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STATE OF THE UNION WITH CANDY CROWLEY

Interview with David Axelrod; Arizona's Immigration Law; Feinberg Speaks about BP

Aired July 11, 2010 - 09:00   ET

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


CANDY CROWLEY, CNN ANCHOR: The United States of America versus the state of Arizona. A legal showdown over illegal immigration. For or against Arizona's new law, the issue ignites the streets, but it's not an even divide across the country. CNN polling shows 57 percent of Americans support the Arizona law, 37 percent do not. Poll after poll shows Americans back the get-tough legislation and then some.

Do you want your state to pass a similar law? Forty-eight percent of Americans said yes, 35 percent, no. And immigration is just one in a series of issues costing President Obama. A Newsweek poll found a majority of Americans disapprove of his handling of the war in Afghanistan, 53 to 37 percent, and of his handling of the economy, 58 to 38 percent. Has the president hit a rough patch or is he on the wrong path?

(BEGIN VIDEOTAPE)

CROWLEY (voice-over): Today, the president navigates an election year.

BARACK OBAMA, PRESIDENT OF THE UNITED STATES: But I believe if we can put politics aside...

CROWLEY: White House Senior Adviser David Axelrod on politics and policy. Then, the immigration debate with New Mexico Governor Bill Richardson and Arizona Congressman Trent Franks. And on this 83rd day of the Gulf oil disaster, the man in charge of compensating spill victims, Kenneth Feinberg.

I am Candy Crowley, and this is STATE OF THE UNION.

(END VIDEOTAPE)

CROWLEY: He can, as President Obama has assured audiences, chew gum and walk at the same time. This week that multi-tasking nature of the presidency was on display, as Mr. Obama moved from being a president reaching out to work with Republicans, while blasting away as the man who wants to defeat Republicans.

(BEGIN VIDEO CLIP)

OBAMA: Without bipartisan support, as we had just a few years ago, we cannot solve this problem. Reform that brings accountability to our immigration system cannot pass without Republican votes. These folks drove the economy into a ditch! And they want the keys back, and you've got to say the same thing to them that you say to your teenager, you can't have the keys back because you don't know how to drive yet.

(END VIDEO CLIP)

CROWLEY: Here to talk about the realities of this election year, the president's most senior adviser, David Axelrod.

David, thanks for joining us.

DAVID AXELROD, SENIOR WHITE HOUSE ADVISER: Thank you.

CROWLEY: Listen, the president gave this big immigration speech, then he goes out and does this on the road. I've talked to many Democrats who say this just isn't going to happen this year. And the fact is, does that set the environment to call Republican -- to equate Republicans with joy-riding kids that should not get the keys back, and then say, I need your help on immigration.

AXELROD: Well, let's not mix issues here, Candy. I mean, on immigration the reality is that for the last time this debate occurred in the Senate, there were 11 Republicans who joined in, and, of course, President Bush helped to lead the effort. And most of those Republicans are not willing to move forward.

Now when the president said what is obvious, which is if we are going to solve this problem in a comprehensive way, which is what the American people want, I know from your open that you're enraptured by polls, if you look at the polls, you'll see that most Americans want a comprehensive solution to this.

But we are not going to get it done without bipartisan support. That doesn't mean that we can't have a good, healthy debate about the economy and other issues. And certainly that's going to be front and center...

CROWLEY: Sure, but a good, healthy debate is different than...

AXELROD: ... in this election.

CROWLEY: ... kind of insulting people. That's all I'm saying is the atmospherics.

AXELROD: Well, the president was out campaigning, and there will be others who are out campaigning as well. And, believe me, they are not sending him flowers and chocolates when they're out on the road. They're making a good, hard case. We're making a good, hard case because the American people are going to have to choose between two economic theories: the one that got us into this disaster in the first place, and the one that is getting us out.

CROWLEY: What is the president doing to promote an immigration bill this year? After the speech, what did he do? AXELROD: Well, the president spoke before and after with members of Congress, and he met with a bipartisan group last summer, a large bipartisan group, and said, look, we need to solve this problem. We need accountability in the system at the border. We need accountability among employers so they are not violating the law. And we need the accountability on the part of people -- the 11 million who are here illegally. And we can do that, but we have to do it together.

And that is still his position. We have not seen movement. Senator Schumer and Senator Graham came up with a good blueprint. We endorsed that blueprint. But we have not seen much movement since.

But, look, this has been...

CROWLEY: Is he going to put muscle behind it?

AXELROD: This problem has just -- this problem been kicked down the road for a long time. We understand that it's a stubborn problem. It's a hard thing to solve in the midst of a campaign because it lends itself to demagoguery.

CROWLEY: Pretty much impossible then during a campaign, right, would you agree?

AXELROD: Well, when we have the opportunity to move forward and solve this problem, we're going to. I think one of the things about this Arizona law is basically -- and this is something we all agree on, the people of Arizona are saying, hey, we want the federal government to live up to its responsibilities.

And we are calling on those folks on the other side of the aisle, who said in the past that they thought this was an important issue to solve, to join us. And when they are willing, then we will be able to move forward.

CROWLEY: I want to talk to you for a minute about independents. I don't need to tell you that you need independents to win in elections. And we had a poll -- Gallup had a poll recently about independents and where they are going. And what they found, and this is compared to July of 2009, where 56 percent of independents supported the president, now, and as of -- yes, as of now, 38 percent.

That is a huge, huge decline. why? What's the matter here?

AXELROD: Well, I have seen all kinds of sets of numbers, Candy. And without fully embracing those, let me say this...

CROWLEY: Would you embrace that there has been a decline?

AXELROD: Well, look, I think I may have said this to you before, but in December of 2008, when we sat down with our economic advisers, and they told us what the country was in the midst of, and what the next couple of years were likely to hold, I said to the president, look, your numbers are not going to be nearly as good a year from now. We would have had a tough election in any case in 2010. This will make that election a little tougher. So this is not a big surprise. We are going through a very difficult time in this country. Now, you know, it's not the same as we were in the 18 months ago, in the six months leading up to the president's inauguration. The last six months of 2008 we lost 3 million jobs in the first three months of his administration. The economy shrunk by 6.7 percent.

Now the economy is growing. Now we have had six straight months of private sector job growth. But it's not nearly enough. The hole that was dug was huge and it took a decade to dig it.

CROWLEY: Do you think that part of the problem, though, and we see this again talking to people anecdotally and talking to independents, that they just don't like the tone, the very kind of thing we led with is that the president came to town, he was going to set a different tone in Washington, it was going to be a different kind of administration, and it kind of looks like the same old thing?

AXELROD: Well, Candy, here is the problem. In order to have a partnership, you have to have people who are willing to be partners. Now Senator McConnell was very explicit. He did an interview with The New York Times, and he acknowledged, our strategy was not to cooperate on big things. The theory is that somehow if we deprive the president of bipartisan support, then we can accuse him of not being bipartisan.

This president spent more time meeting with members of the other party, I think, than most presidents. We have had all kinds of outreach. And we are going to continue to do that and we're going to continue to work with people on given issues where they are willing.

But there is no doubt that the Republican strategy has basically been to say no to everything and to try and turn the clock back in order to win an election and restore the policies that got us into this mess in the first place. And that's something we can't abide and that's something...

CROWLEY: So you don't think...

AXELROD: ... we can't accept.

CROWLEY: ... the president has anything to do with the tone?

AXELROD: I think the president has been pretty good in terms of reaching out. And, no, I don't think he has set the tone. And if you look at the comments on the other side, I think that they have been fairly sharp. That's fine. That's politics. I understand that.

But you can't lay on a president who has reached out time and time and time again and asked for cooperation. I mean, I'll give an example when we were trying to pass through the Recovery Act, the president went over to talk to the Republican House Caucus about it, and on his way over, he learned that they had just issued a press release saying that they were going to vote en masse against it.

Now what kind of bipartisanship is that? I think we need bipartisanship in this country. But we can't order it. They need to be willing to participate in that. I hope that voters send a message to Republicans on this score.

Certainly the direction they are going isn't very promising when you see some of the candidates they are nominating, some of the things that they are saying, it doesn't speak to -- when you call -- when the Senate candidate in Nevada calls the $20 billion that the president asked to be set aside for the victims of this disaster in the Gulf a "slush fund," that's certainly not -- that's not a very encouraging sign.

CROWLEY: Let me hold you right there. We will be right back. And when we return, jobs and the economy. Are we headed toward a third depression?

(COMMERCIAL BREAK)

CROWLEY: We are back with David Axelrod, senior adviser to President Obama. I want to wrap up the political section by talking a little bit about the progressives. I think you've probably read a lot lately about how the progressives are so upset with the president because he didn't stand up when it came time to get a public option in health care, because he hasn't pushed hard enough for the energy bill and the climate bill and that kind of thing, and no action on "Don't ask, Don't tell."

And something caught our ear from last night. And Harry Reid was on "Face to Face" in Las Vegas last night, a show there. And he had this to say about the president's leadership.

(BEGIN VIDEO CLIP)

SEN. HARRY REID, D-NEV., SENATE MAJORITY LEADER: I think he should have been more firm with those on the other side of the aisle. He is a -- he is a person who doesn't like confrontation. He's a peacemaker. And sometimes I think you have to be a little more forceful, and sometimes I don't think he is enough with the Republicans.

(END VIDEO CLIP)

CROWLEY: So that's the other side of the coin. You have people thinking you're too tough on them, but then you have...

(CROSSTALK)

AXELROD: Candy, you just showed me a clip and told me that the president was being too forceful with the other side, so...

(LAUGHTER)

But, look, in terms of progressive Democrats, let me tell you something, we were talking about comprehensive health reform that would make health care available to people who don't have insurance and improve health care for people who do. We have been talking about that for 1-- years. Barack Obama got it done. We've been talking about financial reform for a long time. We have got the deepest reform since the Great Depression. We have -- we increased fuel efficiency standards for the first time in this country in -- in decades. He is in fact moving on "Don't ask, Don't tell," and that policy is going to be changed. And I can go through a long list of things that have languished for years and decades and generations that this president got done in the midst of a very difficult time.

So my -- my admonition would be, don't make the perfect the enemy of the good. We've achieved more in these two years in terms of advancing a -- a solid progressive agenda for this country that will help working families and make this a better and more balanced economy than anyone has done, you know, in our generation.

CROWLEY: So let me ask you about the economy. Because Paul Krugman wrote an opinion in the New York Times in late June, when he said, in part, "We are now, I fear, in the early stages of a third depression. It will probably look more like the Long Depression than the much more severe Great Depression. But the cost to the world economy and above all to the millions of lives blighted by the absence of jobs will nonetheless be immense, and this third depression will be primarily a failure of policy.

(END VIDEO CLIP)

AXELROD: Yes. No, and that -- that column was an admonition to Congress to -- to pass additional economic stimulus. But the fact is, we were in fact very nearly headed towards that kind of disaster when we took office, as -- as I said.

CROWLEY: But we're 18 months in. I know that you all...

AXLEROD: But understand the economy -- the economy is growing. We are growing private-sector jobs. We...

(CROSSTALK)

CROWLEY: ... 9.5 percent unemployment, though?

AXELROD: Of course, Candy, but the hole that was dug over the course of eight years and the disaster we saw was very, very deep. And it's going to take a while to dig out from it. And we had to accelerate that recovery. Part of the setback had to do with events in Greece, things that we couldn't control.

But, look, everybody agrees we have to do -- we have to do more. We need to build these public-private partnerships like the ones the president talked about when he was in Missouri, an auto -- an electric auto plant that would not have happened but for what we did.

And there are millions of job -- people working in this country because of things that we -- and we have to accelerate that. We have to increase exports. And he said we're going to double exports in five years. That's going to boost our economy.

CROWLEY: But the thing that people look at is the 9.5 percent unemployment.

AXELROD: Yes. CROWLEY: And people in your administration, as early as last November and December, were saying we're in the beginning of a recovery, and unemployment is always a lagging indicator; it will begin to go down. And here we are eight months later...

AXELROD: And yes. The fact is that it went down from 10.2 percent to 9.5 percent. But the important thing is the direction. We went from losing 750,000 jobs the month the president took office to six months of private-sector gain.

Do we -- do we feel like we need to do more? Yes. And every single day we're working on things to increase exports to -- to support innovation. We want to pass additional tax relief for small businesses and additional lending capacity for small business.

But there is no doubt that we're in a better position now than we were 18 months ago and that we're moving in the right direction.

CROWLEY: Let me read you something that the vice president said the other day and just ask you if you agree with it. "There is no possibility to restore 8 million jobs lost in the Great Recession."

So is the administration admitting that we will never get back the number of jobs we lost?

AXELROD: Look, I think -- I am sure he was talking about within a short time frame. As I said, the hole that was dug was big. And understand, this -- this recession was a tragedy for families across this country. There are -- we have...

CROWLEY: He was talking about...

AXELROD: Five people are -- five people unemployed for every job vacancy. And, obviously, it's going to take time to turn that around. But you have to grow the economy. You have to build new industries like the clean energy industry. You have you to increase exports. You have to take barriers away, like we need patent reform so that small businesses and entrepreneurs with a good idea don't have barriers that they can't traverse in order to get their work done.

We're working on this every single day. This is the single greatest challenge we face. And we're going to keep at it, day after day after day.

CROWLEY: One last question, because we've got to run here. Guantanamo Bay prison, still not closed. Why not?

AXELROD: Well, obviously there is tremendous resistance to that in Congress. Also, we confronted, when we got there...

CROWLEY: You have nowhere to put them?

AXELROD: That's part of the problem. But the other part of the problem is, when we got there, what we found was there was absolutely no case history on anybody there. So we had to, kind of, reconstruct exactly who these folks were... CROWLEY: For 18 months.

AXELROD: ... and now some have been transferred; others are bound for transfer; others are bound for trial; and some are still there as detainees whose -- whose status is undetermined.

But in order to close Guantanamo, we obviously have to move them to a -- a prison in the states. We identified a location. We have not yet gotten a consensus to move forward on that, and we're going to continue to work on it.

CROWLEY: Will it close this year?

AXELROD: We'll see.

CROWLEY: David Axelrod, thank you very much.

AXELROD: OK.

CROWLEY: Appreciate it.

Up next, why the immigration case is in Arizona courts this week and, next, could impact several other states. Then a debate about the future of immigration reform with New Mexico Governor Bill Richardson and Arizona Congressman Trent Franks.

(COMMERCIAL BREAK)

CROWLEY: Immigration reform is stalled on Capitol Hill, but across the country, state lawmakers are doing record business passing immigration-related legislation. Arizona's new law may have sparked a wildfire. Consider January through March this year versus last. In 2009, 25 states enacted 35 laws. This year, 34 states enacted 71 laws.

Arizona's law requires police to verify the immigration status of anybody stopped for another alleged crime if there is reasonable suspicion the person may be undocumented. As many as 17 states have similar bills pending. Lawmakers in Oklahoma, South Carolina, and Utah say Arizona-like immigration measures could pass in their states next year.

And it's not just states, two weeks ago in Fremont, Nebraska, population 25,000, residents voted in a special election to ban hiring or renting to illegal aliens. Here is supporter Joy Hansen.

(BEGIN VIDEO CLIP)

JOY HANSEN, FREMONT, NEBRASKA, RESIDENT: I think that there is enough support that if enough people, enough cities, enough municipalities come together, the government will have to do something.

(END VIDEO CLIP)

CROWLEY: When we come back, two men who disagree on where and how to proceed on this issue: New Mexico Governor Bill Richardson, and Arizona Congressman Trent Franks.

(COMMERCIAL BREAK)

CROWLEY: Joining me now from Boston is Democratic Governor Bill Richardson of New Mexico. And in Phoenix, Republican Congressman Trent Franks of Arizona.

And, gentlemen, thank you both. I want to start with you, Governor Richardson. I know you are opposed to the Arizona law. You agree with the administration, the Justice Department, filing to get an injunction from keeping that law from going into effect.

But do you not have a certain sympathy for the state of Arizona, which has a number of problems going on, including just the price to the state, which you well know, of undocumented workers in terms of education, in terms of health care, and not to mention some of the violence that has happened in Arizona that can be attributable to illegal aliens.

GOV. BILL RICHARDSON (D), NEW MEXICO: Well, yes, Candy, I am sympathetic to Arizona. They are a border state. They are a neighbor state. We have had similar problems in New Mexico. We are on the border too. And I do believe there is a need for comprehensive immigration reform. Well all agree on that.

What I don't agree with is Arizona taking this issue in their own hands and taking over what is a federal responsibility, harming our foreign policy with Central America and Mexico, and basically passing a law that potentially is discriminatory, racial profiling.

Anybody that looks Hispanic, and this is a state that is 30 percent Hispanic with Hispanics there with many generations, being pulled over on the grounds that they may look suspicious. This issue has divided the country. This issue needs to be dealt with by the Congress in a comprehensive way.

But, yes, I am sympathetic to Arizona. I've toured the border with Governor Brewer. I declared a border emergency. I agree we need more resources on the border. But it's important that the federal government, the Congress, deal with this comprehensively with a legalization plan, with a plan to crack down on illegal hires, and then finally, to give us more resources, more boots on the ground, more Border Patrol, more National Guard, more detection equipment on the border to stem this illegal tide, not just of workers, but also drugs and violence and smuggling.

CROWLEY: Governor, I want to talk to you in a bit about the legalization of some of those who are now here.

But, Congressman Franks, you've heard -- I mean, the most controversial part of this law has been that police who stop someone on another violation, if they are reasonably suspicious that it might be an undocumented person, can ask for those documents. Do you worry that Arizona does begin to look like it is racist, like it is racially profiling? REP. TRENT FRANKS (R), ARIZONA: You know, Candy, I think, unfortunately, this administration has tried to project that notion. But the reality is that Rhode Island, other states have essentially the same kind of protocol. And what is more is that in the federal process called 287(g), it's a program that calls for states and the federal government to work together on these things.

Essentially Arizona has just codified that in state law. And it's ironic that, you know, with all of the arguments that this is somehow about racial profiling, I think the president of the United States has spoken knowing falsehoods about this bill, because the bill itself, in numerous cases, numerous places, outlaws racial profiling. And it's just astonishing...

CROWLEY: But there is intent, Congressman...

FRANKS: ... to me and...

CROWLEY: There is intent, and then there is what actually happens. And the truth is if an Arizona policeman pulled me over for speeding, I seriously doubt he would ask me for my papers. But if someone who looked Latino was pulled over, I am assuming they would ask for those papers. So isn't the net product to be profiling?

FRANKS: No, I don't think so. The reality is for 50 years in this country federal law has required people that are illegal -- or that are immigrants -- or that are legal immigrants to this country to carry documentation to that effect. And that has been the law for 50 years.

And all of a sudden when Arizona codifies this because the federal government is not doing its job, then there is this outcry of racial profiling. And the reality is, the administration's lawsuit against Arizona is not predicated on racial profiling. If they thought that that would hold up in court, then they should sue on that behalf. I mean, that would at least give us a respectable idea of what they're really trying to do.

But what they're saying here is that, yes, they're saying it's racial profiling, but what they're actually suing on is that somehow that Arizona is preempting the federal government's responsibility.

And the -- the irony of that is that that's -- that was the whole predicate. Arizona had to do this simply because the federal government wasn't doing it.

CROWLEY: And, Governor, the federal government has not, I think you would agree, stepped up to the plate on this particular issue dealing with illegal immigration?

RICHARDSON: Well, the reality is that the Congress has failed to act on comprehensive immigration reform, but...

CROWLEY: Well, that's the same thing, right?

RICHARDSON: ... President Obama has -- but -- but -- no, but, Candy, look, Arizona, New Mexico, California, Texas in the last two weeks, we've gotten a substantial more of National Guard troops, Arizona getting the most. Border security has dramatically improved, in my judgment.

It's still not sufficient. Violence on the border has been reduced a bit, although in Arizona and New Mexico, we still have serious problems.

It's not as if the Obama administration hasn't -- on the border security side, which is very important to me and -- and -- and to Arizona, and I'm sure to the congressman. The issue is the Congress needs to appropriate more funds and more resources. But right now...

CROWLEY: But barring that, you can understand why a state would want to act.

RICHARDSON: Well, they may want to act, but they acted incorrectly. They acted in a way that preempts federal authority, but it's also discriminatory.

The brief of the Justice Department talks about racial profiling potentially happening, besides the preemption issue. It also talks about harming a relationship with another country.

Right now, we have six Mexican border governors refusing to attend a yearly border conference with American border governors because of this incident, because of this issue in Arizona. So it is harming our foreign policy.

What we need, Candy, is for Republicans and Democrats in the Congress to step up and pass comprehensive immigration reform, which they refuse to do, because it's a hot issue. They don't want to deal with it before the election.

CROWLEY: But let me ask you, I know that in 1986 Ronald Reagan passed -- got passed a fairly comprehensive immigration bill. It gave amnesty to something like 3 million undocumented workers that were in the U.S. at that time.

Now, 25 years later, there are between 11 million and 15 million, depending on who you believe. So what makes you think that going around and -- and -- and documenting illegals wouldn't just sort of say to others, "Come on in. Eventually you'll get your citizenship"?

RICHARDSON: Well, what is being proposed now by responsible Republicans -- like President Bush several years ago and -- and -- and President Reagan -- is it's not an amnesty.

What they're saying is, let's have a path to legalization. If you speak English, you pass a background check, if you pay back taxes, if you get behind those that are trying to get here illegally, then eventually you get a path to legalization, not citizenship. It will take about 10 years eventually to maybe be eligible for citizenship.

That is not an amnesty. That is basically saying that, with the 11 million that we have here illegally, we're going to give them an opportunity to show that they embrace American values, they can work here, if they're law-abiding, as I said, if they satisfy those conditions...

CROWLEY: Let me give the -- let me give the congressman a chance just to -- to talk about this issue in general. Congressman, what about that? I mean, it sounds reasonable. You have people here -- and I know President Bush used to say all the time that family values don't stop at the Rio Grande, that -- that so many, the huge bulk of these people are coming because they need to feed their families.

So, you know, what about the idea that, yes, in over 10 years, let's bring all of these people out of the shadows, as they say?

FRANKS: Well, Candy, I am sympathetic to the humanitarian aspects of this. My own wife is from the Philippines and came here legally to this country, and there are a lot of people that want to be part of this nation, and I want them to be part of this nation.

But if we ignore the law completely, then those who are trying to come here legally get pushed aside and it just changes everything.

But there's another issue here that is always astonishing to me that this administration seems to overlook and that's the national security component. I have legislation in that regard. I won't describe it, but let me suggest to you that some day we may face an incursion from some malevolent group that comes over our borders with something that changes our world forever.

Just recently, a Hezbollah leader, Jameel Nasr (ph), was arrested in Tijuana, south of San Diego, and I assure you his intentions were not good trying to come over our border. And it's astonishing to me that, when we live in a 9/11 world, that border security is focused entirely on just the immigration issue, when it really -- the national security component is much greater here.

And I guess I have to take a little secondary shot here. When they -- when they try to beat up the governor of Arizona, Governor Brewer, I served with her in the legislature when I was 27 years old. And I will tell you that this is a noble, decent lady that has always -- as long as I've known her -- tried to do what she truly thought was right for her country that would honor her god and her fellow human beings.

And I'm a little tired of her being kicked around and treated like that somehow she is at fault for canceling or for being the one to have to -- to postpone this governors conference, when it was the -- the governors from the Mexican states like Sonora and -- and others that were the ones that said that they wouldn't come. And so...

CROWLEY: Congressman, I think I'm going to have to leave it there, but I -- I appreciate both of you so much coming, Republican Congressman Trent Franks and, of course, Governor Richardson. Thank you both so much for joining us.

FRANKS: Thank you.

RICHARDSON: Thank you.

CROWLEY: When we come back, we'll turn to the gulf oil spill. As early as this week, BP could have a new containment cap in place that would capture the vast majority of oil coming out of the well. But even if the oil stops, the claims will still be pouring in. A conversation with the man in charge of getting compensation to the disaster's victims, next.

(COMMERCIAL BREAK)

CROWLEY: Ken Feinberg is the go-to guy for tough questions in times of crisis. How do you determine pain and suffering? What is the value of loss? How much is a life worth? Tapped to oversee compensation issues in the gulf oil disaster, Feinberg came to national prominence as special master of compensation overseeing a government fund for 9/11 victims.

(BEGIN VIDEO CLIP)

FEINBERG: Will it ever compensate you fully for what's happened? Of course not. And I don't even want to begin to suggest that's the case.

(END VIDEO CLIP)

CROWLEY: Feinberg spent nearly three years working with families of victims to help file claims and determine benefits. He did it without pay.

As the damage from the oil spill in the gulf continues to take its toll along the coast, Feinberg is in charge of BP's $20 billion compensation fund. He will determine who receives money and how much.

(BEGIN VIDEO CLIP)

FEINBERG: I am not a government official. I am not a BP official. The administration and BP agreed that there ought to be an independent person with experience and credibility to design, implement and administer the program.

(END VIDEO CLIP)

CROWLEY: He has been on the road meeting with victims along the gulf already, trying to answer questions, offering reassurance, and determining benefits. It is a task made harder by the fact that oil continues to flow, leaving the full scope of damage yet to be determined.

(BEGIN VIDEO CLIP)

FEINBERG: A program like this cannot be designed or administered from Washington. You have to come down here, hear what people say...

(APPLAUSE)

... take the time to listen. I learned that from 9/11, when I went to New York and the Pentagon and Shanksville, and you have to listen to what people have to say.

(END VIDEO CLIP)

CROWLEY: Ken Feinberg is with us next to discuss the task he'll face long after the oil is capped.

(COMMERCIAL BREAK)

CROWLEY: Joining me now is Ken Feinberg, administrator of a $20 billion fund to compensate Gulf Coast oil spill victims.

I don't envy you your job, because I've been watching -- I talked to a number of correspondents this week about what sort of stories they're hearing and the people that you might be dealing with. So there's the real estate agent who had six deals go belly up on him. There's the fisherman who just bought a boat. There are people whose homes have lost value, not even anywhere near oil.

How many of these people can you please?

FEINBERG: Well, you hope that you can please everybody in one sense, that the program is fair, it's quick, it's consistent.

You know, the -- the -- the claims are as diverse as human nature, and I'll have to look at each claim, can't prejudge everything, see the facts, observe the facts.

Governor Riley in Alabama, I met with him about a week ago, and he looked at him and he said, "Look me in the eye, Ken, and tell me, are you going to do right by the people of Alabama?" And I told him absolutely, and I intent to.

CROWLEY: So when you are looking at all -- this is -- I know this -- this is sort of a basic question. Do you have a staff? Or are you superimposing over the BP people that are working?

FEINBERG: The latter. BP, to its credit, I mean, they have over 1,000 people working in the gulf now on claims, 35 different offices. Within the next couple of weeks, I would say certainly by the first week of August, the Gulf Coast claims facility will replace BP, will keep the people who are good, we'll add people, we'll accelerate claims, we'll process the claims as quickly as we can. We're already prepared to give eligible claimants not one month emergency payments, but six months, with no obligation, no release required, just to try and help people in the gulf.

CROWLEY: And that also will cut down on the lines, I think, rather than coming back every month.

FEINBERG: Yes, sure.

CROWLEY: So you're prepared to give half-a-year's compensation to people so they can kind of count on their lives at least being stable for those next six months?

FEINBERG: Yes, that's right, some degree of additional financial certainty. I work for the people in the gulf. I don't work for the administration; I don't work for BP. And I've got to find a way to accelerate claims.

I want -- I can't help people if they don't file. Once they file, we'll process the claim. If they're eligible, we'll give them up to six months' emergency comp, their choice. They don't have to take six months, but six months' emergency comp without any release of any type.

CROWLEY: And interesting -- we were talking during the break -- you found that people are not as, you know, "Let's all line up and get some money"?

FEINBERG: Oh, no. One of the big challenges is convincing people to file a claim. "Mr. Feinberg, I only get paid in cash. I'm afraid to file a claim. Are you going to be sending all of my information that I provide you to the IRS? I mean, I don't -- I'm not sure about -- what are your -- your intentions?"

No, no, no. This is not easy to convince people that some new program will help them. It takes some work.

CROWLEY: And at the same time, this is a lot different from the other things -- the Virginia Tech victims, 9/11 -- because there were -- there were a controlled group of people. This is -- is massive, and it's an ongoing disaster. And I wonder if the worry about fraud is a lot higher in this case?

FEINBERG: Well, we only had -- out of 7,300 applications in 9/11, we only had 35 examples of fraud. We've got to create as part of the program that I'm establishing an anti-fraud provision or an anti-fraud protection.

We're getting tremendous cooperation from the Department of Justice, which it will help us. We'll make sure nothing can undercut the credibility of this program more than fraud, and we'll take every step we can to minimize the likelihood of fraudulent applications and payments.

CROWLEY: And in our final minutes, tell me how you found people down there. Are they receptive to you? Do they feel as though they are going to get a fair shake? Or just what are those meetings like?

FEINBERG: Every meeting is different. I spent one day in Louisiana going around with Senator Landrieu at various town hall meetings. I've been to Alabama, Mississippi, Florida, tomorrow, back in Florida tomorrow morning.

People are uncertain. They're worried about their financial certainty. It sure would help, Candy, if the oil stopped. That's one problem I've got.

But they're worried. They're angry. They're disappointed. They're frustrated, as diverse as imaginable. But we're trying to deal with it by going and meeting with them. You've got to walk into the lion's den. You've got to be prepared to take the heat, which I am. It's part of the territory.

But I'm confident, as with the other programs I've designed, if I have a chance to meet with people, give them assurance that we're going to be fair in our consideration of every application -- please file your claim. We will do right by you.

CROWLEY: And you have been there enough, I think, probably to gather a sense of economically what we're talking about here. Is $20 billion going to be enough?

FEINBERG: We'll see. That I can't answer. And the main reason I can't answer that yet is, I haven't seen all the applications. Until the oil stops, you don't know how pervasive the oil spill will be, so you don't know if somebody who has not been harmed at all today will be harmed by additional oil next week. Once the oil stops, I believe we'll be able very quickly to get sort of a handle on the comprehensiveness of the claims population.

CROWLEY: Ken Feinberg, you are a busy man and will be, I suspect, for the next couple of years, actually. Thank you so much for joining us.

FEINBERG: Thank you. Thank you.

CROWLEY: Appreciate it.

Up next, a check of the top stories and then a former presidential candidate's new entertainment career.

(BEGIN VIDEO CLIP)

(UNKNOWN): Oh, yes.

(UNKNOWN): To the team!

GRAVEL: And that's why it upsets me, when I see lobbyists like yourselves trying to buy off politicians. It makes me feel like you're not part of the team.

(END VIDEO CLIP)

CROWLEY: Time for a check of today's top stories. So far so good in the Gulf Coast as BP said earlier today that efforts to place a new cap on the leaking underwater oil well is proceeding as planned. However, with the old cap removed yesterday, crude oil is now flowing freely into the Gulf. The new cap is expected to be in place in four to seven days as favorable weather conditions are also helping the process. If successful, officials say the cap could collect all of the oil gushing from the well.

The Boston area is recovering from flash flooding yesterday. Heavy rains damaged several cars and closed at least two bridges. According to the National Weather Service, two to four inches of rain fell in northeast Massachusetts. Several drivers needed to be rescued from their cars as the rain also caused delays in rail service. No injuries were immediately reported. And six U.S. service members were killed in Afghanistan yesterday, adding to the growing death toll in an already bloody summer for coalition forces. The troops were killed in four separate incidents, including two bombings in eastern and southern Afghanistan. One civilian was also killed in Kandahar when a parked motorbike laden with explosives was remotely detonated. Last month 102 coalition troops were killed, including 60 Americans.

Palestinian President Mahmoud Abbas said yesterday that he doesn't see a point in holding direct talks with Israel right now. Abbas says he won't negotiate with Israeli Prime Minister Benjamin Netanyahu until Israel commits to a settlement freeze and agrees to resume talks where they left off in 2008. Netanyahu has refused both of those demands. Abbas says it would be, quote, "futile and pointless" to start negotiations from scratch.

Photos appearing to show former Cuban President Fidel Castro surfaced yesterday on a pro-government blog. The Web site claims the photos were taken earlier in the week at the National Center of Scientific Investigations in Havana. The photos show the former president shaking hands and walking with members of the Cuban think- tank. The photos have not been confirmed by the Cuban government. It would be the first public appearance made by the former president since he stepped down from power in 2006.

And soccer fans around the world will be tuning in to watch Spain take on the Netherlands today in the World Cup final. The game will be the 64th and final match in this year's World Cup, held in South Africa. Spain defeated Germany last week, and the Netherlands took care of Uruguay to reach today's finals. Neither country has ever won the World Cup.

Those are your top stories here on STATE OF THE UNION. Up next, a former politician takes a shot at comedy.

(COMMERCIAL BREAK)

CROWLEY: The name Mike Gravel ring a bell? In 2008 he was the presidential candidate down at the end in the debates.

(BEGIN VIDEO CLIP)

MIKE GRAVEL (D), FORMER PRESIDENTIAL CANDIDATE: And I've got to tell you, after standing up with them, some of these people frighten me. They frighten me.

(END VIDEO CLIP)

CROWLEY: He was the non-conformist former Alaska senator with the puzzling political ads. He had the reputation as the cranky uncle who lives in the attic or the candidate who said what no one else dared say but some people thought.

(BEGIN VIDEO CLIP)

GRAVEL: Our soldiers died in Vietnam in vain. What did all of these people die for? What are they dying for right now in Iraq every single day? Let me tell you, there's only one thing worse than a soldier dying in vain, it's more soldiers dying in vain.

(END VIDEO CLIP)

CROWLEY: Where is he now? At the age of 80, former presidential candidate Mike Gravel has a new day job, Internet comedian. This fall he'll play president on the Barely Political Web series called "I Like Mike: Our President." A preview.

(BEGIN VIDEO CLIP FROM "I LIKE MIKE: OUR PRESIDENT")

UNIDENTIFIED MALE: Mr. President, it's a pleasure to meet you. Lloyd Blankfein, CEO of Goldman Sachs. I assume you want to discuss which members of my company will be a part of your cabinet.

GRAVEL: No.

UNIDENTIFIED MALE: Then why did you ask me here?

GRAVEL: So that I could do this.

(SLAPS)

GRAVEL: That's for the American people.

(END VIDEO CLIP)

CROWLEY: Gravel's philosophy on Washington? You've got to laugh because it's so depressing.

Thanks for watching STATE OF THE UNION. I'm Candy Crowley in Washington. For our international viewers "WORLD REPORT" is next. Gor everyone else "FAREED ZAKARIA: GPS" starts right now.