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JOHN KING, USA

Warrant Issued for WikiLeaks Leader; Bipartisanship?; Trust Deficit; National Debt

Aired November 30, 2010 - 19:00   ET

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


JOHN KING, CNN ANCHOR: Thanks Wolf and good evening everyone. We begin tonight with breaking news. Interpol has just issued an international warrant for WikiLeaks founder Julian Assange, not in connection with the latest leak of U.S. secret documents, but for alleged sex crimes. The Swedish court says Assange is suspected of rape, sexual molestation and illegal use of force. "TIME" magazine just today interviewed Assange reporting they spoke over Skype from an undisclosed location.

Joining us by phone for what this all means our CNN senior legal analyst Jeffrey Toobin. Jeffrey, Interpol issuing this warrant, the Swedish authorities had already made their case, what's the significance?

JEFFREY TOOBIN, CNN SENIOR LEGAL ANALYST (via phone): Well, it means that if he is found in any of the countries that subscribe to Interpol and it's really most of the civilized countries in the world, those, the local police forces there can hold him for an extradition proceeding. They don't have to. It is not an order to these countries to arrest him, but it is certainly an invitation for them to hold on to him and let the Swedish authorities try to get him back to Sweden.

KING: Now, these are charges that he has denied. He has suggested they are somehow trumped up by his critics here in the United States government. This is one challenge for Mr. Assange, but you also believe that he could face a significant legal issue because of the leaks.

TOOBIN: Oh, I think that is a much bigger legal problem. The United States government is united in its outrage and in its belief that Assange has committed a crime here. And frankly given what's public, it seems very likely that he's committed a crime. The attorney general, Eric Holder has said there's a criminal investigation going on. I would not be at all surprised even at this moment that there was a sealed arrest warrant for him that the FBI was waiting to slap on him when they confined him and that's of course a big if whether they confined him.

KING: Whether they confined him and you mentioned the Interpol warrant in some countries would hold, in some countries perhaps would not extradite him. What if the United States had a secret arrest warrant?

TOOBIN: Well, if they had a secret arrest warrant, there are certainly some countries with whom we have a very good and close relationship, which would cooperate in that sort of arrest. But I can't say for sure which countries they are. And I certainly don't know where he is at this point.

KING: Jeffrey Toobin thanks for your help and counsel there. More on the WikiLeaks story a bit later on in the program, but turning now to politics. For about an hour today, Washington was a strange and unfamiliar place. No Slurpees and not really a summit, but a face-to-face meeting at the White House between a Democratic president and Republican congressional leaders who truth be told barely know each other.

That unfamiliarity is the source of Washington's most fundamental problem, the trust deficit. Whether it's an issue with your spouse or partner or disagreement with your boss, a foundation of trust is how we all get through the tough ones. So it should bother you -- it should bother you no matter your politics that President Obama and the country's two most powerful Republicans, one of them about to be speaker of the House barely know each other and don't really trust each other. That trust deficit makes progress on just about anything more difficult, which is why this post-meeting tone was more than a little noteworthy.

(BEGIN VIDEO CLIP)

BARACK OBAMA, PRESIDENT OF THE UNITED STATES: Let's not try to work the Washington spin cycle to suggest that somehow the other side's not being cooperative. I think that there was a sincere effort on the part of everybody involved to actually commit to work together, to try to deal with these problems.

REP. JOHN BOEHNER (R-OH), HOUSE-SPEAKER ELECT: We believe in different things about the appropriate role of federal government. But having said that, the more time that we do spend together, we can find a common ground because the American people expect us to come here and work on their behalf.

(END VIDEO CLIP)

KING: Yes, it really happened, really happened right here in Washington, D.C. of all places, a grown-up conversation in which Democrats and Republicans acknowledged real and important philosophical differences but agreed to try -- to try to find common ground. Well, now comes the hard part. Putting today's tone to the test on some big issues from tax cuts and spending and deficits to a nuclear arms treaty and the question of whether gay Americans should be allowed to serve openly in the military.

And, of course, by sundown there were cracks in the kumbaya spirit. So count me as skeptical, but let's test this talk of a new beginning issue by issue and here to help CNN contributors Erick Erickson and John Avlon and here with me in Washington Democratic strategist Cornell Belcher, senior political analyst Gloria Borger and senior congressional correspondent Dana Bash.

Dana Bash to you first and of course not all spouses have differences, I just want to make that clear. But what's the first test out of the box? Is it tax cuts?

DANA BASH, CNN SENIOR CONGRESSIONAL CORRESPONDENT: Absolutely, it is tax cuts. What they did today is they agreed to at least put together a small group of lawmakers and members of the administration to have negotiations on tax cuts. And I was just told that the first meeting is actually going to be 10:00 a.m. tomorrow morning, so they're going to start out of the box. And you know at first I thought, well, maybe a Republican's being put on the spot here or is this kind of kicking the can down the road and not having the president himself and the leaders make the tough decisions.

And I talked to many Democrat and Republican sources who say you know what, this is kind of the way it's supposed to work. It's OK. You get people in a room who are in power to make decisions and you do it. It is not going to be easy. Whether or not they can do it is still a big question mark because the difference is as you heard from both of them today philosophically especially on tax cuts are huge, but this is the first test.

KING: So let's listen. Here's the president after the meeting. He says it was great to talk. It was great to start to build the relationship. But yes, on tax cuts, we have a disagreement.

(BEGIN VIDEO CLIP)

OBAMA: Here we disagree. I believe and the other Democrats who are in the room believe that this would add an additional $700 billion to our debt in the next 10 years. And I continue to believe that it would be unwise and unfair particularly at a time when we're contemplating deep budget cuts that require broad sacrifice.

(END VIDEO CLIP)

KING: On the floor of the United States Senate, though, one of the men in the meeting, the Republican Leader Mitch McConnell thinks differently.

(BEGIN VIDEO CLIP)

SEN. MITCH MCCONNELL (R-KY), SENATE MINORITY LEADER: It should be what's good for the economy and for the American people. And if we leave the politics aside, if we look at the facts, the answer here is simple. No tax hikes on anybody, no tax hikes on anybody period.

(END VIDEO CLIP)

KING: So if yes, they're going to build this new relationship of trust. Yes, they're going to meet more often, but --

GLORIA BORGER, CNN SENIOR POLITICAL ANALYST: Well, look, I think what this is probably leading to -- and Dana knows much more about this than I do -- is some kind of a temporary extension of tax cuts, which is perhaps what some Democrats could -- could sign on to. They don't want the tax cuts on the wealthy to be permanent, but they might be able to in this lame-duck session at least agree to that. And the Republicans I spoke to today said that they think that they may actually get to that point in the lame duck.

KING: So a temporary deal punted to the next presidential election? Is that leadership?

CORNELL BELCHER, DEMOCRATIC POLLSTER: Well no, but it is about sort of politics does come into play. And it was interesting that even in the Kumbaya sort of moment that the speaker (INAUDIBLE) speaker (INAUDIBLE) said that we have different views on government, which by the way is a political dig.

UNIDENTIFIED FEMALE: You think.

BELCHER: -- because he's basically saying we're for small government and they're for big government in his all sort of political way, but look --

KING: But he said it politely.

BELCHER: He did say -- he did say it politely. But look -- I mean look there is going to probably be some compromise on this. However, it's very interesting what the current speaker said about this. And she said I'm willing to be the lone voice on this, sort of fighting for tax -- for the middle class tax cuts because guess what? This is going to be a political issue now because -- we're going to -- on our side we're going to say you know what? We're fighting for political -- for tax cuts for working people, they're fighting for tax cuts on the rich. So the politics doesn't really stop.

KING: Let me show you more the map before we bring Erick and John in for more of the politics. I just want to show a little bit of the math here when it comes to tax cuts -- if we can get my friend here to cooperate. Well my -- there we go.

Tax cuts come up, here's what the president wants. Renew the tax cuts -- these are the Bush tax cuts passed in 2001. The president wants to renew them for individuals making $200,000 a year or less or couples making $250,000 or less. Even the president's plan would add $3 trillion to the deficit over the next 10 years.

Here's what the Republicans want, just extend all the tax cuts permanently. That would add $4 trillion to the deficit over the next 10 years, so we're not talking chump change here. This is $1 trillion; even the president's plan is $3 trillion. Erick Erickson, these negotiations will begin, as Dana notes, the first meeting is tomorrow.

The Senate will be represented by John Kyl, the number two Republican in the Senate a conservative from Arizona. And yet you tweeted this today. Get ready to get screwed on taxes. Senate GOP chooses Senator Kyl to handle negotiations. He's horrible on strategic thinking.

ERICK ERICKSON, CNN CONTRIBUTOR: Senator Kyl posits (ph) himself as a good strategic thinker, but I've never known him to be a good strategic thinker and that's a problem. The Senate GOP typically gets confused on tactics and strategy and sometimes outthinks themselves. They like the Democratic politicians in Washington have two favorite games, spin the bottle with K Street and kick the can with other politicians. They're going to kick the can with this policy.

UNIDENTIFIED FEMALE: So you think temporary is kicking the can?

ERICKSON: I absolutely think they're going to do something temporary. We'll have this fight again in two years.

KING: John Avlon, as someone who tries to study the middle of American politics, both sides today clearly thought it was important for a tone -- for tone to come out and say, hey, we're going to try to get to know each other; hey we're going to get together more often. We're going to try to build the relationship of some level of trust. The substance is hard, but is that in and of itself an important step?

JOHN AVLON, CNN CONTRIBUTOR: It is an important step and it's a recognition of what the American people overwhelmingly want. There's a beltway cynicism about bipartisanship. Remember Dick Armey's famous line a decade ago where he said bipartisanship is another name for date rape. There's a fundamental distrust that is so cynical to the ears of the vast majority of the American people who expect us to elect people and then find a way to work together.

Find a way to define that common ground. And on taxes it's possible as well whether it's a temporary extension or a proposal being floated by Senator Schumer and McCaskill to raise that top rate to a million, which I think would actually achieve a genuine substantive compromise and make it much more difficult for Republicans to argue that those folks who make over $1 million a year shouldn't have slight tax increase in order to help delay some of the deficit costs. These are all negotiations, but it's exactly the right tone; it's what the American people want. And I really applaud them for both sounding like --

(CROSSTALK)

ERICKSON: You know John I would think it's just the opposite though. I think most Americans understand that when they hear bipartisanship they've got to bend over and get ready.

AVLON: No, Erick, what are you talking about, man?

ERICKSON: Well every time Republicans and Democrats compromise on something, they compromise in favor of bigger government. They rarely ever compromise in favor of getting rid of government. That's the problem we're going to have with this Deficit Commission report coming out, as well.

(CROSSTALK)

BELCHER: But really quickly, John, as the guy who actually earns a living from politics doing consulting, let me take up for politics for a second because this is actually really important stuff. There is a worthwhile fight to have, to sort of -- for Democrats to say, you know what? Too much has been going to the rich; I want to fight for the middle class. And on the same side of the Republicans, you know there's a fight worth having, not partisans --

(CROSSTALK)

BELCHER: -- but that's a fight -- that's a fight worth having on those issues, so politics isn't all bad. There is some --

KING: No politics is good. Politics is good. I'm a big fan of politics. I make my living off politics too on a different side than you do. I think it's great. I do think it would be nice if they would trust each other to have some relationship -- disagreeably, I guess.

(CROSSTALK)

KING: Maybe that's too much to ask --

(CROSSTALK)

BASH: They are going to have more meetings and they are (INAUDIBLE) potentially go to Camp David.

KING: Camp David, yee-haw --

BASH: No, I know exactly. It sounds like -- it sounds like (INAUDIBLE) big deal, but the fact of the matter is it is a big deal for these people who do not, as you said very aptly have any relationship.

KING: And so here's the question, if the leaders agree to at least have a more polite and civil relationship, which I think all Americans could be in favor of. We'll see what the substance is if people can disagree about that. But maybe they can do it agreeably, that would be one thing. How far down does the responsibility for bipartisanship go and I ask in the context of this.

Joe Barton, many of you remember here at home. He is the ranking Republican of the House Energy Committee. I'm getting the name of the committee wrong. He's the one who said that -- essentially apologized to BP for what was happening during the oil spill. He is campaigning to be chairman of that committee.

He faces some opposition. I want to show you the last slide from a slide show he sent around to his colleagues where he said Speaker Boehner is our Dwight Eisenhower in the battle against the Obama administration. Majority Leader Cantor is our Omar Bradley. I want to be George Patton. Put anything in my scope and I will shoot it. Using militaristic terms, it's an interesting campaign argument, but if we're going to have this new let's try to get along and disagree agreeably, that's not that --

(CROSSTALK)

UNIDENTIFIED FEMALE: That's the problem.

UNIDENTIFIED MALE: There's no desperation.

(CROSSTALK)

ERICKSON: You know Joe Barton is not going to become chairman of the House, Energy, and Commerce Committee. They're not going to give him that waiver particularly after making such a big stink over him not being the chairman when they got back because of the BP comment. It's going to be Fred Upton or someone else, probably not even Upton.

UNIDENTIFIED FEMALE: Right.

(CROSSTALK)

ERICKSON: It's not going to be Barton.

AVLON: Because it would be a dumb decision on the BP side alone. But the point is, is that we've actually become desensitized. This language about the war against the Obama administration and in this case, you know obviously, it's a little unhelpful that Barton by identifying Republican leaders as U.S. Army generals de facto makes the Democrats Nazi Germany. But look that is a part of the tone of the problem (INAUDIBLE) stop bipartisanship, a deep cynicism, a hostility and anger, an identity, a tendency to demonize people that disagree with us and that's what we need to overcome.

BORGER: But he's appealing to people in his own party, you know.

UNIDENTIFIED MALE: Yes.

BORGER: There are 34 new House Republicans who have never held elective office before. And they got elected by hating Democrats, hating deficits, hating Obama, a lot of them.

UNIDENTIFIED MALE: How about -- how about opposing --

(CROSSTALK)

BORGER: I think that he was trying to appeal to those people in the Republican caucus.

(CROSSTALK)

BELCHER: Real quickly, but the incoming speaker --

(CROSSTALK)

BELCHER: But the incoming speaker has got the tiger by the tail here on this because at one time, unlike Mitch McConnell in the Senate who by the way doesn't actually have to pass anything, he can continue to play politics, the Republicans are now in charge of the House, they actually have to pass something. They actually do have to reach across and compromise.

KING: OK, so a quick time-out on that point, but that is an important point. They have to do things. He will be the speaker, his responsibility (INAUDIBLE) actually on the history of being a legislator. We'll see if that happens. When we come back, one of the biggest issues facing the country -- John mentioned it a minute ago -- record deficits, long-term debt, the president's commission says it has a plan to fix it, can Washington deal with that?

(COMMERCIAL BREAK)

KING: If you think an agreement on tax policy requires some adult conversation and hard compromise, imagine then what it would take for Washington to get serious about the federal budget deficit. The leaders of a commission put together by President Obama proposed changes to Social Security and Medicare and some tax increases in a plan that would cut the deficit in half by 2015. Not balance the budget, just cut the annual red ink in half. But as the always colorful co-chairman of the panel, the former Republican Senator Alan Simpson notes, both political extremes in Washington are howling in protest.

(BEGIN VIDEO CLIP)

ALAN SIMPSON, CO-CHAIRMAN, NATIONAL DEBT COMMISSION: We will listen now in the next few days to the same old crap I've been dealing with in all my public life, emotion, fear, guilt, and racism. And when people use emotion, fear, guilt, and racism on you, you use facts on them which really irritates them.

(END VIDEO CLIP)

KING: Alan Simpson there, colorful as always there. But can the commission sell its plan? And what will the president do to help them out? More from our panel in just a minute, but let's go to our White House correspondent Dan Lothian. Dan, this is one of the issues, the bigger question of deficit reduction that will really test the nice, polite tone we had out of that not-so-much summit today.

DAN LOTHIAN, CNN WHITE HOUSE CORRESPONDENT: It will, and it will be unclear you know what happens. I think the proof will really be in the pudding what happens in the next couple of days. But you heard, you know, Senator McConnell today saying that the two things that both lawmakers and this White House really need to focus on now in this lame-duck session is the debt reduction.

And then also on to the tax cuts, the Bush-era tax cuts. I mean these are the two issues. There are other things that you've been discussing here. And we've been talking about all day that this administration really wants to push forward the repeal of "don't ask, don't tell". And other issues, as well, but he says you need to focus on these two key issues. That's what they have to focus on in the coming days.

KING: And Dan, they know they're going to have disagreements on some of these issues, but from a tone and a trust-building exercise perspective, is the White House happy today? Or do they think this was just a necessary meeting they have to have and now we're back to normal? LOTHIAN: You know you hear those words, productive, useful, frank. Certainly everyone here having a very optimistic tone and I asked Robert Gibbs, what makes you think that this is going to be any different this time around? You haven't been able to reach any compromise, have any real bipartisanship over the last couple of years. And what will change now?

And he says, listen, you know, the midterm elections was a real sort of wake-up call, if you will, because now looking to next year, at least, when you have Republicans leading the House, but you still have a Democratic president, you still have Democrats leading the Senate, nothing will get done if you don't have compromise. So that's why they're optimistic here. They believe that nobody really wants to sort of see a stalemate happening up on Capitol Hill, nothing getting done, and so because of the midterm elections, he believes and the White House believes that things will happen that they'll be able to move forward on their agenda.

KING: Dan Lothian at the White House -- Dan, thanks. And let's get back to our conversation and let's focus now on the challenge with this report from the Deficit Reduction Commission. There will be a second report, maybe a third report.

What can be done? Back to the group, but first a little reality check. Let's come over here and just look at the math here because this is not an easy one. Let's just look at the federal budget. We'll bring up the pie chart here. Here's where the government, your government spends your money, 21 percent of it Medicare and Medicaid, 20 percent goes to Social Security, 19 percent to the Pentagon -- you get that -- that's 60 percent right there.

Twenty-three percent other spending, that's discretionary federal spending, the Education Department, and other things the government does, seven percent just on interest on the debt. If all earmarks were eliminated and the money wasn't spent elsewhere -- a proposal to do that in the Senate, eliminate earmarks or out rule them -- outlaw them died in the Senate today, that's less than one percent. So when you hear the politicians talking about getting rid of earmarks, remember, even if they did and the money wasn't spent, that's a couple of pennies on the dollar -- one penny on the dollar -- less than that.

The president proposed a freeze on federal salaries yesterday, that's six percent of the federal budget there, and even if the president's plan went through, the savings over 10 years would be less than one percent. So what about the bigger piece of the pie? John Avlon you write about this frequently and you think the politicians in both parties are cowards?

AVLON: Yes, they've -- essentially we've got folks on the far right who are content to demagogue the debt every election cycle but are refusing to deal with it when they have the opportunity and folks on the far left who are just in complete denial about the problems we face. The reality is that this is an existential (ph) threat for the country. Admiral Mike Mullen says the debt is the biggest national security issue we face. And here we've got a courageous attempt by Erskine Bowles and Alan Simpson to lead on this issue and they're being attacked from folks on both sides, especially the left incidentally. And so this is a time for leadership. This is a time for leaders of both parties to step up and show they heard the American people and they're serious about working together. And the plan put forward is serious, it's ambitious, it's tough. But it's going to take pain from both sides to solve this problem. Because the world's largest debtor nation cannot remain the world's sole superpower forever. We need to wake up to that fact.

KING: And as we continue the conversation we just played a bit of sound before Dan Lothian from Alan Simpson, the Republican senator from Wyoming, the former senator. John just mentioned Erskine Bowles. He's President Clinton's former chief of staff. He's the other co- chairman. Listen to how he described this today. Because he seems to think here that Washington is beginning, beginning to listen.

(BEGIN VIDEO CLIP)

ERSKINE BOWLES, CO-CHAIRMAN, NATIONAL DEBT COMMISSION: The era of deficit denial in Washington is over. I don't think there is a soul left in America who doesn't understand that this deficit and this debt is like a cancer, and it's going to destroy our country from within if we don't face up to it and face up to it quickly. And Washington is learning that, and boy, they are learning it fast.

(END VIDEO CLIP)

KING: Are they? Are they? I think out in the country people get this. But in Washington, which we often say might not be part of America --

BELCHER: But John, can I sort of say why it's problematic? Because when I was looking at your chart up there, I mean defense, for example, I'm from Norfolk, Virginia born and raised, whether you're Republican or you're Democrat, you touch defense spending if you're Republican or Democrat, you vote for defense spending cut, you vote to stop one of those submarines from being built. Whether you're Republican or Democrat, I've got an ad against you. Immediately, that's part of the problem with the sort of partisan and the politics come in whether -- on either side. And guess what -- those defense contracts they are spread out all over the country.

(CROSSTALK)

KING: So why can't they say this is so important? If I lose my job over this, so be it.

ERICKSON: You know they did that over health care -- the Democrats did. They were willing to lose their job over health care --

(CROSSTALK)

ERICKSON: It certainly tells you something that they're willing to do it for health care, but not for deficit reduction. You know the fact of the matter is --

(CROSSTALK)

BORGER: Yes, but you won't raise taxes --

(CROSSTALK)

ERICKSON: Look -- you know what --

BORGER: You won't raise taxes --

ERICKSON: Here's the issue, if you freeze that budget that John showed, freeze it for four years or even increase it with the rate of inflation, according to the CBO estimates of income to the federal government, you would have a balanced budget with surplus in five years without doing anything, just freeze it.

BORGER: You know the Deficit Commission takes like decades to get to balanced budget even with all of the draconian things that Bowles and Simpson suggest. It's not an easy job.

BELCHER: You got to cut --

(CROSSTALK)

BELCHER: And you have to probably raise taxes.

BASH: And what is --

(CROSSTALK)

BASH: -- I think was frankly sad is that unless something dramatic changes between now and Friday when they take a vote, this is not going to really probably come before the Senate or the House. Because you need 14 out of the 18 commissioners for the Senate or the House to even take this up. So right now it's a discussion, it's definitely something that the co-chair really wanted to have this discussion -- this is national discussion, but whether or not it will be put to the test, doesn't look like it.

KING: Every family in America --

(CROSSTALK)

KING: Every family in America has had to deal with this over the last couple of years and --

UNIDENTIFIED MALE: Exactly.

KING: -- they look at this town and they think why can't these people sit down like grown-ups and make the hard choices?

(CROSSTALK)

KING: Time-out --

(CROSSTALK)

KING: Quick time-out, when we come back, another tough choice facing Washington, critics in Congress who oppose repealing "don't ask, don't tell" have said for months wait, let the Pentagon study this. Well, that study is out. How will it impact the debate? Stay with us.

(COMMERCIAL BREAK)

KING: The Pentagon released its long-awaited report study on gays serving openly in the military today and President Obama said the findings proved it was time for the Senate to join the House in repealing the so-called "don't ask, don't tell" policy that's been in place since the Clinton administration. The report was based on a survey of military members and their families and its authors came to this conclusion.

Quote, "while the repeal of don't ask, don't tell will likely in the short-term bring about some limited and isolated disruption to unit cohesion and retention, we do not believe this disruption will be widespread or long lasting and can be adequately addressed by the recommendations we offer." Now many in Congress have said they did not want to repeal "don't ask, don't tell" until the military completed its review. Well, today, Defense Secretary Robert Gates said there's no longer any reason to delay a vote.

(BEGIN VIDEO CLIP)

ROBERT GATES, DEFENSE SECRETARY: If the Congress of the United States repeals this law, this is the will of the American people. And you are the American military. And we will do this. And we will do it right.

(END VIDEO CLIP)

KING: So will the Congress take the vote before it adjourns for the year? That's your job.

BASH: Well, I think they're at least going to try. And that's the question. The question is whether or not there are those 60 votes needed to at least start debate on the defense bill which includes this repeal. Just to talking to senators who are sort of on the fence, I think it's too early to tell because as you noted many of them said let's see what the report said.

One example, Senator Olympia Snowe of Maine, she is somebody who I was talking to this about this, and she said, look, it actually sounds like it could be pretty good. But the concern that she had is not so much how people feel in the military, but how is it going to be implemented? And what is going to be really key are a couple of hearings later this week with the service chiefs and others where they're going to get some pretty tough questions from these senators.

KING: As we continue the conversation, I want to play here -- this was in response to a question about can Congress deal with the START Treaty, a nuclear arms treaty with Russia before the end of the year. That is the context of the question. I want you to listen here to the Senate Republican leader Mitch McConnell. Let's listen and I'll make a point on the other side.

(BEGIN VIDEO CLIP)

SEN. MITCH MCCONNELL (R), MINORITY LEADER: Senate Republicans as let's take care of the tax issue, let's take care of how we're going to fund the government for the next ten months, and then if there's time left for other matters, it'll be up to the majority leader Senator Reid to decide if we turn to other things before we adjourn.

(END VIDEO CLIP)

KING: That's the part that doesn't meet the smell test in Washington, D.C. because they're going to have the tax negotiations starting tomorrow. They're going to figure out how to fund the government, that's going to take a couple of weeks. What are they supposed to do in the meantime? Just go to the beach? They have time. They've had a lot of hearings on this issue over the years. I understand it's controversial. And even in this report, about 23 percent of people in the military say they will leave more quickly or think about leaving more quickly. There are legitimate policy questions to be addressed here. But why can't Congress walk and chew gum?

BORGER: Because they don't want to do it now. Mitch McConnell doesn't want to do it now. He'd rather put it off, obviously. You heard what he said. It was pretty clear and, you know, he's got to look at his Republicans. Look at Scott Brown of Massachusetts also. Somebody who said he would wait for the report to see how he was going to vote. He's counting votes right now, he's going to see, and if he knows that he can filibuster or defeat it, maybe he'll say fine.

KING: It's a tough issue, but it's not a new issue.

BELCHER: Quick brought-up point here, this is fascinating to someone who studies political behavior, we have the American public way ahead of the politics on this. And it's fascinating to watch 70 percent of the American public, 72 percent of Americans are in favor of allowing -- and the vast majority of the people in the military see no problem with this. It is only in politics right now where you don't see the courage to act on this. And it's really disturbing.

AVLON: Yeah, this is a time for leadership. And the Democrats should make sure this is a priority. This report makes it very clear the overwhelming majority of people currently serving in the military have no problem. Allies such as Israel and Australia have this policy in place, and it has not disrupted their effectiveness. It's important to remember in the 1950s, there was over 90 percent of members in the military opposed integration of the armed forces, yet the military led on desegregation and led the nation. This is an overdue step. The time is right.

KING: So Erick, what should the Republicans do? Try to use procedural tactics to block that vote? Or should they say if they oppose it, I oppose it, here's why. This shouldn't happen, and let the chips fall where they may on a vote?

ERICKSON: I think they should do whatever it takes to stop it. Who cares what the American people think on something like this. When you have soldiers on the front lines where we're going out of our way to burn bibles and now we're going to introduce gays to the military?

BELCHER: You know what, Erick, I don't give a horse's behind what they think.

ERICKSON: The military has been concerned about that, and that's why the marines don't support it on the front lines and if the marines don't support it, I think we have to take it seriously.

BELCHER: From the polling the military did, the vast majority of the people are fine --

ERICKSON: When you break out who is on the front lines and who is not. The vast majority of the servicemen on the front lines aren't really supportive.

BELCHER: You're chopping this way too thin. It's an issue of rights. Here you're behind the American people on this.

ERICKSON: Who cares what the American people think on this?

BORGER: Harry Truman exercised the leadership that you're talking about on desegregation in the military. And that could've happened here.

ERICKSON: There's a big difference between integration on race and gays in the military.

BASH: The opinion that matters with regard to the military, the people who have their necks on the line is enough, it's their military brass. And that's why what they say is so critical.

If the commander in chief says move this forward, if the defense secretary, who came from a Republican administration, says moves this forward if the generals say move this forward, how about this? Have the feisty debate you guys are having right here in the United States Senate and again in the house if necessary and then have a vote. It's this thing called democracy.

All right, we've got to take a time-out. Hang on there. Thanks for coming in, everybody.

When we come back, a lot more to go including we talked at the beginning of the show about Wikileaks, a warrant for the man who runs Wikileaks. Well, we'll have a conversation when we come back. One of the things he told "Time" magazine is he thinks there might be grounds to fire the secretary of state. What's he talking about? We'll talk about that just ahead.

And when Pete on the street joins us tonight, we're going to give him a little -- kind of like let's make a deal. I'll ask him to pick a number. We'll have fun with it. (COMMERCIAL BREAK)

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

JOE JOHNS, CNN CORRESPONDENT: Hey John. Bad weather stretches from the great lakes to the Deep South tonight. There are flood watches and advisories from New York through Virginia. Strong winds damaged at least ten homes in the Atlanta area and a tornado watch extends into the Carolinas. Here's something new an airline security, the department of homeland security announced today. All passengers flying within or to the United States are now being screened against government watch lists before they get boarding passes. And repeating this hour's top story, Interpol has issued a red notice international warrant for Wikileaks founder Julian Assange in connection with alleged sex crimes. The United States is mad at him about one thing, but apparently Interpol is going after him for something else.

KING: And that, Joe, as we're trying to comprehend the extent of the damage of all of these state department documents. I'm going to go to the wall here to play out the context of all of this. As you take a look at it, it is stunning as you go around the world to look at it. These are the cables, the e-mails back to the state department and from the state department. The bigger the circle, the higher the volume. You see the big circle here from the Washington, to the United States, 8,000, these are the cables around the world. What are we talking about in terms of global impact? Those e-mails to the state department essentially mention or affect all of the countries you see highlighted right here. Let's look at a couple of them as you go through. This is why it's embarrassing in some ways to the United States. Back from Germany. Well, it says the United States sees the Chancellor Merkel as risk averse, really creative. You can guess that key ally of the United States doesn't like that. E-mails back and forth from China or cables in state department lingo refer to North Korea acting like a spoiled child and they call the North Korean leader Kim Jong-Il a flabby old chap. You can be sure that might affect his posture and he's unpredictable to begin with. From France, a key ally, President Sarkozy said to be susceptible and authoritarian. All of this highly embarrassing to the United States. Secretary of State Clinton trying to clean it up and the defense secretary Robert Gates saying today I wish this never happened, but he believes U.S. diplomacy will ultimately be just fine.

ROBERT GATES, DEFENSE SECRETARY: The fact is, governments deal with the United States because it's in their interest, not because they like us, not because they trust us, and not because they believe we can keep secrets. Many government -- some governments deal with us because they fear us. Some because they respect us. Most because they need us. We are still essentially as has been said before, the indispensable nation.

KING: The defense secretary also saying that the computer security improvements that are necessary he believes are well underway with more to come. What is the fallout here? And what did the Wikileaks founder mean today when he told "Time" magazine he thinks there might be grounds to force the resignation of Secretary of State Clinton. David Gergen and Fran Townsend with us after the break.

(COMMERCIAL BREAK)

KING: Let's dig deeper into the Wikileaks controversy for the diplomatic fallout. Joining us from Boston, David Gergen. With me here in Washington, Fran Townsend. Fran, I want to come to you first with this question. In recent days if you try to go on to the Wikileaks site, you might have a problem. It's been crashing a little bit. Is it that just because of added interest or volume? Or could there be say critics, maybe even the United States government using shall we say hackers?

FRAN TOWNSEND, CNN NATIONAL SECURITY CONTRIBUTOR: Imagine that. Look, there were -- the U.S. government clearly has the capability, volume can, in fairness, volume inquiries can bring it down.

KING: If you were still in the United States government, would you be recommending use of such tactics?

TOWNSEND: I might indeed, John. Absolutely.

KING: Maybe it's all David Gergen's students at Harvard. That's my guess. David, I want you to listen to this. "Time" magazine had an interview with Julian Assange today and he is in an undisclosed location. They talked via Skype over the internet. And he's saying the state department was encouraging its employees, the diplomats at the United Nations to get credit card numbers or frequent flier numbers or other information that would help the department track diplomats at the United Nations. Listen to Mr. Assange say he thinks there might be grounds for Secretary of State Clinton to be forced out.

JULIAN ASSANGE, WIKILEAKS FOUNDER: She should resign. You can be sure she was responsible for ordering U.S. diplomatic figures to engage in espionage activities at the United Nations in violation of the international covenants to which the U.S. has signed up.

KING: Should she resign over that David Gergen? Is there anything to that or is that just stirring up more political trouble?

DAVID GERGEN, CNN CONTRIBUTOR: Let's be clear, John, Mr. Assange isn't fit to lick Hillary's boots. This is a man who has been trying to sabotage the security of the United States. He's the subject of an arrest warrant in Sweden on allegations of rape and now he's on the most wanted list of the international police organization Interpol. He's hardly someone from whom we need to take advice about what Hillary Clinton ought to be doing.

KING: Anything you've seen in the documents, Fran, that suggest maybe it's controversial, maybe it's pushing the limits. But is there anything in the documents that suggests the United States is doing something illegal?

TOWNSEND: Absolutely not. And frankly, this is what diplomats do. They collect information about our allies and our friends and our enemies around the world. And by the way, while he's criticizing Secretary Clinton, he might as well include Condi Rice and Colin Powell and Madeline Albright and all the prior secretaries of state. This isn't new. This is what our diplomats do.

KING: All right. Another thing he says to "Time" magazine today and "Forbes," he says he has another set of documents about a U.S. bank that will be released early in the New Year. Here's what he told in "Forbes." The magazine will be published Monday. "It will give a true and representative insight about how banks behave at the executive level in a way that will stimulate investigations and reforms, I presume. For this, there's only one similar example, it's like the Enron e-mails." That's big language, David Gergen, should we take him at his word? I know you think he's a crook and a treasonous conduct here, but do you assume he has something that damaging?

GERGEN: I think there's every possibility in the world he has some documents that come out of a big organization. You know, he's become a magnet. Wikileaks the mischief it's creating is everybody, you know, who wants to now has a place to take they can take out their gripes and grudges by sending him private documents, confidential documents and trying to bring down organizations. So, yes, I'm not at all -- I wouldn't be at all surprised that he has something. But, you know, that still does not mean we should be -- we should tolerate who he is or what he's trying to do. He is an enemy to the security of the United States.

KING: That's what makes this fascinating. It's a tough one to deal with because on the one hand, transparency's a good thing. And if he has documents that prove misconduct at a bank, you would think, yes, we want him in the public domain. However, because of those -- some of his practices, he has no scruples?

TOWNSEND: He's been wholly irresponsible in the way he's handled the information he's gotten access to. We don't know from his statement it's like Enron, the analogy, is what the substance of these documents are. If these are merely sort of substantive text between bankers or other people in a financial institution and reveals corruption or misconduct, fine. But if it's more specific than that, if there are account numbers or pin numbers, he could literally cripple the international banking system.

KING: And here's the favorite tweet of the day from Donald Rumsfeld, the former defense secretary who is a former white house chief of staff, a former member of Congress as well. I was a co- sponsor of FOIA in 1966, there is an appropriate lawful process for declassifying material, it is not Wikileaks.

TOWNSEND: There we are.

GERGEN: Yeah. You know, John, I think the bigger issue we're going to face in this -- in this internet world is that -- they're a huge international organization in every sphere. And if you have an alienated employee, someone in the ranks -- and of course, there are people in every organization that can tear the place apart. And they begin putting out these documents, I think it's going to be extremely hard to lead and to manage international organizations. The security of the United States rests on that but so does the corporate world. You talked about the trust deficit earlier in politics. You begin to have that trust deficit spread in every other organization and you really could damage the workings of the international economy and put a lot of people out of work.

KING: Excellent point from Mr. Gergen. Fran as well. Thanks for coming in tonight.

When we come back, today's headlines, a little look at holiday shopping so far. And don't go anywhere, Pete Dominick still with us.

(COMMERCIAL BREAK)

KING: Welcome back. Joe Johns is with us with more of the latest news that you need to know right now. Joe?

JOHNS: John, a new survey of oil executives predicts drilling activity in the Gulf of Mexico will remain light in the years ahead even though the government's ban on deep water drilling has been lifted.

And since you've been talking about Wikileaks, in an interview with CNN's Larry King, Russian Prime Minister Vladimir Putin plays down the Wikileaks posting of U.S. diplomatic secrets.

VLADIMIR PUTIN, RUSSIAN PRIME MINISTER: It tells us that it is necessary for the diplomatic services to be more attentive through their cables such leaks occurred before in previous times. So I don't see this as being a catastrophe.

JOHNS: And you can see the full interview with Vladimir Putin on "LARRY KING LIVE" tomorrow at 9:00 p.m. eastern. There's a lot of interesting stuff in there but truly there is a bunch of stuff that is not news. Just confirms what we already knew or suspected.

KING: I think that's right, Joe. You'll want to watch the alpha dog. That's what he's called in some of those cables. I bet he doesn't -- he may think that's a compliment. How are you doing on your holiday shopping?

JOHNS: I've just not even gotten started.

KING: Naughty.

JOHNS: I work. That's all I've been doing is working.

KING: I'm glad you're not using the internet at work and the boss is glad you're not using the internet to shop at work. Let's take a quick look at the holiday shopping season so far. One of the questions is are you confident? If you're a confident consumer, you spend a little more. As you can see, today the consumer confidence index is 54.1. It needs to be up here where the red dots are at 90 to have a strong economy. So getting back, we're pretty much a flat line. Still not so great. But Americans are spending a little bit more so far this year. Here's 2010 spending so far. The green line, about more than 200 million people have been shopping. This is in stores and online. Spending about $365. That's $7 more than last year. So we're getting there. A little bit more optimistic here. Where are you buying if you're online, Dell number one in weekend sales, Williams Sonoma, maybe you bought me a coffee maker that's number two, QVC, Best Buy, and good old fashion Sears number five. So we'll see how this plays out. So far, so good the retailers are saying.

When we come back, do you think before you tweet? Do the politicians? We'll share some of our favorites with Pete Dominick. He's a good tweet.

PETE DOMINICK, OFFBEAT REPORTER: What's my handle? Tell them my handle.

(COMMERCIAL BREAK)

KING: So let's get to our offbeat reporter Pete Dominick. He's on the street of New York. He's got all his electronic devices. We are clearly bothering him. Pete, it's Pete's big mouth I believe is your twitter handle. People are going to start tweeting you from all across America. What is your favorite thing about twitter?

PETE DOMINICK, OFFBEAT REPORTER: My favorite thing is you can follow everybody's intricate moments whether they've sneezed or whether they're just tweeting a very important life changing article. It's important to know all these things which is why I'm following so many devices.

KING: This is like Let's Make a Deal, door number one, door number two, door number three, or door number four?

DOMINICK: Let's go with door number one, my favorite number.

KING: Door number one, Pete's favorite number. I'm sure Pete follows Sarah Palin. She says at Sarah Palin USA, here's a tweet for Monday. Inexplicable. I recently won in court to stop my book, "America by Heart" from being leaked but U.S. government can't stop Wikileaks's treasonous act.

DOMINICK: Brilliant tweet John King, the way she makes a perfectly adequate comparison and crowbars a plug for her new book. Brilliant. Number two, what have we got?

KING: Number two, let's do it real quick. We'll sneak number two in. We'll save the others. Here we go. Christine O'Donnell, you're on a roll tonight, Christine O'Donnell, some may cringe when I say this, but Hillary, you go girl. She's no Reagan yet her verbal lashing against Wikileaks is tough. Watch out, Obama.

DOMINICK: As usual, when I hear Christine O'Donnell, I get confused. I guess I don't speak Wicca or I need to go back to college. I don't get it, John King.

KING: I'll send you a tweet right now. Pete, we hope to see you tomorrow. "PARKER SPITZER" starts right now.