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JOHN KING, USA

BP Oil Spill; Midterm Elections

Aired July 12, 2010 - 19:00   ET

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


JOHN KING, HOST: Thanks, Wolf. Good evening. We begin with a dramatic moment under sea in the Gulf of Mexico. It is day 84 of the BP oil spill and this could be a decisive day in the effort to stop the spewing oil. At this hour oil still spewing from the open pipe but look at these live feeds we're getting from BP because BP hopes in the hour ahead to put a cap on the well and hopefully by this time tomorrow know whether this new cap will actually stop, completely stop the flow of oil from its well.

You see the live pictures feeding in there. Let me walk over to the "Magic Wall" and show you our animation of what's happening under sea as we come through. Here's what we know. This is the oil coming out. You remember the containment cap that was put in place. Well over the weekend they decided to take that containment cap, the one that we have been watching the last couple of weeks catching some of the oil take that off.

They also then took off what had been the seal right on top right there. Then what they did is they brought in a new seal, they brought in a newer seal that they hope is a stronger fit. They put it on top. The reason they needed this is because they're bringing in more sophisticated cap in play (ph) then from the side open, this cap, they hope, they can just shut off when they close these vents completely stop the flow of oil, essentially close down the well.

If that doesn't work, if the pressure readings indicate there's a problem with the stability of the well down here, they can still use this to contain to take the oil up to the surface to those ships but the hope is that this more sophisticated cap that actually once they close those wells -- close the valves completely stop the flow of oil. What is the timing for all of this and will it work?

Well let's go straight down to the scene. Our man Ed Lavandera is covering the story from New Orleans tonight and Ed, on the key question when, when will we know if this will work?

ED LAVANDERA, CNN CORRESPONDENT: Well, we've just received late word this afternoon from Admiral Thad Allen that in his words significant progress has been made today and that the next crucial step will very likely begin tomorrow morning and that is what's called the integrity testing of this well and whether or not it will be able to once that cap is in place which is probably very close to happening here in the next few hours and they'll be able to begin testing tomorrow morning according to Thad Allen and that could take anywhere between six and 48 hours and depending on what they read and what they get from those tests, John, will determine where exactly they hang. So a couple of different things could happen. As you mentioned, they could seal it off completely and have everything contained. No need to bring anything to the surface. They might need to bring some of the oil to the surface or worse-case scenario some more damage could cause to the blowout preventer, so a wide array of things could happen here and as you well know as we've seen over the almost last three months, anything has been possible.

Some of this has succeeded. Some of this has failed. But clearly the language we're hearing from Thad Allen tonight significant progress. BP officials are saying that they have been pleased and happy the way things are moving along, so at least a tone of optimism so far based on what we're hearing this evening -- John.

KING: And Ed, that tone of optimism still though the plan is to continue drilling the relief wells even if they think this works, even if they close this down and they can't stop completely the flow of oil, they'll continue with those so-called relief wells maybe by the end of July or early August, right?

LAVANDERA: Right. We need to be very clear. This is not the solution that we've been talking about. This is separate from those relief wells. That work continues alongside this damaged well. It appears that they will be able to reach the area where they want to get to by the end of July then it would take some more time to get everything into place all the equipment necessary to be able to kill the well and shut the flow completely.

KING: Ed Lavandera for us on the scene and Ed will stay there throughout the hour. If they get this cap attached, if we get any further developments -- again you're looking right there at the live picture from the Gulf of Mexico as they lower this new cap into place. Unfortunately in the interim oil continues to spew. Ed will continue to monitor this -- excuse me -- and we'll here as well.

Pivoting now to politics -- when the White House sends (INAUDIBLE) out for the Sunday shows, they go out for a reason. People say what message is the White House trying to send. Well, a lot of eyes raised in Washington when the White House press secretary, Robert Gibbs, on "Meet the Press" yesterday looked toward the November midterm elections and said it's possible, quite possible he said that the Republicans could seize control of Congress. Take a listen.

(BEGIN VIDEO CLIP)

ROBERT GIBBS, WHITE HOUSE PRESS SECRETARY: I think there is no doubt that there are a lot of seats that will be up, a lot of contested seats. I think people are going to have a choice to make in the fall. But I think there's no doubt there are enough seats in play that could cause Republicans to gain control. There's no doubt about that.

(END VIDEO CLIP)

KING: Let's try to understand Robert Gibbs' motivation with two people who know these politics quite well. J.C. Watts is a former Republican congressman from Oklahoma and Anita Dunn, a former colleague of Robert Gibbs at the White House, a former adviser to Nancy Pelosi and Senator Tom Daschle in the presidential campaign as well. Anita, you know Robert very well. When you go out on the Sunday talk shows and you say well you know the Republicans could take back control of Congress, why would he say that?

ANITA DUNN, DEMOCRATIC STRATEGIST: Maybe because it's true, but also because I think it's important for people to understand what the stakes are in the election. I think the White House is making sure people understand there are real things at stake here. I think that when Robert goes out on a Sunday show, what he says has a great deal of meaning as you pointed out.

He doesn't say things by accident. So clearly the White House wants to send a signal I think to Democrats and to the people who came out in 2008 that we need them again.

KING: And some, J.C., say well he's trying to set expectations so if the Republicans come up two seats short, Democrats can say ah-ah this is -- somehow say that's a victory (INAUDIBLE) election. Others say, as Anita said it is sort of a warning to the left that there's been an intensity gap right now. The left seems a little not so motivated, shall we say, and so he's saying hey you better get out there.

J.C. WATTS, CHAIRMAN, WATTS PARTNERS: (INAUDIBLE) three and a half months before the election, before November 3rd. There's nothing that Robert Gibbs said that's untrue. I appreciate his honesty, but I would caution Republicans not to count their chickens before they hatch because there's three and a half months left in the election. However, you have got a mood out there that I think favors Republicans. You have got 60 -- 60 plus seats the Democrats have to defend. So the odds say that things look pretty good for Republicans but again, people still have to go vote.

KING: And let's go inside -- let's go inside one of the secrets of Sunday shows in Washington. You say something on the air and maybe you have a friend. Maybe you have an Anita Dunn watching at home; maybe you have a staffer watching in the White House. They can send you a message in the meantime. You heard what he just said a moment ago. There's no doubt Republicans can do this. Now listen to Robert Gibbs just a few minutes later outside the NBC studio sounding a little bit more optimistic.

(BEGIN VIDEO CLIP)

GIBBS: Well look, I think there are certainly enough seats in play to make the House interesting. I think in the end we'll keep the House and we'll keep the Senate.

(END VIDEO CLIP)

KING: He left that optimistic part out of the first message.

DUNN: Well, you know, John, just picking up on what J.C. said, there are three and a half months before an election and those folks have been covering them or doing them for a long time know that we might as well get that octopus in here to start picking who is going to win and who's going to lose. That guy has a better record than most prognosticators.

But having said that, the reality is of course we could lose but we don't have to. We're not necessarily going to. And the key here is going to be Democrats making a good case for themselves and I think that that's something that is incredibly important to the White House but also to Democratic candidates out there that they have got to go out there and vigorously contest these races and not let Republicans define the terms of the debate.

KING: It is a long time but history also has a big say in how these things work. I want to show you some numbers. Back at this point in July 1994, President Clinton's approval rating was 42 percent. Unemployment in the country was at 6.1 percent. President Obama, his approval rating 46 percent, so a little bit better than President Clinton at this point but the unemployment rate much higher, 9.5 percent now. When you look at those numbers, J.C., is it a failure if Republicans don't take the House, at least one chamber back?

WATTS: Well again I think you have to be optimistic. And I think that octopus says I'm going to engulf the Republicans' lead (ph) here because I think Republicans are going to do pretty well. Can they get to 39, 40 seats? That remains to be seen.

But again, I think the momentum, you know unemployment at 9.5 percent, I don't think that's going to be any better on Election Day in November. President Obama's approval ratings, I don't think they're going to be better on Election Day in November. All those things favor Republicans and plus just the mood of the country about health care, about spending, and about deficits, there's a lot of things that makes Republicans pretty optimistic.

KING: But the president does seem a little bit more combative in recent days and Democrats have wanted that.

DUNN: Absolutely. And I -- you know I think you look at 1994 and you can also say, you know, that was before the Internet for heaven's sake. I mean politics has changed a great deal since than and I think that (INAUDIBLE) comparisons don't make a lot of sense. What is true is that in 1994, midterm, we lost control. That was after 50 years of Democrats having control of the House.

In this case, it has not been very long since the Republicans had control of the Senate, the House and the White House and people remember and Democrats can make a very vigorous case about do you want to go back because Republican Party has not presented itself as an alternative. They don't have a positive agenda. They actually don't have any agenda except to be against the president and you know what, voters sometimes look for more than that.

KING: A lot more politics ahead in the program. Anita and J.C. will stay with us. As we go to break, I want you to show -- I want you to see these live pictures from BP -- again this is underneath in the Gulf of Mexico. You see that cap coming down, if you look closely, the larger structure, that's the new cap. They are bringing down. They will put that on top of the well. They are hoping, hoping it can close off the well completely. If not they say it should still be able to bring some of the oil to the surface for containment. It could be a turning point or it could be another disappointment. We'll continue to track this throughout the hour and of course in the day ahead here at CNN. We'll be right back.

(COMMERCIAL BREAK)

KING: A lot happening in the world of politics today. Let's continue our discussion. Still with us Anita Dunn, former White House communications director and a veteran Democratic strategist and joining us Erick Erickson, a CNN contributor and the editor-in-chief of the conservative RedState.com.

Let's start with this one. The Senate is back in session with Republicans picking up where they left off, blocking an extension of unemployment benefits and small business loans. Senator Jon Kyl (ph) told FOX News Sunday Republicans aren't against helping unemployed workers and small businesses, but if Congress wants to spend the money, it should cut spending on something else.

(BEGIN VIDEO CLIP)

SEN. JON KYL (R), ARIZONA: Surely Congress has the authority and it would be right to -- if we decide we want to cut taxes to spur the economy not to have to raise taxes in order to offset those costs. You do need to offset the costs of increased spending and that's what Republicans object to.

(END VIDEO CLIP)

KING: So Erick, Democrats having a field day with this today saying that essentially that Jon Kyl says keep the Bush tax cuts in place which would of course drive up the deficit but at the same time if you're going to extend those unemployment benefits you have got to find spending cuts somewhere else to pay for them. They say essentially you're going to show (ph) tax cuts for the rich is OK, but unemployment benefits for lower income Americans you have got to cut spending somewhere.

ERICK ERICKSON, CNN CONTRIBUTOR: Well yes. You know, I'm actually in favor of continuing unemployment benefits if more people like Alvin Green (ph) in South Carolina can save them up and beat Democrats, which apparently happened down there. This is a guy who kept getting unemployment and used it to get on the ballot and win the Democratic Senate nomination.

This is called karma. The Democrats (INAUDIBLE) extending employment and they keep saying we need to increase taxes, but they are not willing to have a genuine discussion on cutting spending. So instead they'd rather say the Republicans want to give tax cuts to the rich which is code for tax cuts for small businesses and they don't want to talk about spending. We can't have this deficit commission coming out later this year with a report if the Democrats can't even have a genuine discussion on spending cuts.

DUNN: Well John, you know, spending is spending whether it comes in the form of a tax cut or whether it comes in the form of an appropriations or an earmark. The reality is that the Bush tax cuts were put in the place the way they were to expire because of budget gimmicks that were done so that it would look like that they didn't cost as much in the out (ph) years.

And the reality of this is that the Republicans have made a very -- you know a decision. It's an honest decision. They don't want to give the unemployment benefits. They want to keep the tax cuts skewed to the wealthy and the Democrats are not talking about raising taxes on middle class people. As a matter of fact, I think the president has been extraordinarily consistent since his campaign in saying he will not do that. But at the end of the day, both parties -- and I think Erick would agree both parties are going to have to start paying for their spending.

(CROSSTALK)

ERICKSON: I absolutely think we're going to have to pay for our spending but I'm sorry I'm still having trouble wrapping around how tax cuts are spending.

DUNN: They cut the spending through the tax code. Erick, you know what, at the end of the day if a tax is expiring which means it doesn't exist any longer, a tax cut, and then you want to do it again, you're spending money from the tax cut and you're going to have to borrow money.

(CROSSTALK)

ERICKSON: -- the government's money.

DUNN: Well you know what, at the end of the day it's spending. If we give a tax break to -- if we give a tax break to encourage some sort of investment there that is spending. OK, it's spending just the way unemployment benefits are spending. It's a question of priorities and the Republican Party has made it clear that their priority is spending on the high end and Democrats want to help unemployed workers.

I'm struck by the number of Republican candidates on the stump who are now claiming (ph) that people on unemployment could go get work if they just wanted it. I think maybe they should go to talk to some of those unemployed people because I think most of them would love to be at work right now.

(CROSSTALK)

ERICKSON: The problem is with the Democrats spending it's impossible for people to get jobs and this stimulus bill that the Democrats have passed hasn't created a single job except in government.

KING: We're not going to settle this. We have a disagreement. We'll register that one there.

(CROSSTALK)

KING: We'll continue the debate another day. I want to move on to this one because Erick is right in the middle of this one. Republicans and the National Rifle Association usually go together like guns and bullets but lately conservatives including Erick Erickson have been criticizing the NRA. On RedState.com today he wrote the NRA is all about helping the NRA, helping their organization and not necessarily the cause.

The NRA noticed. Their chief lobbyist told Politico some people would like to use the Second Amendment to drive eyes to a blog. Erick, you are in the middle of this because you started a conversation that perhaps the NRA would endorse the Senate Majority Leader Harry Reid running --

ERICKSON: Right.

KING: -- election out of Nevada. It is a tough race. If Harry Reid's record on guns is good, what's wrong with the NRA endorsing him?

ERICKSON: Well the problem is it's not good on guns. He's voted for all of Barack Obama's nominees including Eric Holder, Sonia Sotomayor and Elena Kagan none of whom find an individual right for Second Amendment unlike the Supreme Court has. He voted for the Brady gun ban. He voted for the automatic weapons gun ban. He's voted for lots of restrictions. Now, the NRA's theory -- I'll give them some credit -- they say well Harry Reid is better than the alternative, Chuck Schumer (ph), well even Chuck Schumer (ph) couldn't get a gun bill through. That's why Chuck Schumer (ph) as the head of the Democratic Senatorial Campaign Committee urged Democrats to stop pushing anti-gun legislation.

KING: You've been through a lot of campaign years. And a lot of times when the NRA is mentioned, when guns are an issue, Democrats get nervous.

DUNN: Absolutely true. I think Erick's broader point though and it is an interesting one because the Democrats faced a similar one in the Blanche Lincoln primary when somebody from the White House went out and kind of attacked the labor movement for having spent a great deal of money for a primary challenger to a Democratic incumbent.

And it goes to the heart of what are these groups for anyway. Are they for their members and are they for their own particular issues or are they supposed to be adjuncts to political parties? And I think that the argument the NRA somehow is betraying the cause because it has the temerity to think about supporting a Democrat once in a while who is not bad on their issues kind of shows how the Republicans see these groups. I think that you know I mean the reality of this is that the NRA overwhelmingly supports Republican members that Erick shouldn't begrudge one or two Democrats now and then --

(CROSSTALK)

DUNN: I know --

KING: Guys I got to call a timeout because we want to show you these pictures, dramatic pictures -- look right now at this as this breaking news unfolds before us. That is the new cap, the white structure going down there onto the base that BP installed over the weekend. The hope is that this new containment cap and you see these undersea robots putting it in place. It was lowered just a moment ago and then they pulled it back up a little bit, is a very sensitive fit.

You're watching these live pictures unfold. The hope is -- and you see the cap now over the top -- is that they can get a good mount, get it tightened on there, then they will close the valves over the next 12 hours or so and test it. Well testing to be done in the morning. If the pressure holds, the hope is that this device you're watching installed right now will actually shut off the flow of oil.

This is day 84 of the BP oil spill. This could be a pivotal 12 to 24 hours ahead. The cap right there just gone into place seconds ago. Hopefully they can get a good fit and keep it on. Then they will test it to see again -- this is not just to contain. The goal is they can turn the well off with this new device. If not, they'll go to plan b which is to continue to draw oil up to the surface to contain as much as they can.

Day 84, pivotal live pictures right there. We'll continue to watch this throughout the hour and of course in the testing period in the days ahead and as we do that, still a lot more to come in the program tonight. Let's walk over and I'll give you a peek from the "Magic Wall".

When we come back we'll go "Wall-to-Wall". It was six months ago the earthquake struck Haiti, the path back has been a tough one. We have live reporters on the scene. We'll also give you some perspective.

Also one-on-one with Jerry Brown -- remember him? He was once California's youngest governor. Can he now become its oldest governor? He's running again.

And in "Play-by-Play" tonight, we're going to show you an ad and you're going to hear a voice -- a Quayle comeback there. And in "Play-by-Play" also Michael Steele, the controversial chair of the Republican Party says no stupidity and we'll tell you just what he's talking about. But we're going to stay right here on these pictures.

We're going to go back to the spill right here as they fit the cap on. Just want you to watch this for a second. They have brought this cap down. Again, this is a new cap. They're going to put it in place. If they get a good fit then they will tighten and secure it and then there are a series of valves on this cap. Once they get a good fit, they're confident that it is in place, they will start to test the valve, close the valves.

You're seeing all the different camera feeds here right now. All of the different BP feeds coming in, all the different angles. You're watching the undersea robots down here. I'm going to actually take a walk across the studio so I can take a closer look at them over here. You're seeing all these different feeds coming in from the underwater feeds.

All these feeds provided by BP and this is the most critical one here in the sense that this is the new containment cap which they have dropped on top. This is the new lead they put on top of the well. This is the well that has been spewing oil for 84 days now. The hope is this new cap fits, they get a snug fit. That was the whole point. Remember the last containment cap -- there was a lot of oil still coming out.

They're hoping this is a snugger fit and then they're also hoping that when they close the valves up here as you see that shot, which is just showing you some valves up at the top, when they close those down, their hope is that it actually shuts off the well, stops the flow of oil. Again they won't know that for testing over the next several hours once the cap is in place to get a snug fit and then they try to get that down.

And then the hope is you can see the larger picture here in this feed, the valves are up here. If they can shut these valves down and the pressure at the base is secure that what they're worried about is if there's too much pressure you'll have the surface, becomes unstable, then they would open some of the valves, take the oil up to the top. But the hope is that this will just shut down. Anita Dunn, I didn't bring you in the program to talk about this but they are obviously closely watching this at the White House.

DUNN: Absolutely.

KING: This has been a huge distraction, a crisis for the president to manage on day 84 if this finally works, how does it change the story line?

DUNN: Well I think it's a pivot past the immediate crisis into what comes next and I think the White House feels like they have got a good operation in place for the next chapter -- just got to get there.

KING: Just got to get there -- just got to get there and again (INAUDIBLE) watching these live pictures coming in. It is dramatic. Some of the video is hard to see because of course it is dark and murky a mile under sea but you see the cap coming down right now.

We're going to continue to watch this story throughout the evening. You see the feed. That gives you -- this feed here gives you a good perspective of the scope of this device. It is larger than the former containment cap and that is because they hope this one is more sophisticated and they can actually use it not as a containment cap but to secure and shut down the well and completely stop the flow of oil.

Again, there is a backup plan if that doesn't work to bring some oil back up to the surface. Those containment ships are still on the surface a mile up. If that doesn't work, they'll do it that way, but again, it's remarkable to watch these undersea robots working. Again, this is a mile below the surface essentially to make sure you get a snug fit. Watching the different feeds come in. Robots try to get to a snug fit.

And once they get a snug fit then they can start to test and close down those valves and begin to test whether "A" this device works and "B" if it works and as they close the valves, whether the well itself can take that pressure and will actually shut down. Much more coverage when we come back. Dramatic pictures on day 84 of the BP oil spill. You are watching as the new cap is put in place -- the goal -- the goal to stop -- finally stop the flow of oil. Stay with us.

(COMMERCIAL BREAK)

ANNOUNCER: This is CNN BREAKING NEWS.

KING: We're back to continue our coverage of dramatic and hopefully, hopefully a turning point on day 84 of the BP oil spill. You are watching right there undersea images -- these images coming into us from BP. This one of many feeds we're getting as they put a cap in place. They hope this cap allows them to completely shut off the flow of oil again 84 days after the tragic oil spill.

The cap was lowered a few moments ago and put in place. We're watching now as these robotic devices fasten it in place. The first time it went down and then they popped it off. This time it has stayed down so we assume they think they have a good enough fit and we're watching now -- as we watch this unfold on day 84, I want to bring Ed Lavandera into the conversation.

He's joining us from New Orleans. And Ed, as you watch this goal number one is to get this in place and then they hope when they close those valves that "A" that the device shuts off the flow of oil and then "B" that the well itself has not been damaged so there's not a dangerous rise in pressure along the ocean floor. Walk our viewers through the key moments ahead.

LAVANDERA: Right. We'll try to simplify the technical aspect of this as much as possible but you mentioned that one valve, so presumably right now there is still oil that is flowing into the Gulf and that's probably coming out of the top of that cap where you mentioned that there's a port there that they will try -- a valve that they will try after this is firmly secured and all of that and they're ready to go.

They'll start attempting to seal off that valve so that they can begin the integrity tests on this containment cap and the rest of the machinery that is down there. We've been told by Admiral Thad Allen just in a statement just a few moments ago that that testing would likely begin tomorrow morning. It could take anywhere between six and 48 hours, so we imagine between now and then it's a matter of securing -- making sure that that's where they want it to be, that containment cap, and making sure (INAUDIBLE) to what extent they can close those valves if they'll be able to do that.

So there's a range of things that can unfold here over the course of the next 24 hours. They can begin that testing and really get a sense. Believe it or not what they want is intense pressure. The bigger -- the higher the pressure, the better sign that is, so at least when I first heard that it seemed a little counterintuitive to me but that's -- we're told that that's what they want at this point. So they'll continue to do that.

And of course the concern here is that more damage be caused to this blowout preventer down there. Obviously that's something they don't want to happen. So, but these are incredibly dramatic pictures, John, as you've been saying as you really get a clear up close view as to what's going down 5,000 feet below the surface of the water here in the Gulf of Mexico.

KING: And Ed, let's continue the conversation. As we do you mentioned these dramatic pictures. I'm going to walk over and we'll just put them up all here. And I know you can see these as well. Some of them are very murky and it's hard to see exactly what's going on. What you see here this is the new cap that's been put in place. And it is remarkable to watch these underwater vehicles remotely operated putting it in place.

And they have -- you'll see them sometimes with hooks, sometimes with wrenches, sometimes they just grab things and pick them up and move them. It is quite remarkable to watch this work, delicate work undersea. This is the cap here and you see all these other images from down in that key area down there. Essentially they get this cap into place and as Ed said when they start doing the testing, Ed, will we know -- this time tomorrow will they know -- the biggest question is can they completely turn the well off? Will this work? Will this shut it down?

LAVANDERA: There's a chance we could now that. If we're going by this 6 to 48-hour range that Thad Allen had talked about in his latest statement and the update on what's going on, it's possible that we could get that sense about how confident they feel about it. Maybe, it's something they can get a pretty quick read on. So, that will be interesting to see as we wake up tomorrow and see how things move forward.

KING: This image you're seeing right there on you screen now, that's a good shot, a close-up shot of the larger cap they have lowered into place. This is a dramatic moment, potentially, a turning point from the BP oil spill on day 84 as they lower this new cap into place as Ed Lavandera just mentioned the key testing will come in the morning. We will continue to track this throughout the program tonight, and of course, in the days ahead as we get information. Ed will be with us throughout the program as well.

We're going to move on now to some politics. Jerry Brown was 36 when he was elected governor of California succeeding a guy named Ronald Reagan. He served two terms, ran for president three times, also served as mayor of Oakland, and he is now California's attorney general. And this year, political outsider, he's running for governor again hoping voters will see his experience as an asset.

General Brown is in Oakland tonight and joins us to go one-one-one. Let me just ask you first, as you watch this, as someone who has been outspoken on issues of offshore drilling, when you watch these pictures unfold, how much is this becoming an issue in campaigns this year?

JERRY BROWN, (D) CALIFORNIA ATTORNEY GENERAL: Well, it certainly shows the tremendous risk of offshore drilling and how important environmental inspection and protection is. But it also shows you we got the talent and the technology to do amazing and wondrous things. So, both a real threat and a hope that if we just pull together and we invest in our minds and our technologies, we can get a lot done. Amazing things done.

KING: We have known each other a long time. I still call you Governor Brown. I know you're General Brown now, the attorney general. In this year of anti-incumbent sentiment, of anti-political sentiment, it is sometimes startling to think that a guy who has been in politics for so long could be running in this campaign, and right now, you're in a dead heat race to be the next governor of California. Your opponent, Meg Whitman, is the former eBay CEO.

A lot of Americans might have come to know her as a top adviser to John McCain in the last presidential campaign. She has launched a new ad against you, governor. I want you to listen to some of it. I'll give you a chance to respond.

(BEGIN VIDEO CLIP)

UNIDENTIFIED FEMALE: They want Jerry Brown because he won't rock the boat in Sacramento. He'll be the same as he ever was, high taxes, lost jobs, big pensions for state employees. The special interests have chosen their governor. How about you?

(END VIDEO CLIP)

KING: Pretty tough ad.

BROWN: Yes. It's completely false. It's really sad that -- I guess, she has these advisers and she didn't vote very much. So, I don't think that she knows the facts let alone the facts when I was governor because I'll you what they are. I advocated limiting pensions. I did. Number two, taxes were reduced by billions and 1.9 million jobs were created during the eight years I was governor. These are the facts. And everything you heard in that ad is completely false.

I'm really kind of disappointed that this first entry into politics does it in kind of the old kind of attack make up stuff and throw mud because, at this crisis, we need not division, we have to pull people together, and at this stage of my life, I think that's exactly what I can offer, bringing a sense of understanding and insight to the poisonous partisanship that is destroying our state, in fact, in many ways is undermining our country.

KING: Let me ask about one of the challenges. You question the facts in that ad, and we'll give the Whitman campaign, obviously, a chance to respond to what you're saying. But one of the issues that raise is taxes.

(CROSSTALK)

KING: I get your point. One of the issues that raise is taxes. Your state unemployment rate right now is 12.4 percent. Nine of the ten metropolitan areas with the highest unemployment in the United States of America are in the state of California. Will the next governor of California, in your view, whether it's Jerry Brown or Meg Whitman have to raise taxes? BROWN: I have committed no taxes unless the people themselves actually vote for them. And I'll tell you one thing we shouldn't do that Whitman is advocating, that's abolish the capital gains tax. That will cost anywhere from $5 billion to $9 billion adding to the deficit and channeling all of the money to the wealthiest people in the state including Meg Whitman herself. So, that's the exact wrong way to start. I just want to say again, all those statements you made are demonstrably (ph) contrary to what the truth of the California budget and taxes and jobs were.

So, yes, it's going to take time. All the states are facing challenges and the next governor will take a number of years to work out. But I want to say we've seen recessions. We've had seven of them since World War II, and California has always come back. This time is going to take longer, but we will come out of this. We will get our employment back.

KING: If you look at the candidate for governor, the Republican candidate for Senate, also a former CEO, they're on track to spend more than $100 million. They are raising money, but they're also pouring a lot of their own money in, and frankly in your case, Mr. Brown, a lot of Democrats are concerned. They think number one, she got a huge fund raising events and number two, some think that you're thinking I'll get this one in the end. I don't need to go and get rush around. I don't need to be on TV and say, for example, right now. Are you worried about that?

BROWN: I'm very concerned because any time you're up against a billionaire who just writes checks, and by the way, she's not on track to do $110 million. That's already in the bank, and she's going to add some very soon. So, we're up against the juggernaut (ph), but I'm convinced, not only by talking to you tonight, but between now and the election, there's going to be a lot of communication, a lot of mobilization, and the people will have plenty of information to decide which direction for California, who has the skills to get this very difficult job done.

KING: How does the immigration issue play in your state? It has been a major issue in the current campaign, a major issue over the years because, A, the border state, B, the high Latino population, and a number of Democratic governors just this past weekend talked to some White House officials at the National Governors Association meeting and said, why did you have to sue Arizona right now? We want to talk about the economy. We want to keep the debate on the campaigns about that and not about emotional and divisive issue of immigration. Do you share that view?

BROWN: Well, I think it's pretty divisive. In California, I think, there's a strong majority for a comprehensive immigration reform. I think that's true. Now, with respect to Ms. Whitman, she advertised in the primary no benefits for illegals. Now, she has billboards in Spanish saying the exact opposite. So, it's an issue, but I think, in general, Californians are open to not only securing the borders as they must but also having a pathway to citizenship as part of overall immigration reform. KING: Jerry Brown is the attorney general of California and the Democratic candidate for governor in one of this year's most fascinating races. Governor Brown, we'll see you out there on the campaign trail in the near future, and we'll invite your opponent on as well. Maybe, the two of you can come out together some time and have a little debate right here.

BROWN: I accept. Let's do it.

KING: All right. We'll see you soon on the trail. Thank you, sir.

When we come back, remember, we're continuing to watch these dramatic developments in the Gulf of Mexico. This is the new cap put in place. They hope this cap fits snugly enough and works right to completely shut off the flow of oil. That is a story we will track in the hours ahead.

And when we come back, the Senate is back in session. Congress is back from its July 4th recess. One of the big issues, financial reform. Can Democrats get enough Republican votes to put that bill on the president's desk? We'll break it down with Jessica Yellin when we come back.

(COMMERCIAL BREAK)

KING: We'll just continue to show you some pictures from the Gulf of Mexico. I just want to give you a quick update here as you look. Right here, that is the new cap that, in the past few minutes, has been placed on top of the well. Eighty-four days, oil has been spewing into the Gulf of Mexico. It will continue to spew, but the hope is, when they secure this new cap in place and close down its valves in the hours ahead, that this cap is strong enough to completely stop the flow of oil and shut down that well and completely stop spewing of oil into the Gulf of Mexico while it takes a few more weeks for the relief wells -- the ultimate solution, they hope at BP, and of course, throughout the Obama administration to close off this well.

This cap was put in place just a few moments ago. We will continue to track this throughout the evening here, and obviously, the government says the key testing will begin in the morning. We'll continue to track that as well. Stay right here.

Now, we want to switch back to politics now. The Senate is back from its July 4th recess. The Congress is coming back. A lot of unfinished business. The Senate Democratic leader, the Majority Leader Harry Reid went to the floor today to welcome back his colleagues but also deliver a bit of a message to the Republicans.

(BEGIN VIDEO CLIP)

SEN. HARRY REID, (D) MAJORITY LEADER: He tried for months to help people and nearly every Democrat has said yes and nearly every Republican has said no. That opposition is stopping recovery in its tracks. Every day, we keep small businesses from creating jobs or deny the unemployed the assistance they need or let Wall Street get away with the same tricks that nearly sank our economy. We're making a difficult situation even worse.

(END VIDEO CLIP)

KING: Harry Reid on the Senate floor today. With me right here in studio is national political correspondent, Jessica Yellin. He's saying the Republicans have been no, no, no. Other Republicans would argue why on some of those issues, but on one issue, very important to leader Reid and very important to President Obama, they are starting to get some Republican yes votes.

JESSICA YELLIN, CNN NATIONAL POLITICAL CORRESPONDENT: That's right on financial reform Wall Street reform. It looks like they picked up three yes votes. Senator Scott Brown from Massachusetts and the two senators from Maine, Olympia Snowe and Susan Collins. Olympia Snowe just saying yes now which means that looks like they have the votes to get this done, they're presuming this week. Reid's office is now saying they hope to do it this week. But the one -- you know, we've all been waiting to see if Olympia Snowe would say yes. The one is fascinating is Scott Brown because he continues to be the bipartisan vote. Do you have a theory why he's always crossing over?

KING: He has to win re-election in Massachusetts. Let's vote what say on Scott Brown. Let me show you part of his statement when he decided yes, most likely. He hasn't said definitely. He said it's a better bill than it was when this whole process started. While it isn't perfect, I expect to support the bill when it comes up for vote, that doesn't mean our work is done. Number one, as you know, he insisted there's a $19 billion, I think, tax essentially on bank. He insisted that that be taken out and because of one senator's objections, fascinating, one guy, that's how it works in the Senate. They went back and redid the deal.

He has complained don't always look at me. Democrats shouldn't always look at him, but he has to win re-election in Massachusetts, and he has to win re-election in a presidential election year in Massachusetts where you assume President Obama will coast to re- election. We'll see what happens. It's a tough governor's race this year. We'll see if the politics of the state change, but I think he know that he needs to be center or right and not way right.

YELLIN: Though, you think he has to worry at some point -- there will be some vote where he has to show I'm a Republican and I will not vote with the Democrats. At some point, he will outrage the base if he continues to be bipartisan all the time.

KING: He'll have to pick some issues, and I'm sure he'll do it on deficit. I'm sure he'll do it if they can get a tax vote. Watch what Republicans will try to do in the next several weeks as all these issues come up. Another big issue for Scott Brown will be if they bring up a climate bill. Will they do a big sweeping climate and energy bill? Or will they have a scaled back bill which has a chance to pass?

The Republicans are saying, scale back. Another one is immigration reform. Is that an issue on which, you know, if the leader, the Senate Republican leader says, I need you on this one, is that one where Scott Brown would reach out because the politics of immigration get pretty dicey. At this moment, there is a debate, as you well known, within Democrats about whether to do those other issues (ph), whether to do climate, whether to do immigration because they know near 10 percent unemployment in the country -- I want you listen to this. The big issue out there, turn on the TV. It's pretty easy.

(BEGIN VIDEO CLIP)

UNIDENTIFIED FEMALE: To keep jobs in Arkansas.

UNIDENTIFIED MALE: Growing jobs.

UNIDENTIFIED MALE: Four of our jobs get shipped overseas.

UNIDENTIFIED FEMALE: Jobs come from small businesses.

UNIDENTIFIED MALE: Saving jobs and fixing companies.

UNIDENTIFIED MALE: They create jobs.

UNIDENTIFIED MALE: Back and create jobs in Florida.

UNIDENTIFIED MALE: It could cost Ohio 100,000 jobs.

UNIDENTIFIED MALE: I want to create new jobs.

(END VIDEO CLIP)

KING: In English and Spanish issue one is --

YELLIN: The same big issue. The problem for Democrats here clearly is that it's not just that they own this economy now, but the majority of Americans believe the stimulus did not help create jobs. That's according to Pew polling. So, for them, the real challenge is how do we make the argument as a Democrat, if you're coming from the Democratic point of view that we're doing everything we can. They're trying to blame the Republicans for the economy we have. You covered politics so long, do you think there's a certain point at which you can no longer say it's the last guy's fault?

KING: You can blame them and their policies, but when you travel and everywhere you go, people say where are the jobs? Where are the jobs? Where are the jobs? Why is Washington more worried about Wall Street than worried about me? The party in power is who gets the kick me sign on their back in an anger election year. And this could be one of those election years. And right now -- the president knows this. The president and the Democrats, they can try to minimize the impact by saying we didn't dig the ditch, but the people count on the people in power to get them out of the ditch.

Jes, thanks for coming in. When we come back, iffy ethics, lipstick, and Michael Steele? What do they all have in common? They're in the "Play-by-Play." Don't go away.

(COMMERCIAL BREAK) KING: If you're just joining us, a lot of breaking news tonight. Here's what you need to know right now. We are at a critical moment in the Gulf oil spill. It is day 84, and during this hour, BP lowered a new tighter fitting cap onto its leaking oil well in the Gulf of Mexico. Look at these pictures as you see them unfold. I'm going to turn around to show you. That is the new cap they dropped it on top. That's above. And you see pictures from the side as well. A whole number of feeds (ph) coming in.

The remote operated vehicle is down there undersea a mile under the water trying to attach this new cap, get it on snug. Once they have a good fit, they will start closing and testing the valves, and by this time tomorrow, we could know if this cap will not just contain the oil but actually shut down the well and stop the flow of oil. We'll continue to track that. The interior department today issued a new ban on deep water oil drilling lasting until the end of November.

In a rare interview on Cuban TV tonight, Fidel Castro, yes, he's back, and he accused the United States of pushing what he says could be become nuclear wars against Iran and North Korea.

ANNOUNCER: Here comes the "Play-by-Play."

KING: Back for the Monday day night "Play-by-Play." With us in studio, former Republican congressman, J.C. Watts, Democratic strategist, Jennifer Palmieri. Michael Steele, the chairman of the Republican National Committee has gotten himself into some controversies over things he has said, but he went out to Nevada, big Senate race this year. The Republicans hope they can knock off, the democratic leader, the Majority Leader, Harry Reid. So, Michael Steele went out to Nevada where some Republicans don't love their Senate nominee. Michael Steele had a message.

(BEGIN VIDEO CLIP)

MICHAEL STEELE, RNC CHAIRMAN: I don't want to hear any nonsense. I don't want to hear any stupidity coming out of this party about anything other than Harry Reid's stupidity. We don't need the fight inside our own House. I'm tired of it. End it tonight.

(END VIDEO CLIP)

KING: An important message, J.C., especially after a primary, if a party still have some wounds, but can Michael Steele deliver that message?

J.C. WATTS, (R) FORMER U.S. CONGRESSMAN: That was tame.

JENNIFER PALMIERI, CENTER FOR AMERICAN PROGRESS: Are you worried about Michael Steele?

WATTS: Something I can defend (ph). No, I think, obviously, Senator Reid has become, you know, a poster child for I think what many people seem to be policies taking us in the wrong direction. And I think he's going to be an integral part of this election, and I think Republicans are pretty optimistic because of what Senator Reid has been a part of.

KING: Speechless? Never seen Jennifer Palmieri speechless.

PALMIERI: I think he's trying to make this a referendum on Harry Reid, which is really a referendum on Obama. And I think, you know, what you saw the White House do yesterday, very clearly, I think the word "choice" spoke (ph) very clearly yesterday. The White House is on the Sunday shows which this is not a referendum, it's a choice and it's a choice between. Not that we have to define that choice on our side and there's a choice between what Obama has been in place, progress that we've made and then -- but then going back to the Bush policy.

KING: Let's stay on this race for a minute and take a closer look at the Republican candidate, Sharron Angle because she is a tea party favorite. She came out. She's a surprise to many when she won the Republican nomination. I want to show you one of her campaign ads. The issue is the issue that is everywhere this year, jobs. Let's take a look at this.

(BEGIN VIDEO CLIP)

(END VIDEO CLIP)

KING: That's a pretty effective, ominous music, shows the unemployment rate has gone up. She's saying in that ad, Harry Reid is the leader. Unemployment in this state is way up. The message is give him at least some of the blame. But listen to this what she told Jon Ralston, a great political reporter out in the state of Nevada. Listen to this just a short time ago.

(BEGIN VIDEO CLIP)

JON RALSTON, HOST, "FACE TO FACE": Provide billions of dollars of incentives for small businesses, and before the U.S. Senate and they're debating it this week. Do you support that?

SHARRON ANGLE, (R) NEVADA SENATE CANDIDATE: I think that's where the incentives should go is to small businesses, yes, because we know they are the engine that drives the job force.

RALSTON: We have made history tonight, because Sharron Angle just expressed support for Harry Reid bill.

(END VIDEO CLIP)

WATTS: She will retract that.

KING: If it's a lot of campaign (ph), you know, a lot of people questioning, they know there's energy in the tea party side, and then you these get candidates who aren't as polished, aren't as experienced and they make some mistakes. Do you get worried when you see those things?

WATTS: No john. The campaigns are long and we all, as candidates, have ample opportunity to put our feet in our mouth or put a foot in our mouth, and I think what Sharron did, I thought it was very effective, 4 percent unemployment, 14 percent unemployment today. I mean, when people are thinking about jobs, I think that's going to be very, very effective. And I think small business, as you showed all those commercials about candidates talking about jobs, but in the TARP, no lending to small business, no incentive for small business. That is where the focus should be.

KING: Quick.

PALMIERI: But I mean that's what -- if Rahm were here, the king of the mixed metaphor, he would say number A, what's your plan, Sharron? And number B, you just endorsed our biggest plan for jobs which is to give more -- to make small business be able to give loans because they're the second biggest drive over jobs.

KING: We will bring you both back. Less time tonight because of the BP news, but we'll bring you both back and we'll debate this Nevada Senate race until November.

When we do come back, "Pete on the street," are you flying the flag?

(COMMERCIAL BREAK)

KING: The World Cup brought out national pride and national flags, but what about now that it's over? What happens to those symbols? Our intrepid offbeat reporter, Pete Dominick, went on the street to find out.

(BEGIN VIDEOTAPE)

PETE DOMINICK, JOHN KING, USA OFFBEAT REPORT: You always have one out or --

UNIDENTIFIED MALE: I don't know. It is colorful.

UNIDENTIFIED FEMALE: I think the problem with flags, the American flag is busy looking.

UNIDENTIFIED FEMALE: I don't own a flag and I don't wave a flag, but I still love my country.

DOMINICK: Do you have a flag outside your house.

UNIDENTIFIED MALE: Of course.

DOMINICK: You do?

UNIDENTIFIED MALE: Yes.

DOMINICK: It's always up?

UNIDENTIFIED MALE: Always up.

UNIDENTIFIED FEMALE: There's one hanging in my garage it's like huge one in my garage.

DOMINICK: Are you a big flag guy or just that hat, your lucky hat?

UNIDENTIFIED MALE: It's lucky hat. It's my lucky hat.

DOMINICK: American flag outside your house, yes or no?

UNIDENTIFIED FEMALE: Yes.

UNIDENTIFIED FEMALE: Yes, sir.

UNIDENTIFIED FEMALE: No.

UNIDENTIFIED FEMALE: No.

UNIDENTIFIED FEMALE: Well, Labor Day comes around, I usually represent a different country, so --

DOMINICK: You do?

UNIDENTIFIED FEMALE: Yes. So, no American flag, but usually, I have a Caribbean flag.

UNIDENTIFIED FEMALE: Honestly and I'm guilty of this, when September 11 happened, I did put it up.

DOMINICK: That's the last time you were --

UNIDENTIFIED FEMALE: That's the last time I hung a flag.

UNIDENTIFIED MALE: The flag up every day and take it down at night.

DOMINICK: But you take it down at night and put it up in the morning?

UNIDENTIFIED MALE: Yes.

DOMINICK: We found him.

UNIDENTIFIED FEMALE: I did that when I watched the U.S. played England.

UNIDENTIFIED FEMALE: We put it up just for holidays.

DOMINICK: Sir, you have a -- let me see your flag on your shoulder. Is that the only flag you have?

UNIDENTIFIED MALE: Yes.

DOMINICK: You don't have any?

UNIDENTIFIED FEMALE: No, we don't have any.

DOMINICK: No.

UNIDENTIFIED MALE: American banner is what we have.

DOMINICK: American banner, what is that?

UNIDENTIFIED MALE: Banners that we hang on the house.

UNIDENTIFIED FEMALE: Classics are my colors and that's where they go in.

DOMINICK: So, there has nothing to do with patriotism?

UNIDENTIFIED FEMALE: Not really.

(END VIDEOTAPE)

DOMINICK: Two years ago, John King, I became a homeowner and it came with a flag. Before that, I didn't have one. Now, I have that and my JOHN KING, USA flag hanging outside my house.

KING: That is excellent. You know, we have flags around the studio right here. And I have my other flags. I wear them right here at the all-star break. These are my Red Sox cufflinks, Pete. I haven't seen you for weeks, so I thought I just, you know, run and we get them on TV there. I think they get in to work (ph). You know, it's All-star break, we're in third place, but we'll get there.

DOMINICK: Well, listen, I -- you know, John, it's a long season remaining. I think we have more players in the all-star game, don't we?

KING: I believe you do yes.

DOMINICK: By we, I mean the Yankees.

KING: But then it rested (ph) for the second half.

DOMINICK: Yes, good, nice spin. Nice spin. Be very rested.

KING: Have a great night, Pete. We'll see you tomorrow. Campbell Brown starts right now.