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STATE OF THE UNION WITH JOHN KING

Kyl to Seniors: "Don't Support the Bill"; Obama Loses Olympic Bid

Aired October 4, 2009 - 11:00   ET

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


JOHN KING, CNN ANCHOR: 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: Sound of Sunday." Fourteen government officials, politicians and analysts have had their say. National security adviser and the U.S. ambassador to the United Nations and several key players on Capitol Hill. We watch the Sunday shows so you don't have to.

I sit down with James Carville and Mary Matalin and the best political team on television. "State of the Union: Sound of Sunday" for October 4th.

(END VIDEO CLIP)

KING: Quite an interesting day. The president's national security adviser offers a more optimistic assessment of Afghanistan and the commanding general of U.S. forces there. National security adviser Jim Jones says there's no reason for the president to rush a decision about sending more troops.

(BEGIN VIDEO CLIP)

JONES: I don't foresee the return of the Taliban, and I want to be very clear that Afghanistan is not in danger, imminent danger of falling.

(END VIDEO CLIP)

KING: And in a clear sign of the tensions within the president's war council, Jones, who is a retired marine corps general, makes clear he would preferred that the commanding general on the ground in Afghanistan not be so public.

(BEGIN VIDEO CLIP)

JONES: Ideally, it's better for military advice to come up through the chain of command and I think that General McChrystal and the others in the chain of command will present the president with not just one option which does, in fact, tend to have a forcing function, but a range of options that the president can consider.

(END VIDEO CLIP) KING: The White House applauds Iran's decision to allow inspectors to visit its newly-revealed uranium enrichment site. But a key member of the Washington security team says Washington needs quick proof for engagement with Tehran to continue.

(BEGIN VIDEO CLIP)

RICE: Onus is now squarely on Iran to adhere to the commitments it has made. If it doesn't, time is short. We're not interested in talking for talking's sake. We're not interested in interminable negotiations. They have to demonstration conclusively that their program is for peaceful purpose.

(END VIDEO CLIP)

KING: And here at home, the man who ran the Federal Reserve for nearly two decades says the economy is showing some positive sign, but Alan Greenspan predicts unemployment now at 9.8 percent nationally will keep climbing.

(BEGIN VIDEO CLIP)

ALAN GREENSPAN, FORMER FEDERAL RESERVE CHAIRMAN: My own suspicion is that we're going to penetrate the 10 percent barrier and stay there for a while before we start down.

(END VIDEO CLIP)

KING: A shot of the White House there on a first Sunday in October. And as you can see, we've been watching all of the other Sunday shows so maybe you don't have to. Joining me now where you can find them only together right here on "State of the Union," the Democratic strategist and CNN political contributor James Carville and Republican strategist and CNN political contributor, Mary Matalin. Welcome.

JOHN CARVILLE, DEMOCRATIC STRATEGIST: Thank you.

MARY MATALIN, REPUBLICAN STRATEGIST: H, John.

KING: Pretty remarkable. The president's national security adviser, who is a retired general himself who has been a commander in the field says it would have been better if General Stanley McChrystal, the current commander in Afghanistan had come up through the chain of command, through the Pentagon, with a private memo saying I need more troops, not to be so public. Evidence of serious tensions here?

MATALIN: Well, maybe General McChrystal tried to do that. We don't know what preceded his going on "60 Minutes." It is awkward when you feel the chain of command is not sufficient to being heard. So when you have to have it leaked in "The Washington Post" through the mother of all media leaking repositories, Bob Woodward, and you have to go on "60 Minutes," it says something about the breakdown in the chain of command. KING: He gave a big speech in London as well saying he didn't think some of the alternatives put forward by people, smaller footprint, using drones, he said he didn't think they would work. Crack the marine code for us here.

CARVILLE: I'll crack anything. This is seven and a half years. This is the longest war in American history. It's not going well. When wars go on for a long time and not well, there's a lot of dissension, a lot of people have a lot of different ideas.

It would almost be frightening if there weren't people like speaking up and saying, look, this is what we should do and this is what we shouldn't do. I think the president is right to have a debate now to evaluate the strategy. The American people's patience is not infinite. Seven and a half year war is pretty much on the outside of what's acceptable and people say are going look, are we going to be there for 10 years? Are we going to be there for 15 years? And these kinds of things are just a byproduct of a war that's going poorly.

KING: And as the political debate goes on, General Jones who was here this morning, pretty reserved guy. He's got it together. I asked him about Senator John McCain, who went to the Senate floor last week and he said, look, General McChrystal wants more troops, General Petraeus supports him, Admiral Mullen, the chairman of the joint chiefs supports him. Why isn't he getting the troops he wants and what John McCain said was that Rahm Emanuel, the chief of staff and Jim Jones, again, a retired general, now the national security adviser were playing politics, catering to the left wing of the Democratic Party. General Jones, you might not be surprised, took offense.

(BEGIN VIDEO CLIP)

JONES: He knows that I don't play politics with national -- I don't play politics and I certainly don't play it with national security and neither does anyone else I know. The lives of our young men and women are on the line. This is -- the strategy does not belong to any political party, and I can assure you that the president of the United States is not playing to political base and I take exception to that remark.

(END VIDEO CLIP)

MATALIN: Well, that would defy war since the beginning of time and I really admire the general. He's in the snake pit of all politics in the White House. Of course, there's politics in war. There's no politics in Iraq? James just gave a patently political answer on Afghanistan, bearing no relationship to the facts what so ever. It wasn't on a static war for seven and a half years, the central front of the war moved to Iraq and now it's moving back. It's a dynamic process which is why Obama reviewed it in the first place.

Of course, there's politics. You can see why he would have to take issue. That's what they sent him out to do, is to take issue and push back on McCain. He has more credibility pushing back on McCain than the current commander-in-chief does, but their war is politics. CARVILLE: I'm a little bit uncomfortable being a corporal defender, being a commandant in the Marine Corps, the head of NATO, General Jones.. This is kind of crazy.

MATALIN: Come on.

CARVILLE: There's so much bras. Look, he is a very, very able guy, and I suspect so is General McChrystal. People are going to have a lot of different ideas about this. Let's remember that Afghanistan actually had something to do with 9/11 unlike Iraq, but we're still there for seven and a half years. It's not a war that is going very well and that is going to cause -- and smart people are going to have a lot of different ideas of how to handle that.

KING: Is he the guy? You make the point about General Jones. On of the questions here, in the Bush administration, we knew the president consulted very closely with the vice president. Secretary Rumsfeld early on was a big player. Then there were all the reports of tension in that war council. And then later, secretary, but at that point national security adviser Rice was the president's trusted friend, but there were a lot of questions whether she had a strong fist as head of the National Security Council. Do we know the role General Jones plays? Is he the guy? He's right down the hall. Is he the guy that President Obama turns to? Or is it the vice president? Is it Secretary Gates?

CARVILLE: It is Secretary Clinton. Or Ambassador Holbrooke. What I do know is that there are -- there are a lot of really smart people that are thinking about this and the thing that I've noticed about smart people, they all have a different idea and in the end it is going to be up to the president to take this. All of these people are very able. All of them want the United States to succeed. Nobody wants to be stuck there. But this thing is going to -- this whole process is going to come to a head and yes, everybody is going to be maneuvering for position and I really don't know who the president's going to listen to.

MATALIN: Speaking of Gates and Clinton have leaked or people that have put out that they are for McChrystal's recommendation. They do want to increase troops. The one thing that was leaked out of the big meeting they had that was everybody was against the Biden proposal. Let's do it from the air, whatever it is.

So nobody is for that. Ironically, he's listening and nobody's listening to the vice president on these security matters, but the president should get the range of options. They should be aired out like that. They're being more aired out outside than they were in the Bush administration.

But there was lots of airing out, lots of debate, lots of heated debate inside the administration, and should be.

And this is a -- this is a movement. What the general talked about this morning was the Cedar (ph) impact. Pakistan's contribution is improving exponentially and the devolution of the central government. So that means, well, maybe we do less focus on the central government and more on the tribal governments, the village governments. It's a constant reevaluation and he should hear from lots of voices.

CARVILLE: You know, I hope the president listens, also -- maybe there's a way that we can do this thing smarter. The idea that you just rush troops in and you rush troops in, that's the answer to everything, I think, is ludicrous.

And a lot of people have said, including people like George Will, hey, it's time to rethink this thing.

I don't know if that's the case, but you certainly -- this is a 7 1/2 year war. This is the first real strategic evaluation we've had in this thing. And you've got to do that. You just can't continue this thing forever.

KING: All right, I want to save some time for much more domestic discussions. I'm going to sneak in a quick break, here. We'll be back with James and Mary. We're going to talk about a whole lot, the health care debate, the jobs debate, trouble maybe for one Republican senator. Stay with us.

(COMMERCIAL BREAK)

KING: We're back with CNN political contributors James Carville and Mary Matalin. Let's bring the focus here at home.

Republican Senator John Ensign of Nevada acknowledged in June he had an affair with somebody on his staff. The New York Times had a big story on Friday about efforts to essentially get the husband a job, the husband, who was also a former staffer, and then some questions about questionable lobbying.

I put the question to Senator Barbara Boxer, who was here earlier, because there's a question here ast to whether this violated Senate rules and perhaps violated federal law.

Senator Boxer's Ethics Committee is investigating it. She says...

(BEGIN VIDEO CLIP)

SEN. BARBARA BOXER, D-CALIF.: I can't discuss this with you, other than to say that there's a preliminary investigation going on and we will look at all aspects of this case, as we do whenever there's a case before us, and try to get to the bottom of it as quickly as we can, in fairness to all.

KING: Can you lay out the issues you are looking at?

BOXER: No. I'm not permitted...

KING: OK, you're not permitted?

BOXER: ... according to the rules.

(END VIDEO CLIP)

KING: Not permitted under the rules.

Mary, as you know, Republicans have wanted to turn the table on some Democrats. The "culture of corruption" was a line Democrats used against Republicans for some time. Republicans saw some openings.

How damaging is this to the Republican Party?

MATALIN: Well, there was just a poll -- and I forget whose it is -- that the number one issue now is ethics accountability, as it was previous, in that discussion, the "culture of corruption."

Of course, they're not talking about all of Murtha's and Rangel's and all of that dishonesty and all of those scandals and what not. So we need to be careful that we don't have a double standard, as the Democrats always do, and I appreciated the senator saying -- not taking that opportunity to make a political dig there. But this is problematic.

It is problematic for both sides. There is a drip, drip, drip issue going on there, and there should be an awareness by the party and the powers that be that they shouldn't just let this thing just float out there.

It's a big problem on both sides. I wish we'd talk as much about all of those scandals on the Democratic side.

CARVILLE: I don't mind talking about them. And I think, just -- obviously, Senator Boxer is constrained by that. I think this is a serious thing.

But I said earlier this year that -- I predicted that the Democrats were going to have (inaudible) problems. I think we do, and I think they need to deal with it.

I think Frank Rich was exactly right this morning, who I -- Frank (inaudible) -- I think he was exactly right about the influence that some of these lobbyists have in the Democratic Party. And if we don't address that, it's going to -- it's going to bite us in 2010.

And if they don't want to address it, that's their problem, but I do think that this is a problem in the Democratic Party. I think the speaker recognizes that. And some of this stuff is coming up through the ethics process. They need to expedite it and see -- if it is as it seems, some of this stuff is pretty serious.

But this is not a Republican or Democratic thing. But Democrats need to understand there is a very strong reform element in the Democratic Party, and they're going to start to emerge at some of the stuff that's happening here. I guarantee you.

KING: Let's come to the health care debate, here, and I want to give you a little back-to-back, different perspective on the debate so far.

Senator Chuck Schumer, Democrat of New York -- he was out this morning and he says, look, the American people are watching this debate, and maybe they don't love everything the Democrats are proposing, but, from Senator Schumer's view, the Republicans have got nothing.

(BEGIN VIDEO CLIP)

SEN. CHARLES E. SCHUMER, D-N.Y.: The Republican Party is a party of "Just say no," and this is not 1980. This doesn't work anymore.

(END VIDEO CLIP)

KING: But the flip side, Senator John Kyl, conservative Republican of Arizona, was right here earlier today, and he said the Republicans have put forward a whole number of amendments. He says they've all been voted down by the Democrats.

And what Senator Kyl says Republicans hope to convince the American people is, look closely at the Democratic bill. Senator Kyl says it's not good for you.

(BEGIN VIDEO CLIP)

KYL: So if you're concerned about paying too much for health care, then don't support the bill that came out of the Finance Committee because it represents a huge increase both in taxes and premiums on Americans, and for seniors, a $500 billion cut in Medicare. And of course, seniors are rightly to be very concerned about that.

(END VIDEO CLIP)

KING: Where is this one going? It looks like the Finance Committee bill will pass the committee. A lot of Democrats don't like it, but they'll vote it out and try to change it on the floor.

Are you convinced, after that process, whether you like the end product or not, that we are now more likely, if not most likely to get a bill this year?

MATALIN: Well, we'll get something, and they'll call it success, but the outcome of the 2010 midterms are going to be predicated on what actually comes out.

If they jam down the throats of the American people, something they don't want, cost-shifting as opposed to cost-control; if they don't deal with the targeted issues that are (inaudible) preexisting and portability; if they don't put something bipartisan in there, one teeny thing which would be an enormous cost-cutter, and that's let competition -- let people buy insurance across state lines. That would be an enormous overnight cost-cutter, not cost-shifter.

So something will pass. Whatever it is, they'll call it success. If it wasn't what the people want, the electorate wants -- and they've been pretty clear about what they want since July, they will suffer the consequences in the midterms.

CARVILLE: I think an underreported story is my friend -- I don't know whether to call him Senator or Dr. Frist, but he was the majority leader, and he said that he would vote for what looks like it's going to emerge.

And, look, they've taken Republican ideas in. The individual mandate -- that was a Chuck Grassley/Mitt Romney idea. End-of-life counseling -- we were at the LSU-Georgia game yesterday. That was sent to Johnny Isakson in Georgia.

The president has said, "Look, I'm open to some of these ideas." These pilot programs with ort reform. What they're doing in Texas hasn't worked at all, but maybe there are ways that you can do this thing better.

And in the end they're going to produce a bill, and it will insure more people, and it's going to do certain things. The Republicans are then going to have to make a choice as to whether to vote for that. And something tells me that there are more of Dr. Frist that are lurking out there, that will -- going to come to say in the end, "You know what? This is -- this is an improvement on what we had, and there might be things in there we don't like, but that's what it is." I'm actually pretty optimistic this thing is -- we're moving the chains here.

MATALIN: Just because LSU -- Georgia lost yesterday, let me defend Johnny Isakson. He pulled back from what was in there. He was never for doctor-incentivized acceleration of the end-of-life decision.

KING: All right. Quick raw politics, before we run out of time. I was asked to moderate a panel the other day at an Atlantic magazine, with the first draft of history conference, they called it. And your old friend, Steve Schmitt was there. He ran the McCain campaign. He worked for Vice President Cheney back in the Bush days.

And I asked him about Sarah Palin's book. As you know, it's -- "Going Rogue" is the title of her book. It's coming out pretty soon. It's already a best-seller, even though you can't buy it yet. And I said, you know, "Steve, how are you going to play out in that book?" Let's listen.

(BEGIN VIDEO CLIP)

KING: When we do the index read, the Washington read, and we look up Steve Schmitt, what are we going to find in the book about Steve Schmitt?

STEVE SCHMITT, FORMER MCCAIN CAMPAIGN MANAGER: I think it may say that I was anti-rogue in the -- in the running of the campaign.

I think that she has talents, but, you know, my honest view is that she would not be a winning candidate for the Republican Party in 2012, and in fact, were she to be the nominee, we could have a catastrophic election result. (END VIDEO CLIP)

KING: Do you agree with that, Mary?

MATALIN: All right. Steve, the Bullet, is a man of many talents, and he -- no one would ever call him the anti-rogue. He is a rogue.

This focus on Sarah Palin is one of these beltway obsessions.

KING: But is he right? Is he right?

MATALIN: Well, she's not going to -- we don't even know if she's running. Focusing on 2012.

Here's what Sarah Palin has become: an iconic expression for people, particularly maligned moms, who feel like they're not listened to, who feel like they're attacked when they express themselves. No one is -- including Steve, who's a friend of both of ours, that she has been pilloried beyond anything that is acceptable in politics.

But to focus on 2012 is irrelevant to what she represents today, which will have an impact on the midterms, which is she's dissed for being an expressive and conservative woman.

CARVILLE: Well, disclosure here. Sergeant Schmitt, who outranks Corporal Carville but not General Jones, came and -- came to Tulane and talked to my students about many of these things. And I would say his comments were slightly more reserved to you than they were in the classroom.

But there's a reason that Sarah Palin is getting all this attention. She's got a book coming out, which is selling, by the way, to be fair to Sarah Palin, it's selling like crazy. She keeps interjecting herself in the national dialogue. She gives a speech in Hong Kong. And yes, people -- and there are a lot of people out there that frankly think that she's -- to put it mildly, not up to the job.

KING: All right. One more. One more before I let you go. Glenn Beck works for another network here in town. I believe it's the FOX News network. And there's been a great controversy about some of the things he said about the president. It was put to Lindsey Graham, a conservative senator from North Carolina, this morning on another program. Does Glenn Beck speak for you and the Republican Party?

(BEGIN VIDEO CLIP)

SEN. LINDSEY GRAHAM (R), NORTH CAROLINA: No. I'm not saying he's bad for America. You've got the freedom to watch him, if you choose. He did a pretty good job on ACORN.

What I am saying, he doesn't represent the Republican Party. When a person says he represents conservatism and that the country is better off with Barack Obama than John McCain, that sort of ends the debate for me as to how much more I'm going to listen.

So he has a right to say what he wants to say. In my view, it's not -- it's not the kind of political analysis that I buy into.

(END VIDEO CLIP)

KING: This is the political analysis I buy into. What do we make of this?

MATALIN: Well, full disclosure, Glenn is a threshold author, Simon & Schuster imprint, of which I'm associated with. Glenn has two best-sellers. This has never happened before. Two No. 1 best-sellers in hard cover and paperback, non-fiction. All right. Somebody out there is listening, what Glenn Beck says. I know he doesn't listen and Lindsey doesn't listen.

Glenn Beck is unequivocal in saying he's not a Republican; he's not a Democrat. He possibly has libertarian leanings in a vacuum. So what he has tapped into is really, really what I think is going to be the dispositive future for us. Maligned mothers.

He did not -- it wasn't just ACORN. He did the czars. He was instrumental in these tea parties and this rising opposition, again, of people who aren't typically listened to. He doesn't affiliate with either party, or any party, but he has tapped into this mainstream of America who feels otherwise not listened to.

CARVILLE: Yes. I think he's nuts, OK? Just out and out nuts. And I also think that he's a blatant hypocrite.

Here's somebody that sits on his show and weeping about how much he loves America and "The 5,000 Year Leap," and then he's absolutely giddy when his country doesn't get the Olympics.

And this is -- I'll tell you another thing about Glenn Beck. He wouldn't know the difference between a football, a bat and a hockey court. This guy is not -- he's just all -- he's just all weeping.

Yes, he'll sell a lot of books, but he exposed himself, just like a lot of these other people did there. And so yes, he gets a lot of viewers, but go look at his reading habits. Try "The 5,000 Year Leap" and I'm not just going to -- that guy just exposed himself for what he was.

KING: We'll call a time out right here. James and Mary, good to have you in the studio again. I love Mary's head gestures when James speaks. It's my favorite...

MATALIN: He doesn't know. He has no idea.

KING: ... my favorite part of the show.

We'll let James and Mary go.

When we come back, I get some breakfast in West Fargo, North Dakota. Come join us, listen. We'll talk health care and the economy.

(COMMERCIAL BREAK) KING: A new report showing the national unemployment rate inching up to 9.8 percent last month is a stiff reminder that, even if the economy has hit bottom, it could be a long way before it starts adding jobs at any significant clip.

In our travels this week, we headed out to the prairie in North Dakota. It's a small population, farm-based economy, so it's fared better than most states in these tough times. But let's take a look at the numbers.

If you look at the state of North Dakota right now, the unemployment rate, 4.3 percent. Again, that's pretty good when you look at the national rate. Eleven point two percent of its residents are uninsured. That is below most of the states. See all that red? Well, North Dakota has not voted for a Democratic president since 1964.

So after visiting a manufacturing plant in the tiny town of Gwinner, we headed to West Fargo to talk health care and jobs with a few of the breakfast regulars at TNT's Diner.

(BEGIN VIDEOTAPE)

KING: Let me start with the front page of the paper this morning, the health care debate in Washington and the leading proposal in the Senate, they voted down the public option, the government plan to compete with private insurance companies. Do we need a public option?

CRAIG OLSEN, FUNERAL HOME DIRECTOR: Not as far as I'm concerned. I think government should kind of stay out of the health care world, I guess, is my opinion.

KING: Government stay out and leave it to the market?

OLSEN: Yeah. Government's proven to be inefficient in everything that they've done pretty much.

KING: Do you agree with that? You don't have insurance at the moment.

JAMIE HIGENSEN, CURRENTLY LOOKING FOR WORK: I don't have insurance at the moment. I completely disagree with that one.

KING: What would you like the government to do?

HIGENSEN: If we could get government health care, I think that would be a great thing.

KING: You think go all the way to government health care?

HIGENSEN: Yep.

JOHN STRATMAN, WORKS IN INSURANCE: I think the most effective thing that could be done is to scrap the entire plan and let it go back to the marketplace. And John, let the marketplace solve it. It can resolve itself. It can make the fixes that are necessary and make it a better system.

KING: Why does North Dakota have the lowest unemployment rate in the country?

OLSEN: I think we're primarily rural based and that's kind of helped ground roots, so to speak.

HIGENSEN: I just moved back into the country, so I haven't spent much time looking right now.

KING: You're getting ready?

HIGENSEN: I'm getting ready to go out to look for a job.

KING: Optimistic?

HIGENSEN: Yes. I think I have a good chance finding one. So, maybe it might be here at the restaurant.

KING: Is that it? Because of the industry mix here, are you shielded from some of the national dynamics sometimes?

STRATMAN: Well certainly the economy here is more influenced by agriculture than any other single source. While there's manufacturing here, it's not to the extent of a Michigan or an Ohio and agriculture continues to roll on, and it seems to manage to roll over the high spots and the low spots.

KING: Are you more optimistic now than say if I were having this conversation six months ago?

HIGENSEN: Yes. Actually when we were thinking of moving back to the United States, I was actually petrified listening to how the economy was going. But now being back here and being back in this area here in North Dakota, I do have more of an optimistic stand that this area hasn't been affected so much as other parts of the country.

STRATMAN: Six, eight, 10 months ago when the downward spiral was in a just incredible pace, I think a lot of people were scared, and myself included wondering where is it going to go? Where is the bottom? But we live in a terribly vibrant economy.

KING: One of the big decisions he's going to have to make in the next few weeks is whether to send thousands of more troops in Afghanistan. The commanding general says he needs them. There's a bigger debate of whether the government of Afghanistan can be trusted, whether it's too corrupt, whether there's fraud in the election. And some people say you know what, not worth American blood and American resources. What should he do?

STRATMAN: I think the president needs to rely upon the advice and the experience of the general that he put in place there. I think he put them in place because he trusted him. So I would be in favor of giving the general anything he's asking for.

KING: Are you surprised that eight years after 9/11, we're still in Afghanistan?

HIGENSEN: Yeah, that shocked me, yeah.

OLSEN: I too think that he should rely on the experience of the general over there and, you know, make those tough decisions and he can't, you know, he can't tap his way out of everything. So I think he needs to, you know, rely on some of that other experience.

(END VIDEOTAPE)

KING: Great coffee and a great veggie omelet at TNT's Diner. We appreciate the conversation there.

And when we come back, more "Sound of Sunday" with the best political team on television. But as we go to break, we want to show you something cool. Let me show you first here, this is China this past week. A parade celebrating 60 years of communist rule in Beijing. You see the troops going by, a massive parade. Here's what it looked like on television.

We want to show you now what it looked like from space. We often use satellites here. We use them to show you what's going on in Ian. We've used them to take you to North Korea. Right now we want to take you into Beijing. And watch this come in here as we go in, we're going to come into the streets of Beijing and here's this, watch this play out. I'm going to go back in time, if I can get this to move over.

Here's what that square normally looks like. Remember the parade you just saw playing out? Here's what the square normally looks like. Some traffic in the streets, not so much. Now watch this as we play it out. This is what the satellite looked like, the satellite images up above. I'm going to stretch it out a little bit.

Here's the main drag and the reviewing stand in here. Thousands of people up in here and watch this as we play this out. We're going to go down the street, you see the parade up in here, more people gathered, more people up here and now we'll go the other way and watch the length of this. Beijing is a huge, fascinating city. The Chinese flag here part of the demonstrations, a little bit of cloud cover and we'll skip by that. Look at all these military vehicles, the show of force in Beijing as they have this parade celebrating 60 years of communist rule. You saw what it looked like on television. That's what it looks like from up above. A remarkable use of satellite technology.

Stay right with us, when we come back, more "Sound of Sunday" from the best political team on television.

(COMMERCIAL BREAK)

KING: I'm John King and this is "State of the Union." Here are storing breaking this Sunday morning.

Former Federal Reserve chairman Alan Greenspan said the unemployment rate will likely push past 10 percent and stay that way for a while. Greenspan told the ABC program "This Week" he believes the nation is in a recovery.

The Supreme Court begins its new term tomorrow. It is the court's first session under President Obama and the first with new justice Sonia Sotomayor on the bench. The high court will tackle dozens of cases, many touch on controversial issues like gun control and putting up religious displays on public property.

Several U.S. agencies are helping residents of Samoa dig out after deadly earthquake and tsunami. Some 300 responders were on the ground in America. More than 165 people died when the quake and tsunami struck. Those are the top stories this hour on "State of the Union."

Joining me now here in Washington, CNN senior correspondent Joe Johns, senior White House correspondent, Ed Henry and senior political analyst Gloria Borger. Thanks for being here. I want to start with what I thought was a pretty remarkable moment, a candid moment in a story Ed Henry spent a lot of his time on, and the rest of us are trying to track. Jim Jones is here. He's the president's national security adviser. Himself a retired Marine Corps general. And I asked him, so General Stanley McChrystal, the current commander in Afghanistan, went pretty public. He needs more troops and he needs them soon. I put the question to General Jones, maybe better if that were done in private?

(BEGIN VIDEO CLIP)

JONES: Ideally it's better for military advice to come up through the chain of command.

(END VIDEO CLIP)

KING: Ed Henry, how serious -- obviously he's not happy because it publicly puts the president in a bit of a box. If he says no now, he's not just saying no to more troops. He's say no to a public request from his commanding general. Tensions?

ED HENRY, CNN SR. WHITE HOUSE CORRESPONDENT: There are and I think there's a bigger story, the real back story is that General Jones has been, even before this latest episode, trying to private to restore what he calls the chain of command because the military has sort of been spoiled in the tail end of the Bush years because then- President Bush was very direct in going to his commander on the ground, General Petraeus, who is still a big player now, obviously, in dealing with requests on Iraq.

And there are people like Defense Secretary Robert Gates who are not happy about that because they get cut out of the process. He's still on now with President Obama and so you bring more people to the table and you follow the right procedures.

What that enables, though, it gives the president a little cushion because he has more time. If he's not dealing with direct requests from the commander on the ground, like General McChrystal, it gives him more time to deliberate. And there are some in the military who think the president is deliberating a little too much and that they want more speed to this. So, yes, there is tension.

GLORIA BORGER, CNN SENIOR POLITICAL ANALYST: You know, the question is really whether the general was going rogue, to coin a phrase.

(LAUGHTER)

BORGER: And this, you know, his plan leaked out and then after there was the big meeting at the White House, he then went over to London and spoke publicly about his proposal. There are some who say that this has been done deliberately so the president has a bracket.

He has got Joe Biden's plan, on the one hand, which is for fewer troops. And then he has General McChrystal and the generals' plan on the other hand, which is for more troops, which allows the president to come down somewhere in the middle.

However, at the White House, I would presume they would rather that the McChrystal plan had not been linked by the general.

JOE JOHNS, CNN CONGREESIONAL CORRESPONDENT: And nobody is going to be happy. You know, on Capitol Hill, you have a lot of Democrats who are obviously pushing against the entire idea and the president is probably going to have to reach into his supply of Republican support to do whatever he has to do with regard to Afghanistan, especially for support to move forward with more troops. So it's a difficult situation.

HENRY: You notice that in 24 hours of the London speech you mentioned, the president had the general at Air Force One in Copenhagen where I was, and it was maybe a little signal, hey, let's talk a little more directly here, not through these speeches.

BORGER: Well, because they hadn't spoken more than once in 70 days which...

HENRY: That's right.

KING: General Jones made the point -- the note he was not at that meeting, boy, would I like the official transcript of that. The questions are quite serious. The questions are, you know, can the Karzai government get its act together? Did it even deserve to win the election? What is the state of the Taliban insurgency. What is the future of al Qaeda? Would it come back into Afghanistan?

What I found striking is that General Jones had a very interesting strategic assessment of the moment, because, as you know, General McChrystal has been on the record saying, if he doesn't get more troops, he's worried he'll lose. And the Taliban will take over Afghanistan again and then in his view, General McChrystal's view, that's an open invitation for al Qaeda to return to the nation where it had its camps, launched 9/11.

General Jones seems much more optimistic about the strategic situation.

(BEGIN VIDEO CLIP)

GEN. JIM JONES (RET), NATIONAL SECURITY ADVISER: What Americans should feel at least good about in Afghanistan is that the al Qaeda presence is very diminished. The maximum estimate is less than a hundred operating in the country, no bases, no ability to launch attacks on either us or our allies. You know, the problem is the next step in this is the sanctuaries across the border.

(END VIDEO CLIP)

KING: In many ways, it begs the question, if there are 100 al Qaeda in Afghanistan, 68,000 U.S. troops, do we really need 100,000 there. And General Jones is very complimentary, but he said the Pakistanis are doing more on their side of the border, but that's really where the fight is.

HENRY: Right. And this fits into what the president has been saying publicly, what General Jones said this morning, which is what the American people understand and they're losing -- you know, their support for the war has been dropping big time, is that some of the bad guys from 9/11 came from Afghanistan, had safe harbor in Afghanistan, Pakistan, as you say, and so that's why they keep stressing that al Qaeda's power has been diminished there on the ground because that enables them to maybe push back on the generals a little bit to say, we don't need to send another 40,000 U.S. troops.

Because what the American people understand more than anything, especially more of the nation-building in Afghanistan, if they see it that way, is, are we stopping al Qaeda, are we dismantling them?

BORGER: Right. Right. And I think -- my understanding is that the questions the president has been asking are clear, which is, what can we do to make sure that there is not another attack on the United States? That is his question. It's not nation-building in Afghanistan. It's not stability in Afghanistan.

So if you were to have fewer troops and left Afghanistan to the Taliban, the big question is, would al Qaeda then find a sanctuary there or not?

KING: But, Joe...

(CROSSTALK)

KING: No, I want you in, but I want to add to this -- Ed, to it. If there's only 100 al Qaeda in Afghanistan, does that then help Senator Carl Levin, who says, you know what, maybe I'll send more troops down the line, but I'm not ready right now.

(BEGIN VIDEO CLIP)

SEN. CARL LEVIN (D), MICHIGAN: I would not commit to more combat troops that the time. There are a lot of other things that need to be done to show resolve. What we need a surge of is Afghan troops. There is a Marine captain in Helmand province who put it this way, he says, our Achilles heel is a shortage of Afghan troops. (END VIDEO CLIP)

KING: That's from the president's own party there.

JOHNS: Yes, but it's all well and good, but it is also true that Barack Obama, on the campaign trail, had a message that got out. And the message was Afghanistan is the problem. We have to deal with Afghanistan.

So a lot of Republicans on Capitol Hill are going to be very quick to say that the president cut and ran if he does anything but what his general is advising. And that's the difficulty for him. He has to sort of finish this job and look like it, and it can't be a "mission accomplished" moment.

KING: And will have more in just a minute. Gloria, Ed, and Joe, stay with us, back with reporters, we'll move to the home front here, some interesting conversations as well, the economy, jobs, health care, a lot more to talk about. Stay with us.

(COMMERCIAL BREAK)

KING: CNN's Joe Johns, Ed Henry, and Gloria Borger. The president said something curious, Ed, when he got back from Copenhagen. We'll get to the Olympics in a few minutes. But he was talking about 9.8 percent unemployment, which is, you know, terrible for Americans and tough politically on any president.

He said he's asking his advisers to look at new options, additional options to help create jobs, which of course, in town everyone said, hmm, is that a second stimulus? Are you going to reach out to Republicans on tax cuts? What do we know?

HENRY: I don't think they're going to go as far as a second stimulus. They've been talking that down for a long time. But it would be hard for them to sell, mostly because, how do you pay for it? Especially in the middle of this fight over health reform where they're still looking for money.

I think they look at more bite-sized things. You had Jon Kyl, a top Republican on the program earlier saying, look, let's look at some tax cuts. Do they put together a much smaller thing that is targeted tax cuts that maybe call the Republicans' bluff? This argument on your show earlier about the party of no or not, put some of those things on the table.

But it's very tricky for this White House because once you put more things on the table, you start acknowledging, subtly or not, the first stimulus hasn't exactly worked.

BORGER: I think that is their key problem. But you know, they're remembering Ronald Reagan who lost 26 seats in the House during his first midterm when unemployment was above 10 percent. And they don't want to be facing a midterm catastrophe here. So that's clearly what they have in mind. JOHNS: And there's also a lot of reluctance out there among the populous about more government spending, more government spending. And if you talk to some economists, they'll also say, look, this artificial support of the economy is not creating jobs, and until you actually have these keys hiring people again you're not going to get the kind of growth you need. So at some point you're going to have to pull the support out from underneath these companies and let the economy go on its own. The question is, when do you do that?

KING: A recurring theme for eight months since the president has been in office is some dissatisfaction from the gay and lesbian community that he has not kept his promises that he made in the campaign. And the Senate majority leader Harry Reid wrote the president a letter this past week saying, what about don't ask, don't tell? The policy of gays serving openly in the military. The Congress would like to change that law. Democrats in Congress, most of them, and they want the president to speak out. So I put the question to his national security advisor, are you ready to do that? Are you ready to lift the ban on gays in the military?

(BEGIN VIDEO CLIP)

JONES: The president has an awful lot on his desk. I know this is an issue that he intends to take on at the appropriate time. And he has already signaled that to the Defense Department. The Defense Department is doing the things it has to do to prepare. But at the right time I'm sure the president will take it on.

(END VIDEO CLIP)

KING: With all respect to General Jones, that is what we call a punt.

HENRY: Absolutely. And it's interesting how the White House, when you talk about, is he taking on too much on with health care or something? They'll say, no, no, he doesn't have too much on his plate. He's got big issues he has to handle. There are certain issues though that they don't think really rise to the level.

I think one reason and politically it will be very risky and I'll make your prediction that they're not going to do anything on this probably until after the 2010 midterms because, A, General Jones is right, they do have a lot on your plate, and B, you do something like that in early 2010, if you punt it now and do it at 2010, fire up the conservative Republican base before the midterm elections, I don't think so.

BORGER: Not a good idea. Not ready, not now, not going to happen.

JOHNS: There's a military culture that tends to resist it. There's also a lot of people out there in the gay and lesbian community who supported this president because they thought he was going to take on their issues. He has to stand back and a lot of people say simply because he has got too many big things that will get the country distracted. And the distraction, you're right, can go right through the midterms.

BORGER: To help his moderate conservative Democrats win reelection, he wants to give them talking points that will work with their constituents. I think that's a concern.

HENRY: What might be counterintuitive is that you see more and more states across the country signing on to same-sex marriage. You wonder whether some of the old ideological -- whether that's not so true anymore. And that's part of the reason why on the left he's getting a lot of pressure from the supporters saying it's not the same culture and climate that you had in 1993 with Bill Clinton.

HENRY: Even President Clinton came out, who signed the defense of marriage act, came out and said he thinks it should be up to the states, it shouldn't be a federal law.

BORGER: It may happen eventually but not right now.

JOHNS: There is a nucleus of Republican opposition to stuff like this that's very strong and very loud, and you can bet that you will really hear them if the president weighs in in that direction. Even though perhaps the polls show that the country would be able to support it.

HENRY: As Harry Reid said, with two wars being fought right now, how can we afford to keep kicking people out of the military? It's an interesting question.

KING: All right, catch your breath, collect your thoughts. When we come back, the lightning round. Two issues. Might be one issue with two different takes on it. We'll give these guys a sentence or three. We're going to be very generous in our lightning round today. Stay with us.

(COMMERCIAL BREAK)

KING: Back now for our lightning round with Ed Henry, Gloria Borger and Joe Johns. Somebody gets a gold, there's a silver and a bronze here. We're going to talk the Olympics. The president makes a big, high-profile trip to Copenhagen. The First Lady goes, she gives a great speech, a huge delegation from Chicago. They thought maybe they were going to win the big prize, the Olympics in 2016. They lost. Chicago didn't even get out of the first round. But the president's ambassador to the United Nations, you know some are saying is this somehow a stand on his reputation, does it diminish his standing in the world? Susan Rice says absolutely not.

(BEGIN VIDEO CLIP)

RICE: It's never a mistake for the president of the United States to be willing to fight and compete on behalf of our country, and that's what he did and he would do it again in a nanosecond.

(END VIDEO CLIP)

KING: Ed Henry, I'll let you go first because you've got so many frequent flyer miles going back and forth from Copenhagen.

HENRY: I did. I'm not going to deny it. I think the bottom line is, did it have a stain? Sure. Look at it. You like to have the front pages. "The Financial Times" when I was in Copenhagen over the weekend, it basically said "Brazil Beats Obama." It didn't say Brazil beats the United States, Brazil beats Chicago. And I think it turns out to be the audacity of nope.

BORGER: There's an interesting back story in the White House. I know that Valerie Jarrett, senior adviser, was really pushing on this. Some other senior advisors were pushing back because they wanted the president only to go if he was going to win and it wasn't clear that he was going to win. They had gotten some indications, Chicago folks can usually count votes but not this time. And so I think internally there may be a little friction over this.

JOHNS: Their intelligence just didn't tell them how cutthroat this whole thing really is. I talked to an Olympian on the phone last night for a long time. And he said the only thing more cutthroat than politics is profit. It was all about the TV rights. It was all about the financial support from the government to the IOC, if Chicago got it. And there were questions about the bid. The president didn't necessarily have all of the information he needed.

KING: You mention intelligence and not having the information. Here's Valerie Jarrett who pushed very hard, as Gloria noted. She told the "Los Angeles Times" this. "The intelligence that we had from the U.S. Olympic Committee and Chicago bid team was that it was very close and therefore well worth our efforts. The message was that a personal appeal from the president would make a huge difference."

HENRY: I'm told the intelligence, where that was coming from, Mayor Richard Daley. He was calling the White House frequently telling them, we're really close. This would put it over the top. Certainly Valerie Jarrett was heavily involved as well. But it was the mayor. And when you talk about cutthroat, I thought cutthroat was the major's middle name. So, Chicago folks can't deal with cutthroat? Come on.

BORGER: Well, they were clearly getting bad intelligence there. And the political question is, do you put the president in a situation where he's going to be turned down? Publicly.

JOHNS: It was a lose-lose situation for him.

JOHNS: But it was a lose-lose situation for him.

BORGER: Sure.

JOHNS: I mean, if he didn't support his hometown, he was going to get a hit. If he went and lost, he's going to get a hit.

BORGER: Sure. KING: Time-out. Olympics ceremony over. We'll award the medals later.

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