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No Conflict; Debt Ceiling; Election Hangover

Aired November 12, 2010 - 19:00   ET


JOHN KING, HOST: Thanks Wolf and good evening everyone. Tonight a close look at just what the Tea Party wants from Washington and the likely flashpoints not only with the Democratic president but also with the Republican establishment, banning earmarks and increasing the government's credit line are two big looming tests.

And we'll explore new moves by the Democrats including soon-to- be-former Speaker Nancy Pelosi to step out of the midterm election rubble. Plus the drama and mudslinging escalates in the Alaska Senate ballot count, write-in candidate Lisa Murkowski calls Tea Party favorite Joe Miller desperate and we'll also ask her about her feud with prominent conservative Senator Jim DeMint.

Let's just say, well, making up is hard to do. A packed hour ahead begins with a big meeting today featuring Tea Party candidates who will soon join the new Congress. They want to cut spending, repeal the Obama health care plan and more. A movement favorite who was once a top House Republican is warning them not to be co-opted by the GOP establishment, at the same time though, Congressman-turned- Tea-Party-activist Dick Armey says he doesn't expect major problems.


DICK ARMEY, CHAIRMAN, FREEDOMWORKS: There is no conflict here. There is no difference of objective or point of view.


KING: No conflict is a stretch to say the least. So let's explore the Tea Party wish list and where it rankles the establishment with CNN contributor Erick Erickson, he's a Tea Party ally from his post as editor of the conservative, Democratic strategist Peter Fenn and here to add their reporting to our discussion our senior political analyst Gloria Borger and our senior congressional correspondent Dana Bash.

Erick Erickson, let me start with you. Dick Armey says no conflict. Well in the House they're prepared to have a vote on banning earmarks, but as you well know, and you've been very critical of the Senate leadership they're saying no, I don't think so. We don't want to do that. Here's Senator Mike Lee, Republican of Utah, a Tea Party guy who knocked off an incumbent Republican senator saying they better make that a priority.

(BEGIN VIDEO CLIP) MIKE LEE (R), UTAH SENATOR-ELECT: I support a ban on earmarks, a moratorium, until such a time as we can get a permanent reform mechanism in place. At the end of the day I think we need a system in place that will guarantee full transparency, full accountability and full debate and discussion on each and every earmark (INAUDIBLE). But what we need in the meantime is to get Congress off the bottle while it irons out those proposals.


KING: So Erick Erickson, when Dick Armey says no conflict, maybe not so much conflict with the House, but with the Senate?

ERICK ERICKSON, CNN CONTRIBUTOR: Yes, definitely with the Senate, with the Senate leadership, there's some in-running around, the DeMint-Coburn earmark moratorium, what they're going to do. There's a report out tonight that basically they're going to flood the zone next week with a lot of anti-spending (ph) proposals, so when someone asks if they supported the earmarks ban they can say oh, I supported cutting spending without ever actually directly answering the question. Mike Lee is going to be an interesting one. He's a good friend. He made some waves today by hired as his chief of staff a lobbyist who was known for getting earmarks and says he did that to figure out how the other side's been doing it so he can stop it.


KING: That's one way to spin that. We'll see (INAUDIBLE). Others might spin that as outsider suddenly becomes insider. We'll see how this --

ERICKSON: Yes, I'm offering no comment. We'll --

KING: There you go. We'll give him the benefit of the doubt but we'll also keep an eye on that one. But Peter, this is hard for any new person coming to Washington. You say you're the outsider, you say you're going to do things differently. You say you're not going to listen to the leadership. I don't care if you're a Democrat or a Republican, a Tea Party guy or a union supported guy once you get here, it's hard.

PETER FENN, PRES., FENN COMMUNICATIONS GROUP: Well it's not taking them too long on this one I don't think. I mean if there was a song to be sung here it would be a whole lot of schmoozing going on and you know everybody is getting the calls from Boehner and they're happy to get them and they're trying to figure out now, wait a minute, what do I do next? And this just shows it I think. I mean they are not going to really have the kind of knock down drag out fight on earmarks that they thought they were going to have and that some of them wanted to have. Even Rand Paul said, hey, well, I'm against earmarks, I've campaigned against them, but you know I want that money to come to Kentucky.


KING: One of the interesting arguments earmark supporters are making is that if you give up this right, you end up giving too much power to the president. Here's Jim Inhofe who in the past I think did actually vote for an earmark ban once, but here he's making the argument now to keep them. Here's what he wrote in Politico today.

"So a ban on earmarks doesn't save one dime. It does however do three things. It trashes the Constitution -- appeal to the Tea Party there -- and violates our oath of office. It cedes Congress's power to authorize and appropriate to the president and it gives cover to big spending." So can they win that argument though, Dana?

DANA BASH, CNN SENIOR CONGRESSIONAL CORRESPONDENT: It's unclear, and there is going to be a test of this on Tuesday, there's going to be a vote inside the Republican conference. It is going to be a vote of new members like Mike Lee and members who have been there a while like Jim Inhofe who don't necessarily agree with that. It's going to be a secret ballot, though, so we're not going to know how --


UNIDENTIFIED FEMALE: -- who votes which way.


BASH: -- tell you that the people who are pushing this, a la Jim DeMint, it's his resolution. He is making -- at least people close to him are making it very clear that they believe that this is the first true test of Tea Party ideals --

GLORIA BORGER, CNN SENIOR POLITICAL ANALYST: And guess who's -- guess who's going to be opposed to earmarks? The Democrats are going to be opposed to earmarks. Barack Obama admits that he made a big mistake by not vetoing a measure that had a bunch of earmarks in it and I think now you're going to see a little bit of a turning of the tables here --


BORGER: Democrats saying you know what --


KING: So Erick, the Democrats, thanks to President Obama could come to your rescue here on this one?

ERICKSON: Well you know it's interesting, when the president spoke last Wednesday acknowledging the election results, he mentioned getting rid of earmarks --


ERICKSON: You know this is one of the caveats the Republicans in the Senate are saying is we want to get rid of earmarks but not unless the Senate Democrats will do it as well. It would be very humorous if the Democrats called their bluff on that.

(CROSSTALK) KING: But earmarks are a (INAUDIBLE) among conservatives, but they are a tiny piece of the spending problem in Washington, D.C.


KING: And we have been discussing all week this provocative proposal, some say crazy, some say brilliant by the president's debt commission that includes a lot of spending cuts. It includes some tax increases. It merges some agencies. Some people on the left say no way, dead on arrival because it touches Social Security and Medicare. Some people on the right say dead on arrival because it includes those tax increases. Here's Tom Coburn, a prominent conservative and I'm saying I agree with him on the specifics, but I say amen, Tom Coburn for what he says at the end of this.

He says "I think the problem can be solved without any tax increases." He's clear about that. "But I'll do what's best for the country in the long-term." Let me read that again. "I'll do what's best for the country in the long-term. If all I can get is 90 percent spending cuts and 10 percent revenue increases, I'll go for that. The point is that no one's going to get it all their way."

Erick Erickson in divided government, with a Democratic president, a Republican House and a narrowly Democrat Senate, isn't Senator Coburn actually speaking the truth there and saying if we want to do business in Washington, we're all going to have to give something up?

ERICKSON: Very much so he is speaking the truth. The sad thing the truth falls on deaf ears on both sides of the aisle. You've got Democrats and Republicans both saying this is dead on arrival when --

KING: So then what --


KING: What happens to it -- I'm sorry for interrupting -- but what happens on if Republican senators who are up in 2012 come forward and say, I don't like it, but I'll give you some tax increases, as long as you give me those spending cuts in a deficit reduction plan --

ERICKSON: Well that's just it --

KING: Will you encourage Tea Party primaries against them?

ERICKSON: It depends on what the spending cuts are and how they go about it. You know there are some acceptable increases. I'm a big fan of getting rid of some of these tax breaks that were lobbied into the tax code to complicate --

UNIDENTIFIED FEMALE: Like mortgage deductions or --


ERICKSON: Not mortgage deductions that would be a big old tax increase on the middle class. No, look at what some companies get in the tax code, which is why it's so big. Anyone who can avoid a lobbyist to go to Washington and get them a tax break gets one for them and not for the rest of us.

KING: Well amen. That's a reasonable counter proposal --


FENN: I commend you for it and -- but the key thing here I think is coming up soon, and that is if the Democrats decide that they're going to put that cap at -- or that floor really, at a million dollars and up, in other words, lets say, OK, fine, $250,000, $2 million, we'll extend the tax cuts, for the middle class we'll extend them. But if you make a million dollars plus a year, that's $113,000 that you get in a tax break every single year. That's two-tenths of one percent of the population. We get rid of that, Erick, it's $600 billion --


KING: Let me add -- let me add one more thing to the conversation. I want you to hear Mike Lee again, because this one could come up quite soon. The government keeps increasing its credit line, raising the debt ceiling because we need to keep borrowing money from China and others to keep the government going and there are a lot of conservatives who say we need to stop that. The question is do you stop it immediately or do you stop it in a grown up conversation so you don't paralyze the government. Here's Mike Lee on the question of should we raise the debt ceiling.


LEE: What I'm unwilling to do is vote to increase the national debt ceiling. So you know we have got a little bit of wiggle room there to play with. But once we hit up against that debt ceiling at $14.7 trillion, and we're about a trillion dollars away from that right now, I think that's at a point beyond which there is no ability to compromise, at least (INAUDIBLE). We cannot continue to mortgage the future of unborn generations of Americans.


KING: To not extend the debt ceiling at some point becomes shutting down the government (INAUDIBLE) right --

BORGER: And that didn't work so well for Newt Gingrich in the '90s. But maybe if they get some kind of serious plan to reduce the deficit and they have something that they can show and say we're on a path to reducing the deficit --


BASH: Problem is that's a long term thing --

(CROSSTALK) BASH: And I got to tell you, listening to Mike Lee, a Republican, I remember talking to so many conservative Democrats who just got defeated last Tuesday, really worried about doing this over the past several months, and they said you know what, this is against our DNA, we hate this, but we have to do it --


KING: This will be a huge -- it will be a huge test of their principles and whether you agree or disagree with them, they come to Washington with their principles on these issues, and it's a huge test of whether they can look at their principles and look at their responsibilities --


BORGER: And another huge test is if they have to come up with a budget alternative --

KING: Everybody --


KING: Quick time-out -- quick time-out here, we'll keep the trains on time. But up next what lessons, if any, are the Democrats learning from their midterm election shellacking? Republicans made Speaker Nancy Pelosi their villain -- you remember that -- but she says the GOP landslide is not her fault.

And later Senator Lisa Murkowski talks about making up maybe with someone in her own party.


UNIDENTIFIED FEMALE: I'll let him make that first move.



KING: Shifting now to the post election challenges facing President Obama and his fellow Democrats. There are policy fights, tax cuts and the military's "don't ask, don't tell" policy to name just two and leadership questions as well. On an Asia trip where he has failed to win agreements on major economic issues, President Obama today also was confronted with questions about whether he thinks it's best for Nancy Pelosi to stay on as the House Democratic leader or time for a fresh start.


OBAMA: I think Speaker Pelosi has been an outstanding partner for me. I think Harry Reid has been a terrific partner in moving some very difficult legislation forward and I'm looking forward to working with the entire leadership team to continue to make progress on issues that are important to the American people. (END VIDEO CLIP)

KING: That's the president today in Seoul. He's moved on since then to Japan. Let's check in with our senior White House correspondent Ed Henry, who is in Yokohama tonight. Ed, the president also answered no when asked today if the election results had weakened him on the global stage.

ED HENRY, CNN SENIOR WHITE HOUSE CORRESPONDENT: That's right. Our colleague Dan Lothian asked him that, not a surprise I suppose that he said no, I've still got some clout on the national stage and in fairness to him the fact that the G-20 summit really came up with very little, just a lot of talk about trade and currencies and not really a lot of action -- it's not his fault.

I mean this is what these summits often turn out to be, but I think when you look beyond the headlines at what he wanted to bring home, the fact is he wanted a free trade agreement with South Korea, and he's coming home empty handed, that is a defeat for him and that may suggest that he's got some issues with clout. And I think moving forward, looking at those tax cut negotiations with Democrats and Republicans next week at the White House, today he insisted at a news conference look, you know he tried to shoot down this "Huffington Post" story that suggested David Axelrod was saying they were going to have to cave in on extending the tax cuts for the rich in order to get the tax cuts for the middle class.

The president if you listen very closely to what he said, he said I'm still against permanent extension of those tax cuts for the rich. That leaves the door wide open to a one-year or a two-year extension of those tax cuts for the rich. Just two months ago he drew a line in the sand and said no way, wrong thing to do. We're not going to let it happen before the election. Now after the election it's looking like he is going to have to give in on that next week. That's a pretty good measure of where his clout is right now -- John.

KING: Ed Henry for us tonight in Yokohama, Japan. Ed thanks, nice Japanese guard (ph) and I miss those trips. Take care, Ed, see you in a bit.

So will Democrats agree on a post election strategy or squabble over whether to defend the left or move to the middle? Dana, listen here to Speaker Pelosi and NPR saying eventually -- essentially don't look at me.


REP. NANCY PELOSI (D-CA), HOUSE SPEAKER: The reason the election results are what they are is because we had 9.5 percent unemployment in our country. We didn't lose the election because of me.


KING: Yes?

BASH: You know what? I mean, look, I'm not here to defend or you know attack anybody, but I think, look, if things had turned out differently in that the economy had gotten better, she wouldn't have (INAUDIBLE) the brunt of it. I mean that's just the fact of the matter. Having said that, you talk to a lot of the conservative Democrats who are just apoplectic that she decided to run again, it's not necessarily that it was her fault.

It's just that she no question got caught up in everything and did become the face of what went wrong with the Democratic Congress, and that's why many of them are just so unhappy that she's still there. And I'll tell you that Heath Shuler, Democrat from North Carolina is going to be on CNN "STATE OF THE UNION" on Sunday, and he's going to make pretty clear, as he has before that if nobody challenges her, he's probably going to step up and do it. He's not going to win, but he's going to make a point --


KING: So Peter, among Democrats when you guys get together and talk about this, she's right, 9.5 percent unemployment, the Democrats were going to take a drumming. But people say 60 seats. You know the average in a midterm is 28 --


KING: Sixty seats is quite a bit.


UNIDENTIFIED MALE: A lot of seats.

KING: The Republicans took 60. They had -- remember early on -- remember early on, it was the president in some of the ads early on and the Republicans mostly dumped that.


KING: They went to --

FENN: And it was Reid and Pelosi and Obama and it was -- look morphed Bill Clinton into candidates in 1994. This is the worst loss we have seen since 1938, so it's been a while.

KING: I missed that one.

FENN: Yes, me too.


FENN: I mean I'm old, but I'm not that old. The other thing I think about this really is that Nancy Pelosi believes that this is a highly volatile electorate. She thinks this pendulum ain't done swinging, so she could find herself as speaker in two years --


KING: She will be the speaker next week. The lame duck Congress, they call it, comes back.


KING: All those Democrats just got voted out of office will be here. I want to go over and just go through the potential -- I'm (INAUDIBLE) emphasis on potential -- agenda here. Look at this fancy work. We have the United States Capitol. That's where they will meet underneath that dome and here are things they could do.

Number one they will do this. There are three senators who will be sworn in because these are terms of other senators. Mark Kirk will take Barack Obama's old seat. Chris Coons will take Joe Biden's old seat. And Joe Manchin will take the late Robert Byrd's seat in the United States Senate. That will happen.

They need to pass some spending bills to keep the government going. They could vote on repealing "don't ask, don't tell". I wouldn't hold your breath, but they could. The DREAM Act essentially gives -- extends some benefits to illegal immigrants, undocumented workers to get college benefits there, that's very controversial. Will they vote on the Bush tax cuts?

Wow, what a big debate. Extending unemployment benefits, tightening offshore drilling regulations, a new treaty on nuclear weapons with Russia is on the table. They might do this. Social Security recipients did not get a cost of living increase, the Democrats and some Republicans want to say give them a $250 one-time payment and there's also what's called doctor fix in the Medicare reimbursement program.

That is everything that is on the table. Let's ask the senior congressional correspondent in the room. One of those, two of those, three of those --

BASH: I was counting them actually.


BASH: I would say about three are probably pretty likely to go through. I think that as you said the $250 one-time payment for Social Security recipients is probably going to go through. I would imagine they'll care of the doctors and the Medicare reimbursement as well. But you know even the tax cuts, even the tax cuts of course they run out at the end of the year, so it is an urgent, urgent issue.

But some Republicans are saying you know what, we won't actually be crying hysterically if we don't do it. And we wait until Republicans take over in January and deal with something retroactively.

BORGER: You know the Democrats have an agenda this long, as you saw. The Republicans have an agenda this big and the agenda is perhaps the tax cuts extending them and maybe the continuing resolution, may be just --

(CROSSTALK) KING: Erick Erickson let me ask you -- let me ask you a contrarian or devil's advocate question here. Is there anything that conservatives would in quiet and whisper conversation like to get done that you would rather not have happen after January when you're in charge of at least one of these chambers, where you think maybe we should cut a deal with the Democrats and do this now and then we can blame it on them.

ERICKSON: You know other than the Bush tax cuts, no, I'm not sure that there is. Now you got a lot of Republicans not necessarily conservatives saying why don't we vote on the debt limit now instead of next year --


ERICKSON: But by and large, no, the Bush tax cuts is going to be a big one for them as is the doctor fix with Medicare.

KING: I want you to listen to this, Peter Fenn. You know the president has named his deficit commission and many of his friends on the left had said dead -- his critics on the right have said dead. One of the guys heading is Erskine Bowles. He was Bill Clinton's chief of staff. He's along with former Senator Alan Simpson, the Republican, chaired the commission.

Here's what he told "The Wall Street Journal" when he was trying to sell essentially seeking some input on the recommendations and then trying to sell them. "I told the people in the White House I had spent more time listening to people in the opposition party than they had done as a whole group." I thought this was going to be the post partisan bipartisan administration.

FENN: Well you know Erskine speaks his mind and on this one I think, look, he's trying to sell this approach and I think -- I'm of the view that, you know, everything should be on the table. I mean folks have come out right away, within 24 hours and say that's dead, that's dead, I'm against this. I'm against that.

I mean -- you look there are interests and they should voice their opinions, but basically I think the approach that some have which is to say hey, listen, let's step back a little bit. Let's figure this thing out. There's a lot of meat in here and let's digest it first.

BORGER: Erskine Bowles is somebody whose name has been floated to take Larry Summers' job. I'm wondering after that quote --


BORGER: -- whether actually he's -- but -- but he's the kind of person that some people believe would do well to be in this White House because that's exactly what maybe they need to hear.

KING: That's good relations -- good relations with the --

ERICKSON: Well -- you know just keep in mind that back in 1994, we had the Social Security Reform Commission and it didn't exactly go anywhere. After January, when the new kids are in town and there's a different speaker, I'm not confident that this debt commission will go anywhere either, but they certainly need to be reading through this. One of the good things about the debt commission report was that it really showed you the trade off, if we do this, you get this result, if we do this, you get something else.

BASH: The key to what Bowles said is not so much the substance, it's the tone and the tenor and the symbolism that the White House has got to be serious about talking to Republicans.

KING: I don't think they don't have any choice right now.

BASH: Yes.

KING: Peter, Gloria, Dana, Erick thanks for coming on a Friday night. Enjoy your weekend. When we come back, the U.S. Supreme Court weighed in today on gays in the military. We'll check the latest headlines just ahead.

Then we go "One-on-One" with Senator Lisa Murkowski. About 90 percent of Alaska's write-in ballots are going in her favor. And she says someone in her own party will ever make the first move she wants to make up.


KING: Welcome back. Let's check in with Joe Johns for the latest news you need to know right now -- hey there.

JOE JOHNS, CNN SENIOR CORRESPONDENT: Hey John. The Supreme Court today let the military keep enforcing the ban on openly gay troops. The Justices turned down a request to temporarily suspend it while the "don't ask, don't tell" policy is argued in the courts.

Defense Secretary Robert Gates put out a statement today. In it he said he's very concerned and extremely disappointed because unnamed sources within the Defense Department selectively leaked results of the military survey of troops on repealing the ban on gays.

Senator John McCain has threatened to filibuster if the repeal of "don't ask, don't tell" is included in the Defense spending bill coming up in Congress. But his wife Cindy criticizes the military's ban on gays and a new video campaign against the bullying of lesbian, gay, bisexual and transgender teams. Let's take a look.


CINDY MCCAIN, WIFE OF SEN. MCCAIN: Our political and religious leaders tell LGBTU (ph) that they have no future.

UNIDENTIFIED MALE: They can't get married.

UNIDENTIFIED MALE: They can't donate blood.

C. MCCAIN: They can't serve our country openly. (END VIDEO CLIP)

JOHNS: You know, John McCain was here to force supposedly the maverick in American politics, but I think there's another maverick in the McCain household right now.

KING: There's a maverick in the McCain household and spokesmen for both say they have their disagreements and that's OK. But if he has to launch a filibuster, maybe he should stay here in Washington and not go home -- not go home. Joe, we'll see you in a bit.

A lot more to come in the program, including they're still counting the ballots, the write-in ballots up in the state of Alaska. We'll talk to the write-in candidate. She happens to be an incumbent senator, Lisa Murkowski, a lot of drama there and when she comes back to Washington.

And we'll talk to our Richard Quest because as we talk about the deficit in this country, they're already dealing with this across the pond in Great Britain where they say there's an age of austerity. Richard has some fascinating thoughts on that and we'll close our show tonight with our good friend Pete Dominick. We'll play a little who said?


KING: Alaska's vote counters are about halfway through the 92,000 write in ballots in the U.S. Senate race. Nine out of ten ballots are being sorted for U.S. Senator Lisa Murkowski. She had to run as a write in candidate after she lost the primary to Joe Miller. Senator Murkowski joins us now from Anchorage. Senator, Mr. Miller, as this count goes underway and as you know from your campaign, people had to fill in the oval and write your name. He says the candidate named Murkowski seems to be getting special treatment from state officials, is that true?

SEN. LISA MURKOWSKI (R), ALASKA: What people have done is they have filled in the oval and they have spelled the name right and Miller doesn't know what to do with the fact that people actually did what they were supposed to do. What we're seeing now, I believe quite honestly are acts of desperation, we're seeing lawsuits that are being filed. We're seeing ballots that are perfectly clear, perfectly clear ballots being charged.

KING: Many of the ballots are exactly spelled correctly. There are some that are close but not exact. There are some that say Lisa m-o-r-k, or Lisa m-e-r-k, they demean you, but they're not spelled exactly like you. He's contesting that he believes the name isn't spelled exactly right that it's a violation of state law.


JOE MILLER (R), ALASKA SENATE CANDIDATE: We're going to be the kind of candidate that looks to the law and expects the rule of law to be applied in this case. The people of the state of Alaska elected a legislature that enacted a law that controls exactly how these ballots are to be treated. That's what we're going to insist on is that the rule of law is applied.


KING: His point is exactly as these ballots should be treated meaning everything has to be spelled perfectly and your advocates say there's a 2007 case where the Alaska court says we have consistently emphasized the issue of voter intent, so if it's clear it's Murkowski, it should count, but Mr. Miller says it has to be spelled right.

MURKOWSKI: Look at what Mr. Miller is challenging, an example of a ballot today, Lisa Murkowski spelled exactly right. But the l instead of being printed is a cursive l. He's challenging that. I ask you, what would the rule of law be on that? It's clear what the voter intent is, the voter intent is Lisa Murkowski. This is the level of challenge that they have resorted to. And again, I would suggest to you that when you make challenges like this, you are working to disenfranchise that voter.

KING: What is your sense of when this will be resolved, not only the count but the legal challenges, in the context of when the new Congress believes in January, do you believe there will be, whether it is you or Mr. Miller, that there will be a senator from Alaska who will by that point be certified the winner?

MURKOWSKI: I absolutely believe so. In fact I think we will know with greater certainty by the end of this weekend, we will be able to move beyond where we are with the count in Juneau and Mr. Miller will realize that any legal challenges that he may choose to advance are effectively going to be mute.

KING: If you are here as Alaska senator in January, one of the questions for the Republicans in the new Congress will be whether they are willing to ban earmarks. You in the past have had 57 earmarks totally $27 million in 2010. In 2009, 95 earmarks totaling about $257 million in fiscal 2009. Do you want to continue with the earmarks or do you that the will of the voter, if you will, especially the conservative voters this year has pushed for a ban?

MURKOWSKI: I think that the way that Senator Jim Inhofe has been presenting this argument in saying, look, if you're really serious about reducing spending if you're really serious about making sure that there is openness and transparency in the process, then eliminating earmarks is not going to be the end-all and be all of the spending issues.

KING: So the tea party's wrong?

MURKOWSKI: What Inhofe's -- well, the tea party needs to and it's not just the tea party, there needs to be a clear understanding of what an earmark really is. I don't think that's the direction we should go, and I think most people, particularly the tea party people who say states rights, we'll make sure that the states have a say in it. We'll make sure that your state's representatives have a say in it. Don't shift it over to the agencies for that decision making to be done there. KING: Earmarks are just a tiny percentage of the spending in Washington and there's a bigger conversation that's starting now about based on this president's commission of deficit and debt reduction in the long-term, the immediate reaction was pretty partisan. People on the left said no way because their proposal touched social security and Medicare, many people on the right said no which because in addition to a lot of spending cuts it includes some revenue increases, higher taxes. Is that your position? If there's any higher taxes, no way, or should both parties say let's set ideology aside before we have a conversation and decide we can't cut social security and Medicare or can't maybe in the end have higher taxes?

MURKOWSKI: I think we have got to be willing to put everything out on the table. Now, we have already seen the people starting to line up and say this can't be on this, this can't be on. If we can't get beyond all of the sacred cows that we all have out there, we're never going to get to tackling these very difficult decisions. You know, we shouldn't -- you shouldn't shoot the messenger because they have put that out there as an issue. You shouldn't say, well, we cannot go there before we even had the conversation. I think we all need to take a very critical look, a very critical review at some of the proposals that are being put out there, we need to be in a listening mode right now, rather than automatically jumping to this point where we're not even going to be able to talk about it. Because if we get into that point, we will never be able to resolve these very difficult issues that we have in terms of how we meaningfully reduce our spending.

KING: The last time we spoke, you voiced some displeasure at one of your senator colleagues, Jim DeMint whose political action committee was spending on behalf of Joe Miller in the race up there. You voiced your displeasure with that and then I spoke to Senator DeMint and he said this.

SEN. JIM DEMINT (R), SOUTH CAROLINA: We have some making up to do, I'm sure if she comes back, but I'm still hopeful Joe Miller will pull off a miracle there in Alaska.

KING: If you come back to the Senate, peace with Senator DeMint or will that feud continue.

MURKOWSKI: He has suggested that he's got some making up to do. I'll let him make that first move.

KING: Lisa Murkowski is the Republican Senator from Alaska, at the moment a write in candidate, awaiting the results from that election. Senator Murkowski thanks for your time.

MURKOWSKI: Thank you John.

A sometime violent protest in the United Kingdom a sign of things to come here in the United States if Washington gets serious about deficit reduction. We'll ask CNN's Richard Quest after the break.


KING: Welcome back. Joe Johns is back with us with more news you need to know right now.

JOE JOHNS, CNN CORRESPONDENT: John, medical workers in Haiti report an alarming increase in cholera cases, 12,000 people have gotten sick. The U.N. wants it could explode to 200,000 and is appealing for money to help. So far nearly 800 people have died.

Remember last week when the U.S. stock market was at the highest point in two years? It did not last. Today they finished their worst week in three months.

It's time for political junkies to update their reading list. Louisiana Governor Bobby Jindal's new book "Leadership and Crisis" comes out next Monday. Then on Tuesday, it's President Obama's new children's book, it's called "Of Thee I Sing" a letter to my daughters.

And in San Francisco today, Mayor Gavin Newsom vetoed a controversial ban on toys in happy meals saying even though we need to fight childhood obesity, parents not politicians should decide what their children eat. He says he thinks this law goes just a little bit too far. Talking about the nanny state all over again.

KING: Gavin Newsom, liberal Democrat, agreeing with Sarah Palin, conservative Republican. Maybe she'll bring him some cookies like she did those students in Pennsylvania.

JOHNS: Won't be very good health wise. Maybe some broccoli.

KING: Especially on a Friday night, no criticizing cookies. Joe Johns, thanks.

When we come back, the age of austerity in Great Britain; as we debate about what to do about our deficit here, are there parallels between the debate in the United States and in the UK? Richard Quest helps us break it down.


KING: President Obama's deficit commission is stirring a feisty debate about government spending priorities. But across the Atlantic, Britain's effort to scale back the government is moving at a faster pace and is generating at times angry reactions. The U.S. is a lot bigger than the UK but the problems and many of the solutions are similar. Let's take a look. If you look through here, here's the U.S. debt and the UK debt. Now we have a much bigger debt in the United States. Long-term debt more than 9 trillion, as opposed to 1.6 trillion. This is a country of 3.9 million people. The UK a little more than 62 million but if you average it out, look at this pretty similar in terms of the per person burden, just shy of 30,000 in the United States, just shy of 27,000 in the UK, the debt carried over, the debt is 62 percent, our long-term debt about 62 percent of our GDP, it's about 76 percent in the UK. That's one way to look at it.

Here's what they're proposing. Prime Minister Cameron has put on the table a number of controversial changes. Some of them will sound familiar if you've been following the debate here. Cut government spending by 20 percent, the prime minister says over five years. Eliminate a half million public sector jobs, cut local government funding, stimulus program here, same idea in the UK, by 71 percent by 2015. Raise the retirement age, remember that from the debate here? To 66 in Great Britain, they want to do it by 2020. Cut the defense budget. That's on the table here as well. Cut long-term jobless benefits at 12 months, that's going to debate in our Congress. Cut foreign office, that's the international foreign aid spending by 24 percent Prime Minister Cameron wants to do. Cut the royal family's budget by 14 percent in 2012 to 2013. Increase the value added tax, very controversial, increase the capital gains tax, very controversial, cut welfare and pension spending by 11 billion also cut police funding by 4 percent a year. This is the prime minister's case; he began making this case for the major social net proposed changes long before he moved 10 Downing Street.

DAVID CAMERON, BRITISH PRIME MINISTER: The age of irresponsibility is giving way to an age of austerity. Labor's debt crisis. The highest borrowing in our peacetime history. The deepest recession since the war. Labor are spent, the money has run out.

KING: Joining us now is our London-based correspondent Richard Quest. You hear Prime Minister Cameron calling this the age of austerity. He says the money has run out. But as we see here in the United States and perhaps on the other side of the pond, when a leader makes these proposals, one of the big questions is are his people with him?

RICHARD QUEST, CNN CORRESPONDENT: And at the moment, the polls seem to suggest in the UK, yes, they are with the prime minister. Everybody knows something must be done. The austerity measures that were introduced by Cameron's coalition certainly raised eyebrows, they were very deep and very severe. And the truth, John, is that we haven't really seen them implemented. It's as we go into the winter months that the child benefit, the housing benefit will be cut, the taxes on VAT go up in January to 20 percent. So it's only the implementation that will really be as you would say, whether the rubber meets the road. If we have had indications from France embarrassed, it's been very, very aggressive opposition and the same indeed of course in Greece.

KING: And is it overall the plan, or are there specific elements, whether it's the pensions or whether it's the tuition, the social welfare, is it one or two things or is it just when you add it all up?

QUEST: The truth is that austerity is a fine policy. Until it hits you. And that's what's happening in the UK at the moment. Everybody believes something must be done, but please, nimbi not in our backyard. And the problem here is the depth of the cuts is so great that everyone will be affected. Now Cameron and George Osborne, his finance minister, admitted exactly this in the budget when they said, everybody has to play their role. We're all in it together, and that's the refrain that they hope will ultimately be the clarion call, the war-time spirit, the Dunkirk spirit, if you like, that this is a war on the deficit. And only by everybody attacking it can they hope to beat it. Now, it is a different situation in the United States. Everybody looks at the U.S. and wonders when will the U.S. start cutting the deficit. Luckily for you, you are the world's reserve currency. You have strong economic fundamentals in many parts of the country. And ultimately that is what is supporting your bond market at the moment.

KING: We'll get to the U.S. leadership in just a second. When we see the protests on the street in recent days in the UK, is it widespread. Is it massive demonstrations or is it a carefully organized but more narrow political opposition?

QUEST: It's neither at the moment. In the UK, it was a student demonstration that turned ugly and then turned a bit violent. What I would call argy bary, nothing to get excited about. However, as we go into winter and child benefit is cut and housing benefit is cut and disability benefit is cut and those who have applied for unemployment benefits are made to work if they're going to get their benefits, then we could be into a repeat of what we saw during the Thatcher years with the council tax, the poll tax, if you remember, where the demonstrations weren't just noisy, they were violent and bloody. If that happens, then we're in a very different game. All bets are off. But the coalition knows that, and for the time being at least everybody in Britain is bracing for what frankly is going to be a difficult, uncomfortable, and probably noisy winter.

KING: Argy bargy is your term. Nothing to get too excited about. That's what the people in the United States are saying about the president's trip to Asia in recent days. The president of the United States has failed to secure agreement on big economic issues with South Korea, with the g-20. He had a news conference in Seoul, Richard, and he says, well, one of the reasons the United States is getting so much heat is, in his view, because it's trying to lead. Listen.

PRES. BARACK OBAMA (D), UNITED STATES: Part of the reason that sometimes it seems as if the United States is attracting some dissent is because we're initiating ideas. We're putting them forward. The easiest thing for us to do would be to take a passive role and let things just drift, which wouldn't cause any conflict.

KING: No deal with South Korea. No agreement with China. A tough meeting with the German chancellor. Is that how the president of the United States is viewed around the world as leading these conversations?

QUEST: At the moment, the president of the United States is not particularly seen as leading. The fiscal deficit, the inability to get things through Congress following the midterm elections. I would never say he is perceived overseas as a lame duck president. That would be far too disrespectful at this point in the proceedings. But in terms of leading an international coalition for growth, I think that would be putting it way too strong. On the other side, John, let me be devil's advocate here. The rest of the world really -- there's a good old-fashioned dose of hypocrisy about the way they're treating the United States. On the one hand, they don't want quantitative easing. They want some of the policies because it experts unemployment, it exports -- it does all sorts of things, currency devaluations around the world. But they also don't want the U.S. consumer and the U.S. economy to be moribund for a moment longer than necessary because the U.S. is the largest market to sell into. So I do sometimes have a wry smile when I hear these critics of the U.S. because, frankly, at the moment the president's damned if he does, and, yes, damned if he doesn't.

KING: Excellent way to put it. Richard Question thank you. A conversation with Richard is always everything but argy bargy. Richard, appreciate your time. Have a great weekend.

When we come back, a comic says she owes her success to a politician. Find out who when we get right back here with our own comic genius Pete Dominick.


KING: Let's end the night the way we like to, with our offbeat reporter Pete Dominick. He is in Atlanta tonight. You're a comedian. Tina Fey is a comedian. Good for her, she got the Mark Twain Award this week. That's tough for Boston. Mark Twain Award. I got it that time. Listen to her giving credit to someone she says has helped her career.


TINA FEY, COMEDIAN: I would be a liar and an idiot if I didn't thank Sarah Palin for helping get me here tonight. My partial resemblance and her crazy voice are the two luckiest things that have ever happened to me.

KING: Good for her. Right?

DOMINICK: Well, absolutely. I mean, Dana Carvey can thank the former George Bush. You know, yeah, you've got to give credit. Comedians, we latch onto something, and we're not good people, John King. We find someone to make fun of and we make fun of them. Whatever the weakness, the quirk, whatever it is, especially if it's a politician, it's been hard to make fun of the president because he doesn't have enough quirks. He says "look" a lot, and he's got that interesting cadence, but nobody's really been able to latch on to making fun of the way he speaks. Somebody will crack it soon.

KING: Hold on for me here. Look straight into the camera because if Tina Fey owes Sarah Palin, who does Pete Dominick owe? Is it Daughtry? Is it Mr. Clean? Is it Yule Brenner?

DOMINICK: Aha. These are good bald jokes. I stand by them. I have been confused for al of them. But mostly I get Mr. Burns, Montgomery Burns from the Simpsons. Homer, where is he? I've also gotten Gollum from Lord of the Rings, both of which send me to therapy on a weekly basis.

KING: Do we pay for that therapy?

DOMINICK: I might go to therapy from those descriptions. Who do you get, John King? A young Ronald Reagan? Look at these kids! We've got to get out of here. Daughtry. They think I'm Daughtry.

KING: Very happy young students. We're happy to end the week with some laughs and some smiles. Pete, stay safe. See you on Monday. We'll see you on Monday, we hope, too. Have a fantastic weekend. Stay safe.