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STATE OF THE UNION WITH JOHN KING

The Sound of Sunday

Aired September 20, 2009 - 11:00   ET

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


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

(BEGIN VIDEO CLIP)

KING (voice-over): It's 11 a.m. Eastern. Time for "State of the Union's" sound of Sunday.

KING: Twelve government officials, politicians and analysts have had their say, but all eyes were on one. For the first time in history, a sitting president of the United States appears on five Sunday news shows.

We'll break it all down with James Carville and Mary Matalin and the best political team on television.

A special presidential edition of "State of the Union's" "Sound of Sunday" for September 20.

He's more optimistic about the economy, yet says to the millions of Americans who are unemployed, it could be a while before you're back to work.

(BEGIN VIDEO CLIP)

OBAMA: It is not going to improve considerably, and it could even get a little bit worse over the next couple of months. And we're probably not going to start seeing enough job creation to deal with a rising population until some time next year.

(END VIDEO CLIP)

KING: On health care policy, the president disputes critics who say requiring Americans to buy is health insurance equals raising their taxes.

(BEGIN VIDEO CLIP)

OBAMA: For us to say that you've got to take a responsibility to get health insurance is absolutely not a tax increase. What it's saying is that we're not going to have other people carrying your burdens for you, any more than the fact that, right now, everybody in America, just about, has to get auto insurance.

(END VIDEO CLIP) KING: And on health care politics, the president makes clear he expects to sign a bill this year and that he understands he can count only on the Democrats.

(BEGIN VIDEO CLIP)

OBAMA: Let me put it this way. You know, I'd love to get Republican votes, but I don't count on them. (LAUGHTER)

And -- and I'm confident that we're going to get health care passed.

(END VIDEO CLIP)

KING: On the world stage, the president says he needs more time before deciding whether to send more U.S. troops to Afghanistan, and he tries to calm increasing Democratic worries that he has no exit strategy.

(BEGIN VIDEO CLIP)

OBAMA: I don't have a deadline for withdrawal, but I'm certainly not somebody who believes in indefinite occupations of other countries.

(END VIDEO CLIP)

KING: As you can see -- and there's the White House on this Sunday morning -- we've been watching all of the other Sunday shows, so maybe you don't have to.

With me here in Washington, where you'll only find them together here on "State of the Union," Democratic strategist and CNN political contributor James Carville and Republican strategist and CNN political contributor, Mary Matalin.

Welcome. A lot of ground to cover. I want to start with this issue. Everybody asked the president about it. I want to show you the cover of New York magazine here. "Hate" is their headline, and on the president's face, some of the slogans we have seen at some of the rallies around the country.

All of us who had a chance to sit down with the president, including yours truly, put the question to him. Jimmy Carter says he sees hints of racism in some of this harsh language. The president says not so much.

(BEGIN VIDEO CLIP)

OBAMA: As I've said in the past, you know, are there people out there who don't like me because of race? I'm sure there are.

That's not the overriding issue here. I think there are people who are anti-government. I think that there are -- there's been a longstanding debate in this country that is usually that much more fierce during times of transition or when presidents are trying to bring about big changes.

(END VIDEO CLIP)

KING: Issue over, James Carville?

CARVILLE: Well, no, it's not over, but I agree much more with what President Obama said than what President Carter said.

And I think, if you look at the Census Bureau data just released, you've had an enormous loss of wealth in the United States since 2001; you've had an enormous drop in income, so it's not surprising that people would be more angry than they'd ordinarily be.

Look -- and I can't -- I'm -- no way for me to go into somebody's mind and tell me what someone's motivation is. But, you know, I'm also not naive enough to know that some people might be motivated by that.

But, as I recall -- look, when President Clinton's health plan was introduced, there was this enormous outcry. And, sort of, what I find funny is that now we find out that the start of it was this woman, Betsy McCoy, who wrote an article in the New Republic. We find out today that she was funded by Philip Morris.

So...

(LAUGHTER)

... you know, when you do something like this, there's always going to be -- you know, when you have this kind of loss of income; you have this kind of loss of wealth, you're going to have anger. That is a necessary byproduct of it. I understand that.

MATALIN: Well, of course, the president can be rational. He knows full well that there is racism out there. But race played more to his advantage in the last election.

There's racism; there's sexism; there's ageism; there's anti- Catholicism. There's all sorts of "antis" out there. None of them had anything to do with the opposition to health care.

So he can be rational, particularly since he knows these clods and demagogues in his party use references to him, from Jimmy Carter to Nancy Pelosi -- they're clever and come out and play the race card.

And the -- and the Obama people themselves played the race card against, of all people, Bill Clinton -- yes, they did -- who is -- arguably had a more authentic black American experience than Barack Obama.

But the Democratic Party has a long history of playing all the hate cards. If you're pro-marriage, you hate gays. If you're pro- life, you hate women. If you're pro-freedom, you hate government.

We're not anti-government. We're cool with gays. We love women. We're not misogynists. They're the ones that are always playing the hate cards, the "anti" cards. And he said it in that bite. We're not anti-government. We're pro-freedom.

If you didn't have such a notorious history of this stuff, we wouldn't be having this conversation.

CARVILLE: I guess -- I guess it was a Republican congressman called him a boy. I guess there's no racial implications to that.

MATALIN: No, he did not.

CARVILLE: Of course he called him -- I wasn't that, "I don't want this boy's trigger finger on the nuclear trigger."

I guess Glenn Beck called him a racist; there's no racial implications to that. I guess -- Doug Brinkley, who was picked by the Reagan family to edit the Reagan diaries, said that he thought that Joe Wilson -- there was a deal of background of bigotry there.

I mean, yes, this stuff gets out there.

(CROSSTALK)

MATALIN: Well, not Brinkley, who knows the guy -- there's no evidence of any -- you know what? This is what they do.

The tactic here was to do a celebrity Ginsburg, right, and to do a defensive joint session. Within hours, a tactic designed to telescope the health care debate devolved into a big fight on race.

Would you call that a successful tactic?

Look where he's -- he's trashing Joe Wilson. He's trashing Glenn Beck. How are you addressing health care?

KING: Well, to that point...

(CROSSTALK)

KING: To Mary's point...

CARVILLE: I went out of my way, just for the record, to -- to say this is about other things. Then she took off after the Democratic Party. I just had to, like, interject a fact or two here, if you don't mind.

(LAUGHTER)

(CROSSTALK)

CARVILLE: What I'm doing is saying what people are saying.

KING: Let me interject a little bit here.

(LAUGHTER)

To Mary's point, the press at the White House, before the interviews, sent very clear signals the president doesn't want to go down this path.

The president made clear, you know, there's a little bit racism, but he doesn't think that's the overriding factor.

Now, that's either what he truly believes or he's trying to have it both ways, knowing someone else is going to have the argument out there.

I want you to come in on that point. But, in the context of this, having heard this message from the White House all week long, you mentioned Congressman Clyburn. He's the top African-American in the Congress, the number three in the House Democratic leadership.

He says this in Newsweek, in addition to things he has said throughout the week. He says this in the Newsweek issue out this week, "When you see people pushing the idea that he wasn't born here, or asking whether he's Muslim, it becomes clear that they're just searching for reasons and ways to undermine the president. We can say that it's not about the color of his skin, but we all know that has some part in it. I've not seen any other president treated like this."

MATALIN: You know, nobody -- there's only 12 percent of Americans that believe that, and rightly so, more African-Americans do believe that, because of their history, it's true. And they have a right to feel that way.

But I'll say again, ageism, sexism -- all the "isms" had nothing to do with the opposition to his policies. And in fact, his race -- this is quantifiable; this is demonstrable in the exit polls, and it's anecdotal, and you know it, is race was -- went to his advantage in the election.

So it's just -- I don't know why we're having this discussion. It certainly isn't advancing his -- there might be -- maybe we should stop and have a real discussion on race. And our good friend Donna Brazile said the other day, we can't have a -- we're having only a hollow discussion if we don't discuss the legacy of Jim Crow and all that.

We're also having a hollow discussion if we don't discuss the legacy of a generation wrecked, as Daniel Patrick Moynihan said, or the poverty pimps or the grievance industry.

So if you want to have a race discussion, let's have a real one, not a lot of demagoguery going and a president who wants to have it both ways.

KING: Would it help, James -- this is clearly an emotional issue. And it has been for decades and centuries. Would it be best, in the political context of right now, for Democrats to say, "All right, the president has spoken; stop. Draw a line, and then judge -- from this day forward, if somebody says something that you think is outside the line, start there, not look back anymore"?

CARVILLE: Again, I can't fault a thing that the president has said. And by the way, the reason that he's saying these things is because we in the press are asking him about it.

He specifically went out there and said, "I don't want to discuss it." It's not your job -- not your job to discuss what the president wants to discuss. It's your job to discuss what you think the news is. But it's a little bit like -- if you talk about this, you're bringing it up, but although you don't want to talk about this, you really want to talk about it -- I mean, this -- Joseph Heller -- this thing would drive Joseph Heller crazy.

(LAUGHTER)

KING: All right. Let's talk about the president's number one priority at the moment, which is trying to pass the health care bill.

I went to see him just after Mitch McConnell gave a speech to a conservative group here in town, where Mitch McConnell, the Senate Republican leader, was quite confident about how the Republicans were doing in the debate.

KING: Here's how I put it to the president.

(BEGIN VIDEO CLIP)

KING: Mitch McConnell told a conservative group, "We're winning the health care debate." What do you think of that?

OBAMA: Well, you know, they -- they were saying they were winning during the election, too.

(END VIDEO CLIP) KING: A confident President Obama there, Mary, that he thinks he's going to get a health care bill this year, whether he gets one Republican vote or not.

MATALIN: I don't know which election he was in. I don't remember thinking through the whole election or saying that we were winning. And -- and Mitch McConnell was speaking to a conservative group when he said that.

The truth is the opposition to health care began before the blitz. Mike Allen in Politico ran a cute little piece about in May, Obama is seeking to regain the momentum on health care. The opposition to health care preceded the town halls, preceded all these distracting discussions, and it goes back to the fact that they misread their election mandate.

It was not to overhaul health care or overhaul the energy sector or expand government at the rate they -- they have. So it's not really the Republicans that are winning or the Democrats that are losing. It's American people from the middle who are the largest constituency who rose up organically.

KING: One of the side debates -- it's not central to keeping down health care costs or expanding access or affordability, but it has become a very emotional issue -- is, will this legislation cover illegal immigrants? Would an illegal immigrant, someone here in the United States who broke the law to get here, be able to get a government-subsidized health care plan, some sort of assistance from the United States government? The president says this.

(BEGIN VIDEO CLIP)

OBAMA: I don't think that illegal immigrants should be covered under this health care plan. There should be a verification mechanism in place. We do that for a whole range of existing social programs. And I think that's a pretty straightforward principle that will be met.

(END VIDEO CLIP)

KING: That the right policy answer, James Carville? Or is that a political answer because of how stormy this is?

CARVILLE: Well (inaudible) I mean, Republicans introduced this legislation to say that you can't treat anybody until you prove citizenship. I was speaking to the cardiologists this week. So somebody is going to come in with a heart attack, you're going to say, "Let me see your papers before I can treat you." That's a pretty -- it's a pretty ludicrous place to here.

By the same token, people do -- you know, don't want people that are here illegally to do this. There's all kinds of things that you work out, because if you're here illegally and your children are born in the United States, they're citizens. It's a pretty complex issue.

I suspect that the Democrats, in order to get this passed, are going to have to be pretty strict on this. And most people don't want their tax dollars to go to people who are -- that are here illegally. And I understand that. But what about -- do you treat somebody that has the swine flu? Do you treat somebody that has an infection? And these are sort of complex societal problems that are not reducible to a sound bite, if you will.

MATALIN: Not surprisingly, James has misstated all of this. It is illegal to not provide health care for somebody who comes in, in an emergency situation. What this legislation is about is subsidizing health insurance which is different from treating. It's illegal to not treat somebody.

But for somebody to be subsidized by the government, they should be able to have -- they should be forced to validate and verify their citizenship. But let's go to the bigger political point, that what people who care about health care reform want is they want their costs lowered and they want their quality maintained.

Now we're talking about federally subsidized immigration coverage, federally subsidized abortions. These are side conversations which have nothing to do with what people want, prioritize what they want in health care.

Furthermore, since this debate has ensued, there are people that don't even prioritize health care anymore. Three times more people want to focus on the deficit and the economy than overhauling health care right now. KING: A quick timeout. A quick timeout here. We're going to make a little money on "State of the Union." We'll be back, though, with more of James and Mary.

When we come back, other topics, including whether the president should listen to seven former CIA directors who say shut down a Justice Department investigation of the Bush administration. Stay with us.

(COMMERCIAL BREAK)

KING: We're back with Democratic strategist James Carville and Republican strategist Mary Matalin.

One of the questions I put to the president was about Eric Holder and this investigation. Eric Holder is the attorney general, of course, looking at potential violations of the law during the Bush administration for this interrogation tactics, this terrorism interrogation tactics.

The seven -- I spoke to the president just after he received a letter from seven former directors of central intelligence saying this is a bad idea, it'll undermine the intelligence community, it's a bad idea, Mr. President, use your powers and stop your attorney general. The president says no.

(BEGIN VIDEO CLIP)

OBAMA: I've made clear both publicly and privately that I have no interest in witch hunts, but ultimately the law is the law, and we don't go around sort of picking and choosing how we approach it.

(END VIDEO CLIP)

KING: Right answer?

MATALIN: You know, his interview here and -- he always tries to have it both ways. It wasn't just those CIA directors who had worked for every previous president. It would have been Poppy Bush and Gates, too, except for their respective positions, Bush 41. And his own CIA director is against it, Leon Panetta.

Everybody in the world says the same thing. This is undermining our number-one tool for attacking terrorists, and that's getting intelligence. The reason the Paks have been able to be so successful at these drone efforts in the Swat Valley and everywhere else is because of the intelligence that we provided for them.

So he's walking it back. They're narrowing the focus. I know they don't want to have this political discussion. But he does have, as commander-in-chief, as the president, you can maintain an independent Department of Justice, but tell Eric Holder, "I want to look forward. I really want to look forward, and I want to maintain an intelligence capacity that helps us continue to fight terrorism." He can do that. CARVILLE: Look, this is not -- this is a loser politically. Poll after poll after poll, every political operative is telling the president to get away from this thing. It's a loser. You've got seven CIA directors saying, "Don't do this." So why is the president doing it? I mean, we can say a lot of things about this president, but, you know, he is -- he is a pretty good politician. He's a pretty bright guy. I don't know. The only thing that one can conclude from this is there's something that the attorney general, who, by the way, he's a pretty able guy himself -- there's something that the attorney general and senior people in the Justice Department know that they just feel like they can't walk away from. That's the only rational explanation for this.

Because if we know what we know now, based on the politics of it, based on the fact that you have all of these -- and your current CIA director and plus the other ones saying this, it doesn't make any sense. And so I suspect, at the end of day, we will find out what the real reason is. Right now, we don't know.

KING: I want you two to pay -- just look over your shoulder as I walk over here, because I want to show you some numbers that I find striking. You two are among the best in the business in looking at campaigns. Now, I want to walk through some numbers with you.

This is the president of the United States opinion among senior citizens. His approval rating among seniors has dropped 20 points in six months, from February to now, seven months, 20 points his approval rating has dropped. That's one stunning number.

I want to move over to the middle of the country here and pull up another number. Come in here, here's his opinion among white men. The president's approval rating has gone from 56 percent in February down to 47 percent, now disapproval way up, as well.

And one last number -- and for that, we'll go out to the state of Colorado. I want to pull this number up here, move this down. And here's independents. The president had a 63 percent approval rating in February, 51 percent down, down among independents, way down among senior citizens, down among white men.

If you look, James, back to 1993 and '94 and where President Clinton and the Democratic Party fell heading into those midterms, you will find eerily similar numbers, especially among seniors and white men.

CARVILLE: I wrote an op-ed piece in the Financial Times about 10 days ago, and the big -- you know, as Ray Charles once said, "What's the worst thing about being blind?" He said, "Well, you can't see."

The difference between this and what was happening is '94 is we're a year out. And, by the way, 47 percent among white men, I have to tell you, is not a bad number for a Democrat. If you're 47 percent with white men and you're a Democrat, that's -- the stuff with seniors is somewhat alarming. Look, the president's had -- his approval rating has dropped considerably. It's still not -- it's not terrible and is inching up a little bit. So these are the kind of numbers that you're going to see.

There are many numbers of sort of positive signs out there for Democrats. I think that we're -- we're -- we're, you know, locked into a position with this health care thing for now is going to be 50/50. But they're coming back in September.

The summer -- I described the summer of 2009 that the Democratic Party had to be feeling a little bit like a Louisiana ditch-digger. When is this thing going to get over with?

But, you know, the -- it's been -- September has been a little bit better month for us. If we can just keep this momentum, we'll be fine.

KING: I assume you, as a Republican, you want the election tomorrow.

MATALIN: It doesn't matter, because what they've -- they've charted a course here. You know all these numbers. It's not just seniors and independents, which were a big part of his victory, his electoral victory. He's lost 3 points among African-Americans. He's lost 10 points of the youth vote, which was your -- the source of your last book, about this is going to -- 40 more years.

All right, so they're not -- they're -- because their -- their tactics -- your tactics can never be wrong if your strategy is wrong. And the strategy is always going to be wrong if it's predicated on this is a realignment, this is a transformational election. It was a repudiation of Republicanism. You had 4 million Republicans that didn't turn out. You had an elevated and energized Democratic base.

And -- and -- and in his majority in the House, which is 40 seats, 48 of those seats were owned by Bush or McCain. He's got these -- he's got a completely split party. Those constituencies and those districts aren't going to change. You can do whatever you want. Your trajectory for 2010 is on a...

(CROSSTALK)

MATALIN: ... downward spiral.

CARVILLE: I don't buy that at all. And if you look at -- by the way...

MATALIN: Want to bet...

(CROSSTALK)

CARVILLE: You look at -- look at -- look at -- I don't know -- look at these economic numbers. And, by the way, yes, Obama is going to take credit for the recovery. And everything that the Republicans said that his plans were a disaster and wouldn't work, right now, in Democracy Corps, we show a 10-point increase since the start of September and how people are feeling about this.

And you're doggone right that it -- and some people believe? I don't know if this is going to be true or not. You know, job creation is going to start in this country some time in the next year. And once we get it going, I can already tell you that the Democratic campaign is going to do that.

So I'm -- you're right. You lose 20 points, you're going to -- you're going to find that you're going to lose a lot of voters. I mean, but -- but -- but I think there's evidence that this thing has not only stabilized, but gotten a little bit better. And we'll see. KING: Let's end on this note. The president is seemingly everywhere if you turn on a TV today, but Carville's had his own media blitz, too. Now, with the use -- the president did all of these interviews himself. Carville, though, has a body double. Let's look. This is the "Saturday Night Live" special on Thursday night and James Carville being asked about all these protests in the country.

(BEGIN VIDEO CLIP)

MEYERS: So, James, what do you think of these protesters?

HADER: (inaudible) these people out there are protesting, grown men dressed up as jokers and goblins and Hitlers. I mean, these -- these people are first-class crazy. And I should know, Seth, because I'm as crazy as they come.

(LAUGHTER)

I mean, look at me. I see this in the mirror every morning and I think, "Yup, that's a good look." Come on, I look like a Skeletor!

(END VIDEO CLIP)

MATALIN: I love that look. I've always loved that look. You're the most compelling, handsome, manly man. He looked like a girly girl. You're my -- you're favorite Skeletor. He has to be funny if you're in politics (inaudible) so we're very proud of you. The girls and I are very proud of you on "Saturday Night Live." That's wonderful.

KING: Look at that touching moment.

CARVILLE: Beautiful wife and beautiful children, what can I say?

KING: And not such a bad impersonator there, either.

CARVILLE: No, no.

KING: James and Mary, thank you. It's ending on a soft, touchy moment. I won't let that happen next time.

MATALIN: OK.

KING: All right, James and Mary, thanks.

When we come back, I go to a place where I started my career, the state of Rhode Island, big unemployment rate, and lots of worry about health care. We'll sit down for a great meal at the Modern Diner, when we come back.

(COMMERCIAL BREAK)

KING: Boston -- Dorchester, Massachusetts, to be exact -- is home for me, but neighboring Rhode Island is also an incredibly special place. I went to college in the Ocean State, and it is there where I fell in love with reporting and where I earned my first paycheck in this business.

It's always nice to go back, but this trip was a little bittersweet. Rhode Island is among the states hardest hit by the current recession. Let's take a look at some of the numbers, 12.8 percent unemployment rate. It puts Rhode Island in the top five states, the highest unemployment rates. Nearly 10 percent of the residents of Rhode Island lack health insurance. The population of the state, nearly 80 percent white, 12 percent Hispanic, and 6 percent blacks.

Now, I mentioned those demographics because, when we stopped at a great landmark, the Modern Diner in Pawtucket, we talked racial politics, as well as health care and jobs.

(BEGIN VIDEOTAPE)

KING: Let me start with a question about the state of the economy here. Rhode Island was one of the states that shot up pretty quickly when unemployment started to go up across the country.

(BEGIN VIDEOTAPE)

KING: Let me start with a question about the state of the economy here. Rhode Island was one of the states that shot up pretty quickly when unemployment started to go up across the country. There are those in the White House who think not only is the worst over, but that we're actually starting to grow again. Do you see any evidence of that view?

FATHER JOSEPH PAQUETTE, ROMAN CATHOLIC PRIEST: Oh yes, I do. I think that there is certainly hope, we're seeing a lot of hope right now. I'm the pastor of a large parish and a lot of my people, some of them are still out of work. Some of them have gone back to work.

KING: Do you see that in your small business?

DANIEL GOLD, SMALL BUSINESS OWNER: Not exactly. I mean, my small business is based on manufacturing. We have seen a little bit of a pickup both locally and internationally. However, generally speaking, I haven't seen it pick up as much as I would like.

KING: Anxious?

MINDY BAILEY, RETIRED NURSE: Anxious, yes. My husband works for the Post Office and they just recently offered to buy out for early retirement and they're looking to get rid of jobs and luckily my husband has been there 25 years. So he has pretty good seniority, but there are people there that are worried about their jobs. KING: Here's one of the other big debates. The front page of The Providence Journal, the latest, there are several competing health care proposals. This is one that was put forward in the Senate that is said to be more middle of the road, not as liberal as the one in the House.

Do you think it's important that Washington deal with health care reform and spend maybe $800 billion or $1 trillion over 10 years or -- is that necessary, or can the country not afford that right now?

BAILEY: I think the country can afford to spend money on health care. We spend money on a lot of things that we don't need to. I think health care is very important.

GOLD: Health care is an interesting one, and here in Rhode Island particularly, we have very little or very few choices in terms of our health care providers, so having the choice to buy health care over state lines or to have, you know, more competition would be definitely welcome here in this state.

PAQUETTE: A lot of my community are elderly people and a lot of them are struggling because they -- and it's costing them a fortune for their medical coverage because they don't have -- some of them don't have -- what is it, 16 million Americans don't have health coverage? And that's a lot of people. And it's sad, everybody deserves health coverage.

KING: Does it make sense to you, the debate, or is it confusing? There are a lot of numbers thrown around, there are a lot of charges thrown around.

PAQUETTE: I'm confused about it, but I do think we need it. We need some clarification on it, for sure.

KING: One more headline. As race debate grows, Obama steers clear of it. There have been some recently, who, when you have a congressman scream up "you lie" during a speech from the president, some other harsh comments made at some of these rallies around the country, there are some who say that part of this is race, it's because there are some people who just can't accept that the country has an African-American president.

Do you think some of it is race? Do you hear race in reaction to President Obama?

BAILEY: I do think that race plays a part in this and I don't think it should be so. I think that the people voted for a president and a Democratic president and then that's what they should be looking for, not that he's a black president.

KING: Do you hear that in conversations about him in your life or just a distant Washington conversation?

GOLD: Yes -- no, I think I have, and I think maybe everybody has heard that issue come up in conversation about Obama or about, you know, candidates in general. I can't personally fathom it in this day and age, but it does exist and I think maybe more in some places than others, but I absolutely have.

PAQUETTE: It saddens me terrible to think that that would be possible, but I have to say that as I listened to the president that day and heard that -- the congressman yell out, that was the first thought that came to my mind. But it saddens me to think that in this day and age that we're still struggling with that.

(END VIDEOTAPE)

KING: Great conversation and trust me, a great tomato and feta omelet at The Modern Diner in Pawtucket, Rhode Island.

When we come back, more of the president's Sunday media blitz. We'll dissect the sound with three of our best and they'll empty their notebooks. Stay with us.

(COMMERCIAL BREAK) KING: I'm John King and this is STATE OF THE UNION. Here are our stories breaking this Sunday morning.

Federal agents have arrested three men in the investigation of an alleged plot to set off bombs in the United States. Najibullah Zazi and his father were taken into custody last night in Aurora, Colorado. Another man was arrested in Queens, New York. The three are charged with making false statements and the Justice Department says more arrests are possible.

The hunt for a criminally insane killer is now in its fourth day, authorities in Washington State say 47-year-old Phillip Arnold Paul walked away from a mental hospital field trip on Thursday. Police believe he's headed to the town of Sunnyside where his parents live.

Florida police are looking for a man whose wife and several young children were found dead. Detectives believe he's in Haiti right now. Authorities found the bodies last night in the family's home in North Naples, Florida.

Those are your top stories here on STATE OF THE UNION.

The White House there on a late, September Sunday morning. And joining us here in studio, three members of the best political team on television. CNN's senior White House correspondent Ed Henry, he knows that building; national political correspondent, Jessica Yellin; and senior congressional correspondent, Dana Bash.

Let's start on Afghanistan. The president with some interesting things to say, but also some of those he will have to deal with in Congress as he faces this big decision about whether to send more troops.

Now Barbara Starr reported the other day that General McChrystal, the commanding general, he is ready. He has his report, he has his recommendation, but Washington, the administration has told him, we'll call you when we want it, we have other things we need to deal with first. What about the Karzai election? What about some other political recommendations?

So I asked the president about his strategy. He has this to say.

(BEGIN VIDEO CLIP)

OBAMA: We are in the process of working through that strategy. The only thing I've said to my folks is, A, I want an unvarnished assessment, but, B, I don't want to put the resource question before the strategy question, you know, because there's a natural inclination to say, if I get more, then I can do more.

But right now the question is -- the first question is, are we doing the right thing? Are we pursuing the right strategy?

(END VIDEO CLIP)

KING: On the one hand, Ed Henry, understandable. The president wants all of the pieces of the puzzle before he makes a key decision, but on the other hand if you hear the general has this report and recommendation, you have got those young men and women at risk in Afghanistan, why would it hold you up? That could open you to criticism.

ED HENRY, SENIOR WHITE HOUSE CORRESPONDENT: Right. You want to get it right, obviously. That's the most important thing here, because the U.S. has not necessarily gotten it right for a long time in Afghanistan, over two administrations now.

And I think your follow-up question to the president was critical. Sir, what would you say to Americans who say you've been in office for eight months? You keep saying you're going to have a strategy, where is the strategy? This is critical.

I, however, would say that people who have been in some of these private meetings with the president say that some of the national security holdovers from the previous administration have said that there has been unvarnished looks at the situation on the ground in Afghanistan, and that people have been remarking in some of these private meetings, we should have had these tough meetings about the facts on the ground two years ago. So that bodes well for the president that he is trying to finally get the facts straight. However, how much time have we lost in the last two years including the first eight months of this administration without getting the strategy right.

KING: And as the president waits, it creates a political vacuum for others to offer their opinions and among those who thinks more troops are needed and more troops are needed now is Senator Lindsey Graham of South Carolina.

(BEGIN VIDEO CLIP)

SEN. LINDSEY GRAHAM (R), SOUTH CAROLINA: I don't believe it's possible to turn around Afghanistan without more American combat power somewhere near 40,000 troops. Having said that, the key to us leading with security and honor is to put pressure on the Karzai government. I want to help this president do the things we need to do, stand up to a skeptical public and I understand why people are skeptical, but I'll be one Republican standing by this president and we will not do it him what they did to Bush. This is not Obama's war in Afghanistan. This is America's war and there's a way to win it. According to our commanders, we're going to need more resources to do and I want to help this president.

(END VIDEO CLIP)

KING: Republican Lindsey Graham wants to help. How about Democrats on Capitol Hill?

BASH: Well, I mean, I think that's the reality is that whether or not they're delaying this announcement or delaying this decision at the White House because of the politics of it, that's certainly one explosive question. But regardless of that, the answer to how Democrats are going to respond is already out there because we've heard especially this past week, Democrat after Democrat after Democrat coming out and saying hold on a second, we need many more answers. That's why you saw some briefings on Capitol Hill with members of the Pentagon with some information about the so-called benchmark.

But I want to go back quickly to Lindsey Graham because yes, he is saying, and just like his very good friend John McCain is saying, we want to support the president in the idea about the need to add more troops. But I think that you are also going to see more Republicans like those two come out and question the process and whether or not it is the right thing to do to say first the strategy, then the resources.

Many people who say that they have a pretty good experience and a track record in Iraq say that all needs to be done at once. So they're supportive of the president right now, but I'm not sure how long that is going to last given how things are going.

YELLIN: And one of the problems he has had, John, is this skeptical public which is what Lindsey Graham is talking about. I think as it turns out these recent terror arrests help him more than anything right now because it's a reminder that this isn't about a project in nation building overseas. This is about America and a threat here. And so in terms of the public relations message that can be very helpful for him. I also think that Lindsey Graham might regret those words when he said we will never call this Obama's war, we will not call this Obama's war. That's a clip the White House should keep.

KING: Dana mentioned the process and the Republicans getting a little frustrated. That was one of the issues that I discussed with the Senate Republican Leader Mitch McConnell. Let's listen.

(BEGIN VIDEO CLIP)

MCCONNELL: The president enjoys very strong support among Republicans in the Senate for what he's doing in Afghanistan. We are, however, disturbed by reports from your network, CNN, that he was in effect asking General McChrystal to delay his recommendation. We think it is time to receive the recommendation. We would like to see General McChrystal and General Petraeus come up to Congress like they did during the Iraq surge and to give us the information about what they're recommending.

(END VIDEO CLIP)

KING: Tough one for the president, Ed, because if the general's report becomes public and he goes up and testifies to Congress and let's say he wants 20,000 more or 30,000 more or as Lindsay Graham said maybe 40,000 more and the president's not ready to make that decision yet, you have a huge debate already and you've got a number out there for people to put a target on.

HENRY: Absolutely. It puts even more pressure on the president saying, look, people are dying on the ground in Afghanistan, get them the resources and as Dana pointed out, it's not just about the strategy.

The strategy and resources have to be done in conjunction with one another. If it looks like the White House is putting political pressure here on the Pentagon to hold back, that's going to be a problem. And also, this is going to be a bigger and bigger issue, this whole question of General McChrystal will be allowed to testify on the Hill. The early indications from the administration is they don't want that to happen. We're going to hear Republicans push it hard.

BASH: And I'm going to be very interested to hear what your last guest, the Senate Armed Services chairman says about this because for eight years, we heard about the frustration among Democrats that there wasn't enough oversight with regard to President Bush. Well now you have a Democrat in the White House and Carl Levin is in charge of oversight of the Pentagon. So if there is any question of whether or not the Pentagon is withholding a very important report because of any politics or political decision at the White House, it will be very interesting to see what he says.

KING: Carl Levin is the chairman of the Armed Services Committee, as Dana notes. He will be here in the next hour. But first a quick break and then much more with Ed Henry, Jessica Yellin and Dana Bash. Don't go anywhere.

(COMMERCIAL BREAK)

KING: Back now with CNN's Ed Henry, Jessica Yellin and Dana Bash. Let's move on to what the president said about health care. One of the things in the Finance Committee proposal in the Senate is a fee on Cadillac insurance plans. If you have one of those high-end insurance plans, your insurance company would have to pay a fee if they give you that big generous plan.

But many people believe the insurance company would then just pass it on to the consumer. Now mostly that's CEOs, but some unions have negotiated pretty good deals. So I put the question to the president, could that be a back door way to maybe break your promise during the campaign to not raise taxes on middle-class Americans.

(BEGIN VIDEO CLIP)

OBAMA: This is a very important issue. I've been talking to the unions about it, I've been honest with them about it. What I've said is that we want to make sure that guys are protected, guys and gals who got a good benefit, that they are protected, but we also want to make sure that we're using our health dollars wisely.

(END VIDEO CLIP)

KING: I take that "but" at the end as maybe some of you are going to be subject to this one if I get a deal in the end.

BASH: That was pretty strong stuff. If I'm a member of the union or maybe part of the political leadership of the union, that I think you're right. It was a shot across the bow because what's going on with regard to this debate is that tax that the president endorsed in his joint session before Congress, taxing the Cadillac plan, it is in the program, and it is in the proposal, by Senator Baucus, but now that it's in there, many Democrats are saying whoa, whoa, whoa, whoa! It's too expansive and the reason is because they're hearing from unions and because unions have very generous plans that they've negotiated. So even John Kerry, by the way, this was his idea to tax Cadillac plans, even he is against the way this is in there.

KING: Oh, that's too easy. That's too easy.

(LAUGHTER)

Wait, wait, wait. He was for it...

(LAUGHTER)

BASH: To his defense, Max Baucus did change it and expand it. But, yes, it was a little too easy.

But that was a very interesting moment. That was aimed at unions but also Democrats on the Senate Finance Committee whose votes are needed to get this through the committee.

KING: How hard is this for the president to keep this coalition?

You know, he needs the unions, but he also needs business. He needs the doctors, but he also needs the insurance companies.

YELLIN: It's proven to be his most difficult challenge to date, maybe in his entire political career. And he is trying his hardest, here in this instance, to at least win over some centrist Democrats and say, look, everybody is going to feel the pain in this, including my base; it's a big signal to the country that I'm not going to cater to the liberal end of the party.

But he is struggling here. He's even given a talk to the unions this week, with a tariff deal that's gotten him in some trouble with China.

So he's given with one hand, taking with another, hoping to reach some kind of balance.

HENRY: But here's what's also going to worry the unions, is, if you read between the lines, when you ask, would you sign the Baucus bill if it came to your desk, he said it's too hypothetical.

But then he walked through -- there were some of the things he likes about the Baucus bill. But I never heard -- if you read between the lines -- "I'm really upset that there's no public option in the Baucus bill."

He didn't really get into that. He's not fired up about that. And so, when you read the tea leaves, again, he's not adamant about what the unions want, which is that public option. KING: He did say in some other interviews that he hopes it's there in the end and he believes it's possible to still get it in the end. But he's not -- you're certainly right. He's not saying it has to be there in the end...

HENRY: Right.

KING: ... which is what the unions are saying.

Let's move to another issue. He also sat down with Jorge Ramos of Univision, who is a great journalist, who reminded the president of a promise he made during the campaign, when candidate Obama promised Univision that, in his first year of office, he would push for comprehensive immigration reform.

The question was put to the president.

(BEGIN VIDEO CLIP)

OBAMA: It would be easy for us to get a bill introduced. The challenge is getting the bill passed. And there I've been realistic. What I said was -- is that this is going to be a tough fight and that we're going to have to make sure that we are working as hard as we can to do it.

I am not backing off one minute from getting this done, but let's face it. I've had a few things to do.

(END VIDEO CLIP)

(LAUGHTER)

KING: That's a fact. He's had a few things to do. This is not happening in the first year of the Obama administration, is it?

HENRY: That was so last year, John.

(LAUGHTER)

I mean, you know, that was a campaign promise. It's right as an interviewer -- and Jorge Ramos was -- to come back and say, "Look, you made this promise." However, you know, the White House staff loves to laugh when we press them on some other -- well, what is he doing on immigration reform?

They say, wait, didn't you ask us yesterday at the briefing why he's taking on too much?

You know, so there's, sort of, this constant push and pull. It's also like the overexposure charge that's out there, and then the White House says, well, wait, didn't CNN ask for another interview with the president, so you guys don't think he's overexposed.

(LAUGHTER)

So, you know, there is a push and a pull, here. He does have a lot on his plate.

YELLIN: Tough fight, hard choices, difficult work ahead.

(LAUGHTER)

These are a politician's way of avoiding the answer. He can't take this on right now, but he will have to in this first term.

BASH: And it will be interesting. Because if he can do it the way that he says he wanted to do it, it could actually be the issue, ironically, that could begin to change the partisan tone.

Because, if he does reach out his hand to John McCain, who's been wanting to do this for a long time, and if they can figure out a way to do it together, you know, you could potentially have an issue where you would have two bipartisan...

(CROSSTALK)

KING: I think that's one of the great questions. Isn't it -- let's assume, from everything we see right now, health care goes down this partisan path. Maybe they get one or two in the end. It looks unlikely at the moment. Maybe they do. Stimulus was three Republicans in the end.

Is there something? Is that it? Is immigration, the emotional, divisive issue of immigration, that's going to be, suddenly, the bipartisan issue?

BASH: Could -- could -- I mean, with a capital "C."

(LAUGHTER)

Because it is so emotional and because -- you know, talk to somebody like John McCain and he will say that he didn't have the best experience with Barack Obama the last time he tried to negotiate with him. But, you know, that was during a presidential campaign.

(CROSSTALK)

HENRY: ... some bipartisanship on Wall Street reform. I mean, let's face it. I think it's easy for lawmakers in both parties...

(CROSSTALK)

HENRY: Absolutely, the details. But heading into a midterm election, if you're a Democrat or Republican incumbent and you go home with -- to the voters and you have not reformed Wall Street...

YELLIN: Yes, the White House is counting on that, too.

KING: All right, a quick time-out here. When we come back, what they love the most on that side of the table, the lightning round...

(LAUGHTER)

... starting with the question Ed just brought up. Is President Obama overexposed?

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

CONAN O'BRIEN, HOST, "THE TONIGHT SHOW": You know, President Obama is pushing so hard for health care, he's going to appear on an unprecedented five shows this Sunday -- five television shows, yes. What's strange is two of them are "Entourage" and "Family Guy."

(LAUGHTER)

(END VIDEO CLIP)

KING: Conan O'Brien, there, setting up our lightning round. One of the questions, "Is the president overexposed?"

Now, the president, in one of those interviews -- he did five -- not "Entourage" and "Family Guy." In one of them, he explained why it's so important for him to be out there primarily pushing health care.

(BEGIN VIDEO CLIP)

OBAMA: I've tried to keep it digestible. You know, it's very hard for people to get their whole arms around it. And that's been a case where I have been humbled. And I just keep on trying harder because I really think it's the right thing to do for the country.

(END VIDEO CLIP)

KING: You heard the president, there, say "digestible." Well, we couldn't resist. Digestible? here's Republican Senator Lindsey Graham.

(BEGIN VIDEO CLIP)

GRAHAM: The president is selling something that people, quite frankly, are not buying. He's been on everything but the food channel.

(LAUGHTER) KING: You're our senior White House correspondent. When's the food channel?

HENRY: Everything but the food channel and anything involving the Fox channel. So I think...

KING: Ouch.

(LAUGHTER)

HENRY: ... we need to expand it a little bit. And as far as overexposure, I'm writing an e-mail now, but I'm going to preview it. "Dear Robert Gibbs, Rahm Emanuel, I do not think he's overexposed. And can I do an interview on Thursday?

(LAUGHTER)

(inaudible) in Pittsburgh. I'll be there.

YELLIN: My favorite part was that he's become the media critic in chief, also. You know, he goes on -- we accuse him of being overexposed. His great strength is speaking. But then he goes on our show and says cable does it wrong. Then he goes on the network shows and says the networks do it wrong. He's given us advice, don't highlight the extremes. He wants to be the main voice.

BASH: I'm going to be, kind of -- you know, the "anti" person here, because I don't get the question. I mean, I think the president should go out there and push what is his top priority.

Why not? You know, go out. You know, go on every single channel. Go on the food channel, if you want to, if you think that's going to help you. Do it. Why not?

KING: All right. One show the president won't be on -- very quickly, here -- John Boehner, the Republican leader of the house, would you go on "Dancing With the Stars?"

(BEGIN VIDEO CLIP)

REP. JOHN A. BOEHNER, R-OHIO, HOUSE MINORITY LEADER: I'll pass.

(BEGIN VIDEO CLIP)

(LAUGHTER)

KING: Any takers in the room, right here?

YELLIN: Look, he'd be great.

(CROSSTALK)

KING: It's a tough crowd. Time out. Thank you all. Ed, Jessica, Dana, thank you very much.

(CROSSTALK) KING: That is.

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