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STATE OF THE UNION WITH JOHN KING

Sound of Sunday

Aired August 23, 2009 - 11:00   ET

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


JOHN KING, CNN ANCHOR: And I am John King, and this is STATE OF THE UNION.

(BEGIN VIDEOTAPE)

KING (voice-over): It's 11:00 a.m. Eastern. Time for "STATE OF THE UNION: SOUND OF SUNDAY."

Fourteen government officials, politicians and analysts have had their say: Chairman of the Joint Chiefs and a top U.S. diplomat; more than a half-dozen key lawmakers on Capitol Hill.

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

"STATE OF THE UNION: SOUND OF SUNDAY" for August 23rd.

(END VIDEOTAPE)

KING: Some think it over on vacation advice for the president from a senator who was once the Democratic vice presidential nominee. Now an Independent, Joe Lieberman says because of a sluggish economy and a mushrooming deficit, President Obama needs to dramatically scale back his health care plan and leave behind, at least for now, his goal of covering everyone.

(BEGIN VIDEO CLIP)

LIEBERMAN: I'm afraid we've got to think about putting a lot of that off until the economy's out of recession. There's no reason we have to do it all now, but we do have to get started. And I think the place to start is cost -- health delivery reform and insurance market reforms.

(END VIDEO CLIP)

KING: And while the Pentagon insists no final decision has been made, there are growing indications the top U.S. general in Afghanistan will ask for more troops. If so, the leading Republican voice on foreign policy tells us the president needs to do a much better job explaining the mission to the American people.

(BEGIN VIDEO CLIP)

LUGAR: He really has to face the fact that his own leadership here is critical. He really can't just leave this to the Congress, to General McChrystal, and say, folks, sort of, discuss this after the report comes in.

(END VIDEO CLIP)

KING: Near-universal condemnation, this Sunday, of a Scottish decision to release the terrorist convicted of the Lockerbie attack that killed nearly 300 people, a huge mistake, say Democrats, Republicans, and the United States's top military officer.

(BEGIN VIDEO CLIP)

SEN. CHARLES E. SCHUMER, D-N.Y.: To let this person out, who is one of the greatest terrorists in the last 100 years, was despicable and will be a block on those who did it for a long time.

(END VIDEO CLIP)

(BEGIN VIDEO CLIP)

MULLEN: All right, this is obviously a political decision, which is out of my lane, but, I mean, just, personally, I was appalled by the decision.

(END VIDEO CLIP)

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

Let's bring in the best political team on television, as we do every Sunday at this hour, and break down the issues.

With me here in Washington, Democratic strategist and CNN political contributor Donna Brazile and radio talk show host and CNN political contributor, Bill Bennett.

Welcome.

Let's start on the outrage we're hearing about the Lockerbie bomber being released by a Scottish magistrate, sent home to a hero's welcome in Libya.

All sorts of talk about what should happen next, what should the consequences be.

Bill, we'll get to Libya in a minute. What about for our relationship with the United Kingdom?

BENNETT: Well, it's tense, but we're actually not in a very dissimilar place, I'm sorry to say.

I note all the outrage. I'm outraged. I'm sure Donna's outraged. But lately, there has become something of a fetish in releasing terrorists as quickly as you can.

I read The Washington Post this morning, very small print, one more guy released from -- Yemeni -- a Yemeni guy released from Guantanamo.

So we release these guys left and right, and then we are outraged by this.

Now, scale and history and so on, one could argue, OK, this is much worse, but since went did we have to treat terrorists in this way?

Was there anything worse than watching this guy come down the steps and being treated with like a hero, women with flowers and so on?

But let me suggest our righteous indignation should start at home, and we should overcome this fetish that we have about capturing these guys and -- and then releasing them.

We had this story in the paper today about the CIA going to get bashed again, no doubt, because the guy who masterminded the Cole operation was in a room where someone carried a gun; they shouldn't have carried a gun; there wasn't any intention to kill him, just to scare him.

But my gosh, it's all about the CIA, and not about this guy who blew up 20 American Navy personnel.

So I think, when we talk to the Scots or anybody in the United Kingdom, I think we need to be a little bit clearer, a little more moral clarity about where we stand on this.

KING: Well, what's the burden on the president of the United States, now, though, Donna? He had nothing to do with this. Of course he has voiced his outraged, said he thinks it was a dreadful mistake to send him home and a dreadful mistake to give him a hero's welcome in Libya.

Colonel Gadhafi would like a meeting with the president of the United States when they both are up at New York in the United States General Assembly. Should the White House say flat-out no?

BRAZILE: Well, I hope the White House will not reward the Libyan president by having a meeting, given what just occurred and what we all saw.

What happened, in the decision to allow this -- this prisoner to go free, it essentially made a mockery of the rule of law. And I think, for most people, and especially human rights advocates, this was just a wrong decision, a wrong-headed decision by the Scottish authorities or the judge, and also for the Libyan officials to give this criminal the kind of hero's welcome that really, in the face of what he did, it was just simply outrageous. There's no other way to condemn it.

KING: The FBI director -- let me jump in real quick. The FBI director, Bob Mueller, says this, in a statement about this, in a letter to the Scottish justice. He says, "Your action in releasing Megrahi is as inexplicable as it is detrimental to the cause of justice. Indeed, your action makes a mockery of the rule of law. Your action gives comfort to terrorists all around the world."

BENNETT: What would be nice would be to recall the Israeli example at (inaudible)

You know, nothing stops us, in international law, from going and getting this guy. He's probably pretty well-guarded. I don't believe it's beyond the reach of Navy SEALs and special forces, however. Because this guy killed Americans. He not only shouldn't be celebrated; he should be brought back to justice.

KING: You think they should go and get him?

BENNETT: I think -- If we could, I would get him. I don't know if we can or not. But I don't see that in the cards. I just don't think that's -- that's the world we live in today, which is one of the reasons we're having problems.

KING: Is this the...

BENNETT: I'd like them to think we would. I'd like them to think...

(LAUGHTER)

... to be very, very worried that the American -- you know, the Americans are on their way. But I don't think they're worried about that.

KING: Let me move on to Afghanistan. I had an interesting conversation this morning. I had Admiral Mike Mullen, the top military officer in the United States, and Karl Eikenberry. He's a retired general, now our top diplomat in Kabul.

We were discussing the elections, and it will be several weeks before we know the results.

We were discussing -- we know that General McChrystal is likely to ask for more troops; at least, that's the impression of anybody, including leading members of Congress who have met with him recently.

I want you to listen to this. In the part of an answer to a question, Ambassador Eikenberry says something that just raised my eyebrows about what have we been doing for six years? Listen to this.

(BEGIN VIDEO CLIP)

EIKENBERRY: For the first time, I believe, since 2002, we have a very clear strategy, and matched against that, we have sufficient -- we have resources that are being mobilized.

(END VIDEO CLIP) KING: Good to hear that this gentleman who has a great resume thinks we have, for the first time, a good strategy and we have the resources, but for the first time? For the first time? It's almost eight years since 9/11.

BENNETT: Yes, well, that would be news to me. I thought we were actually pretty successful in Afghanistan, as Christopher Hitchens said, the only time in history we bombed the people out of the Stone Age. And we were pushing back and people got their freedom. Women were walking around without the required -- the required burka.

The problem is, and I would say this with as much fairness as I can muster, politically, one of George Bush's problems -- I supported the war, but -- very much -- the war in Iraq, is that he never sufficiently well explained what this war was about and why we were fighting it. We could have used more explanation.

Now Barack Obama's the president and he has to explain it. And a column in The Washington Post today points out, it's not really a war of necessity; it's a war of choice. They're not coming in on our borders. Yes, they're planning plots, but why are we in there and in these numbers?

I support this war. I support the president and salute the president for being in it, but we need explanation.

Notice public opinion polls are turning against this war. The other odd thing, though, politically, is I noticed, at the Netroots Convention, that, a lot of the left-leaning groups, this was not a high priority. Maybe it will become a high priority. Sooner or later, it will be a high priority. The president has to explain it.

BRAZILE: General McChrystal is going to come back to the president with a set of strategies, or an outline of a strategy to stabilize the government, to help the non-governmental organizations go into the regions of the country where the Taliban and the war lords are still holding strong, and also, to ensure that our troops and the NATO troops and others who are helping us fight back the insurgency have the resources they need to defeat the Taliban.

This is key, John, not only in stabilizing Afghanistan but also Pakistan. So I think the administration approach, when the president outlines it this fall, will be that we're continuing to move forward, but we have some yardsticks that we have to check off over the next coming week.

KING: When Bill notes public opinion, we saw when public opinion turned on Iraq and how that undermined the Bush administration. You're as plugged into the left of the Democratic Party and the entire Democratic Party as anybody I know.

If you look at The Washington Post poll this past week, 70 percent of Democrats say this is not a fight worth fighting in Afghanistan. How has the president lost his own base, if you will, on saying, I need to stay with me? BRAZILE: I think the president, again, will have to explain, not just to the Democrats, the progressives, but also to the country, why we must continue to make an investment in securing -- helping to secure this country and to ensure that our troops have what they need to be successful.

I'm a Democrat. I'm as liberal as they come, but this is a very important war that we have to win and help stabilize that government.

BENNETT: Yes. People don't support it, but it's not a hot issue yet. Now, it's not a hot issue, maybe, because the health care debate and the economy and so on. But it will get hot. These things -- these things always do.

But one headline, you know, this morning. A number of women who voted had their fingers cut off for voting. That tells you we don't have the ground that we should have. When women go out -- they couldn't vote before; they vote now and get their fingers cut off, if I were writing the president's speech, I might start with that or put that somewhere illustratively in the middle.

KING: But it -- that brings you to the argument, though, about what next, in the sense that it was the United States who helped put that interim president, now elected President Karzai, in place.

If you do not have progress with an infrastructure -- the poppy crop is way up off the charts; there is corruption in the government, there are some who say, despite the admirable goals of the mission, which you both support, that it's time to say, no, let's try something new; let's pull the U.S. troops out and only do it with drones, with intelligence, just, you know, shoot at, from above and safety, high- value targets.

Is it time for that big of a reassessment?

BENNETT: No, I don't think so, not when the Taliban has the ground it already has, as proven by the last thing I said. Look, we had major trouble in Iraq, worse trouble in Iraq, after a few years, than we're having now in Afghanistan. We stayed; we changed strategy, and things dramatically improved.

Let's see what General McChrystal said, as Donna said, and let's see what the president goes -- but, again, I admire him for sticking in there. I just think more of a rationale would be -- would be helpful.

(CROSSTALK)

KING: Before you jump in, I want you to listen to Senator McCain, who believes there will be huge -- are, already, huge political pressures on General McChrystal as he decides how many troops to ask for.

(BEGIN VIDEO CLIP)

SEN. JOHN MCCAIN, R-ARIZ.: I think there are great pressures on General McChrystal to reduce those estimates, but I have great confidence --

GEORGE STEPHANOPOULOS, ABC NEWS ANCHOR: From the president?

MCCAIN: No, I don't think it's necessarily from the president. I think it's from the people around him and others, who, I think, don't want to see a significant increase in our troop presence there.

(END VIDEO CLIP)

KING: It's his strategy, now, President Obama's strategy, now, Donna. How difficult will it be for the president? You mentioned not just the Democrats, but especially the Democrats, who picked him as their nominee because they viewed him as the most anti-war candidate. He comes back saying, I've already escalated by 20-something thousand, I need 25, maybe 30,000 more.

BRAZILE: But remember the president -- part of the president's strategy that he announced several months ago was to not just build our military presence, but also to reform the Afghanistan government so that they're providing resources to the people and the population is not dependent on the poppy crop or the Taliban for their day-to-day services.

So I think this is a three-part strategy, to not only ensure that our military can secure those areas, but also that we help to reform the Afghanistan government so that they are providing direct services to their people and not the Taliban.

BENNETT: It's not mysterious, McCain, like he didn't want to mention who it was. It's the House. I remember David Obey, I remember the appropriations for Afghanistan. They said, can't we give you less, can't we send fewer troops? Again, another argument that President Obama may have with the House leadership. Not just about health care, but about this all-important --

KING: You think of the Senate as well. They plan hearings in the fall, they want to know the end game. The end game of Afghanistan will be a debating point. The end game of the health care debate will be our debating point when we come back with Donna and Bill. Please stay with us.

(COMMERCIAL BREAK)

KING: We're back with CNN political contributors Donna Brazile and Bill Bennett. The president heads to Martha's Vineyard, a well- deserved, any president deserves a vacation. One of the big things he needs to think about though between runs to the beach is what to do about heath care when he comes back. And interesting this morning, Democrat turned Independent Joe Lieberman said you know what, I share his goals, universal coverage and all that, but we can't afford it right now. He needs to scale back. A leading Republican voice, a guy in the middle who would like to cut a deal, Dick Lugar, also says it's time for the president to think hard.

(BEGIN VIDEO CLIP) LUGAR: I would advise the president that bringing up of the health care situation in the midst of a recession, the unemployment problems that Senator Lieberman described was a mistake and that, therefore, he ought to postpone the decision.

(END VIDEO CLIP)

KING: Postpone health care, Donna Brazile, scale back, or go full steam ahead with everything he wants?

BRAZILE: I think it's going to be a little mix of everything. The bill that finally materialized may not be as dramatic or as sweeping as the house bill, but it's likely to offer more than what the Senate has been talking about. John, the status quo is unsustainable. Most families will see their premiums rise next year if we do nothing. Many Americans will lose their coverage because of pre-existing conditions. We know that -- and then 47 million Americans without health insurance. So we have to figure out a way to compromise in such a way that will not weaken dramatically the bill, lower the costs and provide people with -- consumers with more choice. And those with existing coverage, ensure that they don't lose their coverage.

KING: Is there a compromise out there that satisfies her that will get you enough Republicans, or are the Democrats going alone here?

BENNETT: Probably it's scaled down. May I say something, by the way? There are a lot of people on the right criticizing the president for taking a vacation. I don't. I mean, all people should get vacations.

BRAZILE: Really, people criticize --

BENNETT: Oh yes, with all that's going on. Now, I wouldn't go to Massachusetts, myself, just get yelled at on the beach. But that aside, yes, it will be scaled back and it will not be what he promised, but he did promise there would be a bill.

And he cannot retreat from that, otherwise, he's going to fulfill the predictions of those who said it would be his Waterloo. But he's got problems. Because he's got a disagreement with the American people who are now pretty substantially below 50 percent in terms of their approval of this health care plan and it's dragging his whole approval rate down. And there are other arguments. There's Steny Hoyer and Speaker Pelosi. They disagree about a public plan. There's the House plan and the Senate plan. So there are a lot of things to be ironed out. But it's interesting what Donna said. She said, I think you said, we're going to have to iron something out, it won't be what was originally proposed. It will be some combination of all of the above. It will not be the radical change that he predicted.

KING: And we're watching this president. Again, seven months, he's still a relatively new president. He's not been a chief executive of course. We're watching and we're learning and he had a conference call with his online people, his grassroots organizers the other day and he tried to motivate them. Also had some very interesting language in a call with some faith-based groups on health care. Let's listen to the president.

(BEGIN VIDEO CLIP)

OBAMA: I know there's been a lot of misinformation in this debate and there are some folks out there who are, frankly, bearing false witness. But I want everyone to know what health insurance reform is all about.

(END VIDEO CLIP)

KING: "Bearing false witness," words from the scripture.

BENNETT: Yeah, well, there's some false witness being borne on all sides, I would say. And CNN has wonderful features on this, who's telling the truth and who are not. There are claims that are coming out that come out from the conservative side that are right, that are wrong, and some on the Obama side.

He's had to correct a few times. But it's a big, heated debate, and I must say it's very interesting to see the level of engagement of the American people in this debate. Whether you like what goes on at these town hall meetings or not, these meetings are huge. It's amazing. And people are taking a vital, the word is well chosen, interest in this topic, as well they should.

BRAZILE: It's a complicated issue. And that's the reason why, I think, there's so much --

KING: Would it have more clarity if he had his own plan? You know the debate in town. It should have been an Obama plan. And then there's people who say, oh no, there was a Clinton plan, and that's why that one went down 16 years ago. Would there be more clarity? In hindsight, has he handled this one wrong?

BRAZILE: Well, the president laid out his principles and then allowed the sausage makers to basically come up with all of the details. And what we've been hearing is all the sausage making, the grinding.

But, John, there's a lot of disinformation or misinformation that's been shoveled out over the last few weeks, that have caused people to become quite emotional in this debate. And hopefully, the president, when he returns from a much-needed break. And remember, while he's on vacation, he will continue to get his daily presidential briefings and all of the other things that go with being the president of the United States. But the president must come back with a very conservative -- a very concise, sharp message about what he's hoping to accomplish.

BRAZILE: And then, basically, guide the Democrats on Capitol Hill on getting this done.

We need message discipline on the Democratic side. I can't speak for Republicans, but I can tell you, without message discipline, this has been a very difficult, uphill battle for the president.

BENNETT: Message discipline in this context means the same message. Not necessarily a tight message, but let's all be saying the same thing. I think you could conclude without any question that it has been mishandled when you lose 20 or 25 points on an issue, the more you talk about it, the more you lose, you've mishandled it.

KING: We've spent a lot of time on this segment, and this is one of my favorite hours on Sunday, where we kick around all of this sound. We had these spicy political debates. We lost a voice this past week who was a trailblazer in the big, spicy, political debates of cable television.

I want you to hear his voice one more time.

(BEGIN VIDEO CLIP)

ROBERT NOVAK, FORMER CNN ANALYST: The big question for Secretary of State Colin Powell.

I'm going to ask you a very careful question, Mr. Card.

ANDREW CARD, FORMER GEORGE W. BUSH WHITE HOUSE CHIEF OF STAFF: That was the big question?

(END VIDEO CLIP)

BENNETT: Andrew Card's best line.

KING: We will miss Bob Novak. Bill Bennett, give me a good reason why.

BENNETT: Well, he wrote a story that was on the cover of The National Review saying "Bill Bennett for Vice President," and so I have to disclose that. But nevertheless, I still didn't like him very much because he was a disagreeable guy.

(LAUGHTER)

BENNETT: I'll tell you, though, he was tough. You had a list of calls -- you know, I had this position in the cabinet, two cabinet- level positions, you have a list of journalists to call. A lot of them you don't have to prefer for. The call to Novak, you had to prepare for. And you usually ended up saying more than you wanted to say.

And despite the fact that the guy would give you bad treatment, next time he called, you'd take it again, because you would figure, well, this time I can outsmart him. He was tough. He was old- fashioned. He had integrity, intellectual integrity.

The two last conversations I had with him I will remember, he had prostate cancer, I sent him something in the hospital, a little thing that just meant the world to him. And then when he became a Catholic, this tough, skeptical, questioning, "I'm not buying it" guy, becomes a Catholic in his old age. Interesting character. BRAZILE: He could be quite intimidating, if you met him on a street or had an interview, as Bill mentioned, but he was also a gentleman. I mean, he was someone that when I would come to the studio and prepare to go up against him, Bob would lean over and say, don't worry, I won't bite you.

But he was also someone...

BENNETT: Then he'd bite you!

(LAUGHTER)

BRAZILE: He'd tear you up.

But a few years ago, Bob had surgery, I think he broke his hip, and I saw him a few weeks after on the airplane and Bob saw me carrying all my bags, he said, let me carry them up for you, and he put my bags up and sat down and he said, now, I'm going to give you something to drink, because I don't want to talk to you. You know, but he was a gentleman. He was a nice guy, and he was somebody that I enjoyed fighting with.

BENNETT: I'm sure he's in a better place, but if he's not, the real prince of darkness has got a run for his money, you know?

BRAZILE: Oh, my God.

(LAUGHTER)

KING: Amen to that. And he was known as the "Prince of Darkness" and he relished his own nickname. But if you go throughout this building and throughout this town, I met Bob when I was 23 years old on my first campaign, and he was one of the elder statesmen who was a mentor.

And all through this building, there are people, young people, who learned their passion for their craft, their relentlessness that you talk about from Bob Novak. He will be sorely missed. He was a great man and a friend. Up next, we get out of Washington and out to Stacy's Diner, Junction City, Kansas, for this week's diner discussion on health care and the economy from the heartland.

(COMMERCIAL BREAK)

KING: In our travels this week, we visited Kansas, a conservative farm state that like everywhere in America is dealing with the fallout of the national recession. Let's take a look at some of the numbers. The unemployment rate in Kansas, 7.4 percent. Now, that's better than the national average, of course, but Kansas lost the highest percentage of jobs of any state in the month of June, the latest state numbers available.

One thing helping the economy in this state, the presence of Fort Riley, a giant Army installation that contributed nearly $2 billion to the Kansas economy in the fiscal year 2008. I asked the locals in Junction City where to find a good breakfast, they'll tell you, all the farmers and the soldiers, to Stacy's, so we did, for a great meal and a healthy dose of skepticism that answers to big problems are found here in Washington.

(BEGIN VIDEOTAPE)

DENISE OTT, FORT RILEY, KANSAS: We are a lot more fortunate than other communities, because we do have Fort Riley right outside our gates. And at the end of the day, we're still going to have soldiers here. We're still going to have civilian contractors that work on posts, so our community is better-prepared than other communities and the hardships they're facing right now.

BUZ BRUZINA, JUNCTION CITY, KANSAS: Right now, I think we're having a very good year for crops. On the other hand, cattle is not doing so well because the demand for meat products is lower. So the farmer who is -- the rancher or farmer who is diversified is doing OK, because the crops are doing fine, but the cattle are not. So that's key here.

KING: Do you want the federal government to help with health care, or would you prefer them to just leave you with what you got?

OTT: Currently, I'm a military spouse, so I kind of fall under. I have my military benefits through my husband, then I have health care. If I were a civilian, I would probably prefer to keep my own private insurance.

BILL SPEER, MILFORD, KANSAS: So I don't think a large, government-run health care system is going to be successful. I believe, like Buz does, that the coordinated cooperatives and opportunities for business or private individuals to join together to get quality health care is where it's going to go. I think that's best.

KING: This is a very conservative state. The president didn't carry this state, but he has been in office about seven months right now, how is he doing? BRUZINA: I think the president is falling in the trap of what is common in this country. People are impatient to see things done now. He wants things done now. And it takes a little more thought and experience and listening to some of the people who have experienced those things to give him advice and listen to those things.

SPEER: I'll be critical. I think our president is an elitist. He is out of contact with common American people. I am concerned that if they don't let simple, free economic processes and free capitalism roll on on its own, that my children won't see the opportunities for success and comfort that I saw.

If they tinker too much with the economy, it will be impossible for my children to enjoy and my grandchildren to enjoy the things that I earned through hard work, dedication.

BRUZINA: Well, I have real reservations on what the direction we're headed. We're going through a budget cycle right now in this community. BRUZINA: And the pressure to keep the taxes down and the mill rate down is overwhelming, yet there is going to have to be an increase, a slight increase. And this is an indication that this is something that's being forced upon us, because the government has overspent.

KING: You share that, especially as a mom of two young kids?

OTT: I do. I think every parent is concerned about their children. I hope that my children have the same opportunities that I've been granted. I do worry about government spending. You know, at the end of the day, we're very blessed to be in this community, in Junction City, part of the first infantry division, because my children are in the heartland of America. They're able to see work ethic, they see what their dad does, they have a working mom. They know what they need to do to succeed and they have a sense of patriotism. So you know, I hate to admonish anything that the government does and I want to make sure that they have all the goals that I have.

(END VIDEOTAPE)

KING: Great conversation, and trust me, a great meal at Stacy's in Kansas. Up next, more "Sound of Sunday" with three members of the best political team on television. Stay right with us.

(COMMERCIAL BREAK)

KING: I'm John King and this is "State of the Union." Here are stories breaking this Sunday morning. The nation's top military officer says the situation on the ground in Afghanistan is serious and deteriorating. Appearing on "State of the Union" earlier this morning, Admiral Mike Mullen insists no decision though has been made yet on asking for more U.S. troops.

Election officials in Afghanistan say they're reviewing more than 200 allegations of voter fraud from last week's presidential ballot. President Hamid Karzai's chief rival says he has evidence Karzai supporters rigged votes in several provinces. Karzai backers deny those claims. Preliminary results are expected Tuesday.

Senator Joe Lieberman says the joyful welcome home for the Pan Am 103 bomber changes U.S./Libya relations. Speaking on "State of the union" this morning, Lieberman said relations with Libya have now returned to a "bad place" after years of improvement. Abdel Basset Mohamed al-Megrahi was convicted of killing 270 people in the bombing over Lockerbie, Scotland back in 1988. Scotland released him Thursday, citing his terminal illness. That and more, ahead on "State of the Union."

Shot of the White House there on August 23rd, a Sunday morning. The president won't be there most of the next week. He's off to Martha's Vineyard later today for a summer vacation. Joining me here in studio, senior White House correspondent Ed Henry, national political correspondent Jessica Yellin, and senior congressional correspondent Dana Bash. Ed Henry, let me begin with you and what the White House does now. It protested, told the Scottish authorities, please, don't release this terrorist. It asked the Libyan government, please, don't give him a hero's welcome. Well, he was released, he did get a hero's welcome, and now people say, what happens next in U.S./Libya relations. And in fact, U.S. relations with the United Kingdom. Here's what Senator Chuck Schumer said this morning.

(BEGIN VIDEO CLIP)

SCHUMER: This is a disgrace and I think there are two things that should happen. First, I think that our secretary of state should immediately introduce a resolution condemning those celebrations and calling on Gadhafi to apologize for them. And second, frankly, I would like to know if there was some kind of illicit deal here. There was a story in many of the newspapers that this was done, particularly, by the British government in return for getting an oil contract. That would be despicable.

(END VIDEO CLIP)

KING: Everybody's expressing outrage, but is there something after the outrage? Are there consequences to come?

ED HENRY, CNN SR. WHITE HOUSE CORRESPONDENT: Really no leverage for the United States. I mean, when you talk to top White House aides, they say that they were privately urging the Scottish government as you say, not to do this. They obviously went ahead anyway. The president in private did not personally intervene with the Scottish government, but told his aides he wanted White House staff calling the Scottish government in addition to the State Department. So it was clear that the highest levels of the U.S. government was upset, but they didn't really have any leverage. And they don't have leverage now. I mean, Senator Schumer says maybe the secretary of state should introduce a resolution before the U.N. What's that going to do after the fact? So there's a lot of frustration at the White House, because they didn't want this to happen, but there's very little they could do.

DANA BASH, CNN SR. CONGRESSIONAL CORRESPONDENT: And Senator Lieberman made a good point which is that this is one of the rare places in the world where the United States has had, obviously, terrible relations with Libya, but they have thawed in the past couple of years and this just puts that country right back in the bad actors place along with many other countries we have to deal with around the world. KING: And another thing Senator Lieberman said is he was just in Libya with other members of the congressional delegation and he said that what Colonel Gadhafi wanted most was a meeting with the president of the United Nations. Senator Lieberman says that better not happen.

(BEGIN VIDEO CLIP)

LIEBERMAN: Don't expect President Obama to meet Gadhafi at the U.N. General Assembly in New York in September. This is a real setback for the anti-terrorist cause and takes our relations with Libya back to where they were for too long, a bad place.

(END VIDEO CLIP)

KING: Is that about it though, Jessica? The president can refuse a meeting, but as Ed said, his policy levers don't give him much options.

JESSICA YELLIN, CNN NATIONAL POLITICAL CORRESPONDENT: Well, what else is he going to do? I mean first of all, a meeting, that is about the last thing this president needs is a handshake picture with Gadhafi. What's left for this president to do on this front? He has to be tough on terror, he has to look to another chapter to show how tough he is.

KING: Another chapter he's dealing with even as he tries to take a vacation, and he knows not long after he gets back, he's going to get a report from the commanding general in Afghanistan. And the members of the Congress who met with General McChrystal just in the past week say they have no doubt, the Pentagon says a decision has been made, but they have no doubt he's going to ask for even more troops. So one of the big questions there is, how many? There's a low-risk approach, maybe 15,000 troops. A medium-risk approach, maybe 25,000 troops, a high-risk approach, go 50,000, 60,000 troops. What Senator Lieberman said this morning is he's worried about pressure.

(BEGIN VIDEO CLIP)

LIEBERMAN: There's a lesson we should have learned from Iraq. Some of the pressure that was put on our generals there not to ask for what they thought they needed to win meant that we lost a lot of lives, spent a lot of money. My own opinion coming back from Afghanistan with a new team, new strategy, we ought to take the option that General McChrystal gives us that has the least risk. In other words, don't dribble it out, don't go for incrementalism. That's a lesson we learned in Iraq.

(END VIDEO CLIP)

KING: Is President Obama prepared to go to the United States Congress and a Democratic Party that picked him as his nominee because he was the most anti-war, anti-Iraq war candidate and say, guess what, I sent 20,000 more, but now I need 40,000, 50,000 more?

HENRY: I just don't see that happening and I think one of the biggest problems for the president, you highlighted this at the top of the show is this "Washington Post" poll this week showing that the majority of the country for the first time is under 50 percent in terms of supporting like this. Something like 70 percent of the Democratic Party as you said saying they don't think this is a war worth fighting. And I think the other challenge there is that this president doesn't talking about Afghanistan very much. He did talk about the election a couple of days ago. He did talk Monday at the VFW convention in Phoenix.

HENRY: But I was there on Sunday, talking to several veterans at that VFW convention in Phoenix, and Democratic vets who voted for Barack Obama told me, we want more details; we want to know more about the mission; how does he define success?

And Monday when he spoke, he spoke again in very -- in generalities, about changing the strategy, a surge in diplomacy, but they want more information. They're willing to support this mission if they get more facts.

YELLIN: Ed's right. He has not defined the mission in a way that's very clear in connecting with the American people. It's interesting, because this president, who was elected because of his enormously strong communication skills, is struggling on that front, on the health care front.

If he wants to get this kind of support for a mission in Afghanistan, he's got it from the conservatives. He's got to get it from his own base. He's facing a number of problems there. He's got to be more clear about...

(CROSSTALK)

KING: And as you come in -- let me just -- as you come in on that point, his base, let me just put on the screen for our viewers, the Washington Post poll this past week, the country's about divided. But Democrats -- Democrats, 70 percent, seven in 10 Democrats say this is a fight not worth fighting.

YELLIN: And that is why, as Ed said, it would be, you know, incredibly challenging to ask for that -- ask for more troops, and of course, that means, also, more money from his Democratic brethren on Capitol Hill.

You know, the last time Congress voted for a war supplemental or extra money for the wars in Afghanistan and Iraq on Barack Obama's watch, I actually expected more Democrats to bolt. And particularly in the Senate, you only had actually, I think, fewer than a handful of Democrats not voting for it.

But one Democratic senator, a liberal senator, who at the time was just kind of mulling things, so he didn't want me to use his name on the record, but he said, you know, it is so much easier -- so much easier -- to be opposed to the war when it's a Republican. When it's your guy, it is very difficult.

But when push comes to shove, if I am against escalating troops in Afghanistan, I'm going to have to vote against my president.

HENRY: You know, the other part of this, too, the country doesn't really want to have a serious discussion about this yet, but when you talk about 40,000 or 50,000 more troops, after sending 21,000 more, where are we going to get those troops?

We're still waiting for them to come home from Iraq. Many of those troops expect that they're going to go home, not go into another theater. But they may have to.

And I remember, in the waning days of the Bush administration, George W. Bush talked about increasing our forces, recruiting more people. It's very difficult to do.

And there's some question about whether we really have that many troops to send in.

YELLIN: And when you think of all the anxiety people are under at home right now, he really has to explain to them why this should be an added burden in their lives. With the economy, with mortgage foreclosures, this hysteria we're seeing at town halls, people are feeling squeezed. Why do we need another war?

KING: Well, I can tell you, from being out at Fort Riley, Kansas, this past week, spouses of troops that are about to come home from Iraq, think they get about 12 months before they lose their spouse again to Afghanistan.

We'll come to the domestic front when we come back with Ed Henry, Jessica Yellin, and Dana Bash. Stay with us.

(COMMERCIAL BREAK)

KING: We're back with CNN's Ed Henry, Jessica Yellin, and Dana Bash.

Let's move on to health care. If you listen to the conversation this morning, Republicans say, well, Mr. President, we'd come in if you'd invite us down for some much more modest health care proposal. But most interesting was the number of Democrats -- Ben Cardin, liberal Democrat, more liberal Democrat, here on the show saying something has to give. He wouldn't say just what.

Joe Lieberman, Ed Henry, said, you know what, forget universal health coverage right now; we can't afford it; let's make a downpayment on health care reform by doing some of the insurance reforms, preexisting conditions, and prove to the American people that we're going to bring down costs; then come back with the more expensive big-ticket items.

Will that sell at the White House?

HENRY: Not today, but on September 15th, check back, because it probably will. That's the next deadline, as Dana and Jessica know, for the Senate Finance Committee, Max Baucus. They've missed deadlines before. The president's running out of time. The bottom line is that, as much as there's been screaming and yelling at town halls and at the White House, with the Hill, with Democrats and Republicans, this is still a Democratic versus Democratic battle.

And now, when you've got people like Ben Cardin, who's more liberal than conservative, in addition to a Joe Lieberman, as an independent Democrat, saying, Mr. President, maybe you've got to scale it back, that's where this is heading. It's not there yet. It will be there in two or three weeks.

YELLIN: Well, there's a strategy here. The people I talked to at the White House say, basically, what's going on here is that they want to give the Republicans every opportunity to negotiate. They want to be able to say, look, we tried bipartisanship at every turn; they refused.

Then, at that point, the White House has ground cover to go out and say, we're going to do it with the Democrats, without the Republicans, and then figure out what comes next. The bigger problem for them is a policy problem. How do you bring down costs if you don't cover everyone?

The policy wonks will tell you covering everyone is the key ingredient to bringing down costs, so it's a bit of a catch-22, there, in terms of the substance.

BASH: Right. And in addition to the substance, the political problem with that strategy is, once you're done with saying, OK, we tried with the Republicans; let's move on to the Democrats, getting consensus among Democrats. Because that, at the end of the day, is the president's big problem right now.

When you talk about scaling back this idea, the members of the six negotiators on the Senate Finance Committee, they had a conference call on Thursday night of last week, and one of the big things that they talked about was exactly that, the fact that all of them -- now, they're from conservative states, even the Democrats -- all of them said what they heard was, "Wait a minute, you're going to spend $1 trillion more after you've spent almost that on the bailout, almost that on the stimulus? No way."

So a big effort, now, that they're trying to do between now and September 15 is actually to bring the cost, which was about $900 billion, down even further, because there was so -- there's so much outrage they're hearing, separate from the policy, just about the idea that Washington is just spending too much money.

KING: On that point, a lot of protests, a lot of anger, a lot of policy questions at these town halls, but also some new numbers, Ed, that you reported last week on the air.

When they come back from August recess and they look at the Obama administration's midsession budget review, which in February projected a deficit, over 10 years, of $7 trillion, now projects a deficit, over 10 years, of $7 trillion, they now predict $9 trillion. That's trillion with a T.

That has to convince -- I would assume convince the White House that, politically, they know a lot of those conservative Democrats who were skeptical to begin with are going to come back to Washington and say, "We don't have the money."

HENRY: That's right. It's going to be that much harder.

Now, what the White House continues to say is what the president's been saying for months, which is that this actually proves that you need health care reform, because the big driver of the deficit over the next 10 years is exploding health care costs.

And so if you, sort of, walk away from this fight right now, that $9 trillion in debt that piles up over the next 10 years may be $11 trillion, $12 trillion -- just keep adding up, because health care is the big driver.

The problem, though, is, in the short term, as we've been saying, you cannot convince Republicans, but even conservative Democrats, to spend another trillion dollars, right now, because we don't have the money.

KING: You talked about the strategy, Jessica, to essentially call the Republicans' bluff, say we tried to negotiate.

KING: Does the president have to do something bigger to sell that in the sense of calling them to a White House summit and saying, OK, I'm willing to hit the reset button if you prove to me that you're willing to give me something. Do we have to have some big event or do we just run the clock out politically?

YELLIN: So far, they're running the clock out. But I could imagine them saying let's try to get this together, let's try to have some discussion and then saying, look, they refuse because there is so much evidence right now that there is no negotiation room, really, between where the Democratic position is and where the Republican position is. And so the president, what he really needs to do more than anything, is come out with some version of his own to speak above the Congress, beyond the Congress, to the American people and tell the American people why he believes doing health care reform is going to be good for you and your pocketbook, otherwise, it's going nowhere.

BASH: And that was really the goal going into the summer recess. The Democratic goal was exactly that, change the dynamic, change the conversation from what health care reform was going to do to you, to what health care reform is going to do for you. It didn't help, it didn't work because of these town halls.

HENRY: And on that point, some top White House Aides say that they have considered a prime time address to the nation from the Oval Office or go up to Capitol Hill and get the nation's attention, as Jessica was saying. However, they haven't gone that route yet because the president has been trying to grab the nation's attention. How many town halls has he done, how many speeches has he done?

YELLIN: But he doesn't have a plan to sell yet.

HENRY: He still doesn't -- he hasn't had it the whole time and when the book is written about this whole story, there is going to be a lot of hammering about whether there should be a plan on the table.

KING: We like new technology on this problem. We have our magic wall. We don't think anybody has anything quite like it. I want to walk over here, show you a new trick, this is the "Washington Post" is putting this out next week and they were nice enough to let us game run and test it here. It's called POTUS tracker. You can go to the washingtonpost.com and you can find out all about the president, who did he meet with, what subjects did he meet about and everything. I want to show you on the screen now, it's a little complicated to do here. But we'll show you on the screen, if you put in here, who has he met with -- meetings with President Obama, here you get the five people he's met with more than 20 times. Vice President Biden 128 times, Secretary of State Clinton 36. Treasury Secretary Tim Geithner 29, Robert Gates, the Defense Secretary, 28 and Larry Summers, his economic adviser, 22. Where is Ed Henry's name?

HENRY: I think the numbers are off here because he's had to call Vice President Biden in so many times, that those numbers are off, John.

KING: I don't see the Republican leadership on here.

BASH: Well, no, it's not, but they have been down a couple times, but I think mostly with the Democrats. But what you didn't put on here I like, I'll give our viewers something they didn't see, he played golf nine times, and he did go to one Wizards game.

KING: We saw him at that Wizards game, remember that?

BASH: We did. HENRY: I think also the fact that Geithner/Summers, the economic games are near the top of the list, with the Secretary of State, Secretary of Defense, shows how the times have changed where in the Bush administration, it would have been far different with the economy, health care, front and center.

KING: All right, prepare here in the room, prepare here at home. When we come back, the lightning round, two issues we give our correspondents, see if they keep to it this time, two sentences, stay with us.

(COMMERCIAL BREAK)

KING: OK lightning round now, Ed Henry, Jessica Yellin, Dana Bash, here's one. We learn new things from our president all the time, including some language. Here's the president on a conference call the other day with his supporters. He said, "There is something about August going into September where everyone in Washington gets all wee-weed up. I don't know what that is, but that's what happens."

Put me in the "I don't know what that is" column. You're the senior White House correspondent.

HENRY: I was in New York visiting my parents. My mom told me when I was in school, never talk about wee-wee. We're not talking about it on "State of the Union."

YELLIN: OK, it's now on urbandictionary.com post Obama, and they defined it two ways. One is, "to become hysterical, only used when giving a speech without a teleprompter." And then the other definition is "to act in an arrogant and condescending manner towards a constituent."

BASH: He's added a new term to the lexicon, absolutely no one understood or knew what it was, but it's definitely seems like something that we're not supposed to say. KING: We're not supposed to get wee-weed up. Here's something to get wee-weed up about though. Joe Lieberman said, in the current issue of "Playboy," magazine -- Alec Baldwin, the actor.

HENRY: Hold that up?

KING: I don't have the issue, I'm sorry, not allowed in my household -- he said, "I'd love to run against Joe Lieberman," he says, Alec Baldwin says. And we had Senator Lieberman on this morning and I said, what about that?

(BEGIN VIDEO CLIP)

LIEBERMAN: I must say that I respect Alec Baldwin as an actor and as a comedian, and if he wants to run, that's his right.

(END VIDEO CLIP)

HENRY: First of all, congratulations on getting Joe Lieberman commenting on "Playboy." Secondly, Senator Al Franken, why not Senator Alec Baldwin?

YELLIN: Absolutely. He's highly political. He loves to be in the spotlight. Didn't know he was a comedian, maybe this is news for everyone, but he should give him a run for his money.

BASH: You didn't put it on the clip, but I'm going to play it over and over again, Joe Lieberman's face when you used the word "Playboy," before he understood exactly what you were talking about, it was classic. And you know, I'm not taking a position, obviously, but it would be a shame not to have Alec Baldwin on "30 Rock."

KING: OK, I'm going to give you the benefit of the doubt here. We have a few extra seconds in our lighting round. Martha's Vineyard, the president, first and foremost, should do what?

BASH: Well, that's not fair. We know all the things that he should do because we spent some time there. Kayak, spend some time looking at the ocean, taking it in, feeling the cool breeze, just -- he is president and obviously he's got a tougher job than most of us, so maybe he can just take it in a little bit.

YELLIN: Relax, chill out, spend time with the family, try not to look at the Blackberry too much. Every human being needs a vacation, the president deserves one.

HENRY: There is rumor he's going to get the chance to play golf with Tiger Woods up there. I say if you get that chance, take it. That's one of the perks of the office, you've got to do that.

KING: And this is a more somber note, as we wish the president well on his vacation. Do we expect him to go see Senator Ted Kennedy at some point?

HENRY: I have been told the Secret Service has visited Senator Kennedy's home just to kind of prepare things, but I've also been told by very senior people is that the situation right now is such that they don't want to intrude on the family and that it seems less likely because they just want to be sure that Senator Ted Kennedy is up for the visit, and they're not sure he is. BASH: And I was just going to say, this past week, we understood that Senator Kennedy did go sailing, but I think it was a very difficult thing for him to do and I think they're taking it day by day.

KING: All in a day, there. Dana Bash, Jessica Yellin, Ed Henry, thank you very much.

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