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STATE OF THE UNION WITH JOHN KING

Sound of Sunday

Aired January 10, 2010 - 11:00   ET

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


KING: I'm John King, and this is STATE OF THE UNION.

(BEGIN VIDEOTAPE)

KING (voice-over): It's 11:00 a.m. Eastern, time for STATE OF THE UNION'S "Sound of Sunday."

KING: Ten government officials, politicians, and analysts have had their say. Top economic advisers to the president of the United States. Key lawmakers, including the chairman of the Senate Homeland Security and Select Intelligence committees. We've watched the Sunday shows so you don't have to. And we'll break it all down with Donna Brazile and Liz Cheney and the best political team on television.

STATE OF THE UNION's "Sound of Sunday" for January 10th.

(END VIDEOTAPE)

KING: A sober assessment this Sunday from a key senator who, in recent days, has visited several countries pivotal in the fight against al Qaeda. John McCain says recent attacks proved to him that while Americans are safer than they were before 9/11, that's a far cry from saying they're safe.

(BEGIN VIDEO CLIP)

MCCAIN: Al Qaeda can land most anywhere. Where there's fertile ground, they're going to breed. Now, the latest, of course, is Yemen where there certainly is a significant challenge. Al Qaeda continues to inhabit areas along the Afghan/Pakistan border, which again argues for success in Afghanistan.

But I think that we have to continue our emphasis and our focus on the fact that this challenge is not going away anytime soon.

(END VIDEO CLIP)

KING: While praising steps President Obama is taking in the wake of the Christmas Day attempt to blow up an American jetliner, Senator McCain's traveling partner, independent Senator Joe Lieberman of Connecticut, says the administration must find out exactly what went wrong and then take action.

(BEGIN VIDEO CLIP) LIEBERMAN: I think some people have to be held accountable for the mistakes, the human errors that the president acknowledged that were made that enabled that Nigerian terrorist to get on that plane to Detroit, and we've got to change some things in the system.

KING: Well, who? If someone should be held accountable -- forgive me for interrupting, Senator.

(CROSSTALK)

LIEBERMAN: ... better screening, tougher watch lists.

KING: If someone should be held accountable, who?

LIEBERMAN: Well, I think the investigation will show that.

(END VIDEO CLIP)

KING: A feisty political debate here at home. The Republican National Committee chairman, Michael Steele, no stranger to controversy himself, says the Senate majority leader, Harry Reid, should step down because of racially insensitive remarks he made about then-candidate Barack Obama back in 2008.

(BEGIN VIDEO CLIP)

MICHAEL STEELE, CHAIRMAN, REPUBLICAN NATIONAL COMMITTEE: The reality of it is this, that there is this standard where Democrats feel that they can say these things and they can apologize when it comes from the mouths of their own, but if it comes from anyone else, it's racism. It's either racist or it's not, and it's inappropriate, absolutely.

(END VIDEO CLIP)

KING: And lastly, the Obama White House says it's confident the economy in 2010 will be a lot stronger than the economy of 2009. But one of the president's top advisers says the American people have every right to feel anxious.

(BEGIN VIDEO CLIP)

ROMER: There are so many ways that ordinary families are just really suffering through this recession. We tend to focus on the unemployment rates that you've talked about, but there are just lots of -- you know, they have seen their pensions get -- their pension funds get decimated by the stock market, their housing values. They have suffered tremendously.

(END VIDEO CLIP)

KING: As you can see, we've been watching all of the other Sunday shows, so maybe you don't have to. Let's bring in the best political team on television, as we do every Sunday at this time, and break down the sound and the major issues. Joining me here in Washington, CNN political contributor and Democratic strategist Donna Brazile; and the former deputy assistant secretary of state and chairman of keepamericasafe.com, Liz Cheney.

Welcome. Let's start with this debate, both the policy and the politics of the terror debate. You saw the president come out this past week and he said, I'm the president, the buck stops with me. And he used an interesting term.

And I'll start with you, Liz, on this, because your father, the former vice president, other conservatives have said this president has gone soft, in their view, in the war on terrorism, doesn't view it as a war. The president did come out and said, we are at war. Were you satisfied with that? Do you see, from your perspective, an improved Obama response?

CHENEY: No. I mean, I didn't think that it was satisfactory. It requires more from our commander-in-chief than just saying that we're at war. The president himself has to exercise daily, consistent, unwavering stewardship over our homeland security systems or they erode over time.

And if you look at the performance, after the president, of John Brennan and Homeland Security Secretary Napolitano, you know, we had both of them say they were surprised that al Qaeda in the Arabian Peninsula was operational. And then Napolitano said she was surprised that an individual would attack us.

Well, what we have seen over the last year, beginning with the briefings they received from the Bush transition counterterrorism team, throughout the year, we had the attack in Little Rock with somebody who was connected to Yemen. We had the attack at Fort Hood from somebody, a terrorist, who was connected to Yemen. The -- John Brennan was briefly himself personally by the head of Saudi intelligence, who himself had an attack against him with the exact same kind of bomb.

So it goes on and on and on here, even before the Christmas Day bombing. The notion that they were surprised, I think, gave a lot of Americans very real pause and real concern that they simply are operating on a sub-par level here.

KING: Well, I want to get to the substance of that and we'll talk specifically about Yemen, but Donna Brazile, to that point, when you have conservatives making this case, it is an election year here in the United States, and you know this argument. I want you to listen before you respond to Liz to Senator Jon Kyl of Arizona. He is the number two Senate Republican. And this morning, on the one hand, he said the president said the right things, but as Liz said, he said the question is, will he do the right things?

(BEGIN VIDEO CLIP)

SEN. JON KYL (R-AZ), MINORITY WHIP: I think that the president was right when he said the buck stops with me. The problem is he can't be fired right now, and so what he has got to do is provide a sense of urgency with these people who work for him. And I don't blame them as much as I do him, and I don't blame the people in the CIA, for example, or the Counterterrorism Center as much as I blame the heads of those groups who obviously are reflecting the sentiments of the president.

(END VIDEO CLIP)

KING: Do Republicans have the upper hand on the political argument? We'll talk about the policy in a minute. BRAZILE: Well, first of all, John, I take the position that when it comes to national security, this should be a bipartisan concern. I thought the president was absolutely right in taking responsibility but I also thought that the president called on the country to put citizenship ahead of bipartisanship was also the right thing to say.

There's no evidence that President Obama has put fighting terrorism on the back burner. There's no evidence his administration has downplayed the threat or downplaying, you know, whatever information that they have received regarding al Qaeda.

When the president gave what I thought to be strong remarks on Afghanistan in December, he mentioned Yemen. He mentioned the fact that we would have to fight al Qaeda in Yemen and Somalia and other places. So there's no information whatsoever that would lead anyone to believe that this president doesn't care about our security and he's not fighting with every tool that was left by the Bush-Cheney administration.

And I have to say this, because I think the tools that were left, we often give sharp notice to those tools. They were good tools. But we now understand that we know, based on what happened with the underwear bomber, that we have to strengthen those tools.

We can't just gather information, collect information, Liz. But we also have to share it and analyze it so that we can respond to these threats in a timely manner.

KING: Well, as the administration responds, and every administration adjusts to every new challenge and crisis, what should it do going forward in terms of one of the controversies -- and this started late in the Bush administration, because of political pressure and because of efforts to close down Guantanamo Bay or at least reduce the prison population, some of those terrorists, those who were deemed to be least risk -- I won't call them more safe, I will call them least risky, were, some of them, returned to their countries.

And Dianne Feinstein, who is the chair of the Senate Intelligence Committee, said this morning that one of the questions she has is, should we continue to release prisoners from Guantanamo Bay, especially if their destination would be a country with a strong or growing al Qaeda presence like Yemen?

(BEGIN VIDEO CLIP)

SEN. DIANNE FEINSTEIN (D-CA), CHAIRMAN, INTELLIGENCE COMMITTEE: If you look at Yemen, and we're taking a good look at Yemen, what you see is I think at least 24 or 28 are confirmed returns to the battlefield in Yemen. And there are a number of suspected. If you combine the suspected and the confirmed, the number I have is 74 detainees have gone back into the fight. And I think that's bad, and here is the reason. They come out of Gitmo and they are heroes in this world. This world is the only world that's going to really be accepting of them. Therefore, the tendency is to go back, and I think the Gitmo experience is not one that leads itself to rehabilitation, candidly.

(END VIDEO CLIP)

KING: Let me go to the Democrat first on this one. Donna, is it time, at least in the short term, to call a time-out, no more releases from Gitmo, no plans to close Gitmo, transfer some of them to the United States or send the others elsewhere in the world until everybody can take a deep breath and maybe go back and double-, triple-check the intelligence and think about this again?

BRAZILE: Well, let me start with the fact that President Obama has been very reluctant to send many of these so-called terror suspects back to Yemen, in large part because of the instability of their government and the threat of al Qaeda.

President Bush transferred 520 people from Gitmo, 17 to Yemen. President Obama has transferred only 40, seven to Yemen. It's clear to me that with the 200 remaining terrorist suspects at Gitmo Bay that most of them are from Yemeni.

So this is something that the president needs to understand. And I have to say something about our federal system, because this is another so-called, you know, misleading information. Our federal prisons are really tight. I mean, we have over 300 terrorists in federal prisons today, 216 international and 139 domestic. Not one of them have been released.

So I think that we have a strong system in place, but I don't think we should be transferring them back to any country any time soon if al Qaeda is going to use them to further recruit more people.

CHENEY: Look, I think that the whole notion that the president has said we need to focus on closing Guantanamo is one of the things that I would point to when Donna says there's no evidence that he's not committed to fighting this war as a war.

Telling your intelligence services; telling your counterterrorism services, "Your priority is closing Guantanamo," which means people are spending time and man hours on getting Guantanamo closed, time and man hours they could better be spending doing other things that will actually keep us safe.

Telling the world that we're now going to try terrorists in our civilian court system -- if you want to talk about a recruiting tool, Donna, the recruiting tool is saying to terrorists around the world, you attack America and the Americans catch you, the worst that you can imagine is that they're going to give you a lawyer; they're going to give you a trial in civilian court where you can preach jihad; they're going to tell you you don't have to talk, and you might get a judge who throws out the government's evidence, as we saw, in fact, just this week. BRAZILE: Well, Liz, with all due respect...

(CROSSTALK)

BRAZILE: ... President Bush used those same...

(CROSSTALK)

BRAZILE: ... those same federal courts to try Moussaoui, the shoe bomber, and several other terrorist suspects. So what is wrong with our federal courts?

CHENEY: Well, what's wrong with them is that they are an effective...

BRAZILE: Two hundred people have been used -- 200 people have gone through our federal courts, only three our military courts.

CHENEY: Federal courts are not an effective tool for fighting terror. And if you look at what's happened, for example, in 1993...

BRAZILE: Is that a change of position from the Bush administration that tried over 200 people in our federal courts?

CHENEY: The Bush administration was very committed to the military commissions. And, in fact, they had to adjust the military commissions because the Supreme Court told them that they needed to make adjustments, which they did.

Now, if you look at what's happened, you now, in 1993 we tried the World Trade Center bombers in federal court. Now, after 1993, we were attacked repeatedly. We were attacked at our embassies in East Africa. The USS Cole was bombed. We were attacked on September 11th.

The criminal justice system...

(CROSSTALK)

BRAZILE: And there's been other attempts after September 11th, also, to attack us.

(CROSSTALK)

CHENEY: ...not established in a way that can help to defeat terror.

And when you say to a terrorist, you get all of the rights of an American citizen and you're going to be given a trial in civilian court -- and you've now got a situation, with the Christmas bomber, where, instead of questioning him, we are now in a position, as a government, where he's got a lawyer and we're in a plea bargain with him...

BRAZILE: No, we're not. The FBI has gotten actionable intelligence.

CHENEY: So we are now forced to give a terrorist something in exchange for information.

(CROSSTALK)

BRAZILE: Just look at the facts.

CHENEY: Those are the facts, Donna.

(CROSSTALK)

BRAZILE: The FBI...

CHENEY: This guy -- you think he doesn't have a lawyer? He's got a lawyer and he was read his Miranda rights. Do you think that was the right approach?

BRAZILE: Well, what do you want to do, put him in -- put him on a waterboard and -- and try to...

(CROSSTALK)

CHENEY: ... to get information from him so that we don't get attacked again, Donna.

BRAZILE: I'm sure that the... CHENEY: And once you give somebody a lawyer and the lawyer tell them to be quiet...

BRAZILE: I have no problem with our American judicial system, Liz.

CHENEY: In the American judicial system, time and time again, we've seen...

BRAZILE: Liz -- Liz...

CHENEY: Let's just talk about what happened.

BRAZILE: You know, let's talk about the facts. Let's talk about the fact that the Bush administration has tried...

(CROSSTALK)

BRAZILE: ... over 200 people in our federal courts. It was good enough for the Bush-Cheney administration. We should continue to strengthen our apparatus to try and convict these people and sentence them using our court system.

CHENEY: That will not keep America safe, Donna, and I don't believe...

BRAZILE: I -- I believe it will keep America safe.

CHENEY: Maybe you believe that terrorists have the right to...

(CROSSTALK)

BRAZILE: I believe it will keep us safe. (CROSSTALK)

KING: Ladies, I'm going to call a quick time-out on this end of the table. As you can see at home, we've got a feisty conversation going here. We're going to take a quick break and we'll come back with Donna Brazile and Liz Cheney. Don't go anywhere.

(COMMERCIAL BREAK)

KING: We're back with Donna Brazile and Liz Cheney.

Let's continue our conversation about terror because it's interesting if you, to borrow a term, connect the dots.

We talked to Senators McCain and Lieberman this morning, and they say, you know, frustrating with the Karzai perspective but some progress they see in Afghanistan. They're hopeful with the U.S. military perspective in the months ahead. They were very optimistic about the situation in Iraq. They said they had some frustration but pretty good meetings with the leaders of Pakistan on this trip.

And so you get the impression, almost, of a game -- and forgive me; I'm not making light of this -- of whack-a-mole, where you deal with the problem in Afghanistan; you deal with the problem in Pakistan, and it pops up in Yemen.

And so the question was put to Jack Reed, Democratic senator from Rhode Island, a West Point graduate, this morning, if we're dealing with it in these other places and now it's suddenly escalating in Yemen, what do you do about it?

(BEGIN VIDEO CLIP)

SEN. JACK REED, D-R.I.: We have to be engaged in Yemen. The question, and I think Jon's right, is how do you do it?

It has to be, I think, a very, very small footprint. It has to be more about intelligence, more about special operations in collaboration with the Yemeni government. It's a country that has profound problems, a civil war, poverty, running out of resources. It's an area, though, we can't ignore.

(END VIDEO CLIP)

KING: I mean, Liz, you can almost argue this two ways, number one, that it's popping up more in Yemen because the United States and its allies are having some success, maybe, in Afghanistan or in Pakistan, or you could argue it that Al Qaida is adapting; they know our military presences; they know the steps we're taking to fight them, so now they're moving on to less organized, smaller cells in Yemen, maybe in Somalia, elsewhere in the world?

CHENEY: I think it's probably some of both of those things. And I think that, you know, one of the things that we've got to do here that's critically important is convey to the world the notion that we are actually in this fight to win it. I think, when the president stands up and he says we're going to send 30,000 troops to Afghanistan until July of 2011 because we can't afford to fight longer than that, that doesn't convey that notion.

The other thing that we've got to do that this president is not doing is use all the tools at his disposal.

And we talked about intelligence. If you want to get to the bottom of what do the networks look like inside Yemen, you need to be able to capture and interrogate top Al Qaida officials.

President Obama not only stopped that program, but he released the details of how we conduct those interrogations in one of his first acts in office. And I think there's no question but that's made us less safe and taken a very important tool out of our toolbox.

Unless we're willing -- unless we happen to find a terrorist who is going to answer questions after he's been Mirandized, we are in a world of hurt, in terms of being able to interrogate these guys.

BRAZILE: Well, in order to really be effective in our counterinsurgency and counterterrorism measures, we need allies; we need support.

Great Britain is now going to help finance our operations in Yemen. We're spending $70 million. General Petraeus said we need to double that.

Just in December -- of course, the conservatives won't give President Obama any credit because simply they want him to fail, and that's a sad statement -- but in December, President Obama called the president of Yemen to congratulate him on the strikes that they're taking now against Al Qaida.

So we need a functioning, stable government in order to dismantle, disrupt, and defeat Al Qaida, something that the president has made as a strong priority.

BRAZILE: Again, he doesn't get any credit because, Liz, unfortunately maybe the vice president and many others -- the former vice president, you know, clearly you're not getting all the information, but from what I read and from what I see, this president is fighting al Qaeda with both hands.

CHENEY: Well, you know, I think you may be actually looking at stuff that doesn't reflect reality there, Donna. Because the other thing the president did in December after all of the stuff we just went through in terms of the threat from Yemen, was release six terrorists from Guantanamo to Yemen after everything they knew, after the attacks that they had seen on the homeland, he went ahead and he released terrorists back to Yemen.

BRAZILE: Well, as I mentioned, President Bush started releasing these terrorists...

CHENEY: That's right. And... (CROSSTALK)

BRAZILE: ... and in fact, the people who masterminded this effort were people released by President Bush.

CHENEY: ... experience should show that we ought to not do it. It was absolutely a mistake. So what's your argument? President Bush made the mistake so President Obama should redouble...

BRAZILE: And in...

CHENEY: ... the effort there?

BRAZILE: In 2005, President Bush was one who said that we should close down Guantanamo Bay. So, I mean, again...

CHENEY: But he didn't do it. He expressed his desire to do it but he didn't do it. And the...

BRAZILE: ... this holier-than-thou approach when we should be fighting terrorism -- we should be...

(CROSSTALK)

CHENEY: Donna...

BRAZILE: We should be fighting as a country, not as partisans. CHENEY: ... we should be fighting terrorism with every tool we've got. And we're not doing that right now.

BRAZILE: Absolutely, because they're not targeting just Republicans, they're targeting Democrats, they're targeting Americans.

CHENEY: They are, that's right.

KING: We've established the disagreement here. Let me bring the conversation back home and see how we do, see whether we can have any peace at the table in that regard. I'm going to hold up this new book, "Game Change." It's by John Heilemann and Mark Halperin, two very accomplished political journalists.

And one of the controversies being generated by this new book is the Senate majority leader, Harry Reid was questioned about then- candidate Barack Obama during the 2008 campaigns. And this is what the book reports. "Reid was wowed by Obama's oratorical gifts and believed the country was ready to embrace a black presidential candidate, especially one such as Obama, 'a light-skinned' African- American 'with no Negro dialect unless he wanted to have one,' as he said privately."

Donna Brazile, you are among the African-American leaders in the Democratic Party that Senator Reid has called over the weekend to say, I'm sorry, this was a mistake, poorly chosen words. Take us inside the conversation.

BRAZILE: Well, first of all, I think Senator Reid has expressed enormous remorse for his statements. He has not only apologized to President Obama, but to a number of civil rights leaders. He has made phone calls. You know, Harry Reid is a...

KING: He's a national leader of your party...

BRAZILE: He's a national leader...

KING: ... a veteran senator from Nevada, a national leader of your party, can you believe that in this day and age he would say something like that?

BRAZILE: Look, I am profoundly disappointed in his choice of words. I'm disappointed whether I hear it from Glenn Beck, from Harry Reid, anyone else, let's be clear about that, John. But I also know that Harry Reid is a man of integrity, someone who has been a champion of civil rights, hate crimes, voting rights, and he's someone who has earned the respect of many in the civil rights community.

That's why I believe, as President Obama said yesterday, for someone who has been a leader on social justice issues,we accept his apology.

KING: Well, the African-American chairman of the Republican National Committee this morning said he thinks that Harry Reid should resign. He says, otherwise Republicans will retire him. He is on the ballot, of course, in 2010. And Michael Steele also said he believes there's a double standard. That Democrats can just say, I'm sorry, where in his view if Mitch McConnell, the Senate Republican leader, or let's, for the sake of argument at this table, say Richard B. Cheney, the former vice president of the United States, Michael Steele's argument is if a white Republican said this, there would be hell to pay.

(BEGIN VIDEO CLIP)

STEELE: Oh, yes, there's a big double standard here, and the thing about it that's interesting is that when Democrats get caught saying racist things, you know, an apology is enough. If that had been Mitch McConnell saying that about an African-American candidate for president of the United States, trust me, this chairman and the DNC would be screaming for his head very much as they were with Trent Lott.

(END VIDEO CLIP)

KING: Do you believe that's the case?

CHENEY: Absolutely. I think there's a clear double standard. I think there's no question but that, you know, liberals rush to excuse racism from other liberals. And I think that's clearly what this is. I think Donna and I can agree very clearly that these are the kind of remarks that don't have any place in 2010 in the American political debate. And I think what Harry Reid has done is give the people of Nevada yet one more reason to vote him out of office this year.

BRAZILE: But I would hope that the people of Nevada, and I'm going to Nevada because I like Harry Reid, I support Harry Reid, he's my kind of man, he fights, and he is a tough fighter. And he is somebody who has put together a very important caucus with diverse voices, diverse people, but he's someone that when you want a fighter for civil rights, for equal rights, for equal opportunity, you go to Harry Reid because he will fight. He will stay on your side.

It's unfortunate he made these remarks given his history. His history is a champion for people of color. But I take him at his word that he's deeply sorry and offended by his own remarks and I will support Harry Reid.

KING: But before we let you go, Michael Steele, we just showed, the Republican National Committee, taking issue with Harry Reid. He has had a tough week himself. He has his own book out and he has been on a book tour and he has been saying -- criticizing spending in the Bush administration, criticizing to some degree the McCain campaign, saying the Republican Party has lost its way.

Most Republicans would say, sure, at least agree with some of those examples, but they think the timing of this to them is incredibly odd. You're in the middle of a midterm election year. You're trying to raise money, momentum is on the Republican side. Are you comfortable as a conservative with Michael Steele as the leader of the Republican National Committee or as some Republicans privately are saying, boy, he's causing us a lot more harm than good right now? BRAZILE: Liz, are you looking for a job?

(LAUGHTER)

CHENEY: I think he is making a lot of -- thanks. Donna, please don't endorse me for that.

(LAUGHTER)

BRAZILE: Go ahead, girl.

CHENEY: Look, I think he's making a lot of really important points. I think that the whole issue of, you know, what's going to happen with Republicans in 2010 and 2012 for voters out there around the country, sitting around their kitchen table, they could care less about these debates going on in Washington, who is running the Republican Party and who is not. They want to know who is going to make sure that they've got jobs, who is going to cut their taxes,who is going to keep the country safe.

And I think those are the issues that will ultimately decide the outcome of these races.

KING: A healthy and feisty conversation. Liz Cheney, Donna Brazile, thanks for coming in.

When we come back, more "Sound of Sunday" and the day's big issues with three top political reporters. Don't go anywhere.

(COMMERCIAL BREAK) KING: Joining me now here in Washington, Anne Kornblut. She is a White House correspondent for The Washington Post; CNN national political correspondent Jessica Yellin; and senior congressional correspondent Dana Bash.

And you know, we do book plugs here. This is Anne's new book right here: "Notes from the Cracked Ceiling." We will get to this in a little bit more. But let's continue the conversation that was rather feisty at the end there between Donna Brazile and Liz Cheney on Harry Reid and whether there is a double standard involved.

Just to refresh our viewers, if you're just tuning in, in a new book, and that's this book, "Game Change," Harry Reid is quoted saying racially insensitive things about Barack Obama. Saying he thinks he was a more successful candidate because of his light skin and because he had, quote, "no Negro dialect."

KING: Well, Harry Reid knew this was going to be a controversy and he called the president of the United States. And here's what President Obama said: "Harry Reid called me today and apologized for an unfortunate comment reported today. I accepted Harry's apology without question because I've known him for years. I've seen the passionate leadership he has shown on issues of social justice and I know what's in his heart. As far as I am concerned, the book is closed."

But the political debate, Dana, of course, continues. You cover Harry Reid on Capitol Hill. It's not the first time his tongue has gotten him in trouble. But what are the ramifications of this? Is it case closed? As Donna says, apology accepted. But?

DANA BASH, CNN SENIOR CONGRESSIONAL CORRESPONDENT: One of his advisers this morning said the next 24 hours will determine whether or not it's case closed. The fact that the president came out and said this in a nanosecond, that he got the call from Harry Reid and that he accepted his apology, that is not an accident. That was a political piece of choreography that he and the White House aides and Harry Reid's aides decided to do very, very fast.

I mean, the amount of damage control, the way that they went after this so fast was actually quite remarkable. You mentioned that this is not the first time this has happened to Harry Reid. That is the big problem for Harry Reid. He's in a very, very tough re- election battle in Nevada. He already is not very popular back home and very well-known, but not well-liked.

And the problem is that he time after time sticks his foot in his mouth, and this is just the latest example of that. Never mind the racial problems, and that's going to hurt him.

KING: Well, Anne, we got this text message. And it's a pretty good question -- text question. "Will Senator Reid's comments hurt his relationship with President Obama in terms of policy as Senator Reid has been somewhat a liaison for pushing the Obama agenda in Congress?" That's a text from Massachusetts. It is a good point. Harry Reid is incredibly important, challenge number one for the president, trying to negotiate a deal on health care. What is the relationship to begin with?

KORNBLUT: I would doubt that it's really going to hurt -- the president has shown both during the campaign and now that he has got a pretty thick skin when it comes to this. And I think, as Dana pointed out, we all got the e-mail yesterday from the White House, kind of a surprise in the middle of a Saturday, to get a statement from the White House saying that he had spoken to Harry Reid.

He is not one to -- the president, that is, is not one to take things like this personally, to fly off the handle over it. They have a pretty decent working relationship overall. And ultimately what the White House wants is to get back to substance. To get health care passed. They're not going to let this get in the way. I would be shocked if this got in the way of that.

KING: But when they say -- Jessica, jump in, when you say they're not going to let this get in the way, of course, the Republicans would like to keep this getting in the way. And their African-American national chairman, Michael Steele, who, as I said in the last block, is no stranger to controversy of his own, but he was out this morning making a point, Jessica.

Listen to Michael Steele. His point is, if a white Republican had said this, everyone wouldn't go, oh, he apologized, it's over.

(BEGIN VIDEO CLIP)

STEELE: Mitch McConnell had said those very words, that this chairman and this president would be calling for his head, and they would be labeling every Republican in the country as a racist for saying exactly what this chairman has just said. So if I sat here and said what he just said, if Mitch McConnell used those words, no one would find it to be credible.

(END VIDEO CLIP)

KING: The other chairman, of course, the Democratic chairman, Tim Kaine, sitting right there with Michael Steele.

JESSICA YELLIN, CNN NATIONAL POLITICAL CORRESPONDENT: First of all, a masterful political play by Michael Steele because he would like to change the topic this morning from some of his own issues right now.

And sure it's true that the Republican Party has a different history and a different baggage, Abraham Lincoln notwithstanding, on the issue of race. Just like the Democratic Party has different history and baggage on national security. And so they each have to be careful -- more careful than the other party on those particular topics.

To some extent he may be right. But, look, and let's point out we've all heard racial gaffes. Joe Biden himself said something very similar and he became -- what did he say, he was -- Obama was clean and articulate and he became vice president. So the country is kind of used to gaffes like this.

KING: You mentioned Michael Steele's issues. He has his own book out right now. And he has been on this book tour and along the way, in addition to criticizing Obama and the Democrats, he has done a fair amount of kicking his own party. And a lot of Republicans have been unhappy about that. And many privately questioning whether he can be an effective chairman.

This morning Michael Steele defended himself and someone else who defended him is the man who was in the last election the Republican standard-bearer.

(BEGIN VIDEO CLIP)

STEELE: I believe passionately in those principles that drew me to this party. And I get angry sometimes when we walk away from those principles. I get angry and frustrated when I see those principles not being regarded because they have been the foundation for generations.

KING: Do you have confidence in Michael Steele as the party chairman or does he need to go?

MCCAIN: I have confidence in Michael Steele.

(END VIDEO CLIP)

KING: To borrow a phrase from Barack Obama, is the book closed? Is Michael Steele fine going forward? You were making some calls on this the other day.

BASH: I was -- I'm still surprised at the level of disdain, frankly, for Michael Steele from within his own party. I made a slew of calls on Thursday and Friday as this whole issue was blowing up, and this issue, of course, being the fact that he is on a book tour and he has been talking about --he has been saying things that has not agreed with many Republicans like saying that the Republicans can't win back the House.

And going back in timing and talking about what Republicans have gone wrong when many Republicans say it's time to look forward. So a lot of anger at him because of the fact that they think that he's profiting himself but not helping his party and the fact that John McCain is the one Republican we've seen publicly to come out and support the chairman. It's just such a...

(CROSSTALK)

YELLIN: ... like, OK, he doesn't want to be the first to say (ph) go, right?

BASH: I won, I won (ph).

(CROSSTALK) YELLIN: ... wants to be the first to say he defended him publicly that we've heard.

KING: Does it matter of is this one of the inside Washington dramas that we all care about because we cover politics, but does if you're out there and you're a swing voter out there in the middle of the country, does it matter who you are going to vote for for House or Senate? Does it affect whether or not you're going to get a job? Does it affect the price of asparagus?

YELLIN: No. But what does matter is that -- is the job. Michael Steele has a job to do, which is to raise money and to organize his party, and the establishment Republicans are angry that he's not doing those two fundamental things. They're down on their fund-raising and they don't feel involved and they don't feel cohesive. And that can translate at the polls to a lack of voter enthusiasm, a lack of coordination that does matter.

KORNBLUT: And to the extent that this is yet another distraction in a Republican Party that looks fractured, even if people have never heard of Michael Steele, people aren't political junkies, don't know who he is, this is just another example of what appears to be in- fighting in a party that doesn't have a clear leader.

BASH: And the bottom line is that Republicans felt that they had a very good week last week. They feel they've got momentum. They feel like the issues are on their side and the last thing that they want is somebody who is at the head of the party who is off-message.

KING: All right. A quick break. We'll be back with Anne Kornblut, Jessica Yellin, Dana Bash, don't go anywhere.

(COMMERCIAL BREAK)

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

Top U.S. Commander David Petraeus says the United States must make a long-term commitment to fight the terror threat in Yemen. In an exclusive interview with CNN's Christiane Amanpour, General Petraeus said part of that commitment will be financial but not ground troops. Intelligence officials believe that would be Christmas Day bomber trained in Yemen. Catch Christiane's entire interview today. That's at 2:00 p.m. Eastern.

Crews in Northern California are scrambling to restore power to thousands of people who lost electricity after a strong earthquake. The 6.5 magnitude quake struck late yesterday afternoon near Eureka, in Northern California.

KING: It left a hodgepodge of debris but, thankfully, no serious injuries.

People across much of the nation struggling to stay warm in bone- chilling cold weather that stretches from the Midwest to Florida. In Florida snow flurries have been reported as far as South Naples on the Gulf Coast.

CNN meteorologist Bonnie Schneider says the temperatures expected to drop into the 20s for several hours tonight in Central Florida, where the citrus crop is located.

Those are your top stories on "State of the Union."

And we're back now with our panel, Anne Kornblut of The Washington Post, Jessica Yellin and Dana Bash.

A remarkable thing happened this past week. We had another retirement from the Senate. And when politicians step away, they, nine out of 10 times say, "I just need more time with my family."

(LAUGHTER)

It's never about their prospects. It's never about their political standing. But Christopher Dodd of Connecticut, a veteran senator who watched his own father lose a Senate seat some years ago, said something a little different.

(BEGIN VIDEO CLIP)

SEN. CHRISTOPHER J. DODD, D-CONN.: There's nothing more pathetic, in my view, than a politician who announces they're only leaving public life to spend more time with their family.

(LAUGHTER)

The result of this announcement today I hope will create that opportunity, but it's not the reason for my decision.

(END VIDEO CLIP)

KING: Honesty.

BASH: It is. What do we call that -- F5 on the computer, where you say, OK, F5, "spending more time with my family."

(LAUGHTER)

I think the fact that he acknowledged that was pretty -- was pretty candid and pretty remarkable.

And the other thing that he was candid about in that statement that he gave right in his -- at his own home was the fact that he has a tough -- he's had the toughest battle of his political life this year. And the hard, cold fact is that, talking to many Democrats involved in his campaign, it didn't look like he was going to win.

So he is somebody who is revered by many in the party. He's been in Congress for -- and the Senate for 30 years. But this is actually something that is good news politically for his colleagues because they feel like they can keep the seat in their column because they have a pretty good candidate running.

YELLIN: And yet it's bad news, broadly. It's ironic. It's a contradiction.

Because, just as you say, it's good news because they can probably now win that seat, and yet it's a reflection that it's a bad year for the Democrats. If this were -- if everything were going gangbusters, Chris Dodd's personal issues, right now, wouldn't have the same impact in the polls and his standing as it's having.

And so Dorgan and the Dodd retirements reflect that this is going to be a very difficult year. Expect the Democrats to lose some seats in the Senate, despite Dodd's -- Connecticut still staying strong for Democrats.

KING: When they say "lose some seats," now, most believe they'll lose two, three, four. They'll keep a majority, most -- it's early -- but not the 60. But if you work at the Obama White House; if you're in the Obama administration, that 60 -- boy, it's a magic number you don't want to give up.

KORNBLUT: And the 60 has been hard enough. So if you can imagine losing...

(LAUGHTER)

Sixty hasn't exactly been perfect for them. So you imagine losing one or two.

Now, that said, there are a number of Republican retirements. And I know we feel like the midterms are around the corner because, of course, it's January and they're in November, but, as we all know, a lot will happen. And I think it probably won't be -- traditionally, it hasn't been until about July or August when we have a real sense of what direction this is going to go, despite the retirements.

KING: I want to take some time. I want to talk about this. I'm going to hold it up.

(LAUGHTER) This is the big cover, "Notes From the Cracked Ceiling" -- this is Anne's new book -- "Hillary Clinton, Sarah Palin, and What it Will Take For a Woman to Win."

I'm standing around the table right now with three of the best reporters in Washington, D.C. They happen to be women.

I remember my first campaign, when I covered Michael Dukakis. I was a young man. Believe me, I was once a young man. It was a long time ago.

(LAUGHTER)

And it was mostly guys on the plane. There were a couple of women. But even our business has changed significantly. But when you were working on this book after a campaign that saw historic candidacies, Hillary Clinton running for president, Sarah Palin, the surprise and very dynamic and interesting, yes, controversial choice for Republican vice presidential nominee, what struck you the most? KORNBLUT: Well, it's interesting you talk about the press corps. And for the first time, on the Hillary Clinton campaign, there would be a lot of women that were covering her that would come in and out, and then we all saw each other again -- we hadn't seen each other in three months -- but we showed back up when Palin was picked.

(LAUGHTER)

What was interesting to me is that it was two women who are obviously very different. They have nothing in common ideologically. But they did withstand a lot of harsh scrutiny and a lot of -- I mean, both media double standards, but also from voters, questions that voters wanted answered about, in Hillary Clinton's case, who was she as a woman; in Sarah Palin's case, who was she as a mother, a lot of us not knowing what's appropriate? What can you ask of a female candidate that's just human or that's unfair?

And so I wanted to go back and see, was there anything in -- did the two of them have anything in common? And I also interviewed a lot of other prominent women politicians, Nancy Pelosi, Condoleezza Rice, about their experiences and what it might take down the road.

KING: And it's a different world now, both in terms of covering the politicians but seeing politicians in leadership.

BASH: There's no question. I remember when -- the day that Sarah Palin was picked -- I was covering the McCain-Palin campaign -- I was asked on the air on CNN, well, how is she going to deal with the fact that she's got not only five kids but she's got an infant at home?

And I responded, not really knowing the official McCain campaign line and what they would say, but I said I would imagine that they would say, "You wouldn't ask that question of a man."

The next day I went to a McCain-Palin rally and I was treated by the women there as a rock star because of the fact that women responded to that saying, "You go, girl," saying a man would never be asked that question.

And that was, to me, the biggest indicator of what you've expressed in your book, Anne, of the difference that we have now with women getting to the point where they are really actively running, not just women who may be beyond their childbearing years, but women who are in the middle of raising families. And it's just such a different world.

YELLIN: And I thought it was no -- it was telling, we should say, that, the minute Sarah Palin was chosen, we were immediately talking about her ovaries. Did she give birth to this one child in particular?

(LAUGHTER)

I mean, it was remarkable, and astounding to people, very difficult, that a woman could both be of childbearing years and seeking power. And that's the juggle that's very hard for society to deal with, at this point.

KING: In defense of this man, not men everywhere...

(LAUGHTER)

... you can check all the transcripts. I never mentioned Sarah Palin's ovaries.

(LAUGHTER)

We're going to come right back. We have our lightning round, and the subject is a very colorful male politician, the California governor, Arnold Schwarzenegger. Don't go anywhere.

(COMMERCIAL BREAK)

KING: Lightning round, now, with Anne, Jessica, and Dana. In television, as in life, not everything goes according to plan. Watch closely David Gregory of "Meet the Press" interviewing the California governor, Arnold Schwarzenegger.

(BEGIN VIDEO CLIP)

SCHWARZENEGGER: We need to move the state forward and bring in both of the parties together and to get our infrastructure, the water infrastructure passed.

(CRASH)

SCHWARZENEGGER: Pay no attention, it's just a little earthquake.

DAVID GREGORY, HOST, "MEET THE PRESS": When you speak, things happen.

SCHWARZENEGGER: See, in California when there is a noise, governor never shakes -- worries about it because earthquakes happen all the time.

(END VIDEO CLIP)

(LAUGHTER)

KING: Now, we have to be careful because there was an earthquake off California yesterday. That was not an earthquake, that was just a very quick-thinking Governor Schwarzenegger. So, live TV?

BASH: Live TV. And I think it's proof that Arnold still has his Hollywood connections, because he was talking about infrastructure and the props department was clearly paying attention. Because they immediately threw...

(LAUGHTER)

(CROSSTALK)

YELLIN: I just want to say in defense of California, I've lived through earthquakes, they're not that bad. This whole country mocks California. Earthquake, I'd take it over a hurricane any day.

KORNBLUT: That's the whole special category of things that go on in the background when politicians are talking. That turkey video that Sarah Palin has, there could be a whole special Academy Awards for...

(CROSSTALK)

KING: That was Maria cracking the picture frame.

(LAUGHTER)

KING: Up next, we get out of Washington, as we do every week. Our thanks to Anne, Jessica and Dana. We're going to get out of Washington, we're going to head to a place where Dick Cheney every now and then has breakfast, Norris Fish Creek Inn (ph). It's in Wilson, Wyoming. We had a great meal and a great conversation on the issues that matter most of you. Stay with us.

(COMMERCIAL BREAK)

(MUSIC PLAYING)

KING: John Denver music there talking about the state of Wyoming. This is a special week -- a very special Sunday for us here at STATE OF THE UNION, our visit to Wyoming means we've kept our promise to visit all 50 states in the first year of our program, which, of course, is the first year of the Obama administration. And in keeping it, I have had the great privilege to share a meal with everyday Americans from coast to coast, Hawaii and Alaska included. Hearing your concerns about the big issues and often getting a sense of changing public opinion before it shows up in the polls we read so religiously if you live and work here in Washington.

Wyoming is, of course, a very conservative state. It was our 50th stop. Let's take a look a little bit at the state: 7.2 percent unemployment now, a big jump from just 3.1 percent a year ago. Almost 14 percent of Wyoming residents lack health insurance. Who are some famous people from the state of Wyoming? The artist Jackson Pollock and Buffalo Bill Cody, of course, the American West entertainer, and our most recent former vice president, Dick Cheney, is a resident of the Jackson area in Wyoming.

Our location for breakfast this week is in the shadow of the majestic Grand Teton range. And the conversation at Norris Fish Creek Inn another reminder to us that no matter where you are on the map, geographically or politically, the issue likely to be at the top of the list is the economy and jobs.

(BEGIN VIDEOTAPE)

KING: The question we ask everywhere we go, because it's going to be so different in different places is, how is the economy here?

KAREN GARVIN, SMALL BUSINESS OWNER: It has been bad and right now I don't see any evidence of it getting better. KING: What makes you think that?

K. GARVIN: We own an excavation company here. And we have probably done half the business that we have done in the past 10 years. And usually at this time of year we have a lot of projects on the books already for next year, and right now there's nothing.

KING: Why is there nothing?

DAVE GARVIN, SMALL BUSINESS OWNER: No money. No -- a lot of this place -- our businesses and a lot of businesses here survive on second homes. A lot of the, you know, people coming here and buying the second homes, building second homes. And there's just -- there's no money. I mean, it isn't coming in. I mean, Dukes is a realtor, I mean... KING: When did that happen? When did you just sort of feel it?

DUKES MURRAY, REALTOR: Beginning of last summer. In Jackson Hole, the average priced house starts at $1 million. So unless you're buying with cash, it's a jumbo loan. And there's just not a market for jumbo loans right now.

KING: And so what is the domino effect of that? Because you know, people will think, well, you go into a town, it's a resort town, it's million dollar homes. And you've got a lot of maybe everyday Americans who are struggling, maybe they work for a carmaker, maybe they work (INAUDIBLE) manufacturing (INAUDIBLE) too bad, they're rich people anyway.

K. GARVIN: Our daughter dates an architect who was laid off who now works at the grocery store at the bakery because, you know, he has got to survive. You know, so, that's the domino -- that's what I see as the domino effect.

KING: So the president spent most of his first year saying this was mission number one, trying to find ways to help people. Good job, bad job, indifferent job?

MURRAY: Jury is still out. I think only 20 percent of the money they say, has been spent.

D. GARVIN: I don't see it. I haven't seen it. I hope it gets better, but I don't see it so far. I don't. I'm with Dukes, the jury is still out.

KING: Let me just have a show of hands so I have some perspective in the sense of if you supported Obama in the election, hands up. So nobody. OK. So we're in a conservative state. That's not surprising.

D. GARVIN: We want him to be successful.

KING: Both of your senators have been very critical of the health care plan. The White House and Democrats and Congress health care plan. A couple of times they have tried to be in the room negotiating, but then they say, no, we're not going to get anything from these (INAUDIBLE). Is that all right with you guys? Block it or should they try to do something?

D. GARVIN: I think they should try to do something.

MURRAY: Yes, I'm not sure 1,000- or 2,000-page document is what we need, I don't think any of us really know what's in there, that's what is the mystery. You know, is this really going to help or do we need baby steps?

KING: How do you do it at a family business? Do you guys insure yourselves?

K. GARVIN: Yes, we insure ourselves and we carry health insurance for our employees, also. KING: And how is that in terms of the costs over the last few years?

K. GARVIN: Huge. It's hard. It's hard to do.

KING: When he's not in Washington, the former vice president hangs out in these parts. Ever see him around here?

MURRAY: Of course we do, yes.

D. GARVIN: Yes.

MURRAY: Cheney's here, I mean, this town attracts a lot of people from all over the world, really, but Dick is liked very much in our area.

KING: But when you see his -- he had a pretty high profile in the first year of Obama, and many people were surprised by that. Came out pretty early on and criticized the security policies and criticized, you know, taxes and spending and government. Did that surprise you when he was done, when the Bush administration was over? Did you just think, he'd just go back to fishing here and doing his business?

MURRAY: I really -- I don't like to see that kind of political bickering back and forth, even though we support him, you know, I don't think it helps our country get out of a tough situation. Like we say, we'd like to see Obama be successful. It would help all of us.

KING: What should he do in his second year? What lesson should he learn from the first to be more effective, in your...

D. GARVIN: Cut spending.

KING: Cut spending.

D. GARVIN: Cut spending. I think we're out of control.

KING: Cut spending? Why does the spending bother you?

K. GARVIN: Well, the deficit is so huge right now. I just don't think it's helping our economy. I don't think it's helping anybody.

(END VIDEOTAPE)

KING: Great meal and great conversation there at Norris Fish Creek Inn. We thank everybody there and everybody all across the country who made some time for us and shared some pretty good meals with us.