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STATE OF THE UNION WITH JOHN KING

Interview with Ambassador Susan Rice; Interview with Senators John Cornyn and Dick Durbin about Health Care; Donna Brazile and Ed Gillespie on Sound of Sunday; Senator Arlen Specter Gets 'The Last Word; 'American Dispatch' from Eugene, Oregon

Aired August 9, 2009 - 20:00   ET

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


JOHN KING, HOST: I'm John King and this is 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, Democrat Dick Durbin of Illinois.

Plus, Republican turned Democratic senator Arlen Specter gets "The Last Word."

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.

SUSAN RICE, U.S. AMBASSADOR TO THE UNITED NATIONS: 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: 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)

BARACK OBAMA, PRESIDENT OF THE UNITED STATES: 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. A 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're 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...

RICE: Indeed.

KING: ... 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's 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 that 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: 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 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.

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.

KING: 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.

KING: So 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 a 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 Republican Senator John Cornyn of Texas.

I want to start with the economy and, directly to you, Senator 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?

SEN. JOHN CORNYN (R), TEXAS: 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.

KING: So, yes, extend unemployment benefits?

CORNYN: 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 spectrum.

The chairman of the Budget Committee, Kent Conrad, has raised doubts on this program. That votes were there. And he already 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?

SEN. DICK DURBIN (D), ILLINOIS: 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 a -- 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.

KING: Senator Durbin, the man leading those bipartisan negotiations you just talked about is the chairman of the Finance Committee, Max Baucus, and he 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.

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. 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 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.

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.

And up next, we'll get analysis on where this health care is heading with political strategist Donna Brazile and Ed Gillespie.

(COMMERCIAL BREAK)

DON LEMON, CNN ANCHOR: I'm Don Lemon. "STATE OF THE UNION with John King continues in just a moment. But first, we want to give you some headlines.

Swine flu. Trade, climate change and drug trafficking all on in the agenda for the North American leader summit in Mexico. President Obama arrived tonight for talks with Mexican President Felipe Calderon and Canadian Prime Minister Stephen Harper. The summit follows one of Mexico's deadliest months in its war against drug cartel.

Seven bodies and parts of a mangled helicopter have been pulled out of the Hudson River a day after a violent midair crash above New York. But the search goes on for two more victims, more wreckage and an explanation.

Investigators believe a small plane rear-ended a sight seeing helicopter just before noon yesterday sending boats plunging into the river. All nine people onboard died including -- including three teens. Investigators are asking for pictures and videos of yesterday's crash.

I'm Don Lemon. "STATE OF THE UNION" continues right now.

KING: Joining me, former Republican National Committee chairman, Ed Gillespie, and CNN contributor and Democratic strategist, Donna Brazile.

Donna, let's start with that statement from Dick Durbin, which was in part startling, in part maybe a reflection of reality though. He says he doesn't like it, that he wants a strong public option in the bill, but if the Democrats don't have the votes, that he thinks maybe pass a bill that doesn't have a public option, get to Conference Committee with the House and then maybe try to restore it there.

That's a concession of a bit of a problem, isn't it?

DONNA BRAZILE, DEMOCRATIC STRATEGIST: John, first of all, four out of five committees have passed real strong health reform. We know that at some point the Democrats will have to get together and try to figure out how to make sure that these bills are consistent.

The public would like to see some option in the reform package that will lower costs, and to ensure that they don't get dropped from their current system.

I believe a public option is necessary, not only to lower costs, but to ensure that most Americans with pre-existing conditions can go about their way and get the best possible insurance.

There's a lot of debate going on right now within the Democratic caucus over the best way to proceed in September. I think right now the president would like to see the four guiding principles he put on the table remain intact. But I also believe that the democrats -- majority of Democrats would like to see that public option stay in there.

KING: But what does it tell you -- and again, I want to be clear and fair to Senator Durbin, he wants it, and he hopes it's there in the end, but he essentially says, look, if we can't get it in the first sweep in the Senate, let's do something, lay down a marker, and then try to get it later.

That is not what the president hoped we would be talking about.

ED GILLESPIE, REPUBLICAN STRATEGIST: It's not what the president hoped we would be talking about. And the fact is this reflects the drop in support and understandable skepticism about a public option that voters are bringing to bear right now on their elected officials, and particularly senators, while they're home for these town hall meetings and House members as well.

John, I think where this is heading is to have a bill that is scaled back, focused on those who are involuntarily uninsured, where you can get some bipartisan consensus, drops the public option, drops these tax increases, drops the slashing of the Medicare system. I suspect at the end of the day, you get a health care bill that gets some Republican votes, and doesn't have all that the president wanted in it, but he signs it and tries to claim victory.

But I think it will actually be a victory for those who are opposed to these massive government interventions.

KING: Let's -- hang on one second, let's stay on health care, but I want to bring some more sound into the conversation.

First, on this issue of the public option, you heard Senator Durbin open the door a little bit. Governor Dean -- Governor Howard Dean, the former chair of the Democratic National Committee, who happens to also be a long-time practicing doctor in the state of Vermont, he says you need to keep the public option.

Let's listen.

(BEGIN VIDEO CLIP)

HOWARD DEAN, FORMER DNC CHAIRMAN: If you're voting against having a public option, what you're voting against is something that 72 percent of Americans in two polls want, which is the choice. Most of them aren't going to sign up for the public option, but they think they have the choice.

(END VIDEO CLIP)

KING: They think they should have the choice.

Donna, what's interesting right now is that this is largely a debate among Democrats over what the next step is, is it not?

BRAZILE: Well, John, the Democrats have offered plans. The Republicans, while there are some plans on the table, the leadership clearly have not embraced it and they have made it clear to Congressman Ryan, don't put forward your plans, because let's debate with the Democrats.

What we do know, John, is that if we do nothing, insurance premiums will continue to go up.

KING: Hold it up. Hold it up, if you want to hold it up.

BRAZILE: We have the most expensive health care system in the world, ranked 24th, and yet we get less bang for our buck.

The other problem, John, is that for the uninsured, they have the best insurance program in the world and that is they can go to the emergency room, and Ed and all of us have to pay for it.

So I think what Governor Dean is saying, if we really want to lower costs, we want to, you know, ensure choice and make sure that patients run their health care system, we need to keep that public option in the debate. GILLESPIE: John, let me -- Donna is right about the cost. And that is the central focus of most voters. That is where the concern is. And I think that's where this White House got off on the wrong foot, because it made people realize that they are going to raise my cost -- if I have insurance, my cost is going to go up in order to pay for those who have no insurance right now.

There are other ways to do this, to make sure that we can help get those who are involuntarily uninsured covered in the system. But raising the cost of those who have insurance now, private sector insurance or even Medicare insurance, is the wrong way to do it.

And look, the public option is not just a choice. It is going to end up siphoning folks out of the private insurance system into the government-run system. It's as simple as that. A friend of mine -- best friend, runs a couple of car dealerships up in Harrisburg, Pennsylvania. He did the math.

Paying the 8 percent surtax on his employees would be cheaper for him than providing the insurance he currently provides for 74 employees. He'll shift them into the public option if that's where things end up. And people know that. They're starting to figure it out.

BRAZILE: Well, the costs will continue to go up $1,800 a year, Ed, because in fact we have more Americans retired, and the government program, the Medicaid, Medicare program will continue to rise over the next 10, 50 years because more and more Americans will start to retire.

So we have to do something to control costs and continue to provide choice.

KING: This is a legitimate and a very interesting policy divide. What are your choices, what should they cost, where would the money come from?

There is also a political calculation that the White House and the Democrats are going to have to go through as we move through August as the lawmakers prepare to come back. And that is the president has been adamant that this must happen this year. And for him not to get a health care bill would be viewed as a huge failure.

So one of the options on the table is let's try to have bipartisan negotiations. They're working on that in the Senate. But if you come back, about a month from now, and you don't have Republicans on board, the Democrats try to muscle this through.

They've got a nearly 80-seat majority in the House, 60 votes in the Senate if you get the two independents. So Dick Durbin, also earlier this morning, says if necessary, do you it the Democrats' way.

(BEGIN VIDEO CLIP)

DURBIN: If it reaches a 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.

(END VIDEO CLIP)

KING: It would be a major challenge. You'd have the Democratic president, the Democratic majorities muscling through on the Republicans. Could they do it?

GILLESPIE: I don't think they can, John. The American people don't want to see something of this significance to be done with one- party-only support. They want to see something that reflects bipartisan consensus because they understand that that probably protects their interests.

Trying to muscle this through using reconciliation or some of these protected procedures in the Senate I think would result in a huge backlash for Democrats. And I don't think they would get it done.

BRAZILE: Well, we've had 16 years to do something, and nothing happened even when the Republicans controlled both the Congress and the White House. What the Democrats want to do is to lower the costs and provide choice for all Americans and to keep their existing insurance that they have.

We have the votes -- everyone knows that. And we are moving it through the committees, everybody sees that. But the White House must revamp their message this coming fall to ensure that the American people are brought along so they understand what's in it for them, how they will benefit from it, John.

KING: Donna Brazile, Ed Gillespie, thanks.

And straight ahead, he was heckled and booed at a recent town hall meeting on health care reform. He's also being challenged for his Senate seat by a fellow Democrat. Pennsylvania senator Arlen Specter gets "The Last Word" next.

(COMMERCIAL BREAK)

KING: Twenty-seven newsmakers, analysts and reporters were out on the Sunday morning shows. Only one gets "The Last Word." That honor today goes to Democratic Senator Arlen Specter of Pennsylvania.

Senator, thanks for being with us.

SEN. ARLEN SPECTER (D), JUDICIARY COMMITTEE: Thanks for the invitation. It's nice to be here.

KING: You were among the members of Congress this week who went home to a health care debate that was a little loud. At a town hall, you had some boos and some heckling when you were there with the secretary of health and human services, Kathleen Sebelius.

You know the debate about this. Is this grassroots democracy, people coming out to voice their opinions, or is it orchestrated and manufactured by maybe deep pocketed interest groups that don't like the president's plan?

SPECTER: Well, it's some of both. There's no doubt that the boos and catcalls were orchestrated, but there were many people there who wanted to talk about health care, and I didn't take the boos personally.

Listen, in a democracy, you can be orchestrated. It's just unfortunate that so much time was spent away from the issues, but in my line of work, you have to be prepared for whatever comes.

KING: Amen to that. Let's talk about some of the issues. One of the big questions is, are there enough votes in the Senate for this public option, a government insurance plan that would compete against private insurance plan?

The president says it's critical, but one of the big questions is, are there enough Democratic votes? Does Arlen Specter believe it is essential there is a public option health reform?

SPECTER: I believe that a public option would be very helpful, but it is true that there are many who don't agree with that. And there is exploration on an idea of a co-op advanced by Senator Kent Conrad.

You have to remember this, John. We do not yet have a bill. It has not been formalized. Senator Schumer came out several weeks ago with the idea that the public option ought to maintain a level playing field. And I think when we see the specifics, we may well find sufficient votes.

All of that has yet to be determined when we really get down to brass tacks and see the details.

KING: You're a veteran of the Senate, you've been in negotiations for many years. Let me ask you a simple question. Dick Durbin today, the number two Democrat, said that he very much wants a public option, but that if you need it just to get a bill through the Senate and then get to the negotiations with the House, he said he could see himself supporting legislation without one.

If the Senate passed a bill without a public option, could it come back in compromised negotiations, or would that kill it?

SPECTER: Well...

(LAUGHTER)

There are a lot of hypotheticals in what you say. I think Senator Durbin is saying that if he can't get a bill with a public option, he'll take the best he can get. I'm not prepared to go that far at this stage. I think that's premature. I think we ought to fully explore the public option to see if we can make it work out.

KING: I'm fascinated by your role in this debate, because if we go back in time, and I was there for this debate, it was Arlen Specter, then a Republican senator for Pennsylvania, who helped change the dynamic in the Clinton care debate back in the old days.

And we're showing pictures of you on the Senate floor with your infamous chart now. This is 1994 against Hillary care, and you brought this chart out and your leader at the time, Bob Dole, adopted it as his best friend, saying that what Hillary Clinton was proposing was this bureaucratic nightmare.

When you look at what's on the table now, is the plan significantly different or has Arlen Specter changed his views?

(LAUGHTER)

SPECTER: It's a totally different plan, John. The Clinton administration had single-payer. It had a gigantic bureaucracy between the doctor and the patient. There is a lot of interest in single payer and everything ought to be on the table, but the bureaucracy which was set up in the Clinton plan and was detailed in that chart with all the agencies, boards and commissions, so what we're talking about now is totally different.

KING: As you know, your role in that debate back in 1993 and 1994 is one of the things the man now challenging you in the Democratic primary, Congressman Joe Sestak, raises when he questions whether Arlen Specter is really a Democrat or whether Arlen Specter decided for political survival reasons he had to leave the Republican Party and go to the Democratic Party.

We had Congressman Sestak on this show in this same role as "The Last Word" a while back. And this is what he said about you, sir.

(BEGIN VIDEO CLIP)

KING: Is he a good enough Democrat?

REP. JOE SESTAK (D), PENNSYLVANIA: I'm not sure he's a Democrat yet. What I need to know is what's the principles you're running for?

(END VIDEO CLIP)

KING: He was suggesting you were running from the Republican Party and he wasn't sure you were a Democrat.

SPECTER: John, I've been voting with the Democrats more than with the Republicans all during my tenure. Pro-choice, support a woman's right to choose. I broke with Bush on embryonic stem cell research, on the nuclear test ban treaty.

President Obama thinks that my principles and values are right in line with his, which is why he's backing me, and Joe Biden and Ed Rendell.

When Congressman Sestak starts to throw stones, he lives in a big glass house. The guy has the worst voting record in the Congress from the Pennsylvania delegation. He's missed 104 votes this year. He talks about his military record. If he was still in the service, he would be court martial, and he's been AWOL, absent without leave. Now I don't want to get involved in brickbats, and I'd rather talk about the issues, but if Congressman Sestak wants to go negative, I'm prepared to battle him toe to toe.

KING: Maybe we'll have you both on the program to talk the issues some time. Let me ask you in closing, if you look at the polling in your state right now, the Quinnipiac Poll, recently came out in the field. Does Senator Specter deserve to be reelected? 40 percent of Pennsylvanians said yes, 49 percent, sir, said no.

What is it about you or about the issues debate that would have nearly half of the residents of your state who know you so well saying no?

SPECTER: Well, it is common when it's candidate x versus no one that no one does well. The real...

KING: Well, let me interrupt you on that point. We're almost out of time. But there is someone, Pat Toomey, who's the likely Republican candidate. And if you do a general election match-up of Specter/Toomey, in May, you led by 20 points. That is a dead heat now.

SPECTER: Well...

(LAUGHTER)

I don't want to get into the details, but that poll had a lot of problems. It polled the same number of Democrats as Republicans, and Democrats vastly outnumber. But even that poll showed me in the lead.

But getting back to your prior question, re-elect figures for incumbents are characteristically low.

But listen, John, there's only one poll that counts, and I've been in a lot of elections and a lot of primaries, and I didn't ask the president to clear the field. I'm prepared to take on all comers. And I think that when the final tallies are in, I feel confident.

But it's a campaign. And, starting tomorrow, I'll be traveling the state. My practice is to hit all 67 counties to take my record to the people. And I've been elected five times. So far it's been successful, and I'm going to continue to work at it.

KING: A great race in a great state. Senator Arlen Specter, we will check back in with you as the race goes on. Take care, sir. We'll talk to you in the near future.

SPECTER: Nice to be with you.

KING: When we come back, our "American Dispatch" from Eugene, Oregon.

(COMMERCIAL BREAK)

KING: Three words we have heard far too often in our travels in recent months: "unemployed," "homeless" and "hungry."

Sadly, we heard them all at once in our travels to Eugene, Oregon for this week's "American Dispatch."

Take a look at these numbers. One in every six Oregon residents are living in food stamps. The unemployment rate in the state is 12.2 percent and that has doubled/

We visited an organization called the Relief Nursery that serves more than 1,000 children and their families every year. It is a remarkable, inspiring place. But as it thrives to serve more families in need, it, too, is feeling the toll of recession.

(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 an invaluable safety net for a struggling single mother.

JULIE BONNEAU, HOMELESS MOM: About two weeks before Christmas, my boss came to me and said, listen, if we -- you know, we have to cut people back. They run the risk of 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. With no money coming in, I had 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.

GABRIEL BONNEAU, JULIE BONNEAU'S SON: That is a car.

J. BONNEAU: That is a car, huh?

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 that's struggling, it's like, 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, it 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's telling you how drastic the increase is. There are newly needy families -- and what I mean by that is families who have had jobs, who have had one or two-parent incomes, have had a home, might have even been small donors for the Relief Nursery or volunteered their time here.

What we're finding in 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 is 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've 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.

G. BONNEAU: Mama spin me.

J. BONNEAU: Mama spin you? You want to spin?

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

J. 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, there's nobody else that's going to.

I love you.

(END VIDEOTAPE)

KING: We certainly wish Julie and her family the best.

We'll be here again next Sunday and every Sunday at 9 a.m. Eastern for the first and last word in Sunday talk.

Until then, I'm John King in Washington. Take care.

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