I'm actually probably a little more conservative than Mitch McConnell. I think this will be a very different record than David Souter's. I think she surprise people. I think she is larger than this caricature of her.

Maybe you get into Princeton on affirmative action but you don't graduate summa cum laude on affirmative action. And I think having been a trial judge, having a sense of reality and coming from the Bronx, which also can give a sense of reality...

(LAUGHTER)

... I think this is going to be an interesting judge, and not one who will always displease conservatives.

BRAZILE: A prosecutor, a corporate litigator -- this woman has real-life experience.

KING: So are your liberal friends worried about her?

Do they think she's going to surprise the president?

BENNETT: I hope so.

(LAUGHTER)

BRAZILE: I believe that she will make a fine justice of the Supreme Court. And what you've seen in Judge Sotomayor's background is a woman who is quite poised, qualified.

BRAZILE: I was impressed with her knowledge of the law. And, again, I think she should be confirmed. She has presided over 3,600 cases. And they couldn't find fault with any of those -- many of those cases.

BENNETT: This isn't the one to fight. This isn't -- you know, you're going to have a gunfight at the OK Corral sooner or later on the court, but it's not going to be over this. This is replacing David Souter. If we start talking about Kennedy -- replacing Justice Kennedy, then you're going to see.

KING: Then we'll go to the corral? OK. While so much attention was focused on the hearings this week, you know, normally we rehash a lot of the Sunday sound here, but I want to go back a few days because the president didn't even get too much attention.

We were all focused on the hearings. The president was out in Michigan early in the week talking about the economy. And listen to him responding to his critics here.

(BEGIN VIDEO CLIP)

OBAMA: My administration has a job to do as well. And that job is to get this economy back on its feet. That's my job.

(APPLAUSE)

OBAMA: And it's a job I gladly accept. I love these folks who helped get us in this mess and then suddenly say, well, this is Obama's economy, that's fine. Give it to me. My job is to solve problems, not to stand on the sidelines and carp and gripe.

(END VIDEO CLIP)

KING: It's a political statement there in a speech, Donna, but it's also a statement of fact, isn't it, when you're president for six months, it gets harder, fairly or unfairly, in the world of politics we live in, it's gets harder to say, this is George W. Bush's mess.

BRAZILE: I think what President Obama sought to do this week was to explain to the American people that while, you know, $200 billion have been spent thus far in the stimulus package, there's another $600 billion on the way.

And we all know that it takes time to get this money through the system. And more importantly, with state revenues declining, much of this money that is flowing into the states is being used right now to close critical budget gaps.

And I think the president went out this week to say to the American people, have a little bit more patience, this money kept us from having an economic freefall, now it's time to make those critical investments.

KING: Does he have the standing?

BENNETT: Well, maybe. But it seems to be a little diminished or tarnished, a little clay feet here. Maybe the emperor needs more clothes. We had an incredible statement this week from a Democrat senator, Committee Chairman Max Baucus who said, the president is not helping.

I didn't know this could be said by Democrats, but it was actually said. So that's something. But look, as Mitch McConnell says, you have got all of this debt, all of this spending, you did the chart this morning with the OMB director, Peter Orszag, it's going this way.

The trajectory is not dipping. And then you get this bombshell report from the Congressional Budget Office this week that, no, the trajectory will not be reduced with the spending, it will go on. That was the basic premise of the health care, the whole proposal by President Obama, to reduce the spending. And this proposal will take it to the moon.

KING: Let's take a quick time-out.

(CROSSTALK)

KING: Hold on, a quick time-out. We're going to come back. We're going to spend a lot of time on health care. We'll just take a quick break. We'll be right back with much more of Bill Bennett and Donna Brazile, stay with us.

(COMMERCIAL BREAK)

KING: We're back with CNN contributors Bill Bennett and Donna Brazile. And as we speak, our Facebook page is lighting up with comments and questions because people say they want more answers, more straight talk about this health care debate because of all the concerns being raised, how much is it going to cost? Do you actually stop the growth in federal health care spending over time. How much will it cost them? Might it affect their choices?

Donna, the president all along has said we need to do this by August, get it out of the House and get it out of the Senate. So then they can have the grand compromise negotiations into the fall. With all of this confusion and the CBO saying it's going to cost more than you think, it's not going to bring down cost as fast as you think, if at all.

Different proposals about how to pay for it in the House and in the Senate, this all just among Democrats. Should the president say, you know what, let's take a little bit more time and get this right or should he keep pushing?

BRAZILE: Well, first of all, I don't think you -- I think right now the president should continue to keep the pressure on Congress to try to get this legislation out by the end of July or first of August.

And, John, look, the CBO revised some of their estimates on the House bill, H.R. 3200, and basically they said that over a 10-year period this bill will be budget neutral, it pays for itself and there will even be a $6 billion surplus. So they revised their own estimate later that evening.

But I think the president needs to sit down with the key players in the House and Senate and see if he can get this bill through by the end of -- before summer recess.

KING: But sit down now? You heard Peter Orszag this morning, they want to have this hands-off approach, let the House pass the bill even if they don't like parts of it, let the Senate pass the bill even if they don't like parts of it, just so they have two bills passed and then they get everybody together and they'll rewrite the whole thing.

And a lot of people in Congress are saying, Mr. President, you know, if you keep letting this fray, and more people say, I can't vote for this, can't vote for that, this may go off the cliff before you get to the compromise talks. Should the president tomorrow say, let's get down to business?

BRAZILE: Two out of three House committees have already passed this -- this bill. A major Senate committee has passed the bill. So I think the president needs to put a little bit more pressure on those members to get the bill -- at least get these bills through and then see if we can come up with a compromise during the summer recess period.

KING: We often ask, what would Jesus do. What would Reagan do?

(LAUGHTER)

BENNETT: Well, he wouldn't be spending this kind of money, I don't think. But look, I mean, you've got a Democrat president, you have a Democrat House, Democrat Senate. He can force something through out of loyalty, out of whatever, something can go through.

But what the heck is it going to be? What kind of Rube Goldberg contraption is this thing going to be? And what's going to be the price tag? And I think Mitch McConnell has a very good point. You have got these huge deficits piling up already and here comes this health care thing and if it is not carefully thought through, it's going to add to those deficits and create problems. He has got to get in and get his hands dirty. He can't say, well, you guys work it out, and then so he can separate himself from it. He has got to dig into this thing. He has made this the centerpiece. I didn't ask him to. I don't think the American people did, by polls they didn't say this is the most important. He made it the centerpiece. KING: Republicans clearly see a political opening here. And I want to get most of the infighting -- the important infighting is among the Democrats right now, because if they can resolve their differences, at least he gets a bill, they have the math. I'll get to that in a minute.

But I want to show our viewers and show both of you two charts, just a little deja vu all over again. You guys look over your right shoulder, and you'll see this. On left here, that is a chart released back in 1993 describing the Hillary/Bill Clinton health care plan.

Republicans used that as a very effective weapon to say, this is what you will get, a government-run health care plan that will confuse you to no end. Then on the right is a chart put out by the House Republicans this past week.

We have better graphics 16 years later. But essentially the same point, that if you let Obama and the Democrats pass a health care plan, this is what you're going to get.

KING: And you try to figure out how to get health care to pay for it in the world. Now no plan that has passed. So this is not quote/unquote accurate but it is clearly a political design by the Republicans to say all of these Democratic proposals are going to leave you big government gobblygook. How do the Democrats counter that, Donna?

BRAZILE: Well first of all, I think the Democrats should continue to emphasize that unless we fix this broken system, health care costs will continue to consume more and more of our budget -- $33 trillion projected over the next 10 years. So if we do nothing, we will still pay more for health care in this country. Right now it's consuming more than 35 state and local budgets. So we are have to do something. The bill will give us a lower cost, better options and hopefully a public option, so that people who are now uninsured, including those Americans who can afford to buy health insurance, but because they're young, they're on one hand purchasing health insurance, this bill will give young people and other people better options to get good health care in this country.

BENNETT: Well sure, we need to fix health care, but you don't lower health care costs by putting in a system which will raise health care costs dramatically and increase deficits. And it is clear that this monster that's coming through, at least in several forms, most of its forms will do just that. The reason -- one of reasons they have to push it because charts like this, and other reasons, public unhappiness is increasing. We have a petition on the radio, one of our sponsors has put it out, say that you're opposed to health care plans. It's one of our sponsors.

And it's interesting, we have not only reached the 500,000 mark, the rate at which people are signing up is increasing. So one understands why the administration wants to put this through because the more people are finding out, the more they're getting worried.

KING: And so Donna, what is happening? We had an election in November, what we thought we got was united government, a Democrat in the White House, a Democratic House and a Democratic Senate. Instead, it seems at time that we just have a different kind of divided government. You have a Democratic president who is fighting with wings of his own party in Congress, including this is from "Democracy in America," it is an e-mail. It's a liberal organization. It is now sending an e-mail to its supporters essentially saying send us money so that we can run tough ads pressuring Democratic senators who have taken millions of dollars from the health and insurance interests while standing in the way of one of President Obama's top priorities. So now you have Democrats raising money to attack Democrats at a time Republicans sense a political opening here. What is wrong?

BRAZILE: Well, first of all, the Republican Party is trying to figure out who is leading them and what their charge is. I think there's a very vigorous and healthy debate taking place inside the Democratic Party.

KING: Including running ads against them? Accusing them of taking money from health insurance companies? I'll raise money, but they'll essentially saying that they've been bought to block President Obama.

BRAZILE: Let me just say, this is probably the only time I'll say this, as vice chair of the party, I would hope that the party would remain unified behind the president and supporting his agenda. But put that aside, these are Americans who would like to see progressive change take place in this country. They believe that there was a mandate for change in 2008 and they're hoping that the Democrats on Capitol Hill follow through on that mandate and not get up here in Washington, D.C., and second guess the electorate. That's pretty much what's happening.

BENNETT: Well, we have a health care plan, too, by the way. You know, Paul Ryan and Dr. Tom Coburn have has put together a plan that's pretty good. This is of educational interest though, because it's good for both the Democratic Party to know and conservatives to know that not all Democrats are liberals, at least on everything. And the ascension of the centrality --

BRAZILE: The first time you say that. You're a former Democrat.

BENNETT: I'm enjoying as much of it as I can stand. But this is an educational network. There are blue dog Democrats and there are people in the Senate who don't want to do it, and this isn't a Debate that's going on. They're savaging each other.

KING: It's rough and tumble at the moment. We will see where we get in the end.

BRAZILE: It's tough love. KING: It's tough love. OK, tough love. Donna Brazile and Bill Bennett, our ambassadors of tough love here on "State of the Union." Thanks, both, guys. Up next, we head to Jay's Diner in New Jersey. In Newark, New Jersey, for a conversation on the economy, jobs, and race relations in a city that believes it's turning around.

(COMMERCIAL BREAK)

KING: As we decided where to go outside the Beltway this week, we remembered CNN has a big project, "Black in America 2" coming up in the week ahead, so we wanted to keep that in mind as we traveled. We went up to a great American city in Newark, New Jersey. And look at the city right here. Fifty-three, almost 54 percent of the population is African-American. The unemployment rate, 13.5 percent. And sadly, still on the rise.

But here's a bright side in the city of New Jersey. It had lost population from the '60s dramatically. The Newark, New Jersey, population now above 280,000, that's up 3.3 percent, just since 2000.

So we sat down for breakfast at Jay's Diner, a fabulous restaurant in Newark, New Jersey, and we wanted to talk about the economy. Where are the jobs and also what it's like to be black in America.

(BEGIN VIDEOTAPE)

KING: Let me just start with your sense, each of you, on the economy here. The national unemployment rate is inching up toward 10 percent. Here in Newark, it's higher than that, especially in the African-American community. What's your sense of what the issue is?

GERALD DRINKARD, NEWARK: Back in the day when we were really a more prosperous city, we had major stores that were employing people who were local. Now you have more independent entrepreneurs that just isn't that type of employment opportunities.

CHARLES HAYES, NEWARK: I'm in the automotive field, and a lot of people are cutting back on buying. People are not quick to do their tune-up on their car until the very last minute. So, yes, we see it.

KING: Worse before it gets better or are we starting to pick up? A tough one.

HAYES: It's tough. That's not easy. Sometimes there's times that it's getting better, then we start hearing negative reports again.

DRINKARD: I think good things are in place, excuse me, but it's going to take time. It's going to take time.

KING: When you look at what's happening in Washington, do you see an adult conversation about the country's problems or do you see the same old harpoon thrown back and forth?

PEGGY GODFREY-DRINKARD, NEWARK: It's going to take time, and we have to get out of the bad habits in Washington as well as the nation as a whole, some of our bad habits. We've been so dependent on credit that we don't really have, you know, buying homes that we can't really afford, those type of things. It's not just the government, it's also just the people in general. We all have to be willing to do a little changing.

KING: Six months into the history; six months into the first African-American administration, is it different being black in America now than it was if I were here before the inauguration of Barack Obama?

(UNKNOWN): My life is the same. I think it's -- America's different. You know, it's more diverse now than I've ever seen it, and I think that's a very good thing. This is just -- you know, it's just a start of a story to tell later on, a great story. That's how -- that's what I feel.

(UNKNOWN): I see a difference in the -- the young men, I guess, African-American young men -- I think they have a role model they can see as tangible; they can almost feel it, touch it type of thing.

It's wonderful to see someone of my color and sitting there, a family man, a man that's concerned about not just his own personal family but the country and people outside of the country. So, I mean, it's a wonderful feeling to see that.

(UNKNOWN): Have I seen a significant change? Not enough. Because their reality is what we really need to be concerned about, the state of our school systems, the state of the economy, the state of single-parent households, the state of being able to go to college, you know (inaudible) college.

Again, the role model you talked about, with President Obama, that's important. You know, now we -- now we feel connected, not because he's black but because he's more open. He's a family man. He cares about people. He listens to what people have to say.

(UNKNOWN): Right. You know, of course, he has his faults, like anyone -- we all do. But I -- I think he brings a new face to the White House, not just because he's African-American, but the way he perceives -- and technology -- he embraces technology.

(UNKNOWN): Right. Twitter, MySpace.

(END VIDEOTAPE)

KING: And don't forget. CNN, Wednesday night at 7 p.m., "The Moment of Truth" with Steve Harvey and Tom Joyner," live from Times Square. And then, at 8 p.m., CNN will premier the first part of "Black in America 2." That's followed by President Obama's press conference at 9 p.m. Eastern. And at 10 p.m., "Black in America 2" continues. That all starts Wednesday night, right here on CNN. Forty years ago today, American astronauts were in moon orbit, only hours from touchdown. We'll bring you that historic moment in the astronauts' own words in just a few moments. But straight ahead, the best political team on television joins me for a free-wheeling discussion of all today's news headlines. We'll be right back.

(COMMERCIAL BREAK)

KING: I'm John King and this is "State of the Union." Here are stories breaking this Sunday morning.

The U.S. soldier on this newly released Taliban video has been identified as 23-year-old Private First Class Bowe Bergdahl from Ketchum, Idaho. He disappeared in Afghanistan nearly three weeks ago.

In a statement today, his parents say they're hoping and praying for his safe return.

A civilian helicopter crash during take-off today in southern Afghanistan. It happened at the NATO air base in Kandahar. Sixteen civilians were killed, five injured. The Russian-made chopper was on a mission to support NATO forces in Afghanistan. NATO says the chopper was not shot down.

Prime minister Benjamin Netanyahu says Israel will go ahead with the Jewish housing project in East Jerusalem despite U.S. objections. Israel annexed East Jerusalem after the 1967 war, but Palestinians still consider it Arab territory.

That and more, ahead on "State of the Union."

Joining me now from Washington, CNN senior White House correspondent Ed Henry, national political correspondent Jessica Yellin and senior congressional correspondent Dana Bash.

Welcome, all. Let's start with the health care debate.

If you listen to the president since taking office, August was huge. He said he needed the House, needed the Senate to both pass legislation so then they could all get together and broker a compromise. That was his deadline. Now the budget director says it's something else.

(BEGIN VIDEO CLIP)

KING: The president said this was his deadline. Now you say it's his goal. That's a softening?

ORSZAG: Well, we want to get it done by August, by the August recess, and we think we can.

(END VIDEO CLIP)

KING: We think we can? HENRY: They're back-pedaling, even though they won't admit it.

(LAUGHTER) I mean, clearly, in your interview, there was news there, in that the budget director is now suggesting it's not as hard a deadline, at least, as it was before.

I shouted this very question to the president on Friday after he made his statement. He just looked at me and said, "Thank you," and he kept walking...

(LAUGHTER)

... very politely, I will add.

But it's clear he doesn't want to get into whether the deadline is softening, but it is. Because, when you've got moderate, you know, Democrats in both the House and Senate, saying we need more time; don't dig in your heels, the president has to start showing some flexibility.

YELLIN: And the White House -- yes, the White House is feeling really nervous right now. I mean, they know that this thing is a mess. And the president doesn't want to commit to any one of these plans yet because he wants it to -- get it worked out through Congress. But there's a lot of frustration that he's not showing enough leadership by laying down markers and giving in.

BASH: And that was actually communicated to the White House on Friday. I'm told by sources on Capitol Hill that the whole reason why we saw the president come out late on Friday -- Ed had been getting signals, rumors it was going to happen and then it happened -- because they got an SOS signal from Democratic leaders, saying, help; this is a mess...

(LAUGHTER)

... we need presidential pushback; get out there. And that's why he did.

HENRY: This is the big question, about how much leadership he's going to exercise. I was mentioning before, when we were in the break, here, that, on Tuesday, the president came to the Rose Garden and basically said, look, it's time to buck up, show some leadership.

I asked Robert Gibbs in the briefing, "Well, is the president then going to say whether he's in favor of a surtax tax that the House Democrats want?"

And he said, well, we're going to leave that to -- to congressional Democrats to work out.

Well, the president, at some point, has to start exerting more leadership as well. They're trying to save him as, sort of, the ace in the hole, but if this keeps unraveling, he's got to get more involved.

KING: Let's --- let's -- let's pick up on that point. You asked specifically about the surtax. I was struck, if you read -- the cover of the new Newsweek has an essay by Ted Kennedy, who's missing from Washington, frankly, and he's missed in the negotiations. Because he is someone who the Republicans trust to make a deal.

And many of the Republicans would tell you that, we're talking to these other guys but this one's so dicey, we're not sure.

And Senator Kennedy, knowing his leadership, both the majority leader in the Senate and most of the chairmen, don't like the House surtax.

Senator Kennedy writes this. "I'm open to many options, including a surtax on the wealthy, as long as it meets the principle laid down by President Obama, that there will be no tax increases on anyone making less than $250,000 a year."

That's your beat. Is the senator from Hyannis Port...

(LAUGHTER)

... trying to move his colleague along?

BASH: I think he's trying to move his colleagues along a little bit, but he's also trying to -- I think the big part of what he's trying to do is get his voice out there and make it clear he does have a voice and he knows that he has a lot of power in what he says.

However, with regard to that specific substance on the surtax, the senator from Hyannis Port knows full well that that kind of surtax isn't going to get through the Senate, and not just because Republicans hear the word "tax" and go ugh; it's because some of his fellow Democrats, who have given the Senate a very big majority. They've given them a majority because they come from conservative states where that is just not going to fly.

YELLIN: To be a little counterintuitive, that one thing that happened this week that almost helps the president, in some ways, is this CBO report. It comes out saying this is going to cost a lot more than anyone expected and the White House predicted. And they can use that, the White House, to some extent, to tell the left wing of their party, look, you guys have to give on some of these major issues, maybe even some of the big pieces, and maybe that can push them further down to a centrist compromise that could get more people on board. That's at least what they're hoping.

KING: Washington can at times be -- this is me speaking, politely, a parallel universe. You see most of the fighting right now is among the Democrats. And so some people are saying, let's slow down, let's take a breath, let's not rush to August, and then we can maybe even get some bipartisan support.

But this question was put to the chairman of the House Ways and Means Committee, why don't we have a bipartisan bill? Charlie Rangel says...

(BEGIN VIDEO CLIP) REP. CHARLES RANGEL (D-NY), CHAIRMAN, WAYS AND MEANS COMMITTEE: We've been dealing with this bill for over six months and we've had hours of hearings and the fact that it's not bipartisan is not because we Democrats don't want to have a bipartisan bill. We don't have any Republican answer. It's easy to say what you don't like about this bill, but it would be far more constructive if we had something to work on.

(END VIDEO CLIP)

KING: There are Republican proposals.

HENRY: Right.

KING: But the -- especially in the House, the Democrats have such a huge majority, they don't really get much traction.

HENRY: Charlie Rangel is right to some extent, the Republicans haven't really done very much at all to move this process forward. You have to say that objectively. That's a fact whether the Republicans like to hear that or not.

On the other hand, Democrats have these huge majorities, they have to govern. They've got the White House, they've got the House, they've got the Senate. You've been talking earlier about, well, the idea is to push this through both chambers before the August break, then you come back in September, work out differences in the Conference Committee. That's the normal process.

But I've been hearing that in private some White House aides have been floating the idea, well, maybe we'll just have the House pass one version, the Senate pass one version, and that Senate one, which will be more of a consensus one, just make the House pass that version later, instead of a Conference Committee where everything will get pulled apart.

The problem, of course, is that then you have the House Democrats on record supporting this surtax that could become very unpopular. And then voting for a second version that doesn't have the surtax and is more popular, and they're going to get blasted in the election year.

And so, the bottom line is that shows you -- because I've had other people in the White House say, no way, we're not going to do that, there will be a Conference Committee, because there's too much confusion here about what the process is going to be. And the process often becomes the policy.

And the Democrats are not sure which way out. And that gets back to, if you keep letting all of the Democrats on the Hill work out this and beat it to death, at some point the president has got to say, this is the road we've got to go on.

KING: And so how much does that factor in on Capitol Hill? Because anybody watching at home, 60 percent of the personal bankruptcies in this country are because of health care costs, they're bankrupting families and they watch a conversation like this and they might say, what are those yahoos up to? They might even say, what are us yahoos talking about? Because we're talking about votes and process and committees and families are filing for bankruptcy.

BASH: Well, look, I mean, I think that that is very true. And that's why, you know, just back to the point of Republicans, certainly Republicans in the House, they say that they have tried to come up with some ideas and they're just getting shut out.

But I think it's -- to be fair, it's important to keep our eyes on that key committee in the Senate which they say they're going to actually have something this coming week. There have been Republicans who have been working, you know, they say constructively, and Democrats admit that as well. And they are trying to achieve the goals of what Jessica talked about.

The key goal here, from their perspective, is to not only give almost all Americans coverage, but to bring medical costs down. And that, they say, is the absolute imperative to do what you were talking about, stop those bankruptcies that people are filing left and right because they can't pay their health care bills.

KING: Quick time-out. We'll be back right back. Ed Henry, Jessica Yellin, Dana Bash, stay with us. STATE OF THE UNION will be right back.

(COMMERCIAL BREAK)

KING: We're back. Talking to CNN's Ed Henry, Jessica Yellin, and Dana Bash. So let's stay on health care for a minute, because as we talked a bit earlier, the president wanted the two bills by August and then somehow figure out how to do the compromise.

And there are some echoes of early in the administration, when he came in and said, I need that stimulus bill and I need it yesterday, Orrin Hatch, who is a key player, we just saw him in the Sotomayor hearings, but he is also a key player when it comes to health care reform. He says, what's the hurry?

(BEGIN VIDEO CLIP)

HARRY SMITH, GUEST HOST, "FACE THE NATION": Is this all going too fast?

SEN. ORRIN HATCH (R), UTAH: Well, I think so. You're talking about one-sixth of the American economy. You're talking about myriad problems here. You're talking about people who are all over the map, as far as what they really want to do.

And I think there's a really good reason why the president wants to do it, he knows he can't sell it if it lasts -- if the debate lasts very long because it is so expensive and costly.

(END VIDEO CLIP)

KING: You see Senator Hatch almost every day. Do Republicans think they will succeed in taking some time here? BASH: Well, I think that they might be able to, and it's not because of Republicans, but it's because you're hearing that loudly, very loudly, now from many important Democrats, key Democrats in the Senate and also conservative Democrats in the House.

And I don't think you can underestimate the politics here in that you saw Democrats at the very beginning with an incredibly popular incoming president, you know, take one for the team and vote for the stimulus package even though they -- it was not going to be popular back home. And now there's a lot of controversy about that.

So I don't think you can rule out the fact that that is a very important dynamic in the fact that they're looking at this enormous piece of legislation like health care reform and saying, we don't want to make the same mistake twice. And that's why we want to slow down a little bit.

YELLIN: On the other hand, a White House official said to me this morning, these folks in Congress know it's going to be worse for them if they don't get health care done than if they push something through right now. And that's a meaningful threat when the president's political arm is advertising against some Democrats in their own district over health care reform issues.

The other thing is, why is President Obama rushing this? Everybody thinks it's a big rush, why make it happen in this time frame? It's what you said just before the break, which is so many Americans are filing for bankruptcy now, so many Americans are feeling this pinch. The White House wants to show that we can "get 'er done, get 'er done," get it through, Washington works.

And they want to put that kind of pressure on members of Congress, big picture kind of pressure. It's just not working. KING: I mean, let me raise -- Ed, before I let you jump in, let's raise something else that I think is also part of the White House calculation, and that is a president who was up here early in the administration, is now back here.

Still got probably the best approval rating in town, but he's back close to planet Earth. And let's show -- this is our CNN poll of polls from this past week. How is President Obama handling his job as president? Fifty-seven percent approve, 36 percent disapprove.

Now 57 is a pretty good number in American politics, but that is back where you would find about Bill Clinton, about George Bush, roughly in that ballpark. That's a traditional approval rating, not the Obama numbers we had at the beginning.

Is that factoring into the sense of urgency, that he has political capital but maybe less today than he had a month ago?

HENRY: Absolutely. Because it could be diminishing. But I think obviously we heard, as you were suggesting, a lot of these stories during the stimulus debate, that look, does he have the muscle, there is all of this hand-wringing on the Hill and the White House found during that debate, if you let Congress go on and on and on, you're going to wait another 50 years for health reform.

HENRY: And so why not strike while the iron is hot and while his numbers are still relatively high? They don't know where they're going to be six months from now. And the big factor is 2010 of course. It's not quite here yet, but as Dana knows that if this gets carried -- the reason they're pushing this so hard for August, if it goes back to September or October, then they've got to also deal with climate change and other issues.

All of the sudden Harry Reid will say, well, maybe we'll do it January. You're in an election year and everybody hardens and thinks about the voters and it's going to be that much harder to get it done. So that's why he's pushing.

KING: So we're six months into the Obama administration. One of the things that strikes me is that in these conversations we have every Sunday, how rarely we talk about our secretary of state, Hillary Clinton. She's one of the most best known politicians in America. She was a candidate for president. She was a first lady before that, but she's taken such a low profile in the administration. But this week, she spoke openly, openly about her frustration with what we call the vetting process, how long it takes to go through the background, the financial records, the tax forms. If I want to put you in the government, it can take me months to get you the job. Let's listen to the secretary of state.

(BEGIN VIDEO CLIP)

HILLARY CLINTON, SECRETARY OF STATE: The clearance and vetting process is a nightmare. You have to hire lawyers. You have to hire accountants. I mean, it is ridiculous and I'll say that as somebody -- and then, here's one of the questions you get asked. First of all, you have to remember everywhere you've lived since you were 18 and beyond a certain age, you can't even remember when you were 18.

(END VIDEO CLIP)

KING: When were you 18? She is giving public voice to something that if you talk to any cabinet secretary, any agency chief, they say, come on.

HENRY: And for either party as well. The same thing was going on in the Bush years. There obviously needs to be reform to the system. But beneath all of that, which is the truth that she's speaking out and that she's not taking a shot at the president over that, it's the system. But beneath that, there has also been frustration among the Clinton folks that some of their ambassador picks, for example, that they wanted, were sort of mixed by the White House and instead some of the campaign contributors that the president wanted to reward got those jobs, but postings like Japan for example. And so there is a little bit of frustration beneath the surface that she hasn't gotten all the people she has wanted, despite all the talk about harmony.

YELLIN: There's some internal politics there. There's also the absurdity of how the process is working post Daschle. After Daschle got nixed, this has been absurd. I mean, she is particularly frustrated about a man who has been working on AIDS issues with people on remote countries and they're all upset about his W-2 forms. Where are his W-2 forms and why were they late? And instances like that, you can't get them vetted. It's all so slow. It's very galling to a lot of people.

KING: OK, we've got to call a time out. We're out of time here, so I'm going to vet this conversation. We did come up with a new term, post-Daschle Washington.

BASH: Tom Daschle will be so happy.

KING: He'll be thrilled. In just a moment, we'll take a look back at 40 years to a time when the whole world joined in watching an extraordinary event.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: It's one small step.

(COMMERCIAL BREAK)

KING: Oh, boy. Those were Walter Cronkite's words 40 years ago when the first American spacecraft landed on the moon. That's 40 years ago tomorrow. Sadly, no one would have been more interested in engaging in this anniversary than the long-time CBS News anchor who passed away Friday at the age of 92. Let's take a look back at Apollo 11 in the words of the astronauts on the ground and the ground controllers who made this happen.

(BEGIN VIDEOTAPE)

JOHN F. KENNEDY, FORMER PRESIDENT: I believe that this nation should commit itself to achieving the goal before this decade is out of landing a man on the moon and returning him safely to the earth.

UNIDENTIFIED MALE: The prime crew now departing from their crew quarters here at the Kennedy Space Center. Forty seconds away from the Apollo 11 lift-off. Counting. We are a still go with Apollo 11. Thirty seconds and counting. Five, four, three, two, one, zero, all engines running.

Liftoff! We have a liftoff! Thirty-two minutes past the hour, liftoff on Apollo 11. We received the good wishes back. Thank you very much. We know it will be a good flight. UNIDENTIFIED MALE: Apollo 11, this is Houston. All your systems are looking good going around the corner. We'll see you on the other side, over.

UNIDENTIFIED MALE: Everything looks OK up here.

UNIDENTIFIED MALE: We're getting a beautiful picture down here. The color is coming in quite clearly and we can see the horizon on the relative blackness of space.

UNIDENTIFIED MALE: This is Houston. We're getting a beautiful picture of this rather in conspicuous central peak. UNIDENTIFIED MALE: This doesn't look very fertile to me. I don't know who named it.

UNIDENTIFIED MALE: Things are looking great. You're go, 30 feet down, two and a half. The engine stopped. Houston, the eagle has landed.

UNIDENTIFIED MALE: Rocket tranquility. We copy you on the ground. You got a bunch of guys about to turn blue. We're freezing again. Thanks a lot.

UNIDENTIFIED MALE: It's one full step for man, one giant leap for mankind. Man from the planet Earth first stepped foot upon the moon, July, 1969. We came in peace with all man kind.

UNIDENTIFIED MALE: The president of the United States is in his office now and would like to say a few words to you, over.

UNIDENTIFIED MALE: Hello, Neil and Buzz, I'm talking to you by telephone from the Oval Room at the White House. For every American, this has to be the proudest day of our lives.

(END VIDEOTAPE)

KING: I'm John King. This is "State of the Union."

The unemployment rate keeps climbing despite the president's bold stimulus promise.

OBAMA: We intend to help save or create 2.5 million jobs.

KING: And the Obama health care plan hits an enormous speed bump.

UNIDENTIFIED MALE: The bill will actually increase cost in our health care system.

KING: White House budget director Peter Orszag gives us his take on the economy and answers critics of the health care plan. Question after pointed question for Supreme Court nominee Sonia Sotomayor. And now the Senate prepares to cast its judgment. Insight from the leaders of the Judiciary Committee, Democrat Patrick Leahy and Republican Jeff Sessions.

KING: Twenty-five years after he spoke to the Democratic National Convention as a presidential candidate, the Reverend Jesse Jackson gets the last word.

And today's "American Dispatch" from Newark, New Jersey, a city fighting to rebound from a history of crime, unemployment and despair.

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