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STATE OF THE UNION WITH JOHN KING

Sound of Sunday

Aired January 31, 2010 - 11:00   ET

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


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

(BEGIN VIDEOTAPE)

KING (voice-over): It's 11 a.m. Eastern. Time for "State of the Union's Sound of Sunday." Fourteen government officials, politicians and analysts have had their say, the White House press secretary and the president's top political adviser, Republican leaders in the House and Senate as well as the new GOP senator from Massachusetts. We've watched the Sunday shows so you don't have to. We'll break it all down with our exclusive Sunday duo, James Carville and Mary Matalin and the best political team on television. "State of the Union Sound of Sunday" for January 31st.

(END VIDEO CLIP)

KING: The White House is scrambling this Sunday to find a new plan to bring 9/11 terror suspects to trial. As the administration looks for venues other than New York City, White House Press Secretary Robert Gibbs won't flatly guarantee those trials will ultimately be in federal court. Yet he makes a bold prediction.

(BEGIN VIDEO CLIP)

GIBBS: Let me tell you what plan A is for Khalid Sheikh Mohammed. Khalid Sheikh Mohammed is going to meet justice and he's going to meet his maker.

KING: In a federal courtroom or in a military condition?

GIBBS: He will be brought to justice and he's likely to be executed for the heinous crimes that he committed in killing and masterminding the killing of 3,000 Americans. That you can be sure of.

(END VIDEO CLIP)

KING: The Senate's top Republican predicts that if the White House insists on holding those trials in federal court, a good number of Democrats will join Republicans and deny the administration funding for the trials.

(BEGIN VIDEO CLIP)

MCCONNELL: It ought to be tried in these military commissions. They also ought to be detained at Guantanamo. I think, John, any community in America is going to object in the same way that New York finally did to these people being put on trial in the United States in civilian court.

(END VIDEO CLIP)

KING: The come from behind winner in the race for Ted Kennedy's old Senate seat describes himself as a big tent Republican who favors abortion rights and Scott Brown guarantees when he gets to Washington, there will be less back-room deal making.

(BEGIN VIDEO CLIP)

SENATOR-ELECT SCOTT BROWN (R), MASSACHUSETTS: What it means is that now there will be full and fair debate and there will be no more behind-closed-doors meetings. Make no mistake, I am a fiscal conservative. And when it comes to issues affecting people's pockets and pocketbooks and wallets, I'll be with the Republicans if they are in fact pushing those initiatives.

(END VIDEO CLIP)

KING: And starting next week, a new voice in the Sunday conversation and in the "State of the Union" anchor chair.

(BEGIN VIDEO CLIP)

CROWLEY: We're not here for our own sort of internal inside-the- Beltway conversation. It's supposed to be relevant. And I think that people do tune in. You're right. It's like not just an honor. It's sort of a heavy responsibility because you've got to -- people have minimal amounts of time. You and I know that. And so to get them to devote an hour, we hope we can by saying here is why we care, here is where this is headed, here is how it relates to your life.

(END VIDEO CLIP)

KING: Congratulations to Candy Crowley. And this is the last time I get to say this. As you can see, we've been watching all the other Sunday shows so maybe you don't have to.

Joining me now in Washington where you can find them only together right here on "State of the Union" Democratic strategist and CNN political contributor James Carville, Saints fan, and Republican strategist and CNN political contributor, also a Saints fan, they share that, Mary Matalin.

MARY MATALIN, CNN POLITICAL CONTRIBUTOR: You bet. Congratulations on your great year, all 50 states.

KING: Thank you. Thank you for being part of a great year here on "State of the Union."

MATALIN: A good meal in every state.

KING: A good meal in every state. A couple of good meals in every state, actually. Don't tell the bean counters though. Let's start with a very serious subject. At the very top there, you're hearing Robert Gibbs was on the program earlier. As both of you know, a huge dust-up over whether to take Khalid Sheikh Mohammed, other 9/11 suspects from Guantanamo Bay, bring them to trial in a federal courthouse in the United States.

After initially saying yes, New York City says no thank you. It will cost too much money. It will strain our police department. So the administration is looking for somewhere else. Do you believe, James Carville, the administration will stand its ground and find a federal courthouse somewhere else in America? Or will there be backtracking and perhaps military commissions?

JAMES CARVILLE, CNN POLITICAL CONTRIBUTOR: I hope that they find a federal court to try him because I'm not for trying this person as a soldier. I think he's a criminal and he ought to be tried as a criminal. Interesting thing is, even when Israelis caught Eichmann, you know what they did? They took him back to Tel Aviv, they gave him a trial, a lawyer and they hung him. And he tried to use the defense that he was a soldier. And they said no, you are a criminal.

And if our courts can't protect us from a criminal like this, the how do we go out on the street? You know, when I was a kid, we didn't play criminal, we played soldier. And this man is a criminal. He should be tried, hung as such, publicly. Public justice is what has to happen here. And I hope that they don't back down. This is very important principle at stake here. I congratulate the Bush administration for holding to the same principle, for treating the people that they caught not as soldiers, but as criminals.

KING: As you come in on this point, Mary, the White House would say this is not just the president, not just a Democratic president and a Democratic attorney general, they say Secretary Gates, the holdover from the Bush administration says to try them in a closed setting, a military commission, would be a recruiting tool for al Qaeda. General Petraeus says that and a lot of the intelligence officers on the front lines say don't give al Qaeda a recruiting tool. Do it in public. So Khalid Sheikh Mohammed might say some things. So what? Let him do it in a public courthouse so that if he's convicted, you can say to the entire world, open and transparent.

MATALIN: Well, that's a pretty big "so what" because what he could say, and would have access to as being accrued all the rights of a United States citizen is any potentially defensive evidence so he could open up and fight for and get and reveal all the classified information that is -- goes to the policies that have protected us for these many years since the Bush administration put them in place.

So that's a pretty big "so what" versus the recruiting tool argument. That's the same as saying -- the logic of that is that, if we just give them their day in court, they'll go away, or if we just close Gitmo, they'll go away. Or if we just elect Barack Obama, they'll go away. They were loathing us, fighting us and trying to wipe us out way before any of these things existed.

So it's not going to happen. They are not criminals. They are not soldiers. They are barbarians, they dress up as women, they kill children in front of their parents and they should be brought to justice, but in a way that doesn't increase insecurity to the United States citizens.

KING: As you come in, hold on one second, as you come in, there's a huge policy debate here and you see it play out between you two. There's also the political equation that the president needs money to fund any plan he would have to bring them from Gitmo to trial in the United States. And it's not just the Republicans increasingly James who are saying, no, I want you to listen to Evan Bayh, Democratic senator of Indiana, on this very question.

(BEGIN VIDEO CLIP)

SEN. EVAN BAYH (D), INDIANA: Is there some way to try them without spending the money? Why spend the money? We've got a lot of other fiscal problems.

(END VIDEO CLIP)

CARVILLE: Because the money that we spend is going to make a statement to people, that these are criminals and that our courts are perfectly able to protect us. When I lose faith that our federal courts and our federal prosecutors can't protect us from somebody like this, how are you going to walk out on the street? How are you going to sign a contract? How are you going to trust anything?

The amount of money we spend for that in return for the fact of not letting these people be soldiers. And you're right, I've got to assume that Secretary Gates, General Petraeus, happened to know a little bit something about terrorism and recruiting. When justice is public, it makes a very large point. And that's the real -- that's the really, really important thing here that we shouldn't miss as a nation.

When people go to law school and they go and they look at courts, you have to say that's what keeps us -- that's the rule of law in this country, that we trust our courts to be able to pursue these things.

MATALIN: But they don't believe in our form of justice. They're not impressed with our form of justice. When they don't like something their women do, they stone them to death. They don't educate their children. They do not believe in our form of justice. So they're not going to be impressed by our giving it to them. They laugh at us. They scoff at us. They lawyer up.

You know, the reason they're not going to fund this and there aren't going to be any -- has to do with the mirandizing. We used to laugh, we used to make fun of liberals, progressives and say the next thing you know they'll be mirandizing terrorists. After 50 minutes of interrogation during which he was drugged for his injuries, they mirandized, not a soldier, not a criminal, a terrorist who comes from the epicenter of where the new threat is emerging in Yemen.

CARVILLE: I have to say this because just to point out, this is exactly the way that the Bush people treated these people, of which, of course, no Republican said anything. But I'm going to go to a larger point --

MATALIN: Not true.

CARVILLE: -- to say that the Israelis had it right in that we have to -- our courts are perfectly capable of dealing with convicted and hanging this guy.

KING: Let's change subjects to a remarkable moment that played out on Friday in Baltimore. I was in the back of the room when the president of the United States, a Democrat goes up. It was like the British parliament taking questions from his fiercest opposition critics here in the United States, the House Republicans. The president is going back and forth and back and forth and back and forth. And one of the exchange was from Jeb Hensarling, who is a conservative Republican from Texas, outspoken on matters of spending and deficit and debt and he had a question for the president.

(BEGIN VIDEO CLIP)

REP. JEB HENSARLING (R), TEXAS: Will that new budget triple the national debt and continue to take us down the path of increasing the cost of government to almost 25 percent of our economy? That's the question, Mr. President.

OBAMA: Jeb, with all due respect, I've just got to take this last question as an example of how it's very hard to have the kind of bipartisan work that we're going to do because the whole question was structured as a talking point for running a campaign.

(END VIDEO CLIP)

KING: If you need any proof these guys don't talk to each other enough, it's Jeb Hensarling, and the president twice called him Jim.

MATALIN: Right, right.

KING: But that's just -- it's an honest mistake on the president's part.

Did anything come of this, in your sense? Is this a -- this a step in the right direction? Should we do this once or twice a year or was it just theater?

MATALIN: Well, that will never be repeated. That's not to be replicated. His State of the Union was a tour de farce, OK, which I'm not -- they're just not -- it just was terrible. But this was fabulous. This was the best political theater I've ever seen. He -- to go into the lion's den, and he roared and he was great.

The substance was spurious, of course. But he -- all the advantages were to him, and he played to his strong suit and his sweet spot, and he was great.

But he also jiu-jitsued his midterm election plans because he accepted and embraced Republican ideas, which rejected his campaign tactic, which was going to be the party of no and the party of old ideas. And he put on record everything with which he agrees.

So we have a place to go forward from. We -- there are things with which he agrees, we could get done before the midterm elections. So, as wonderful as it was for a short-term advantage to the president, it will be a -- a midterm advantage to Republicans and a long-term advantage to the country.

KING: Should we do this all the time? It was like question time in parliament, the president or the prime minister going in there and taking it on with his critics.

CARVILLE: I'm all for it. I mean, it was great.

(LAUGHTER)

You know, I think people -- people, kind of, like that. I think he had a good response. I wish they'd have just pointed out that, of the deficit, 84 percent were attributable to Bush policies and 16 are attributable to Obama's policies.

MATALIN: Spurious.

(CROSSTALK)

CARVILLE: It's not spurious. That's just an actual fact, according to CBO.

MATALIN: No.

CARVILLE: But -- and I think that's an important thing that he point out exactly where the blame lies for the fiscal mess that we're in. We can't get out of it until we understand that.

But I did think that he did a -- I think it was the best week he's had in a long, long time. I thought he did a -- a good job at the State of the Union. I thought he did a great job in Baltimore. And, you know, we had a good economic -- now, he's got to put two or three of them together, here.

KING: Let me ask you a question before we go to break. There are a lot of Democrats in this town who are beginning to look at the midterm election climate, and they assume they'll lose seats, and the question is how many.

Let me ask you, James Carville, your friend, Bill Clinton, was president for eight years. Many said he was a better president once he had to talk to the Republicans all the time after the 1994 elections.

Would Barack Obama be a better president if the Republicans gain a significant amount of seats in November?

CARVILLE: You know, that's like saying you're in better health if you have a heart attack first.

(LAUGHTER) Does anybody really want to have a heart attack to prove it? I don't think so. I know of anybody.

(LAUGHTER)

They'd say, God, well, you know what, he had that heart attack; it scared the hell out of him and now he's doing a lot better. I don't think that anybody, you know, would want to go through that.

You know, one thing about politics is the voters are in charge and people adjust. And what you saw, I think -- to use an analogy, what you saw is the president adjusting to what was a significant defeat for the Democrats in Massachusetts. And maybe we won't lose as many as people think now. Let's wait and see.

KING: Let's wait and say. Let's take a quick break. Much more to discuss with James and Mary. We'll be right back.

(COMMERCIAL BREAK)

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

In the president's State of the Union address this past week -- Mary didn't like the substance of it -- one other thing the president was trying to do is reset the agenda. He said jobs would come first. He said health care would still be a priority.

One of the bigger messages was he said, in year two, he was going to try to be better and he hoped the town would be better at working together.

Let's listen to the president.

(BEGIN VIDEO CLIP)

OBAMA: But what frustrates the American people is a Washington where every day is Election Day. We can't wage a perpetual campaign, where the only goal is to see who can get the most embarrassing headlines about the other side, a belief that, if you lose, I win.

(END VIDEO CLIP)

KING: That is exactly 10:00 p.m. in the East, the president of the United States telling a joint session of Congress, we cannot wage a perpetual campaign, 10 p.m. Eastern.

At 12:32 a.m., two hours and 32 minutes later, this e-mail from a guy named Barack Obama. "So tonight, I'm asking you to join me in the work ahead. I need your voice. I need your passion and I need your support. Can you help fuel our fight for the middle class with a monthly donation of $15 or more? We've just finished a year. We've come through a difficult decade. But a new year has come. A new decade stretches before us. We don't quit. I don't quit. Let's seize this moment to start anew, to carry the dream forward," so on and so forth. James Carville, I know interest is high on a big night like that. The Republicans were trying to raise money, too, on State of the Union night; it's not just the Democrats.

But if you're the president and you're saying you're going to finally make Washington different, do you wait a day, 24 hours, before you send out a fund-raising e-mail?

CARVILLE: Look, the day that you're going to take politics out of Washington is when you're going to take water out of the Potomac. All right? It's just...

(LAUGHTER)

It's not going to happen. And you can give all the speeches you want; you can talk about this, and we're going to transcend this -- and when he says that, honestly, it just goes in one ear and out the other. I mean, I -- I just discount that kind of thing so naturally, I don't even remember it. KING: And what about people -- when I travel the country, this is the thing that drives them crazy -- and not just him. Again, it's not -- it's not the president; it's not the Democrats. It's all of them, that they say one thing and then, within minutes, do the other.

CARVILLE: Again, the better answer, I think -- and I agree, he's no worse than anybody else. And we could all go find a thousand quotes by a thousand people, each from both parties, is -- is the reality of this place is that the lobbyists are a very powerful force and politics is around the clock; I'm going to confront that -- I'm going to deal with it; I'm going to deal with the system, as it exists.

He is not going to change the system. He's a great speaker. He can have a great night. He says that; it is just pap. It's meaningless.

KING: Well, Mary, if you can't change the system; if you accept that, that you can't change the system, and that campaigns are perpetual, and even after you say, let's not have one, within a few minutes, you're trying to raise money off -- I mean, what -- will the polarization -- can it ever end?

MATALIN: Well, we should be -- all of us should be more articulate and thoughtful about what it is we're objecting to.

Why would we -- bipartisanship is so overrated. We were talking about this on the set the other night. I'm Atilla the Hun; you're a collectivist, and it was ever thus. That's how the country -- but that's good; that competition of ideas is good.

What people really want is more accountability. They don't want you to say one thing and then do nothing. That's different from being political. That's being accountable. They want transparency.

He said sunshine is the best disinfectant. We can deliver that without jiggling with all this other -- really, we're not scratching the itch.

MATALIN: But politics is a good thing. It's what forged the steel that is the backbone of this country. And we can do it. And they want civility. They don't want to be called -- they personally, voters don't want to be called Nazis or evil mongers or liars or racists or any of the other names hurled at them for opposing ideas.

So if we're more civil, more accountable, more transparent, we can have great fights. There is nothing wrong with having a good fight.

(CROSSTALK)

CARVILLE: Well, and there is nothing wrong with -- now by the way, there's a lot of bipartisan things that get done under the name of politics. Let's not forget that. The point is, is that it is utterly -- and I think people, when people say it, they probably mean it. No one has ever taken the politics out of Washington. No one has ever taken interest groups out.

From time to time people have confronted and defeated it or risen above it. But it just is something that it drives me crazy. It always has and it always will.

KING: One of the things that has changed in the last five years or so is that five years ago you would not ask a little-known state senator who had just been elected to the United States Senate if they were thinking about running for president. But it happened when a guy named Barack Obama came from Illinois to town. And it's happening again now that a little-known state senator, Scott Brown, in the state of Massachusetts, is about to come as a Republican and take Ted Kennedy's seat.

So Barbara Walters sat down with Scott Brown this weekend and she asked him if he'll run for president in 2012?

(BEGIN VIDEO CLIP)

SENATOR-ELECT SCOTT BROWN (R), MASSACHUSETTS: I don't have a business card. I haven't even been sworn in. I don't have any exploratory committees started. I don't have anything -- it's overwhelming and it's extremely humbling. I don't know what else to tell you.

(END VIDEO CLIP)

KING: I don't know what else to tell you. He could have said no.

(LAUGHTER)

MATALIN: Well, he hasn't done the (INAUDIBLE) fake thing down yet. But I will tell you what, he is more powerful than this president right now in setting the agenda for this midterm. And the new agenda, thanks to the epic defeat of the Democrats at the hand of Scott Brown, is taxes. He started out with the Jack Kennedy tax cut spot. Terrorism, he ran on funding -- taxpayer-funded defense of terrorists as opposed to defeating terrorists. And health care is off. And taxes and deficits and terrorism are back on. He set the agenda for the midterms. That's a pretty auspicious beginning for a young senator.

KING: He has -- before you jump in, James, he is the hero of the Republican Party at the moment. But the question, and I'll go to the Democrat first, maybe this isn't quite fair, is, do you believe that national Republicans will still be so in love with Scott Brown when they learn more about his positions on issues like abortion and same- sex marriage?

(BEGIN VIDEO CLIP)

BROWN: I feel this issue is best handled between a woman and her doctor and her family. And on the marriage issue that you brought up, it's settled here in Massachusetts. I believe that states should have the ability to determine their own destiny and that the government should not be interfering with individual state's rights on issues that they deal with on a daily basis.

(END VIDEO CLIP)

KING: So he favors a woman's right to an abortion, although he does favor parental notification and consent in the case of minors. And he believes if a state legislature or the people in referendum in a state pass a referendum, pass a law saying you can have same-sex marriage, that's OK with him. He doesn't want the courts to set that policy.

CARVILLE: Right. He is not going to run for president and he's not going to be the Republican nominee for president. He's a pretty smart guy. He figured that out. I also think he did another smart thing, he didn't come down for the State of the Union. He is just waiting until he got sworn in and he just stayed and he watched it in Massachusetts.

Seems like he might be an effective Republican senator. I don't know that yet. The one thing I know is he's not now or not ever going to be the Republican nominee for president. That we know. But we'll where it goes from there.

MATALIN: You know, the Republican Party is and will always be a pro-life party. He's also in his line-up on the life issues against partial birth. But the -- also the Republican Party is -- states, local government, government representation close to the people. KING: That's the Dick Cheney position on same-sex marriage.

MATALIN: That we are -- like let the states decide on this, and that's very mainstream Republican. But the party is always going to be pro-life. And whether or not he -- you never say never. But I don't think he's running. Everybody says that knows him that worked with him, Ron Kaufman (ph), all those guys, he's the real deal, and he'll be a great senator.

CARVILLE: I can't promise you that he won't run. But I can promise you he won't win.

KING: So we do this on Sundays. I have been blessed to have you two be part of this experiment. And every now and then we ask our audience what they think because they don't know what to make sometimes of this political marriage.

You two, you get along great. You agree on some things, you disagree on a whole lot of policy things. Here is a question, we had text message sent in asking James Carville, will you ever run for office?

CARVILLE: No, and for a simple reason. My two children -- I have two children, I've got a 14-year-old and soon to be a 12-year- old.

MATALIN: We have two children, they belong to both of us.

CARVILLE: We have two. And -- no, we are delighted. We're having a good time in New Orleans. We have a very exciting mayor's race down there which of course we're involved in. And we love politics. But I've never really aspired to run for office. And I think that there are some things about my past that don't need to be drug up in a 30-second commercial. We'll leave it at that.

MATALIN: You don't have to tell your kids everything. I'm one of the don't ask don't tell with our kids.

KING: If Mr. Carville ever came home and said, I'm thinking about this, Mary, what would happen?

MATALIN: I don't know. I feel that's like a question for Olivia Manning today. Colts or Saints?

CARVILLE: Well, she's for the Colts...

(CROSSTALK)

MATALIN: Well, I know, but it's...

CARVILLE: But Archie and Eli would play -- by the way, both graduates of Newman (ph) High School (INAUDIBLE) Emerson Norman Carville (ph) is in the seventh grade. You know, the only time I ever really thought of something is -- and I couldn't because of the residency requirement, but mildly entertained the idea of running for mayor of New Orleans at one time, but we've got a terrific candidate...

(CROSSTALK)

MATALIN: Would have supported him there. But we're both supporting the same candidate, Mitch Landrieu, so we're -- but only for that office, nothing else.

KING: I mean it when I say it, you two have made this show and this hour a whole lot better. I'm grateful for it. And I wish you a great Super Bowl week. And off we go. MATALIN: Who dat? Who dat? We're following you around, John.

CARVILLE: Who dat? Who dat? Who dat? Who dat? Who dat?

MATALIN: We'll be with you, John, whatever you do.

(CROSSTALK)

CARVILLE: ... thank you...

(CROSSTALK)

KING: James and Mary, thank you much. When we come back, we bring our reporters in and we keep talking about the issues and the "Sound of Sunday." 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.

Ten Americans face child trafficking charges in Haiti. The accused say they were trying to get 33 kids to temporary shelter in the Dominican Republic. Haitian authorities though say the American charity workers lacked the proper paperwork.

A grisly discovery in Mexico. Police say at least seven bullet- riddled bodies were found scattered throughout northern Juarez, an infamous battleground for ruthless drug cartels.

KING: Officials say it's unclear if the victims were in a drug war between cartels and the Mexican military or if the criminals were trying to exploit chaos there.

Vice President Joe Biden says a new report on stimulus spending shows nearly 600,000 jobs were funded in the last quarter. The figure represents just a fraction of the stimulus spending. Critics disagree but Biden says this spending indicates -- the new numbers indicate the recovery package is on track now to save or create 3.5 million jobs by the end of this year. Those are the top stories here on "State of the Union." Up next, we'll bring in the best political team on television, including our new anchor on "State of the Union" to break down more "Sound of Sunday."

(COMMERCIAL BREAK)

KING: Joining me now in Washington, CNN senior White House correspondent Ed Henry, Amy Walter, editor-in-chief of "The Hotline" and senior political correspondent Candy Crowley who next week gets the 4:00 a.m. wake-up call. She gets the new anchor of this program, "State of the Union." I'm going to keep rubbing that in. I'll call you next week. I probably won't. I'll be sleeping.

CROWLEY: I'll call you.

KING: A crackling debate about what should be done with these terror suspects held now at Guantanamo Bay. The 9/11 suspects led by Khalid Sheikh Mohammed, the president wants to put them on trial in a federal courthouse in New York. The mayor initially said yes, now he says no. So they're trying to find a new venue. One of the key question is, if the administration holds to its plan and finds somewhere in the United States to bring them into a federal courthouse, Congress would have to fund it. Mitch McConnell, the Senate Republican leader was here earlier. He said if that question comes up, he will do everything he can to block the funding.

(BEGIN VIDEO CLIP)

MCCONNELL: Yes, absolutely. I think that will be done on a bipartisan basis. The sooner the administration figures out that whatever domestic support they had for this is totally collapsing.

(END VIDEO CLIP)

KING: Ed, what do they do? When I was trying to ask Robert Gibbs, he did not flatly commit that there would actually be federal trials. He said they would move forward and that was their preference. But when I said, can you guarantee it? He didn't directly answer.

ED HENRY, CNN SR. WHITE HOUSE CORRESPONDENT: So much for that kumbaya the other day at the House Republican Conference. I thought everyone was getting along.

AMY WALTER, EDITOR-IN-CHIEF, THE HOTLINE: Senator McConnell was not there.

HENRY: He was not there technically so I guess he has a pass. I mean the bottom line is that everybody in both parties is a classic example of Washington being broken knows that something needs to be done here.

The terrorists have been sitting in detention. Even Republicans like John McCain, it's not just Democrats saying something needs to be done, we have to close Gitmo, et cetera. And nobody really wants to come together and meet each other halfway. The administration has certainly made some mistakes in sort of bowling forward without really checking in with the locals in New York for example to really make sure this would fly in Manhattan. They didn't do a lot of that groundwork, it appears. But frankly, I don't think they have a solution. And it seems unlikely they're going to do it in Manhattan. And they may have to push this back to a military base because Guantanamo doesn't really seem to be the solution.

CROWLEY: They left their options open in this sense. Obviously President Obama as a campaigner was very critical of George Bush and saying we can try these terror suspects and show everyone what the U.S. judicial system, we can do it in civilian courts. However, he himself, President Obama has taken some of those suspects and said they will be tried in military court. So that option remains open. And if I were a betting person at this point, I think that probably looks like their safest route. KING: And in an even-numbered year, Amy Walter, you have even Democrats, especially after Massachusetts, Scott Brown used this very effectively in his race up there, the Republican candidate. You have a whole lot of Democrats saying we'd love to be with you, Mr. President, but...

WALTER: Remember, who represents New York, Charles Schumer and Kirsten Gillibrand are the two senators who have also, while not being as outspoken certainly as Senator McConnell, were asking for the president to back off.

So this is not just a Republican-Democrat thing. The reality is when Democrats get nervous is when Republicans start pulling out the terrorism issue. They start to retreat. They reflectively say this is an issue where we've been put on the defensive. We don't have the authority in the same way that voters see Republicans. And so they don't want to get into a debate on this. Certainly when they have health care, jobs, economy and re-election.

KING: Let's come in on the jobs debate there. Ed Henry was talking about why can't they find a way to meet halfway or at least work this out on terrorism. Ed, will it be an issue? Can they do that on the jobs bill? I asked Robert Gibbs earlier today what would be in the bill. He said it would be about $100 billion mostly in tax cuts and tax credits.

(BEGIN VIDEO CLIP)

GIBBS: We're not creating the jobs that we'd like to and I think that some additional recovery and stimulus spending is important in order to, again, create an environment where small businesses and large alike can hire more workers.

(END VIDEO CLIP)

HENRY: What's interesting is that in the last few days, some senior White House aides have been saying since that Scott Brown's election they've been getting calls from rank-and-file Republican senators saying look, we get that he campaigned as 41, the 41st vote in the Senate, and there's no longer that Democratic supermajority. And these rank-and-file Republicans are signaling, at least privately, the White House says, that they're not always going to be with Mitch McConnell on every single thing like they have been, sort of block of what no one thinks. They are ready to meet the White House halfway on some things. And what White House people are saying behind the scenes is the jobs bill will be the first test because the president has already said for example that he's willing to put some tax cuts that are favorable to Republicans on the table in this jobs bill. Are they going to try to meet him halfway? This is the first test.

WALTER: And well I think -- it's a very interesting strategy, right? This is what the White House has been setting up now for a few weeks, we are not going to let this election, this midterm election be a referendum on Democrats. It's going to be a choice election, which is a nice theory. But in reality, Democrats run everything and voters know that. The voters in Massachusetts were not electing Scott Brown to come and bring a Republican agenda to Congress. You're exactly right. They brought him as a check and balance.

And I think it is in some ways, you're right, it's dangerous for Republicans to vote against something that looks politically popular. But in the end, these Independent voters, they're not some strange group of people that who are they, where did they come from? They want the same things that most people do, which is they want to see results. And fundamentally, if Democrats can't show results, they don't care if it was parliamentary back dealing or whatever it was, why they didn't get it done. They just see that nothing got done and they're going to blame Democrats, not Republicans.

KING: If they blame Democrats because they're in charge right now on the question of jobs, the issue is whether the health care bill -- about five weeks ago, David Axelrod was here and he said, we're deep in the red zone, used a football metaphor, right down there ready to score a touch down. Of course at least you might say a fumble since then.

KING: But I asked Robert Gibbs. I said where is it now?

(BEGIN VIDEO CLIP)

GIBBS: We're still inside the five-yard line.

KING: You really believe that?

GIBBS: Absolutely. We're one vote away in the House of Representatives from making health care a reality.

(END VIDEO CLIP)

KING: Now I got an e-mail from a Republican right after that debate, saying he means the other five-yard line. Do you see any reasonable path for health care reform to be revived before the election?

CROWLEY: For the very reason that Amy just articulated, and that is, I cannot fathom a scenario under which the Democratically- controlled House and the third of the Democratically-controlled Senate can go to the polls in November going, "Gosh, we didn't get health care, I'm sorry. I know we're in charge, but we didn't get it." It's just disastrous. They're going to have to find something. They will then say, "Well, it isn't everything we wanted, but it will improve this."

I think you saw the president starting to go there in his State of the Union. I think yes, they will get something -- the definition of something.

HENRY: They could be inside the five, but it's fourth and goal, no time-outs, and ...

CROWLEY: Five minutes takes five weeks.

HENRY: The bottom line is, you're right, there is no easy path to actually get this in. And so I think that they do have to bring the voters something. But I was stunned by the fact it took about a half hour into the State of the Union before the president brought up health care. That was your surest sign that this is going nowhere in the short term. What they hope inside the White House, and I stress hope, is that after they get a jobs bill signed into law, they think that's going to happen, they'll come back to health care. But there are a lot of Democrats on the Hill saying, let's let this fade for a while. KING: A quick break here. When we come back, we'll talk more with Ed, Amy and Candy about the midterm election climate. You can catch Ed later doing Pro Bowl analysis on CNN Radio somewhere. Stay with us.

(COMMERCIAL BREAK)

KING: We're back with Ed Henry, Amy Walter and Candy Crowley. So we're in a midterm election year. I went to Michigan right after the State of the Union address. The Democratic governor there is term- limited, Jennifer Granholm. She's had a tough eight years. Her state for 43 months now has led the nation in unemployment. So I asked her this political question.

(BEGIN VIDEO CLIP)

KING: You're finishing up your term. But would you want to be a democrat on the ballot this year?

GRANHOLM: No, no. Personally, no, I am glad I am not on the ballot at all.

(END VIDEO CLIP)

KING: No, calling it like you see it. What can you do? Is there anything they can do? Unemployment is 10 percent. Forget what's happening in Washington. People don't like the poisoned partisanship of Washington, but when you have 10 percent unemployment, 15 percent in her state, 12 percent in other states, the value of people's homes has dropped 50, sometimes 75, sometimes maybe $100,000. God forbid in some cases even more. Is there anything you can do to change that undertone in the political environment?

CROWLEY: You can bring the jobless rate down. I think it will go a long way to mitigate what will surely be losses for the Democrats, if the jobless rate gets out of the nine, 10-point range, even better if it got out of the 8-point range. It doesn't look like it's going to do that. But, you know, economists, we can't always guarantee what it's going to look like.

I think the other thing they can take heart in, Democrats, is that when you ask people who are you maddest at, they equally pick Republicans. So it's anti-incumbent which naturally makes Democrats the larger target because there's more of them, but I think they can take some comfort that Republicans, this is not oh, wow, wow, we need Republicans. HENRY: Governor Granholm, her next sentence was that it's more anti-incumbent. She was honest about the fact that I wouldn't want to be a Democrat on the ballot, but acknowledged that I wouldn't want to be a Republican on the ballot either. And so that is out there.

And I think that sort of underreported a little bit this week is that Vice President Biden was with some Democrats and basically said that by the spring, we're going to start having positive job growth each month starting in the spring because of the stimulus. It's only a few months away. And there's going to be a check on that. Is that true or not? And as you say, bringing unemployment down would go a big step toward staving off Democratic losses.

KING: Let's tell Amy, when you look at the list of 100 targeted House races and the 20 top Senate races, how much does this simple fact factor in? If you ask people right now, are things going badly in the country? Sixty-seven percent of Americans say yes, things are going bad in the country. Now I guess the silver lining is in February, it was 79 percent. So only two-thirds of Americans now instead of more than three fourths. But in that political environment, you do not want to be the guys in charge.

WALTER: Absolutely not. And what we're seeing and Scott Brown is a perfect example of this, are insiders are running as outsiders. Scott Brown did not come up -- he's not some sort of organic come from the Tea Party movement. He was a state senator.

CROWLEY: He had a pickup truck.

WALTER: He did have a pickup truck. That is true. I think many other state senators should buy them. That's what everybody, buy pickup trucks. But it is about how you're positioning yourself in this environment to take advantage of that.

What we're seeing even from some incumbents is, yeah, I'm with you, I'm angry too, and that's why I've been working to do X, Y and Z. Now pointing fingers isn't going to work because I think fundamentally, yes, voters want to see some real results. But if you can show as a governor or as an incumbent member of Congress, I've done real things to make a real difference if your life and you focus on that as opposed to trying to focus on the, well, we brought unemployment down 2 percent.

KING: To that very point, Ed, this may not be fair, I'm going to walk over to the magic wall, but in my travels when you ask people about this, people are unemployed or people who are struggling, they say these guys don't get me. They don't just mean the president and his team. But they are in charge of the moment. They don't get me and they don't understand my struggles.

I want to do something over here and again, I said this might not be fair, I'm not criticizing any of these public servants. But these are the members of the middle class task force, the vice president is the chairman. So we want to take a look. Do they get the struggles of working class Americans? Now the vice president is certainly not a wealthy man. He's been in public service all his life. Ray LaHood, the Transportation Secretary, also was in the House for a long time, not a wealthy man.

But if you walk through -- again, I'm not saying they're wealthy, but Garry Locke is a former governor, Peter Orzsag, Christina Romer, an economist, a former governor, if you look at Larry Summers especially, net worth between $7.5 million to $29.4 million -- all public servants, all committed to the cause. I'm not trying to take issue with any one of them. But when you travel, people say they don't get me, the middle class. They get Wall Street more than they get Main Street. Are they sensitive to that at the White House?

HENRY: Absolutely they are. Look at an example like Ted Kennedy, Scott Brown now taking his seat, wealthier than any out there, I believe and got it sort of in his bones as a public servant that you had to connect with the middle class and did it again and again, even when he was in trouble in many, many election cycles. And so I think when you go back to the Massachusetts race when you're talking about Scott Brown running as an outsider, Martha Coakley now sort of a footnote, but she ran as an incumbent basically.

WALTER: She could have run as an outsider because she's not part of Washington.

HENRY: She's not part of the Washington insider group, so there were lessons there that I think a lot of candidates in both parties are going to have to take.

CROWLEY: I think Ed is exactly right. Bobby Kennedy, Jack Kennedy, there are people along who have been quite wealthy who totally became champions of the underclass or the middle class. So it's not your bank account, it's your mindset.

CROWLEY: And I think people are feeling that they really haven't lived a life that has struggled.

And it isn't, it may not be true in some of these cases, but it hasn't come across. It struck me that the president has shown up with Joe Biden a lot lately, and I wondered if that wasn't some of the, you know, good old Joe, common guy...

(CROSSTALK)

CROWLEY: ... the kid from Scranton, yes.

HENRY: And if you listen to what the president is doing, the president came from humble roots, not a rich man. He's wealthier now because of the books he's sold, et cetera, in recent years.

But look at the kinds of settings he's getting into now, just in the last few days, with Joe Biden, who's got those middle-class credentials, but also, the president takes off the jacket, loosens the tie, wants to talk to real folks.

People inside the White House say you're going to see a lot of that between now and November.

WALTER: But I think the real issue is that -- the priorities that politicians are putting on the issues. And that's what voters, I think, get more than anything. And that's where the health care debate has been so problematic. Because they said, we sent you guys to Washington to fix the economy; I don't know how health care fits into that; it doesn't make sense; and you've spent all these months wrangling with each other, cutting backroom deals and not dealing with the issues that we know are the most important.

The other danger point for politicians is when they try to latch on to one of these things -- I'm going to be the middle-class warrior. How many of those people fall flat on their faces?

You know there are going to be these guys who get a pickup truck and drive it, and it turns into a disaster because they don't look...

(CROSSTALK)

HENRY: ... ironic is that, after the last few months of spending it on health care, to try to reach out to that middle-class voter.

WALTER: That's right. HENRY: Instead, the president, sort of, got attached, people inside the White House now acknowledge, to the sausage-making in Washington. He's got to separate himself from that real fast.

KING: The perfect segue to where we go next. Ed Henry, Amy Walter, Candy Crowley, thank you so much.

Up next, we take our conversation out to middle-class Americans, the Fleetwood Diner in Lansing, Michigan. We ask them about the most pressing issues facing Americans. And guess what their answer is? Jobs.

(COMMERCIAL BREAK)

KING: When we hit the road the morning after the president's State of the Union address, we decided to go to Michigan for a reason. For 43 months, it has led the nation in unemployment.

Look at these numbers: over 700,000 people now unemployed in the state of Michigan. Unemployment has been over 10 percent since December, 2008.

When we first started State of the Union, one of our early stops was the Fleetwood Diner in Lansing, Michigan. We had a great meal and a good conversation, so we decided, this week, to go back for more.

(BEGIN VIDEOTAPE)

KING: This state has had the highest unemployment rate in the country for 43 months -- 43 months, going on four years.

The president said in his speech that the economy and jobs, jobs and jobs were going to be the top focus, after the past year spent, largely, with health care, at least just the number one issue they've debated in Washington.

Was it the right time to make that pivot, change the emphasis? Should he have done that from the beginning?

(UNKNOWN): No, I don't hold the president responsible for the unemployment in Michigan. I think that's a Michigan problem and that's a Michigan government problem. And, no, I think health care is a legitimate issue and should be pursued.

(UNKNOWN): I should probably call myself an independent. I'm very cynical and I don't have a lot of hope in what the president is able to accomplish, whether he's a Democrat or a Republican.

(UNKNOWN): Now, I'm an independent, but I have a little more faith that it's just going to take more time. It's not -- there's a lot of real complex issues on the table.

KING: Has this recession -- and Michigan has been in the ditch longer when they started this. How has it affected you personally?

(UNKNOWN): Well, there's a -- in my position, I'm actually disabled now. But I notice that the state's struggling to even meet low-end-income people's medical and -- and physical needs.

(UNKNOWN): I graduated 20 months ago with my master's in social work. I did work in the field for about 90 days, and I make more money here at the diner than I do in the field.

(UNKNOWN): I'm retired from law enforcement and law and, you know, don't take a -- a big vacation this year. You know, we're still able to go out to dinner, do the things, pretty much, we want to do. We scaled down Christmas.

KING: A little more than a year in, when you look at the president now, rate him as a leader.

(UNKNOWN): About a five right now. I -- I think he could be more commanding, but I'm not in his shoes, so it's hard to say. Like I said, he's taken on a lot, and, me, I'd be having headaches left and right. But I'll give him a five, right down the middle, for the time being.

I hope that he's able to get things moving and get people working with him, but I think he needs to be a little more forceful in himself because he has that ability.

(UNKNOWN): I'd give him a six and a half. And I give him that number because, given the pressures that he has, he has been able to keep -- to keep people at bay and, kind of, quell some of the fears.

(UNKNOWN): I'd give him a five, five and a half, working on (inaudible). I think that he's young and he's made some mistakes, and I think that he's working on correcting those. And I still have some hope for that.

KING: In a town that is, in part, defined by the auto industry, do you sense that? Have they turned a corner, and will they come back, or do you think that's still an open question?

(UNKNOWN): I think they better hope Toyota doesn't get back on its feet real fast.

(LAUGHTER)

(UNKNOWN): It's too soon to really see if that is, indeed, the case. I hate being such a cynic, but we do have the highest unemployment rate, and that's a fact, the highest in the nation, and I don't anticipate us getting out of that position for a very long time.

(UNKNOWN): I personally don't think that we'll come back as strong as it used to be. I think they've realized they should have been looking ahead 20 years ago, and I don't think they can recover fully what they had, the dynasties they had then. I think it's going to be more moderate, but I'm hopeful that it will at least be sufficient.

(END VIDEOTAPE)

KING: I hope you notice that healthy Greek salad, but it was the last meal on the State of the Union budget, so I did tried the onion rings as well.