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STATE OF THE UNION WITH JOHN KING

Interview With Susan Rice, Senators Durbin and Cornyn

Aired August 9, 2009 - 09:00   ET

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


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

The escalating war in Afghanistan. The fallout from former President Clinton's trip to North Korea. And tonight's presidential summit in Mexico. We'll map out the administration's pressing global challenges in an exclusive interview with Susan Rice, the U.S. ambassador to the United Nations.

Congress heads home to face Americans anxious about the economy and divided over proposed health care changes. We'll discuss the policy and political divides with two key senators, Republican John Cornyn of Texas, Democratic Dick Durbin of Illinois.

Plus, the big gap between the president's personal approval ratings and support for his handling of the big issues. We take America's pulse with two top pollsters.

And our "American Dispatch" from Eugene, Oregon. The recession puts a squeeze on many community support organizations just when struggling parents and hungry children need the help most.

This is "State of the Union" report for Sunday, August 9th.

President Obama heads to Mexico tonight for a summit with the leaders of Mexico and Canada, a reminder of the mounting international pressures even as he struggles to sell his top domestic priority, health care, here at home.

Greater cooperation fighting Mexico's deadly drug war is one thorny summit topic. And elsewhere on the world stage, Afghanistan, Iran, and North Korea all present the White House with difficult policy choices. A full and often frustrating list for the president and for his ambassador to the United Nations, Susan Rice. Welcome. RICE: Good to be with you.

KING: Let's start with Iran. You have seen and there are reports today in "the New York Times" -- I'll hold this up -- this massive trial under way of those who are accused of illegal conduct in Iran after the elections, including some people who say they were simply just filing diplomatic reports back to their embassies.

What do we make of these trials?

RICE: Well, these are show trials, and they are clearly a demonstration of the fact that the Iranian leadership is not reconciled to the concerns of its people regarding the validity of the elections. And it's unfortunate. It's to be condemned, and our view is that if Iran wants to demonstrate that it is prepared to be a responsible member of the international community, then it needs to treat its people with respect and adhere to the rule of law. And unfortunately, these show trials are in the opposite direction.

KING: In addition to the show trial, a prosecutor in Iran has acknowledged that some of those taken into custody were tortured. Do you view that as a responsible step, that they made mistakes and they are publicly conceding them? Or is that a glimpse at what you think are more troubling practices in Iran?

RICE: Well, I think there's a great deal we still don't know about how the demonstrators and those that were arrested have been treated. But obviously, reports of torture are of grave concern and suggest that the regime in Iran is not reconciled to the concerns of its people and their reactions, their very compelling reactions to the elections.

KING: And as we watch all this play out, there's also the concern of three Americans who apparently wandered into Iran on a hike. Iraq's foreign minister this morning quoted as saying he has met with an Iranian official and Iran confirms it has these three American citizens in its custody. What do we know about their condition? And are there conversations either directly or through third parties to try to gain their release?

RICE: We have not had it confirmed directly to us through our representative power, the Swiss in Iran, that in fact these threes are being held by the Iranians. We seek that confirmation, and we will work through the Swiss to obtain their prompt release unharmed. This is obviously of significant concern to us, as are the cases of other Americans who continue to be held in Iran. Mr. Robert Levinson, a number -- a couple of dual nationals who we're quite concerned about. So we will continue to press for the swift and safe release of all Americans.

KING: Let's step back a bit. I want to use a timeline to show the relationship over time with Iran in between the Obama administration.

Back in March, the president said in the early days of the administration that he wanted a new chapter that included dialogue. (BEGIN VIDEO CLIP)

PRESIDENT BARACK OBAMA: My administration is now committed to diplomacy that addresses the full range of issues before us and the pursuing constructive ties among the United States, Iran, and the international community.

(END VIDEO CLIP)

KING: But then in June, after the elections and watching the demonstrations in the street and some of the handling, the reaction by Iranian officials, the president voiced extreme concern.

(BEGIN VIDEO CLIP) OBAMA: The United States and the international community have been appalled and outraged by the threats and the beatings and imprisonments of the last few days.

(END VIDEO CLIP)

KING: And then just this past week, of course, we watched President Ahmadinejad sworn in for his new term.

Ambassador Rice, there are some who say if you are so critical of the reactions after the elections, the protests there, there's been no demonstrable progress when it comes to the nuclear program, that the United States, despite its hope for engagement, really has no choice now but for you to pick up the ball at the United Nations and say we need tougher sanctions and we need them now. Is that the course?

RICE: Well, John, first of all, obviously we're deeply concerned by the elections and their aftermath. But let's be realistic, this is not a regime that was a golden child prior to the elections and suddenly turned evil. This is a regime with which we've had grave concerns for many, many years.

The reason why we have indicated an openness to dialogue is because we are committed to preventing Iran from obtaining a nuclear weapons capacity. And we believe that there is a prospect, through engagement and through dialogue, to try to negotiate with our partners, the other permanent members of the Security Council plus Germany, the permanent end to its nuclear weapons capability.

That option remains on the table, and we leave it there in our national interests. But it's not out there forever, and indeed, if there are not indications that Iran is prepared to engage constructively, to open up and dismantle its nuclear program, consistent with the proposition and the proposal that the United States and others put on the table in April, then we will look to other means...

KING: Do they have until the end of the year or do they have until next month?

RICE: Well, we're not going to impose any artificial deadlines. But at the G-8, the president and other leaders indicated that they will do a stock taking of where we are with respect to Iran in September, and we will do that and we will consider appropriate next steps in light of the Iranians' response or non-response.

KING: Another dramatic international story this past week was former President Bill Clinton coming back from North Korea. The president you served at the State Department and in the White House. He came back with the journalists Laura Ling and Euna Lee, who had been kept prisoner in North Korea.

There are those very critical of this. While they are applauding the release of these two journalists, they say essentially that the United States gave up too much. A man who once held your job at the United Nations, John Bolton, saying "it comes perilously close to negotiating with terrorists," sending Bill Clinton over there and giving North Korea certainly a propaganda victory with those photographs. Perilously close to negotiating with terrorists?

RICE: Absolutely not. That's, in fact, a ridiculous statement. We don't negotiate with terrorists. That's the policy of the United States, but this was a unique opportunity for the former president, on a private humanitarian mission, to obtain the release of two American women who have been held for many months. It would have been disgraceful for the United States, having verified that this was a real opportunity to obtain their release, to leave them in captivity.

KING: He's not just...

RICE: This was a private humanitarian mission. It accomplished the release of these two women. We're relieved and delighted to see them reunited with their families. It in no ways changes our policy or approach to North Korea, and we are quite pleased with the outcome.

KING: He's hardly a normal private citizen. He's the former president of the United States, and his wife happens to be the secretary of state of the United States, and he went over there with his former chief of staff and others who worked on the Korea issue at the State Department. So it was a pretty high-powered delegation.

Did we gain anything from it? He spent more than three hours talking to Kim Jong-il, a man that people in your job and elsewhere in the administration frankly concede we don't know a lot about, because he is such a reclusive leader. Did we gain any new information? And was there a message back to this administration about what next? Another country with whom we have very difficult dealings over its nuclear program.

RICE: Well, let me restate. This was a private humanitarian mission. President Clinton...

KING: People talk, though.

RICE: President Clinton did not convey any message from President Obama. But...

KING: Did he bring one back? RICE: Obviously, he listened. And we're still in the process of continuing our debriefings with President Clinton, and he obviously heard what Kim Jong-il had to say. And what that contributes to our understanding of what's going on in North Korea I'd rather not get into in this discussion, but obviously we look forward to a full analysis of the observations and analysis of what President Clinton brought back.

KING: Respecting do you want to have further conversations. Does it leave you more hopeful that there might be a diplomatic opening just around the corner or less hopeful?

RICE: I don't think either, John. The fact is, the North Koreans know what they have to do if they want to rejoin and be responsible members of the international community. Our goal is the complete and verifiable denuclearization of the Korean Peninsula. They have made commitments, the North Koreans, that they have not fulfilled. So they need to uphold their international obligations, return to the six-party talks. In that context, we have said that we would be prepared to have a direct dialogue, as was the case during the Bush administration. But North Korea can't continue to make commitments and then violate them and expect to start from where they left off. The ball is in their court.

KING: An isolated opportunity to take advantage of the assets and the negotiating skills of Bill Clinton? Or is this a return to the global stage? And might we see him in a troubleshooter role again in the future?

RICE: Well, obviously, this was not a negotiation. I want to be clear about this. This was a humanitarian mission. But Bill Clinton has enormous skills, experience, and talent. We're very grateful for his willingness to take this private mission, and we're pleased with the results. And I can't predict what might transpire down the road, but we obviously value what he can contribute.

KING: We're going to take a quick break. Much more to discuss with Ambassador Rice, including upcoming elections in Afghanistan and calls by some to add even more U.S. troops to the battlefield there.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

OBAMA: To all of the other peoples and governments who are watching today from the grandest capitals to the small village where my father was born, know that America is a friend of each nation and every man, woman, and child who seeks a future of peace and dignity, and we are ready to lead once more.

(END VIDEO CLIP)

KING: We're back with the United States ambassador to the United Nations, Susan Rice.

Ambassador Rice, that's the president there in his Inaugural Address to the country. He said: "We are ready to lead once more." What are you doing differently? The president of the United States, his ambassador to the United Nations, his diplomatic corps around the world, what are you doing differently than the previous administration?

RICE: We're doing a lot differently, John, and what I think what is so striking is that six months into the new administration, the president and his national security team have made enormous progress in renewing American leadership of the world and restoring our standing.

We see that manifest in our efforts to concert other countries to deal with the global financial crisis. We see that in a very changed approach in Iraq where we are redeploying our forces responsibly and we're on track to have all of our forces out by 2011. We have a completely new approach in Afghanistan and Pakistan where we're focused very concretely on disrupting and dismantling and defeating al Qaeda and denying it safe haven in Pakistan.

We're engaged with the Middle East in an effort to broker peace between the Israelis and Palestinians. We've had outreach to the Muslim world. We're tackling the H1N1 pandemic flu virus.

On so many different levels, energy, climate change, this administration is renewing our relationship, strengthening our alliances, developing more effective partnerships to deal with, work with China and Russia, deal with North Korea with...

(CROSSTALK)

KING: Just -- I need to stop you just because we're tight on time. But I want to get up on one of the points you're making. You just watch me, and I'll walk over here. You're talking about strengthening alliances.

I just want to pull up the map here of Afghanistan where, of course, more U.S. troops are involved in tough battles, the capital, Kabul, up here, the Helmand province down here. And Ambassador Rice, this is the current state of play, 62,000 U.S. troops in Afghanistan, other nations contributing 34,000.

If our alliances are so renewed, why can't the president -- and President Bush had the same problem, but why can't President Obama convince other nations to add to that number in this fragile, delicate part of the world?

RICE: Well, in fact, John, the number has increased substantially. Our partners and allies...

KING: Just through the elections, though, is the commitment.

RICE: Our partners and allies have made additional contributions of troops, but they've also made critical contributions in other areas: training the Afghan security forces and the police, investing in development and providing for the human needs of the Afghan people, strengthening governance and fighting corruption. These are all pillars of what is now a comprehensive strategy that the president is pursuing in Afghanistan.

KING: But you'd like more troops, would you not?

RICE: Well, we clearly have sought and have obtained additional contributions of forces from our NATO partners. We think we have what we need going into the critical August 20th elections.

And what we're pursuing now, John, is a strategy with three components. Not only on the military side where we're stepping up security in support of the Afghans in the run-up to the election, but critically important, strengthening the ability of the Afghan government to deliver for its people, provide hope and economic opportunity, get away from poppies and invest in agriculture, and similarly fight corruption and improve government.

KING: But some speculation in Afghanistan that President Karzai, seeing his opponents close the gap in the polls a bit, might delay those elections, now scheduled for 11 days from now. Would the United States tolerate that if it happened?

RICE: We expect the elections to be held on August 20th as planned. The Afghan people are ready and waiting, and our aim is to ensure that there's a level playing field, that the Afghan people have an opportunity to freely choose their next leader in security.

KING: Let me ask you, lastly, there's a story -- a comprehensive story about Afghanistan in The Washington Post today. And the lead of the story makes your head snap back a little bit. It says that experts expect another decade of U.S. military commitment in Afghanistan and that the costs could surpass the price tag of the Iraq War.

Are you prepared to tell the American people to strap in for that?

RICE: No, not yet. We're prepared to say, look, this is hugely important to America's national security. We need to defeat al Qaeda in Afghanistan and its extremist allies. We need to ensure that Pakistan is not operating as a safe haven from which al Qaeda and affiliated terrorists can attack us in the homeland.

That is what this strategy is about. It's ensuring the most critical aspect of our national security. We have been very clear that we want to invest what is necessary to achieve that and do it as efficiently and quickly as possible.

The president has been very clear that we're going to measure our progress every step of the way. He has directed his national security team to put in place measurable metrics, as we call them, on a number of dimensions to be able to ascertain and determine whether we are meeting our goals.

We are on track to provide those metrics to Congress as planned in September. We've been consulting with them as we formulate them. So we're confident that we have a new strategy, that will be effectively implemented, that will help us be on course to accomplish the goal of dismantling and disrupting and defeating al Qaeda.

And it's something that we need to give the resources and attention to because it's so critical to our national security.

KING: We'll have you back later to discuss the metrics on this Sunday. We're out of time, Ambassador Susan Rice, thank you so much.

RICE: Good to be with you.

KING: Up next, the health care debate up close, members of Congress head home for the summer break, and hear, sometimes loudly, from their constituents. Two leading senators discuss how their hopes of a bipartisan health care plan are fading and whether they see the economy finally bouncing back. Stay with us.

(COMMERCIAL BREAK)

KING: Another 247,000 Americans lost their jobs in July. But in that bad news, a glimmer of hope: the first monthly decline in the national unemployment rate in more than a year.

President Obama says the worst may be behind us. The past month was not as encouraging from the president's perspective, though, when it comes to the health care debate.

Both the House and the Senate missed White House deadlines for action. And now members of Congress are using their August break to get a firsthand assessment of whether the folks back home support the sweeping and expensive changes Mr. Obama says are critical.

Let's talk it over with the number two Democrat in the Senate, Dick Durbin of Illinois, and Republicans Senator John Cornyn of Texas.

I want to start with the economy. And, directly to you Mr. Cornyn, will Republicans support something the White House and Democrats say is critical, and that is another extension of unemployment benefits, even though there's a bit of a glimmer of hope in the economy?

Would you support that extension, and will Republicans make that an easy issue?

CORNYN: I think we need to provide a safety net for people who find themselves out of work temporarily. And hopefully the economy will pick up. Unfortunately, White House projections are that unemployment, even though it dipped down by one tick, will go over 10 percent. So, you know, it looks like we're in for some pretty tough days still ahead.

So, yes, extend unemployment benefits?

I think we need to take a close look at that. We don't want to provide a disincentive to work, but where people are out of work and they need -- need some help, sure. We're -- we're open to that.

KING: All right, Senator Durbin, the big issue on your side is whether there will be a public option, a government plan to compete with private plans in the health insurance (inaudible)

The chairman of the Budget Committee, Kent Conrad has raised doubts on this program, that votes were there. And he said this in The Washington Post on Thursday. "The hard reality is that a public option does not have enough support in the Senate to pass."

You're the number two Democrat. Should your caucus be prepared for a health care bill that does not have a robust public option?

DURBIN: Well, I can't speak for the caucus, but I'll tell you, luckily there are three Republican senators and only three who are still negotiating with us. And we want to keep them negotiating. Some of them are opposed to a public option. Some want a co-op approach to it. But we're determined -- despite the kind of pressure that they're under to stop negotiating and stop working on it, we're determined to get a bill to the floor. It doesn't have to be a perfect bill, but it should move forward through the amendment process.

And at the end of the day, we've got to -- have to make sure that we have health care reform that really helps middle-income families.

KING: If you're determined to get a bill that those three Republicans support -- and I assume you hope would go to Senator Cornyn and others and say, look, you might at least try to give this a good look -- then you're open to having a bill. Because Senator Grassley, Senator Enzi, and others have said they don't want a public option.

If you want to keep them in the room, then, by extension, you are open to a bill without a public option -- fair?

DURBIN: I support a public option, but, yes, I am open. Just understand that, after we pass this bill -- and I hope we do -- in the Senate, it will go to conference committee. We'll have a chance to work out all of our differences.

So we'll see how this ends, but I don't want the process to be filibustered to failure, which unfortunately, many senators are trying to do. I want to make sure that we do something positive for the American people.

KING: Well, Senator Cornyn, let me come in on that point, because Senator Enzi, Senator Grassley are trying to reach agreement on some sort of a co-op plan that they think would get health care especially to people in rural areas -- and your state has many of them -- without a strong government hand.

Are you open to a co-op that has, maybe, a larger government role but not a full government option?

CORNYN: Well, I'm not for a government takeover using another name like "co-op," but so we have to see what the details are.

But, you know, the problem is that there's a lot of middle ground where we can meet where it's insurance reform; it's realigning incentives to provide value rather than incentivize volume of procedures; providing continuity of care, medical homes and the like, which I think have a lot of hope out there to providing better quality of care at hopefully a lower price. But the problem is, some of these extreme positions like the so- called "government option," in conference committee, where Democrats have a super-majority in both the House and the Senate, without some assurance that the public option, or government option, is off the table, I don't see how we make much headway.

Because we know, at least according to one group of analysts, that if there's a government option, it undercuts all private-sector competition, and about 119 million people who currently have insurance will lose it and find themselves on the government plan.

KING: Senator Durbin, the man leading those bipartisan negotiations you just talked about is the chairman of the Finance Committee, Max Baucus, and said this this past week, that he wants to keep going, but that, by mid-September, he'll have to make a decision of whether he can keep those Republicans on board.

And he said this. "If Republicans aren't there, it could get to the point, where sometime after the recess, Democrats may have to go in a different direction. I hope not, but we have to face facts."

Facing facts would be going it alone with a Democratic bill. As you know, many of your own conservative Democrats think that's a bad idea, both from a policy standpoint and politically, to have one party trying to just shepherd and use its muscle to move through such a dramatic change to our health care and our economy, because of the role of health care in our economy.

DURBIN: I can just tell you, John, we need to take the time to get this right. But understand, Max Baucus has been working tirelessly for almost a year getting ready for this negotiation.

For months, he's been in a room with these three Republicans. These senators are under intense pressure from the Senate Republican leadership and Senate Republican donors from Texas and across the country, and yet they've stayed the course, and I respect them so much for it.

If it reaches the point where we cannot reach a bipartisan agreement, I don't want to see health care reform fail. We only get a chance once in a political lifetime to do something. We've got to make sure that, at the end of the day, we're going to come up with health care reform that really serves middle-income families across America.

You know, John Cornyn and I work in the Senate. We have some options when it comes to health insurance which Americans would dream of. Every American should be told the following. "You can either keep the health insurance that you have today, if you're satisfied with it, or you can have the same options that members of Congress have, to choose private insurance plans that are best for your family that are affordable."

We also want to make sure that there's health insurance reform. We know that people across America are denied coverage because of pre- existing conditions; they have limitations on the amount of coverage; they can't carry their insurance from one job to another. We need health insurance reform, and the health insurance industry is fighting us on this.

KING: But let's get...

DURBIN: At the end of the day, we want to make sure we have health care reform.

KING: Let's get to the mood out there, now that you're all back home trying to take the pulse of your constituents.

And I want to begin in Senator Cornyn's home state, because Lloyd Doggett, a more liberal congressman there, had a town hall and he had quite a loud town hall, and then he went on CNN and said he sees this as all part of some orchestrated effort by critics of the president's plan, not a grassroots revolt.

Let's listen to Congressman Doggett.

(BEGIN VIDEO CLIP)

REP. LLOYD DOGGETT, D-TEXAS: They do have a script. I think this has disseminated through the Republican Party, through Web sites that they're going to and through some of the private organizations that are helping orchestrate all this.

(END VIDEO CLIP)

KING: Other Democrats have gone as far as saying there are angry mobs out there. But, Senator Durbin, your colleague in the Senate, Claire McCaskill, a Democrat from Missouri, says, wait a minute -- she said, "I disagree that the people showing concern over some health care proposals are manufactured." She disagrees with that. She says they're real folks with strong opinions.

Who's right? Congressman Doggett or Senator McCaskill?

DURBIN: I can tell you Claire McCaskill's right that there is a large group in America stuck right smack dab in the middle.

DURBIN: They have honest questions about health care reform, questions that need to be asked and answered.

In the meantime, we have these screaming groups on either side. That isn't helpful. Let's be honest about this. Town meetings are not bean bag, I've had hundreds of them and sometimes folks get upset. And that's part of America, part of our process.

But this is clearly being orchestrated and these folks have instructions. They come down from a Texas lobbyist in Washington...

(CROSSTALK)

KING: Let me ask you something -- let me interrupt -- let me interrupt, Senator. Is there anything wrong with that? This country was founded on a whole series of events, including the Boston Tea Party in my home town, where people were organized and instructed and they were instructed to go somewhere and raise hell. Is there anything wrong with that?

DURBIN: I'll tell you what's wrong with it, when there are a group of people honestly sitting in the middle trying to ask the important questions and get the right answers, and instead someone takes the microphone and screams and shouts to the point where the meeting comes to an end, that isn't dialogue, that isn't the democratic process. You know, we need to respect free speech, but we need to respect one another's rights to free speech too. When these people come in just to disrupt the meetings, no, that isn't right.

KING: So, Senator Cornyn, do you agree with Senator Durbin that some of these people are overstepping?

CORNYN: Well, I was with Congressman Doggett yesterday at a community health clinic here in Austin, and there were, I would say, an equal number of people who were clamoring for a single-payer system and those who said that this is -- they're scared to death that what they have now they won't be able to keep, and that Medicare, which is, of course, the safety net health care system for so many seniors, will be undercut by $500 billion, cut from that program just to pay for this vast expansion of the government's role in health care.

The latest budget projection by the Budget Committee shows that over a 10-year period of time, this will cost $2.4 trillion, that's the House bill, and of course, it will be funded by Medicare cuts, it will be funded by tax increases on small business. And during a time of recession, that would kill the ability of small businesses to allow us to retain and create new jobs.

So I think we need to slow down, as Senator Durbin said earlier, that's why I'm glad we have this August recess, we can talk to our constituents, hear from them, and let's keep working together to try to come up with something that makes sense, not this huge government takeover of our health care system.

KING: Senator Durbin, Senator Cornyn sent a letter to the president this past week complaining, because the White House has sent out an e-mail saying, if you see anything "fishy" out there about health care, send it in, report it to an official White House Web site so they can try to rebut the information.

Do you see anything wrong with the government use of resources to essentially track political opponents? I want to ask you in the context of this. Let's say eight years ago Dick Cheney had asked for conservatives out there to send in information, say if they saw a state senator named Barack Obama show up at an anti-war rally and give a speech, that would be fishy and send that in. What would you have said then if the government resources were being used to track opponents like that?

DURBIN: What I can tell you is that the White House is not trying to collect names of any Americans. What they're trying to do is post on some of these Web sites a rebuttal to some bad information.

I just heard my colleague talk about a government takeover of health care. That isn't in any proposal before Congress today, and I think Senator Cornyn knows that. I've also heard the suggestion that this is going to pay for abortions across America, not true in any version of the bill.

The same thing when it comes to coverage of undocumented people in America. There is no coverage of undocumented people. This idea we're going to take hundreds of billions of dollars out of Medicare, that isn't in there either.

There's so much bad information out there, you can understand the effort to at least let people hear both sides of the story.

KING: Gentlemen, I'm sorry, but we're out of time on this Sunday. I promise, you can both come back here as this debate continues. Senator Cornyn of Texas, Senator Durbin of Illinois, thank you both, gentlemen.

CORNYN: Thank you.

DURBIN: Thank you.

KING: President Obama remains personally popular with a majority of Americans, but it might surprise you to know George W. Bush received a higher grade six months into his presidency. When we come back, two of the nation's premier pollsters chart the president's standing and the anxiety shaping public opinion about the economy and health care.

(COMMERCIAL BREAK)

KING: President Obama reaches 200th day in the office this past week with a majority of Americans still approving of his job performance. But there are clear concerns about his handling of the economy and the health care debates and of the level of government spending. Joining us with a unique insight is Republican pollster Bill McInturff and Democratic pollster Peter Hart.

Gentlemen, thanks for being here. I want to get deep into the numbers here. But let's just start by looking at this, how is the president handling his job as president? This is from our polling at CNN: 56 percent, that's not bad, but it's down seven points from in April.

And I just want to give people this comparison. Rating the presidents at six months, 51 percent of Americans say Barack Obama's presidency has been a success at the six month mark. It might surprise people, this is pre-9/11, remember, 56 percent thought President Bush had a more successful start.

Let me start with the Democrat in the group. What has changed that had should make the president nervous?

HART: Well, I think the president is doing quite well when you've got 56 percent, and even at 51 percent here. I mean, what should make him nervous is obviously the economy. You've got to have an improving economy at this stage in the game.

The economic signs are not great even though unemployment did not grow as much as they thought.

KING: We can bring over economic numbers and this is your work for NBC/Wall Street Journal.

And Bill McInturff, the president should be a little nervous about the state of the economy, the anxiety the American people have. But if you look at the numbers, there's not exactly a great deal of faith in the Republican Party to deal with it. A little better than a year ago in July of 2008, but Republicans can't be dancing too much in these numbers.

MCINTURFF: Well, John, a few other things, we looked at other issues, government spending, the deficit, and taxes as recently as last year, all of those things have shifted issues where the Democrats have had between a 7- and 20-point advantages.

All of those things have shifted to a Republican advantage in the NBC/Wall Street Journal poll. So if you're the Obama administration, you've been in office for six months and issues like taxes, government spending, and deficits swing to the Republican Party, that's a major concern and it reflects the concern people have that we're spending a ton of money and they're not yet convinced we're getting the results for it. KING: Structurally after the election, we talked about Obama's America, the Latino vote coming up, the Democrats solidifying in the suburbs. Was that premature? Was there a structural change in the country? Or six months into this administration plus a couple of weeks, are we seeing that ball still in play?

HART: Well, I think the Democrats and certainly with the Latino vote is doing exceptionally well. I think the suburban vote still remains very much up for grabs. But when you look at health care, Democrats continue to have a major advantage as they have before.

And also, you have to look -- we had an apex back in July of 2008, these figures are exceptionally good, I think, for the president. He has got to feel better than some of the commentators are saying.

KING: No, I can't believe you would say that. I want to put up some -- I want to just put up a historical time line here and then we'll have a seat as we talk about this one.

KING: But you see here, all the way back to Jimmy Carter, when it comes to growth in the economy, the unemployment rate, consumer confidence, the rate of savings, the percentage of non-elderly Americans lacking health insurance, if you look at these numbers over here, this president -- and he inherited a lot of the bad economy -- but he has negative growth. He has the highest unemployment rate of all the way back to Jimmy Carter, the lowest consumer confidence -- and these numbers here, obviously, the percentage of those lacking health insurance is one of the (inaudible). Let's go over and sit...

(CROSSTALK)

KING: Please?

MCINTURFF: Yes, I think this is the problem for the president. I've done a lot of work looking at consumer confidence, and there's only been four times since post-World War II that numbers have been this bad.

Every other time that they've been this bad, it's taken between two to four years to improve. We've had 17 months. We have a long, long way to go, historically, before these numbers get better. And the problem for the president is not this year but next summer. And by next summer, people are going to have, kind of, a fuzzy memory of George Bush, and it will be the Obama administration economy.

And I think they -- he has a -- they and he and his administration are under enormous pressure. Because it may well be that they don't see improvement yet, and we could have an off-year election like 1982, where you take the brunt of the bad economy before it recovers for your reelection two years later.

KING: Well, let's walk over and have a seat as we continue the conversation...

MCINTURFF: OK.

KING: ... and hopefully we can navigate.

Peter, you recently did some focus groups with independent voters, trying to get a sense of is there a shift out there?

It was a group, obviously, that came over and helped the Democrats enormously. But it, comes six months in, to Bill's point about consumer confidence, about concerns about government spending, that group in the middle, that if they swing, especially in a midterm election, could cause serious damage to the president's standing in Congress, the number of Democrats in Congress.

What are they worried about?

HART: It's fascinating to listen to them talk. First of all, there are two things. Yes, they're very concerned, as Bill said, about the fiscal control issues and the problem with spending.

But when they talk about President Obama, they refer to him by first name, "Barack." I mean, it is as though there's an intimacy and a relationship there. And there's a tremendous sense of hope and a tremendous sense of support.

I was really very, very surprised that, for all of the problems that he may be having on the economy or in dealing with health care, on the personal level and in terms of how the American public relates to him, he still has an awful lot of wind at his back.

KING: And if that's the case, what does it do if you're the loyal opposition?

MCINTURFF: Well, I agree. I think that the president has enormous personal standing. People in this country want to see him succeed. But, you know, the proof is in the pudding.

What's really changed during this June to August time is a sharp drop in confidence in what's called the Obama economic stimulus, where, by 20 points, they're now saying they're not sure it's going to improve the economy. So what's happening is the kind of signature element of the Obama administration, which is the stimulus, is, kind of, dropping in confidence. And we're having a little bit of a reduction in, kind of, consumer confidence.

We were feeling a little better; now we're sliding again. And so what people are balancing is his personal regard versus whether his policies will be successful.

And what Peter and I are tracking in the NBC/Wall Street Journal poll, is that, in fact, the percent saying they're confident about Obama being able to improve the economy has in fact been dropping.

And so there's a certain reality. Either the economy gets better in the next year and he takes a little bit of credit, or, if it doesn't, I think he and his party stand to take a hit in the off-year elections.

KING: We sometimes oversimplify things, so let me ask for your help...

(LAUGHTER)

... in the sense that, when we look at the health care debate, and is the government going to have too much reach in such a personal issue, or can the government afford this right now -- is that what Americans are thinking? Or is it this broader, "I lost my job. My neighbor lost my (sic) job. There's a lot of foreclosure signs around here, and, you know what, I don't think my kids are going to be better off than me"?

MCINTURFF: Well, I do a lot of work in health care, and I think the health care debate is fundamentally important. But, yes, I believe there's a broader unease about the state of the economy and whether the Obama spending program is going to work, that is very much a part of this health care concern.

And what people are talking about isn't just health care; it is, can we afford it and how much spending are we doing?

And so I don't see health care being, kind of, distinct, in some separate box. I see it as part of this, kind of, broader concern facing the present administration.

HART: And my bet is, at the end of the day, we are going to have a health care reform bill. And when we do, the American public's going to feel a lot better.

Right now, we're in the interregnum period, in trying to figure things out. I think, at the end of the day, we're going to have a bill and, when he signs the bill, the American public is suddenly going to say, here's a major check mark that we've gotten through.

It still comes back, as Bill says, around to jobs, to mortgages, as you explained. The American public's got a long way to go through this. And I think there's a sense that somehow the worst of the economic recession may be behind us. I would say wait and see. I still think we've got tough times.

KING; So let me -- let's close on this theme. George W. Bush left office and some people said, well, it was Iraq; some people said it was the financial crisis; some people said it was Katrina. I think you could link them all together. It was a confidence question. When you traveled the country and talked to people, it was like, "What happened here? Is this guy competent to be president? Can he run the government in a competent way?"

Where are the American people, right now, in their new president, again, just shy of seven months?

Do they view him as a competent leader, not a politician who can win a campaign but someone to govern the economy?

HART: I think two things. One, I think they see him as competent. I think, on all the, sort of, skill sets, they see him as very good. I think the one thing that they don't know is how strong and how steely is his backbone?

And I think that will be measured in the future. If they perceive him to be strong and tough, they'll stay with him.

MCINTURFF: I think the president's been given a long rope. They want him to succeed. But to your question, we have two very important races coming up, New Jersey and Virginia governor's races. There's lots of polling that independent swing voters and others that had moved to vote for Obama are shifting back to vote for Republican candidates in those races.

I don't always take these races seriously as a harbinger of what's to come. I do this year. I think that what we seem, in terms of the vote pattern, in terms of turnout, and what we see in terms of those votes could be an early warning shot.

And I would say, by the way, if the Democrats lose both races, the Democrats in Congress are going to be taking a long, long look before they jump on some of these additional votes that they're going to be asked to make by the Obama administration.

KING: I need to call a quick time-out.

MCINTURFF: All right, thank you.

KING: I'll invite you guys back, Bill McInturff and Peter Hart, two of my favorites and the best in the business.

HART: Thank you.

KING: Thank you, gentlemen.

Next we'll take you to Eugene, Oregon, where the recession is hurting already struggling families as well as the organizations trying to help them deal with neglect and hunger.

(COMMERCIAL BREAK) KING: Three words we have heard far too often in our travels in recent months, unemployed, homeless and hungry. Sadly, we heard all three as we traveled to Eugene, Oregon, for this week's "American Dispatch." One in every six Oregon residents are on food stamps. The unemployment rate is more than 12 percent. One of the big problems of this economy is that more people need help, but the agencies that give that help, well they're struggling, too.

(BEGIN VIDEOTAPE)

KING (voice-over): Lunch time at the Relief Nursery, salad, English Muffin pizza and a little pineapple. Gabriel Bonneau washes his down with a cold glass of milk. For three hours a day, a chance to learn and play. It's invaluable interaction for a young boy working to overcome a speech impediment and to have a safety net for a struggling single mother.

JULIE BONNEAU, HOMELESS MOM: About two weeks before Christmas, my boss came to me and said, listen, we have to cut people back. They run the risk of us shutting their doors with a company that small. So they let me go. And they knew I was going to sink. Two weeks later, I lost my apartment. No money coming in, no money to pay rent.

KING: So for a bit, this van was Julie's home.

BONNEAU: It's been towed about seven times in the last couple months. It's kind of hard to see your house not running and knowing that this is where you sleep.

UNIDENTIFIED MALE: That is a car.

BONNEAU: That is a car.

KING: Now she rotates among friends with an available couch and her three children stay at her ex-husband's apartment. In a packed but organized file, the road map to recession survival.

BONNEAU: This is a sheet that tells me where free lunches are in the community so that my kids can eat for free. I try to stay up on that. I try to carry it, so if I hear somebody struggling, wait, I know where you can find help. If somebody needs food boxes, there's places to get food boxes in here. And so, I know I'm not the only person that needs the help. KING: The Relief Nursery is proof of that. Executive director for programs, Sharri Da Silva says in the first three months of 2009 has helped as many families as it did in all of 2008.

SHARRI DA SILVA, RELIEF NURSERY: We served over 1,000 children last year, so that is telling you how drastic the increase is. There are newly needy families, what I mean by that is families who have had jobs, who have had one or two-parent incomes, a home, might have even been small donors for the Relief Nursery or volunteered their time here. What we are finding is Oregon is that early childhood and family hunger has drastically increased.

KING: It is an increased demand the Relief Nursery and organizations like it often can't meet, a waiting list of more than 200 families here. The cruel irony of this recession is that government and private funding sources seem as hard to find as jobs.

DA SILVA: Every single funding source that typically supports us is having a challenge right now. When we have people calling and saying my family doesn't have food, or I'm losing my home and I don't know where to turn, that's difficult if we can't help them.

KING: There are encouraging signs. Food donations surged when word spread that vandals had destroyed the nursery's mobile food bank.

DA SILVA: We have also started doing what we call a family fun and food night which is once a month, families come and gather and have a fun meal together. The first time that we held it, we had 30 families attend. And last week, we had over 170 families come.

UNIDENTIFIED MALE: Mama spin.

BONNEAU: Mama spin you? You want to spin?

KING: Julie Bonneau has been coming since the beginning, and usually after another frustrating day hunting for work.

BONNEAU: It's really tough. I'm finding that I'm competing with -- when you apply for a job now, you have 200 other people standing in the same line.

KING: No jobs and no room in the shelters, which makes Julie all the more grateful for the Relief Nursery safety net.

BONNEAU: It is awesome. It is -- it's -- I know they're safe. I know that they're well taken care of. I have to stay positive. My kids count on me. If I don't give them a positive face, nobody else is going to. I love you.

(END VIDEOTAPE)

KING: A remarkable visit to Eugene. We'll be back in just a minute.

(COMMERCIAL BREAK)

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

(BEGIN VIDEO CLIP)

KING (voice-over): Congress faces angry voters at home. Are the protesters being fairly portrayed in the media?

President Bill Clinton's trip to North Korea -- was he upstaging his wife, the secretary of the state, or did the press just miss the point?

This hour of "State of the Union," Howard Kurtz as always, breaks it down with his "Reliable Sources."

(END VIDEO CLIP)

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