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STATE OF THE UNION WITH JOHN KING

Sound of Sunday

Aired September 13, 2009 - 11:00   ET

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


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

It's 11:00 a.m. Eastern. Time for "State of the Union's" "Sound of Sunday."

Eighteen government officials, politicians and analysts have had their say. The president's senior adviser, health secretary and press secretary, and key lawmakers on Capitol Hill. We've watched the Sunday shows so you don't have to. We'll break it all down with Donna Brazile and Ed Gillespie and the best political team on television. "State of the Union: Sound of Sunday" for September 13th.

Big policy differences remain, but Democrats sound more optimistic this Sunday about passing major health care reform changes this year. But one of the Republicans the White House hopes to bring on board isn't convinced yet, and says a compromise on the so-called public option being floated by many Democrats isn't enough.

(BEGIN VIDEO CLIP)

COLLINS: The problem with the triggers is it just delays the public option because the people who are going to be making the determination about whether the market's competitive enough wants the public option. So I think the trigger is just the delay.

(END VIDEO CLIP)

KING: It's been a deadly weekend for American troops in Afghanistan and as the president considers whether to send thousands more, the Democratic chair of the Senate Intelligence Committee says the president has not clearly explained the mission and calls for a withdrawal timetable.

(BEGIN VIDEO CLIP)

FEINSTEIN: I believe the mission should be time limited, that there should be no, well, we'll let you know in a year and a half dependent on what we do. I think the Congress is entitled to know after Iraq, exactly how long are we going to be in Afghanistan?

(END VIDEO CLIP)

KING: And the Republican lawmaker who interrupted the president's big health care speech by shouting "you lie" says he's done apologizing.

(BEGIN VIDEO CLIP)

WILSON: I am not going apologize again. I apologized to the president on Wednesday night. I was advised then that thank you.

(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, former Republican National Committee Chairman and George W. Bush adviser Ed Gillespie and CNN contributor and Democratic strategist, Donna Brazile.

Let's start with Congressman Wilson there. Ed, he apologized, he called Rahm Emanuel, the White House chief of staff. He says he apologized to the president, but he did it through the chief of staff. But he says he's done now. But Democratic leaders have said unless he goes to the floor of the House and apologizes not just to the president, but to the institution for violating decorum, they may pass a resolution sanctioning him.

ED GILLESPIE, FORMER RNC CHAIRMAN: That's their prerogative, obviously. The speaker of the House runs the House of Representatives, and Speaker Pelosi can do that. I think that Congressman Wilson rightly apologized as what he said was inappropriate. I worked on the floor of the House, I worked for the president of the United States, I was dismayed as were many other Republicans by this, but I think if the leadership does this and they don't do it in a way that's bipartisan in protecting the institution, I think they're going to run a risk of looking very political themselves, but it's their prerogative and they're free to do it.

KING: Move on, Donna? They're in away making Congressman Wilson a bit of a hero on the right. He's raising a boatload of money, his opponent is too. But passing a resolution sanctioning him or should they just move on?

DONNA BRAZILE, CNN CONTRIBUTOR: John, I think the speaker and others and this includes Republicans, this is really not a partisan issue. This is about the House of Representatives. Ed worked for the House. I worked for the House. We both knew as staffers that the decorum of the House was set, you know, centuries ago and he violated that. Had he made this speech on the floor, his words would have been taken down because that's the rules of the House.

So I do believe that Mr. Wilson should go and apologize, but I hope that the Democrats don't spend too much political time and political capital trying to, you know, just focus on this one congressman when there are much larger goals at stake.

KING: As you know, some conservatives said it was a double standard. They say in his speech, the president didn't name anybody, but he mentioned the so-called death panels and the controversy about that and he said prominent politicians and we all know Governor Palin has been the leader in this effort have talked about these so-called death panels and the president said that's a lie. He didn't name anybody, but he said that's a lie. I tried to ask the White House Press Secretary Robert Gibbs this morning if that's a lie and Governor Palin said it, does that make her a liar?

(BEGIN VIDEO CLIP)

GIBBS: I think that for whatever reason, despite many media outlets saying that what governor -- former Governor Palin wasn't saying wasn't true, she continued to say it. I'll let Webster define how one -- what one calls her. I think in the absence of fact --

KING: If it's not the truth, is she lying?

GIBBS: Well, in the absence of noble fact, sometimes what happens is we fill the void with stuff that, quite frankly, isn't true.

(END VIDEO CLIP)

KING: So if it's a lie from the floor, you lie from the floor is out of bounds, what about what the president said, Donna?

BRAZILE: I think what the president was trying to do, John, was to separate fact from fiction. There's been so many lies told about the health care bill. So many misstatements, so much misleading information that it's really charged the public and I believe what the president was trying to do was to put the facts out there so that those who are peddling misinformation would in some way try to focus the fact that many Americans will lose their homes this year, their jobs this year -- 22,000 Americans losing their health insurance each and every day. Let's focus how we solve a problem, not figure out how we disagree on certain points.

KING: But the president raised the point and because of the Wilson thing, it's been made it. So let me try this with you. If I tell a lie, then what does that make me?

BRAZILE: You're a liar.

KING: OK.

BRAZILE: If you take my paper away from me, you're a thief. But John...

KING: So do you believe Governor Palin is a liar?

BRAZILE: I believe that Governor Palin and many others have basically peddled misinformation. On April 16, 2008, as governor of Alaska, she signed a resolution essentially saying what the House bill stated. In 2003 when the Republicans passed the Medicare prescription drugs plan, they had end of life counsel in there. So there is no death panel. Again, we have spent the entire summer, a major democracy focusing on whether or not we want to kill somebody's grandmother or grandfather when the fact is that we're trying to focus how we lower cost, provide more choice and competition. So I'm not going to get into who lied, who misled the American people because we can have a conversation now that will go back, you know, over the last 10 years about how many people have misled the public.

KING: It's a very legitimate point. Why aren't we talking about the intricacies of health care, but this is how the political system gets diverted. Ed, you've been there in the Oval Office. When you're going over a speech and you know certain words are going to cause reaction, you might not be exactly sure, but you know which words are going to light a fuse. And so when the president said that, they had to know.

GILLESPIE: They had to know and I think it was a mistake. I think that Gibbs made a mistake this morning and I think he came up short.

I think there's been a time honored tradition that's given way over the last decade or so that's unfortunate. I've seen President Bush when I was serving him be attacked vitriolically by people. I thought it is wrong then, I think it's wrong now to attack President Obama in any kind of personal or vitriolic manner.

And I think we ought to go back to a time when we didn't question people's motives. You can say someone's wrong. I believe that President Obama was wrong when he said people aren't going to be shifted out of their private insurance under his program. I think tens of millions of people will be shifted into a public option if its part of the -- I think he's wrong to say it.

That doesn't mean that he's lying. It doesn't mean that he's intentionally misleading. It means that I believe that his statement is inaccurate and I have some data that shows that. We ought to stay focused on that and stay away from motive.

KING: Let me ask you on that point, here's the front page of "The Washington Post." A big protest, the tea party came to Washington yesterday, a big protest, sizable crowd outside the Capitol. Here is one of the things that one of the organizations affiliated with this were handing out and putting on windshields. I don't even want to read the words. I'll let them speak for themselves. I've been at this 21 years in this town, 25 years in all in this business and to Ed's point, I love a good partisan fight. Is that out of bounds?

GILLESPIE: Totally. Absolutely out of bounds.

BRAZILE: I agree with that.

GILLESPIE: It makes my stomach hurt. And I understand the concerns of a lot of the people who were out on the Mall yesterday. I think they have legitimate concerns about the rising deficits and the debt. We're now looking at $540,000 per household in new debt or in total federal debt. That's unsustainable and people are right to be worried about future generations and the impact that is going to have on them. But we can talk about that in a civil manner. BRAZILE: And I agree with Ed that people have a right to be concerned about the debt, but they had a right to be concerned about the debt for the last nine years. It has been a tremendous amount of money that has been spent, and I think that one thing that the Democrats are trying to do with reinstituting pay as you go is to ensure that everything that they propose is paid for. That's important to put out there because again, let's talk about misinformation.

It's somehow or another when you elect a Democrat, when you elect -- when liberals are in charge, because I've gotten charged up on this. People are now basically throwing out everything saying well, those liberals are going to spend us, you know, clean. That's crazy, John. Under Bill Clinton and Al Gore, they got control of the deficit, they put this country on the path of fiscal prosperity and that's what President Obama intends to do, but we first have to fix some things.

KING: Let me ask you one more question on the tone and then when we come back from the break, we'll deal with substance, I promise you. But if you pick up Maureen Dowd in the "New York Times" this morning, she talks about some of the language, the coarse language being used in this debate. She comes with the conclusion, Maureen Dowd does this, "Some people just can't believe a black man as president and will never accept it." And in her column, she quotes Jim Clyburn, the number three Democrat in the House, an African-American from South Carolina, the House majority whip and he says "a lot of these outbursts have to do with delegitimizing him as president."

Donna Brazile, do you believe people -- some of these attacks, or at least the language of the attacks is because he's African-American?

BRAZILE: John, I believe that some of the attacks basically that the American people are worried sick about the state of the economy, the state of their own lives. It has nothing to do with race because I talk to black people and white people all of the time, Hispanics and everyone in between.

People are worried and I think a lot of what's driving people right now insane and angry and upset is because they feel like they've lost control. They're losing control. Now in terms of race, race has been a subtext, pretext in every political campaign in American history. It's been the elephant in the room, but I'm not going to label any one of those protesters as racists. I don't believe that their concerns are based on the color of his skin.

BRAZILE: They're concerned about the amount of money that this government is spending.

GILLESPIE: And, John, I -- look, like I say, you look at the language that was directed at President Bush by the left, there was obviously no racial component to that. Again, we're talking about motive here. I don't know what -- I think people are motivated by a genuine concern for the country. There may be some who share Maureen Dowd's analysis or assessment.

I would venture to guess that the vast majority of Americans feel very proud that we have reached a moment in this country where we have elected a black president. Much more than any slight minority who may have a concern that we have an African-American in the White House, and I suspect that's the true nature of America. KING: On that point, we'll take a break. Donna Brazile, Ed Gillespie, we'll be right back. And when we do come back, President Obama says in an interview you can see tonight, I own it. What's he talking about? Stay with us.

(COMMERCIAL BREAK)

KING: We're back with the former Republican National Committee chairman, Ed Gillespie, and Democratic strategist Donna Brazile. The president, obviously trying to sell his health care plan, he is out there more often, he was in Minnesota at a rally yesterday.

He will be on "60 MINUTES" tonight and he talks about how important it is to him to get this right.

(BEGIN VIDEO CLIP FROM "60 MINUTES")

BARACK OBAMA, PRESIDENT OF THE UNITED STATES: I intend to be president for a while and once this bill passes, I own it. And if people look and say, you know what, this hasn't reduced my costs, my premiums are still going up 25 percent, insurance companies are still jerking me around, I'm the one who is going to be held responsible.

(END VIDEO CLIP)

KING: That's a statement of fact and political fact, Ed Gillespie, that he is the president and he will be held responsible. Because if it passes, I will own it, what about if it doesn't pass?

GILLESPIE: He'll own it also. He'll own the spectacular failure of that push. I suspect at the end of the day, John, there is something that gets done that has health care in its title. I think it will -- unlikely to have much of what President Obama is seeking right now.

But if it does, by the way, one point the president didn't mention, and again, staying away from motives, just fact, data points, the provisions in terms of the public option that they're seeking, the actual expenditures, most of the actual effectiveness of this doesn't kick in until 2013, a year after his re-election bid.

And so he will own it, but he has been careful and the administration has been careful to make sure he doesn't own it before he has to seek re-election on it.

KING: All right. Is the public option dead?

BRAZILE: I hope not, John. I hope not because without the public option or something that is called -- and I don't get into semantics, then there's no choice for millions of self-employed Americans, for small businesses, no competition and no availability.

Look, John, the average American family of four is paying $1,100 a year to subsidize those without insurance. We need to find a way to insure more Americans and to require that insurance companies provide competition so that those with insurance are not paying premiums that they cannot afford.

GILLESPIE: John, can I make a point about this because I think it's very important, and Donna, you know, makes the point that is made over and over again relative to the public option that we ought to have it out there to provide competition.

Again, saw Gibbs this morning make the point about Alabama and the one company controlling X percent of the marketplace. But you could fix that without a public option. You could fix that by allowing health insurance companies to compete across state lines in the same way auto insurance companies do, or life insurance companies do.

We don't need to have a government option, a government-run program to fix that problem. And the Republicans have put that forward as an alternative approach, and it would be helpful if the Democratic majority in the House, if they really -- and Senate, want to get a bipartisan approach to consider something like that.

KING: Why not try it?

BRAZILE: But it is also important that the Republicans acknowledge that anything that is involved -- people who are involved and receiving a public option, the government will not be subsidizing it, it will be fully paid for by premiums.

And I think that information, that fact should get out there as well. This is important for competition.

Look, I'm self-employed, John, and the only thing that has changed over the last 10 years since I left the Hill where I had many, many options -- I'm jealous that I cannot receive the kind of health insurance I received as a congressional staffer, the only thing that has changed is my age.

And yet here in the District of Columbia, without all of the options I need for myself -- or the employees, it is tough. And Blue Cross Blue Shield, my provider, they have a $600 million profit. That's a fact. So we need to find a way to lower the cost so that we can employ -- or we can insure more Americans.

KING: But what about his idea? Let them compete across state lines, give it a chance?

BRAZILE: You know, John, you know, unlike Republicans, I'm open to every option. Unlike Republicans, I...

(LAUGHTER)

BRAZILE: If that's one way to give the people who are self- employed more options, more accessibility and more affordability, put it on the table. But stop rejecting the overall approach of lowering the cost for all Americans.

KING: In Esquire magazine this month, a guy who knows a little bit about the health care debate, former President Clinton, offers some advice to President Obama. He says this quote.

"The president is doing the right thing. I wouldn't even worry about the Republicans. I'd worry about executing. Do I think he's doing the right thing even though he's jamming a lot of change down the system? I do. So there's a lot that's a lot like my first year, but it's going to have a different ending -- he is going to get health care reform."

Ed Gillespie, on that specific point, "I wouldn't even worry about the Republicans."

GILLESPIE: Right.

KING: I know you're a Republican, but if you're the president and you're trying to get this done and get this done this year, with the clock ticking, is it time for him to say, if they're there in the end, fine, but we're going to do this in the Democratic family?

GILLESPIE: Huge, huge risk, John. First of all, huge risk in terms of the public reaction to that, I think. I mean, doing something like this without a bipartisan approach is going to result in a lot of backlash and people feeling like they're not listening to a thing they're saying out here in the country.

I think he will also lose his post-partisan attribute which is a critical aspect of his popularity, his personal approval rating, which stays high even though has job approval is coming down.

I thought it was striking when Senator Shaheen said this morning, I actually made a note of it watching from home, that significant bipartisan input would make a bill bipartisan regardless of how the vote comes out.

They're clearly laying the groundwork to say, well, we'll tell you what bipartisan is, it doesn't matter if Republicans vote for it or not, this is bipartisan, even it's a Democrat-only vote. It worries me.

BRAZILE: At some point the Republicans must decide if they want to be part of the problem or provide solutions. The Senate HELP Committee accepted 160 amendments from the Republicans. The -- Chairman Baucus has held dozens of meetings with Republicans to try to find some bipartisan solutions.

The president has made overtures, and look, many liberals, many progressives, we're not, you know, happy that the president is making all of these overtures, but at some point the Republicans must decide as a political party if they're going to provide...

(CROSSTALK)

BRAZILE: ... their own solutions.

KING: It's an interesting question. He won 53 percent of the vote nationally. He turned nine states that Bush won in 2004, red states, blue. KING: So would you say if he gets a bipartisan bill, he should get at least 53, 55 percent of what he wants?

GILLESPIE: I don't know if it's a straight algebraic equation.

KING: Or is it better for the Republicans to say, let's test next year whether people still back him.

GILLESPIE: I suspect that if he goes the route they seem to be laying the groundwork to go, that Republicans will resist that. They'll say, we're not going to provide some bipartisan patina to something that is purely a Democratic bill. I don't blame him for that if that's what it is.

BRAZILE: Our preference is to have bipartisan support, but we're not going to watch the status quo.

GILLESPIE: Can I just say, Republican leaders haven't been down to talk to the president about this since April, is my understanding. So there's a lot of talk and a lot of show, but they have not been down to talk to the president.

KING: We're short on time. I want you to listen to an average American. He's a self-admitted fiscal conservative, he's not a liberal Democrat, so I want to make sure we put him in the right -- this is Joe Ray, he runs a seafood business in Portland, Maine. I met him this weekend. Here's his worry as the Congress debates health care.

(BEGIN VIDEO CLIP)

JOE RAY, SMALL BUSINESS OWNER: I have three children. I'm concerned about what's going to happen to them? Are they going to be carrying this bill forever? That's my biggest concern. I just think that right now he's out there spending, spending, spending and I just hope that it helps the country.

(END VIDEO CLIP)

KING: How does the president deal with that, Donna, because you talked to Democrats and Republicans. I've been to 34 states in the last eight months and that is the biggest issue. Can we afford this? What about my children?

BRAZILE: You know John, the reason why the Republicans lost in 2006 and lost again in 2008 is because many people like that gentleman were sick and tired of the way Republicans were spending their money. This president will not make the same mistake.

GILLESPIE: John, I just spent a lot of time, I head up a group called Resurgent Republic. We talk to Obama voters who are Independents and undecided on the congressional generic to find out what is it that concerns them. Their concern about the debt is overwhelming. They say it's unsustainable. The fact is that this president has proposed to double the debt in the five years and triple it in 10 years. That is more debt than we've seen since presidents one through 43 and they're rightly concerned that this is going to result in inflation down the line or it's going to result in cuts in government services or massive tax increases or that the Chinese government which buys most of our debt is somehow going to have greater control over our economy.

KING: Even if he brings it down over the long term, though, in the short term, even if the president keeps his promise and brings it down in the short term, meaning a year from now, a little more than a year from now, next November, your party's vulnerable on that, isn't it?

BRAZILE: John, look, my party, the Democratic Party and I'm a proud Democrat, we inherit a lot of mess and we have to start cleaning up that mess and part of cleaning up that mess means that we have to wrestle the deficit. But in order to do that, John, we also have to make America fiscally sound and prosperous again because we're losing revenues and we cannot spend our way out of this, but we must invest in critical infrastructure so that we can grow our way out in the future.

KING: I need to call a time out there. Donna Brazile, Ed Gillespie, thanks for coming in. We'll see you again. And up next, we get out of Washington and listen to you. We go to the beautiful state of Maine, not just to see the coastline, but for our weekly CNN diner discussion on health care and the anniversary of 9/11. Stay with us.

(COMMERCIAL BREAK)

KING: We chose Maine for our travels this week. We hear a lot in our politics these days, lying if we didn't list the chance to see the spectacular seashore as summer that gives way to fall as one of the reasons. But the bigger reasons really was that it's two Republican senators could play critical roles in the health care debate.

It's a state also rich with Independent voters and that group more than any other has turned skeptical of President Obama over the summer. Let's take a closer look up here at Maine. Number one, we should note for you, the unemployment rate 8.4 percent, a little below the national average -- 9.1 percent of its citizens lack insurance in the state of Maine.

And remember, when we were there, this week was of course the anniversary of 9/11. Four Maine residents died on 9/11 and 39 service men and women from the state have died in action since 9/11. Now at the Miss Portland Diner, we had an outstanding haddock sandwich, the Downeast Reuben, they call it. And we were reminded that even though there are worries about how to pay for big health care changes, still deep support for the president in a state he carried handily last November.

(BEGIN VIDEO CLIP)

KING: Let me start with this. How many watched the president's speech. Hands up if you watched? Two out of three. OK. Is this what you want? DAVID UNGER, CAPE ELIZABETH, MAINE: This is what I want, being a small business owner, I'm getting creamed. And the things that he laid out I really have no objection to probably 99 percent of it.

KING: Ninety-nine percent of it, that's pretty good. How about you?

JUDY COLBY GEORGE, YARMOUTH, MAINE: I support most of the ideas. I also own a small business and I just think that currently the way the health care works is not fair to everybody, and I think we have to come up with a better solution.

KING: Is there anything that gives you pause, whether it's the price tag, how to pay for it, government reach or do you think they've got it about right?

BOB GREGOIRE, SEBAGO LAKE, MAINE: I think how to pay for it is really important thing. When you talk about the savings that, you know, by going to those programs, I really think that's going to be tough.

KING: So he squeezed savings for Medicare and Medicaid, he says it won't affect your care, but that makes you nervous.

GREGOIRE: It does. That makes me very nervous.

KING: So if he faces a choice in two, three, six weeks, going along with the Democrats because the Republicans don't want to accept the proposals or let this carry on into next year and try to build bipartisanship. Do it the Democratic way or take your time?

UNGER: Do it the Democratic way. He's giving the Republicans the opportunity to work with them and to make a cross-party policy. And you know, you've been watching the Republican response the way my wife called him the grumpy, the way they just sat there.

KING: Does one or two Republicans equal bipartisanship or do you need 10 or 12?

GEORGE: I would rather have 10 or 12, but I also think the whole country can't be held hostage to, you know, half of the Senate who doesn't want to play in the sandbox.

GREGOIRE: Yeah. I think we need some bipartisan into the debate and get both side.

KING: If you can't get it do you delay health care reform or do you do it?

GREGOIRE: No. I don't want to delay it. I want to get it done.

KING: It's hard to imagine, but it's eight years.

GREGOIRE: I know.

KING: Eight years since 9/11. Let me close on that point. Do you still think about it and do you still worry about it like you did in those days after 9/11. Do you feel safer, think there's less of a threat?

GREGOIRE: I think there's still a threat there. I think we have less of a threat than we did a few years ago, but there's still a threat there and we've got to solve the problem.

GEORGE: I guess I feel like there's more of a threat in the sense that because we decided to be belligerent around the world instead of trying to find ways to work with people and understand other people, I feel like we've gone backwards in that area and I think that creates a greater threat.

I think it would be more important to be -- for us to learn more and be more outward into the rest of the world.

KING: Do you worry about it like you did if we were having this conversation seven or eight years ago, just after 9/11?

GEORGE: It depends on -- my husband is working in Afghanistan right now so lately, yes.

KING: How about you, in terms of your (INAUDIBLE)?

UNGER: It's always in the back of my mind somehow, somewhere, you know, just something triggers it. So I'm much more cognizant of it happening. I think we're still under threat.

(END VIDEOTAPE)

KING: Our thanks to everybody there at the Miss Portland Diner. A great meal, great conversation. And when we come back, the best political team on television, more sound of Sunday.

(COMMERCIAL BREAK)

KING: I'm John King and this is STATE OF THE UNION. Here are stories breaking this Sunday morning. A deadly weekend for U.S. troops in Afghanistan. Four soldiers were killed in two separate roadside bombing attacks. Defense Secretary Robert Gates is expected to approve sending thousand of additional forces to Afghanistan to deal with that growing threat from roadside bombs.

The family of an Iraqi journalist jailed for throwing his shoes at former President Bush is celebrating today ahead of his expected release. Muntazer al-Zaidi is scheduled to be released from prison tomorrow after serving a nine-month sentence for assault. Al-Zaidi threw his shoes at Mr. Bush as an act of protest over the Iraq War.

Tennis star Serena Williams is out of the U.S. Open after an on- court confrontation led to her loss to unseeded Kim Clijsters. Williams was called for unsportsmanlike conduct after screaming at a line judge, costing her match point against Clijsters. Earlier, Williams had smashed her tennis racket at the end of first set. That and more ahead on STATE OF THE UNION. Joining me here in Washington, CNN senior White House correspondent Ed Henry, senior political analyst Gloria Borger, and senior congressional correspondent Dana Bash, welcome.

Let's get straight to the health care debate. The president give his big speech last week. The next big step is the Finance Committee trying to come out with a bill. They're talking to Republicans. The Senate Budget Committee chairman, Kent Conrad who is part of those negotiations, sounds very optimistic this morning.

Let's listen.

(BEGIN VIDEO CLIP)

SEN. KENT CONRAD, CHAIRMAN, BUDGET COMMITTEE: We hope to. We meet again on Monday. We have people working all weekend. A number of us have worked through the weekend. We think we are very close to an agreement. And I want to repeat the agreement that we have the Congressional Budget Offices has told us is fully paid for, bends the cost curve in the right way, and does extend coverage to 94 percent of the people.

(END VIDEO CLIP)

KING: Ed Henry, deal in the making or?

ED HENRY, CNN SENIOR WHITE HOUSE CORRESPONDENT: They're certainly very hopeful at the White House, but we've heard this before and it has fallen through. The Finance Committee has met deadline -- you know, missed deadline after deadline.

Now at the White House, when you talk to senior aides, one thing that they believe the president succeeded on Wednesday night was just by having this speech. Putting some more pressure lawmakers, especially in his own party, that it finally got Max Baucus to push this along and get to the brink of a deal and actually set out some guidelines about what's actually in the bill and when he's going to get it done.

Now there's at least a timeline, whether they fulfill that is another question. But the president did put some pressure on them this week.

KING: And he did make progress with the Democrats. But has he gained anything with Republicans?

DANA BASH, CNN SENIOR CONGRESSIONAL CORRESPONDENT: That is going to be something that we are going to see this week. Look, it is significant for Kent Conrad to say that because he all along has been the one saying over and over, we're ready when we're ready, let's take it slow. The fact that he's that optimistic really does tell us something.

I just got off the phone with a source in the Finance Committee, a Democrat, who said that we definitely should expect something this week, probably midweek from Max Baucus. And we are going to probably see the answer to your question, whether or not there will be a Republican signing onto it. We are going to see that probably in the next two or three days.

Now, you know, right now, it's still a big question mark. If I were to guess right now, I would say probably not, but you know what? They seem to be very optimist that maybe they can get something done and they're not going give up on Republicans, even if they don't sign on to a deal this week when it is announced.

Perhaps they can get them as they go through the process when they start to really take votes in the committee.

GLORIA BORGER, CNN SENIOR POLITICAL ANALYST: But you know, this bill is not going to have a so-called public option in it, and that's going to be the key for House Democrats because you've heard Nancy Pelosi at first say that she couldn't pass a bill without a public option, then she kind of moved back off of it a little bit and said, well, maybe not so much.

So, you know, you see that cement cracking, as you will, around the Democrats' (INAUDIBLE), but it's going to be interesting to see whether House Democrats say at all that, yes, that's something in the Senate bill that we can live with.

KING: Well, let's explore that a bit further, because two of the Republicans the White House had hoped and perhaps still hopes to get, remains two Republican senators. They're more moderate than most of the Republican caucus.

Now one of them, Olympia Snowe, is in the negotiations. The other one, Susan Collins, was on the program this morning. Now Olympia Snowe initially supported the idea of a trigger. Not the public option immediately. But she would have a trigger down the road. If there's not competition, if more people aren't covered, two or three years down the road the trigger would kick in.

Senator Collins this morning on the program said, no, that's not acceptable to her.

(BEGIN VIDEO CLIP)

COLLINS: The problem with the triggers, it just delays the public option because the people who are going to be making the determination about whether the market is competitive enough want the public option. So I think the trigger is just a delay.

(END VIDEO CLIP)

KING: Senator Collins says the trigger is just a delay. Senator Snowe, who was for the trigger, now says forget about it. The trigger is off the table. We're going to go with this co-op approach.

(BEGIN VIDEO CLIP FROM "FACE THE NATION")

SNOWE: It's not on the table and it won't be. We'll be using the co-op as an option at this point as the means for injecting competition in the process.

(END VIDEO CLIP)

KING: So if that's the case, my translation of that, is never mind whether those two Republicans vote for it in the end. If the bill being negotiated is a co-op option, the Senate bill -- the lead Senate bill will have a co-op option, not a public option, then the public option is dead?

BASH: Well, I think that there are a couple of points here that we have to talk about in terms of the timeline of this. Most immediately, what we are going to see in the next couple of weeks in the Senate Finance Committee, it won't have a trigger, won't have a public option, it will have a so-called non-profit co-op.

I think what the White House -- and Ed can certainly speak to this, and Gloria, too, is focused on is ultimately what this health care bill would look like when it heads to the White House, when it actually -- if it leaves Congress.

At that point, that is where the White House and Democrats think that they might have that so-called trigger option. I think what was most interesting is the split among these Maine Republicans, and the reason is because at the end of day, whether or not they can get a Republican on, they have been focused, the White House, on Olympia Snowe.

But she has also said, and she said to me in an interview this week, she won't -- doesn't want to be the only Republican. So if they can't even get her colleague from Maine, they might not get her either.

HENRY: Well, and it's up to Senate Majority Leader Olympia Snowe, obviously. I say that jokingly because...

(LAUGHTER)

HENRY: ... that's part of the thing that sort of drives Democrats batty is the fact that it's up to Susan Collins and Olympia Snowe essentially whether there is a public option. And this is why there is so much pressure on this president in part, saying, what -- Democrats are saying, what did we vote for last year?

BORGER: Can I just say, during the campaign, we all covered this campaign. How many times did candidate Barack Obama mention the words public option?

KING: I believe that would be zero.

BORGER: I believe that would be zero. Right. So suddenly every liberal in the Democratic Party is saying, wait a minute, we need this public option. Well, they weren't screaming about it during the campaign so I would guarantee you that this White House will then come out and say, you know what? What we're getting is a very, very good idea and it's going to cover the amount of people you want to cover, and it is going to keep cost down. HENRY: True, because it was not the way health care was framed in the campaign.

BORGER: Exactly.

HENRY: But this White House waited too long to push back on the liberals and say hold on, hold on, that's not the point.

BORGER: That's this summer, yes.

KING: We need to get a break and we're going to talk about the tone of our political conversations in a minute, but first I also want to share with people something the HHS secretary, Kathleen Sebelius, said this morning. It's very important. Many parents around the country, many employers around the country wondering when will that H1N1 vaccine be available? Here's the secretary.

(BEGIN VIDEO CLIP)

SEBELIUS: We're on track to have an ample supply rolling by the middle of October, but we may have early vaccine as early as the first full week in October. We'll get the vaccine out the door as fast as it rolls off the production line.

(END VIDEO CLIP)

KING: So first week of October, the administration believes it will have the vaccine and will be held accountable for that.

HENRY: It certainly will and that is why to their credit, they behind the scenes have been working very hard on this and the president himself, I remember being overseas with him I believe in Moscow and he called in for a conference call back here in the D.C. area with some of the top health officials even then because he realizes he needs to have a personal role. They need to be awake in this because this could have massive implications for the economy for one thing if all of a sudden people start getting H1N1 and they have to stay home, they don't have to go to work, their kids get it, they can't go to day care, they can't go to school. It is going to have big, big, ramifications.

BORGER: It's also a question of competency in government. You're at a point where you're proposing a huge sort of government-run healthcare plan so to speak and if you can't run the vaccines for the flu, you're going to be in big trouble.

KING: Let's take a quick break. Ed, Gloria and Dana will be with us on the other side. We're going to talk about the coarsening tone of our debate in Washington and whether the president has trouble on with his party on the issue.

(COMMERCIAL BREAK)

KING: We're back with CNN's Ed Henry, Gloria Borger and Dana Bash. As you all well know, one of the big sub plots last week after the health care speech was "you lie," the words shouted at President Obama by Republican Congressman Joe Wilson. Now he apologized and called the White House chief of staff just after the speech and apologized. Olympia Snowe, a senior from Maine, served in the House before she moved over to the Senate, she says this.

(BEGIN VIDEO CLIP)

SNOWE: It was an unfortunate and disgraceful incident that occurred in the House of Representatives. I've served 16 years there and I've never witnessed that. So I think it is unfortunate that it, you know that it brings disrespect to the institution and to elected officials.

(END VIDEO CLIP)

KING: This morning, Congressman Wilson said he's done apologizing and Democratic leaders, Dana, you work on Capitol Hill, said unless he goes to the floor of the House and apologizes, not only to the president, but to the institution, they may sanction him. Is that going to go forward now?

BASH: They say that it will. I just spoke to a House Democratic leadership aide this morning who said they have to deal with what they call the breach of decorum or they said that silence shows that they think it's OK. Because look, there have been times in the past, not in this kind of forum with the president standing there or aimed at the president, but where people have said and you guys know this, you've covered health for a long time as well, have said things like that and it was stricken from the record. It's just not allowed.

Politics of this, separate from that is Nancy Pelosi earlier this week said let's just move on. But guess what, Democrats realize that this is at a time when Democrats are very much divided and still are on the policy. This is a uniting force for them and they want to keep it going.

KING: So even though he says he's sorry, Congressman Wilson is raising a lot of money on this, so is his opponent, the polarization of our politics. And after his appearance on FOX News Sunday this morning, he was handed a photograph, of him, during his gesturing when he said it to the president. He's signing autographs.

BORGER: He's a folk hero now, right, to some people? I'm old school. I think what he did was terrible and it did serve a political purpose, coalesce the Democrats and I talked to Republicans this week who are upset because they feel that he became the angry face of the Republican Party. And that that's not the message they need right now as they search for sort of a new Republican Party, a new message, a way to combat Barack Obama and this is not -- this sort of angry tone, the party of no as some folks call it is not really what they wanted.

HENRY: But I remember covering President Bush and Senate Democratic Leader Harry Reid called President Bush a liar and a loser. He said I apologize for calling him a loser, but not a liar. And he didn't do it on the floor of the Senate and they say it's because of a political issue in Nevada and that there's a real reason why he called him a liar. But Democrats didn't say oh, that's awful and that crossed the line. So there is politics here. And the Democrats are going to end up ...

KING: Shocked, politics in Washington?

HENRY: The Democrats are going to end up delaying getting to the substance of the health bill if they keep doing this, but Dana makes a good point as does Gloria, that this is sort of firing up the Democratic base at a time when Democrats are kind of divided.

KING: I want to move to a giant issue facing the president, health care is one of them, but Afghanistan, a deadly weekend for U.S. troops there. In the short term, they're thinking maybe 3,000 more troops to help with these attacks in Afghanistan. But the president faces a decision about whether to send 10, 20, maybe even 30,000 more troops. Quite interesting this morning, Dianne Feinstein, the chairwoman of the Senate Select Committee on Intelligence, not only does she say the president hasn't clearly explained the mission, she wants a timeline.

(BEGIN VIDEO CLIP)

FEINSTEIN: I believe the mission should be time limited, that there should be no, well, we'll let you know in a year and a half dependent on how we do. I think the Congress is entitled to know, after Iraq, exactly how long are we going to be in Afghanistan?

(END VIDEO CLIP)

KING: Ed Henry, that's a pretty big warning shot from a leading Democrat, saying not only Mr. President you haven't explained to us what the exit strategy is, but we'd like a date.

HENRY: Yes and you combine that with the fact that Russ Feingold, a Democrat, has asked for a timeline to pull out troops in Afghanistan. Senator Carl Levin has now said we need to get the Afghan army to stand up before we send mores U.S. troops. And I've got to tell you, this week it's going to be front and center again because at the end of the week, the president for the first time in office is going to award a medal of honor to someone.

HENRY: He's going to do it posthumously to Sergeant Jared Monti from Massachusetts and I met his father this week. And it's just an incredible story of bravery. He died over three years ago. And the president is going to award this medal of honor. You know covering the White House, those ceremonies are always very, very powerful. And so once the president talks about somebody who served so bravely in Afghanistan and made the ultimate sacrifice, it is going to put this front and center yet again.

BORGER: We have to hear from General McChrystal. We don't know exactly what he's going to recommend. But I think you have a lot of Republicans ironically who were on the president's side on this and Democrats who are not, but I think given the lessons of Iraq, one of the things that you're going to hear a lot of people asking for, like Senator Feinstein, is an exit strategy before we go all in. And we haven't heard that from the president. Doesn't mean you're not going to hear it. BASH: I've got to tell you, I almost fell off my chair when I heard Dianne Feinstein say that because you talked about Russ Feingold, he is a liberal Democrat who has really pretty much been the only one in the Senate to call for a timeline for withdrawal from Afghanistan. Dianne Feinstein is no lefty on national security matters at all. So this to me is very telling in terms of where not just the left of the president's party is, but maybe where most of the president's party is.

KING: Let's add to that point. Susan Collins, the president is counting on Republicans to help him here and most have been. But listen to the skepticism of Susan Collins who was just recently in Afghanistan with John McCain. (BEGIN VIDEO CLIP)

COLLINS: I will tell you having spent two days there just last month that I just don't know that more troops is the answer. We clearly need more American civilians to help build up institutions. We need to grow the size of the Afghan army, but we're dealing with widespread corruption and a very difficult terrain. I'm wondering when this ends and how we'll know when we've succeeded.

(END VIDEO CLIP)

KING: Very lonely being commander in chief.

HENRY: It is. And this is where we talked about presidential leadership this past week on health care and giving that big speech on your program a few weeks ago, Republican Senator Lugar who has been close to this president on foreign policy, worked with him a lot in the Senate, says he needs to get out there and make the case.

When you look at the CNN poll showing about 42, 43 percent of the American public supporting this mission, I mentioned Sergeant Monti with the medal of honor. I talked to his father and his father said this president needs to make the case because he, even though he lost his son, is saying we need to win the war and we can't pull out.

BORGER: But part of the difficulty is you're dealing with what's widely regarded as corrupt government. And so how do you say to Americans, send your treasure over there when you don't know exactly where that treasure is going to wind up? It's very difficult.

KING: Let's go to a quick break. When we come back, our lightning round. Obama versus Palin on one word, lie.

(COMMERCIAL BREAK)

KING: All right, back for our lightning round. We might call this tip of a hat to Bill Safire, on language. The word "lie" in our political discourse quite a bit this week. Here's the president, Ed, Gloria, Dana, stand by, here's the president talking about those death panels. He said there's people out there saying we are going to put in our health care plan these death panels so we can kill off seniors. The president says --

(BEGIN VIDEO CLIP) OBAMA: such a charge would be laughable if it weren't so cynical and irresponsible. It is a lie, plain and simple.

(END VIDEO CLIP)

KING: Pelosi jumps to her feet, the speaker does. Ed Henry, who's he talking about there?

HENRY: Well, he didn't single out Sarah Palin, but Sarah Palin was one of the people pushing that. So the president, by extension, he was calling Sarah Palin and others liars. I think there's a difference than the way Joe Wilson approached it by saying "you lie" breaking the decorum of the chamber. There's a difference. But he essentially called Sarah Palin and others liars.

BORGER: Yes, he called Sarah Palin on it. It was a little bit of campaigning from the address to the Joint Session of Congress which we're not used to because it was quite political. But he called her out, no doubt about it.

BASH: He did and remember, he was doing that because the White House had been begged by Democrats to do exactly what the president did. Because they had spent the entire month at home as one Democrat this week said answering charges that they said were not even in the legislation, anybody's legislation. So he was basically answering them and he did it in a very forceful, very passionate and very direct way.

KING: But wait. You guys have no problems connecting the dots. I asked Robert Gibbs about this this morning. I said, wait a minute. Let's go to the dictionary. If it's a lie, isn't she a liar?

(BEGIN VIDEO CLIP)

GIBBS: I think that for whatever reason, despite media outlets saying that what former Governor Palin was saying wasn't true, she continued to say it. I'll let Webster define what one call her.

(END VIDEO CLIP)

BORGER: Can I just say it depends on what the meaning of "is" is?

HENRY: Ouch.

BASH: You thought he'd actually say, yes, that's right, he thinks she's a liar. That would have been pretty good.

KING: I didn't get that. I don't have my pocket dictionary or my pocket constitution today.

HENRY: Have you ever watched the daily briefing? I'm sorry Robert, I'm just saying. That's what press secretaries do. You've been in that briefing room. They take something that they don't have a good hand on and they try to fiddle with the cards a little bit and get a better hand. BORGER: Didn't work.

KING: I assume we'll get a response from her at some point.

HENRY: It will be on Facebook.

BORGER: She's probably tweeting as we speak.

KING: Ouch. All right, we'll call it a day right there. Dana Bash, Gloria Borger, Ed Henry, thanks for participating especially in our fun lightning round.

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