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Not Enough Jobs; Tax Cuts; 2012 Election

Aired December 3, 2010 - 19:00   ET


JOHN KING, HOST: Thanks Wolf and good evening everyone. Tonight fresh evidence of an anemic economy and rising unemployment that is souring the holiday season for millions of American families -- we'll debate whether Washington needs to do more to help and if so, just what.

And we'll explain why a Democratic senator asked about reaching a tax compromise with Republicans said this.


SEN. ROBERT MENENDEZ (D), NEW JERSEY: It's almost like the question of do you negotiate with terrorists?


KING: Also a fresh reminder tonight, democracy doesn't always rule. A deficit reduction commission appointed by President Obama endorses a tough mix of spending cuts and tax hikes, but it falls short of the supermajority needed to force Congress to act. We'll talk to a commission member who says the problem is too many politicians put their reelection over what's best for the country.

And the president makes a surprise visit to Afghanistan delivering an early Christmas greeting to the troops. Yet here at home, usual allies wonder why the president isn't helping them in big fights over tax cuts and getting more Americans benefits, unemployed Americans who are about to lose their benefits.


UNIDENTIFIED MALE: That's a moral outrage. I ask where is our outrage of something like this.


KING: Is the president letting -- is the president letting his party down? CNN contributors Erick Erickson and Roland Martin are here to navigate the policy and the political divide, but first let's dig deep into the government's sobering new numbers.

I'm going to walk over here to the wall and walk you through this. When you put this recession and the aftermath into context, it is simply stunning. We're going to go back in time here, all the way back to 1950. Look at the U.S. unemployment rate. You see the highs and the lows. 1982, 10.8 percent, you see that high there, today 9.8 percent. Down a little bit from its high right at the end of the recession, but still right up there. And it is stunning.

And one of the things that makes you especially sad is when you look throughout the current recession, look at the flat line. It just stubbornly has refused to go down, 9.8 percent back in May, 2009, 9.4 percent. It is just a painful, painful recession. Let's take a closer look here comparing recessions. I want to go back in time again here. You'll see here a number of recessions 10 different times when the economy dipped watch the lines, the dark red line at the bottom, that's the current recession.

As you come through this, it's stunning if you take a close look. Take a minute to look at this. You see all these other dips. They come down to the bottom, they come out faster. Down at the bottom, they come out faster. Down at the bottom, they come out faster. Look at this one. A slow fall and it refuses to come up. It's just stuck down here. That is the problem. That is the deep economic funk we are in. So the question -- one of the big questions in Washington do those who are on extended unemployment, unemployed for 99 weeks or more, should they get more benefits?

There are nine million Americans, 8.9 million right now getting unemployment benefits. But if you take a closer look here, this is what happens. Now the average check just under $300 right there unemployment monthly check, 1.9 million, they're impacted right now. They lose their benefits at the end of the year unless Congress passes new benefits. Another 2.9 million Americans right behind them. They are on extended unemployment benefits now. If more extensions aren't granted, they would come up and have the same problem right down the line.

And let's just take one more quick look at that. Where do they live? These are the two million Americans who are about to lose their unemployment benefits. The darker the state, the higher the number, 100,000 in Florida, Texas or more, California, Illinois, you see up here in New York and Pennsylvania. You see the lighter colors -- that means a smaller hit, but still a significant hit for Americans about to lose their unemployment benefits. So what should Washington do?

Let's start the conversation with Erick and with Roland. Roland, one of the big debates in town is the Democrats say just simply have a heart, extend these unemployment benefits, and then we'll worry about everything else. But a lot of Republicans say I want to have compassion, but not if it adds to the deficit. Show me what we'll cut.

ROLAND MARTIN, CNN CONTRIBUTOR: Well I'll tell you what, if you sit here and say that we're not going to give extension of the tax cuts to those people who are frankly the one percent wealthiest in the country, you can also do that. The other issue that really jumps out when you look at these numbers here and that is we see that they're down when it comes to charitable contributions. People complain about food stamps, talk about Section 8 housing. And so if you take away these extensions, then what do those folks do? They are going to go for those very same social services. You're going to be paying for them in another area of the government as compared to extending unemployment benefits.

KING: Erick, why can't -- we know we're in a partisan environment. We know there are big legitimate, philosophical differences about tax cuts and about government spending that are real policy differences. But why can't everyone come together at a time like this and say here's something we're going to agree on in the short-term at this holiday season so the people out there know OK, we're going to get you through Christmas. We'll get you into the New Year and then we're going to maybe go in a room and fight some things out, but let's help you first.

ERICK ERICKSON, CNN CONTRIBUTOR: They'll pass them. I don't have any doubt that they'll extend unemployment benefits. It's brinkmanship on all these other issues. Both sides are playing it. There are real philosophical issues. There are many conservatives who think we can't just keep extending unemployment benefits, but they're going to get extended. The issue though is the flat line on unemployment and the recession. The stimulus was supposed to help. All these other things were supposed to help and yet they're not. The Democrats after the defeat on November 2nd said it was the message. But, well the policy seems not to be working either looking at the lines.

MARTIN: John, also let's -- let's also remind folks of something here. When Erick talks about the stimulus not working, a third of the (INAUDIBLE) stimulus package was tax cuts. And so when you hear Republicans say tax cuts --

ERICKSON: But not really, Roland --

MARTIN: Erick, one second -- when you hear Republicans say tax cuts is the answer, a third of that was tax cuts and people also assume that nothing actually even happened when there were tax cuts in there.


ERICKSON: Not really tax cuts though because they were, quote, unquote, "tax cuts for working Americans". Most of the tax cuts they were taking credit for were for people who don't pay taxes to begin with. Look at the Ronald Reagan recession from 1982, terrible with even higher unemployment. They got out of it much quicker because of the stimulative free market policies that Ronald Reagan put into effect as opposed to all the government spending. The Keynesian economists that are out there running the show right now are clearly failing.

KING: Well one of the debates now, there's obviously -- the president can't get even if he wanted to propose another big stimulus package through the Congress -- not going to happen. A lot of Democrats wouldn't vote for it and the Republicans are about to take control of the House.

So what they're debating now is these Bush tax cuts due to expire at the end of the year. The Democrats want to say let's draw a line, maybe it's at $1 million -- that's the Senate Democratic proposal -- anyone above than that would pay higher taxes, anyone below that would keep the current tax rates. In the House they just passed a plan, $250,000 is where they draw the line. Here's Claire McCaskill, Democratic senator from Missouri, noteworthy to note she's up in 2012, saying why won't the Republican support us on this one and then again we'll keep the rest of the fight going down the road.


SEN. CLAIRE MCCASKILL (D), MISSOURI: If they think it's OK to raise taxes for the embattled middle class because they're going to pout if we don't give more money to millionaires, it really is time for the people of America to take up pitch forks.


KING: Now that's a great line. And Senator McCaskill is a good feisty partisan. But here's the truth, if you're watching at home. It's all a charade. And I'm not blaming the Democrats. It's what the Democrats are doing a charade in the Senate and the House. What the Republicans have done saying we won't vote on anything until we get our way on taxes is a charade as well. They know, Roland, they're negotiating a deal. There's going to be a deal in the end, but they want to have all these votes in the meantime so that when somebody runs for office down the road, you can say Senator Roland Martin voted against these taxes. He is an enemy of the middle class.

MARTIN: I talked to Congressman Bobby Scott of Virginia. And he said very simply, we can't even afford these tax cuts for the middle class. What you hear none of them talk about that these very tax cuts will contribute some $3 trillion to our deficit. And so nobody likes to criticize the middle class, obviously. Also, I love this whole notion how the middle class keeps moving, you know.

It's all of a sudden 250,000, then $500,000, then $1 million when really one percent of the top wage earns in America earn more than $250,000. So to me, that's not middle class. And so it is a game, but I do believe Democrats should draw a line. If they absolutely believe that we cannot afford above 250, don't even bother trying to go above that and tell Republicans you want to vote against 95 percent, go right ahead.

KING: Can the Republicans hold firm on this one, Roland? If you look at the polling, if you look at the polling, a CBS poll, continue the Bush tax cuts for all 26 percent, continue for households at 250 grand or below 53 percent, and expire for all 14 percent. So the majority of Americans on the basic question (INAUDIBLE) are with the Democratic position. Can the Republicans hold firm?

ERICKSON: Oh, absolutely. I think they're going to. What Republicans understand across the board is that while the Democrats call on tax cuts for the rich and tax cuts for the wealthy, in fact it's tax cuts for job creators. There's never been a poor man to write a paycheck or start a business. It's people who make over $250,000 a year or $1 million a year, looking at Bob Menendez, Chuck Schumer and Claire McCaskill there they've had government jobs for so long and none of them have run small businesses. They don't get it. MARTIN: Well, John, John, I need to add this here. I talked to Austan Goolsbee today from our TV1 (ph) Sunday morning news show and here's the thing that you also have to recognize. Those who are under 250,000 traditionally are the ones who are doing more of the spending. Those who are making above that typically are saving that very money. And so when you look at consumer confidence, businesses want people to be spending more. And so you would think that you would want to put the money in the hands of those more likely to spend as opposed to those more likely to save.

ERICKSON: But those who are saving the money are largely saving it because of the uncertainty over this debate. They would love to be plowing this money back into businesses and hiring people but not if the government is going to take --

MARTIN: But all of those making over $250,000 are not business owners, and Erick, you know that --


MARTIN: Erick, you know it very well and people out there are simply saying that how can we sit here as a nation and save the butts of Wall Street and ignore Main Street?

ERICKSON: Because you can't pick and choose who is and is not a job creator in that set. It would complicate the --

MARTIN: Yes, but you're assuming everybody is.

ERICKSON: -- across the board.

MARTIN: But you're assuming everybody is --

ERICKSON: No, I'm not assuming everybody -- I'm not assuming everybody is. I'm just assuming I can't pick out the job creators from that crowd, but I know that's where they are.

MARTIN: Well I want those who are also able to spend money and also we talk about the people who are on the bottom, we're going to pay for them when you look at those food stamps and you look at Section 8, so watch those numbers increase and (INAUDIBLE) Republicans and Democrats then say?

KING: All right, a time-out in the tax debate. I can see we're not going to settle that right here. When we come back Roland and Erick are still with us and some hints of presidential campaigns to come. Why does Republican Senator Lindsey Graham think one of his Democratic colleagues might challenge President Obama in 2012? And Secretary of State Clinton discusses her future in politics while on a trip in the Middle East.


KING: Past 24 hours or so, a number of sort of helpful hints or funny clues, little mysteries about 2012 politics. Let's keep talking with Erick Erickson,; Roland Martin with me here in studio. I want to start with this one.

Lindsey Graham, little mischief perhaps, he's a Republican senator from South Carolina, goes on a conservative radio show yesterday and says, you know, I think my Democratic colleague Russ Feingold who just lost his election maybe he's going to challenge President Obama in 2012.

Hmm, well, we called Senator Feingold's chief of staff today and here's what Mary Irvine said. Quote, "Senator Feingold is not running for president in 2012. Any suggestion he is thinking of running, planning to run or interested in running is untrue. Senator Feingold is a strong supporter of President Barack Obama and wants to see him reelected in 2012."

We'll all looking around, Roland. Will anybody get in? We always hear about the complaints on the left about the president, maybe it's about the war, maybe it's about the health care bill, maybe now it's about this tax cut debate, but to challenge a Democratic any incumbent is hard. To challenge a Democratic incumbent who happens to be African-American is near impossible, isn't it?

MARTIN: You know what, there was a reality show with Bobby Brown and Whitney Houston -- her favorite phrase was "hell to the no" (ph). They can apply right here. You will not see a challenge to President Barack Obama.

KING: Not any challenge or what about a message -- if you wanted to run a message candidate --

MARTIN: You could try.

KING: -- against the Iraq war you could go to Iowa --

MARTIN: Right.

KING: -- and you could maybe do OK in New Hampshire.


KING: Then you run into places where the traditional Democratic base kicks in --

MARTIN: You could have what I call a fringe candidate. You are not going to have what I consider a credible candidate run against President Barack Obama. They will get crucified if they actually do so.

KING: It's your dream, Erick, but you don't --


KING: But you don't expect it, right?

ERICKSON: I'm not going to hold my breath on that. I don't think it's going to happen. What I think people are forgetting is that the Democrats and Republicans both since 2008 have been working very, very hard to clean up their primary and caucus playing field to try to prevent things like this from happening. And it's just -- it's going to be impossible largely for anyone to do it.

KING: And so let's flip then to the Republican side -- a lot of speculation about who gets in. We spend a lot of time talking about will Governor Palin run? We know Governor Romney is making the move and he says he's going to wait to make a decision, but he's getting ready to run. Governor Pawlenty is getting ready to run. On the program last night, I had a good friend of Mr. Erickson, Senator Jim DeMint. He has said flatly he's not running. He's a conservative favorite.


KING: But he was standing next to Mike Pence, congressman from Indiana. Watch this.


KING: Senator, you've told me in the past you're not going to run for president in 2012. What about the guy standing next to you? He's making moves and he might run for the Republican nomination. What do you think?

SEN. JIM DEMINT (R), SOUTH CAROLINA: I think he might make a good president, so we need to keep our eye on him.


KING: Not exactly an endorsement, Erick. But what happens in conservative circles with your friends when Senator DeMint who does carry some influence when he says that?

ERICKSON: Oh, you know, people don't go to Detroit to give economic speeches unless they're flirting with president and guess what? Mike Pence went to Detroit and gave an economic speech. He's going to have a lot of weight. I would gladly support Mike Pence in a heartbeat. In fact, we're supposed to have a phone call this afternoon. I had to cancel; I wonder what that was about.

MARTIN: You also don't leave a House leadership position especially when you're --


MARTIN: -- take over the House if you're not planning on running for president.

ERICKSON: Now the question is, is he going to run for president or governor of Indiana? Mitch Daniels' term limit is up in 2012 and a lot of people speculate he may do that instead. It's very hard to run from the House to the presidency.

KING: It's very hard, but a lot of people would say you couldn't run from the Senate to the presidency --


UNIDENTIFIED MALE: We saw what happened there.


KING: And as they say, it happens. Let's move on, Secretary of State Hillary Clinton, all these people always first there was the big rumor, would she switch out with Joe Biden for 2012? They've put that one away. Joe Biden is going to be the vice presidential candidate with President Obama in 2012. I know people think aha, well will she run in 2016? Does she still want to be president? Listen to this.


HILLARY CLINTON, SECRETARY OF STATE: I think I'll serve as secretary of state as my last public position and then probably go back to advocacy work, particularly on behalf of women and children.


KING: Do we believe her?

MARTIN: Two words -- think, probably. Those are not definitive words. Will not is a definitive phrase, so like it or not, she still has some wiggle room there.

KING: So Clinton-esque, not Sherman-esque.



ERICKSON: Exactly. I cannot believe we're a month from November 2nd and we're talking about 2012 already. Man the American people are going to be tired come December --

MARTIN: Well, I'm going to tell you what --


MARTIN: On the Republican side, the reason I think that this is all important is because it's the shakeout. And so everybody keeps saying who is the Republican front-runner? When you saw the number of candidates on the Democratic side, they needed that amount of time to really shake it out, folks to prove themselves in that process --


ERICKSON: I have a prediction --

KING: Go ahead --


ERICKSON: I do have a prediction. Whoever participates in the March 2011 Republican presidential debate will not be the nominee. KING: You might be right about that. But if you go back in time to other cycles, it was not long after this when people -- especially the lesser known candidates who feel like they might get squeezed out --


KING: -- by the Clinton or the Obamas or the Edwards and the Democrats last time or by the Palin's or the Romney's this time. That stuff happens fairly quickly on this one. Ron Paul tweeted this out today. Ron Paul, libertarian, Republican congressman. "Re: WikiLeaks, in a free society we're supposed to know the truth. In a society where truth becomes treason, we are in big trouble." Essentially taking issue there with all the Democrats and all the Republicans, the overwhelming majority have said Julian Assange should be tried for espionage or treason.

MARTIN: Erick, go right ahead.

ERICKSON: You know I've always said Ron Paul's a nut and I stand by that.

MARTIN: You know what; being a native Texan it's a little hard sometimes for me to realize that Ron Paul is also a Texan.


ERICKSON: I believe he actually starred in a cartoon a while back as Marvin the Martian.


MARTIN: Here's the whole deal for Ron Paul. The members of the House on -- in Intelligence Committee, they learn about things that are secret and we don't know about. So what did he say? They shouldn't talk about those things? Come on, Congressman.


KING: The policy debate aside, let me tell you something from experience. Ron Paul has a lot of people out there who watch, who tweet, follow, who e-mail, and for saying what you guys just said, well your weekend is going to be, the inbox is going to get --


ERICKSON: -- change my phone number --


MARTIN: And see, if you e-mail me, oh I will e-mail you back, so go right ahead.

KING: It's called a healthy discussion in our democracy --

(CROSSTALK) KING: Have a great weekend. A lot more to come tonight -- when we come back, four (ph) other things we'll do is share with you a conversation with Senator Tom Coburn, Republican of Oklahoma. The Democrats like to call him Dr. No. He just cast a vote on the president's debt reduction commission that might surprise you and he's got some surprising things to say.

We'll also debate what are we supposed to do now about this sluggish economy? Should we tax more? Should we spend less? How does the economic growth argument fit up with the deficit reduction argument -- a fascinating debate coming up on that point too.

And the president, you woke up this morning, you thought he was going to deliver a statement on the jobs report here in Washington. Instead we found out he was in Afghanistan for three hours, a quick trip to say Merry Christmas to the troops. What else? Who else was he talking to?


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. President Obama granted the first nine pardons of his administration. No big names on the list. The oldest conviction for a liquor violation goes back 50 years.

BP now says the Gulf oil spill was much smaller than previously thought. Today the chairman of the House Energy Committee demanded BP prove it by submitting all materials related to the company's new position.

The Air Force's new unmanned space plane landed in the dark early this morning at California's Vandenberg (ph) Air Force Base. Just about everything concerning the X-37B's mission is secret, but the Air Force does say the space plane completed its objectives in orbit and there will be another launch next spring.

And on Capitol Hill today, the leaders of the military services testified about repealing "don't ask, don't tell" telling lawmakers both yes and no.


ADM. ROBERT J. PAPP, COAST GUARD COMMANDANT: Allowing gay and lesbian Americans to serve in the Coast Guard openly will remove a significant barrier to those Coast Guardsmen who are already serving capably.

GEN. GEORGE CASEY, ARMY CHIEF OF STAFF: I would not recommend going forward at this time given everything that the Army has on its plate.

GEN. JAMES CARTWRIGHT, JOINT CHIEFS VICE CHAIRMAN: My faith in our leadership from top to bottom causes me to favor repeal. GEN. NORTON SCHWARTZ, AIR FORCE CHIEF OF STAFF: I do not think it prudent to seek full implementation in the near term.


JOHNS: Well, it's good to see the military speaking with one voice.

KING: It is because of that split in part that Senator John McCain thinks he can get the 41 votes, that he thinks 41 is enough to block action on this. Interesting though today Senator Scott Brown of Massachusetts who has to run for reelection in a more moderate state, 31 years in the military reserves, he announced he'll support the repeal. So we'll see how this one plays out, fascinating process (ph).

When we come back, another senator who would have to vote on the issue, Tom Coburn, he was on the president's deficit reduction commission. Democrats often call him Dr. No. He has a message to all of his colleagues, Democrat and Republican. Stay with us.


KING: Some Democrats refer to our next guest as Dr. No. And they don't mean it as a compliment. Republican Senator Tom Coburn of Oklahoma is a medical doctor and he routinely votes no on Democratic proposals to spend borrowed money. But today Senator Coburn is also under fire from some conservatives. He joins us now from Capitol Hill. Senator, it's good to see you.

I want to start with this debate about tax cuts and what to do with the Bush tax cuts due to expire at the end of the year. The Democrats in the Senate wanted to bring some proposals to the floor today. And my understanding is that you are the senator who said no and invoked your rights under the rules to delay that vote until tomorrow. Why?

SEN. TOM COBURN (R), OKLAHOMA: Oh, John, it really didn't have anything to do with that. It was more about how do we get in a strategy to where we can get out of here. It's an unfortunate occurrence, and that's about as far as I'll go with it.

KING: An unfortunate occurrence, the Democrats are still in the majority, they will be next year with a smaller majority. I want you to listen because this question came up; the Democrats are having a news conference about their strategy and a reporter asked Bob Menendez, Democrat of New Jersey, why are the Democrats bringing proposals to the floor that they know can't pass? Essentially saying you know the Republicans are going to block this, you know you can't do this, so why? Listen.


MENENDEZ: Do you allow yourself to be held hostage and get something done for the sake of getting something done when in fact it might be perverse in its ultimate results? It's almost like the question of do you negotiate with terrorists?


KING: Is that how you view this? Almost like the question do you negotiate with terrorists?

COBURN: Oh, I don't think so. And I don't really think his implication was that. You know the Senate is filled with a lot of different individuals and the whole goal is to try to do -- everybody's whole goal is to try to do the good things for America. And it's just one of those unfortunate times where we weren't able to accomplish that.

KING: Well, one of the things that is part of this divide -- one of the issues is to whether or not to extend unemployment benefits, extended unemployment benefits. They are due to expire for millions of Americans. We learned jut today the unemployment rate actually went up to 9.8 percent. Do you believe those Americans whose extended unemployment benefits are about to expire, do they deserve government help?

COBURN: Well I think certainly some of them do and probably the vast majority. But we also know there's a negative incentive. But let's say we extend them. Should we pay for them? Should we charge that money to our children or should we eliminate something else in the government that will not have a negative impact on the economy and help those people.

KING: Well --

COBURN: So the real question -- the real question is we're going to give compassion to those people who are unemployed, but we're going to deny compassion to the people who follow us. Specifically our children and grandchildren. And I don't think that is an adequate place to put our children. It's easy to spend their future away in the name of good things when, in fact, we have another option. And that is eliminating some of the $350 billion worth of waste and -- waste, fraud, and duplication I've outlined before.

KING: That brings us to the bigger issue that we wanted to speak with you today. You are a member of the president -- the president wanted this commission on deficit and debt reduction. It had its report today. It passed with a majority, but not the super majority it needed to force the Congress to take a vote in the House and the Senate. And you agreed you have said publicly I don't want to raise taxes. I don't think you have to raise taxes to balance the budget, but you were willing to say I'll have an open mind and support this report because I think this a big enough issue and we need to deal with it. So you were not going to let your ideology to reflexively say no. For that, what you have received you're someone who gets criticized often by the left as we noted. This criticism from the conservative editorial page of the "Wall Street Journal." "GOP senators and commission members Judd Gregg, Mike Crapo and Tom Coburn have endorsed the report on grounds that something has to be done. But this is the triumph of desperation over experience. Republicans won the recent election by opposing tax increases. And the fastest way to lose that majority would be to break that promise." Why is the right -- why are you getting criticized -- I think what you're saying is I want to have an open mind. Is having an open mind a crime in Washington?

COBURN: Well, you know, if, in fact, I'm doing my job right, I'll get criticized from every group from every angle all the time. And what I was sent here to do was -- first of all, the very real problem that's in front of us that's urgent, we need to get that platform with which to act on. And that was the attempt of the deficit commission. The deficit commission vote doesn't mean anything because we don't have 14 votes. Hopefully it's a basis where we can see some people starting to work together.

KING: And when you say that, again, I want to try to get you -- help me understand the politics of the moment. People on the left have said no, it touches Medicare and it touches social security. You're under fire now from the right because you have committed the sin of saying you at least keep an open mind about revenue increases, tax increases if it's the only way to get a broad deal that you think addresses the scope of the problem even if you don't like anything. And Americans for tax reform -- the policy director there -- tweets out this, "By agreeing to the Simpson/Bowles tax hikes, pledge breakers Coburn, Crapo and Gregg have admitted they lied about taxes to get elected." Did you lie about taxes to get elected?

COBURN: The hyperbole that the interest groups use doesn't need to be responded to. What needs to be responded to is I can have my position all day long. How good is that going to do for Americans for tax reform or the "Wall Street Journal" if we end up having to run a bond rate on American debt? What good does that do? And so I see the urgency of our position and the crisis that's coming is -- we can't wait for another election to strengthen our position.

KING: Well, you make that point. You just said the interest groups don't need to be responded to. But isn't that part if not a significant part of the problem that people on the left feel beholden to their interest groups and afraid to defy them? People on the right are afraid to defy them?

COBURN: Well, I obviously am not afraid to defy them.

KING: You're one vote, though, sir. How do you convince enough of your colleagues the country needs to be bigger? We need to take bigger steps even if it ends up we lose our jobs?

COBURN: I think what you do, you have to lead by example. Look, nobody has stronger conservative credentials than I do. It's not about credentials and not about the interest groups. It's about America, everybody, liberal, conservative, Democrat, Republican, whoever it is, are we willing to put everything at risk to maintain purity on our positions? Or should we be trying to solve this big issue? You know, if this was a small issue, I wouldn't move at all. You know, to my core I believe these things. But I also believe that our children and the generations that follow us don't deserve for us to take our positions and say we have to have 100 percent to be able to get a solution that gives them the same kind of opportunities we've had.

So I know that doesn't swallow down to the hard right and I'm sure Kent Conrad and Dick Durbin's position didn't swallow down to the hard left, but the fact is, we need some grown-ups leading on what is possible to solve this problem. And the problem, you know, think about what will happen if, in fact, the same thing happens to us that happened to Ireland and has happened to Greece and probably going to happen to Portugal. What happens to America? And we need to be worrying about preventing that. Do I think we should do things different than this report? Absolutely. But I didn't get a -- what I got a vote on was what came to the table. And it's better -- Kent Conrad had a fabulous statement. He's right. The only thing worse than supporting this is not supporting it.

KING: Senator Tom Coburn, we appreciate your time today.

COBURN: All right, John.

KING: So should deficit reduction be a priority now or economic growth? Maybe more stimulus spending, tax cuts. When we come back, a debate on the economy with Robert Reich, the former labor secretary and Grover Norquist, the conservative president of Americans for Tax Reform.


KING: The government reported today that the unemployment rate is on the rise, up now to 9.8 percent. Stubbornly sticking just near 10 percent. A commission appointed by the president, the leaders of that panel said deficit reduction should be the top priority in Washington, including big government spending cuts. What should Washington do in this tough economy? Joining us from Berkeley, California, Robert Reich is now professor of public policy at the University of California. Here in Washington, Grover Norquist, the president of Conservative Americans for Tax Reform. Let me just put it to the question right there. Mr. Secretary to you first, what should Washington's priority be right now, stimulus spending for job creation or spending cuts for deficit reduction?

ROBERT REICH, FORMER LABOR SECRETARY: Right now I would say, John, in the short-term stimulus. Not only stimulus, but a new WPA to put people to work, extending unemployment benefits. We need also to maybe provide a tax cut in the form of exempting the first $20,000 of income in the payroll tax and making that up by extending and applying the payroll tax to incomes say over $250,000. Many things we can do. But the most important thing is to get money back into the pockets of working people, get jobs back so they can turn around and buy things and that will in turn stimulate more job growth.

KING: Grover, stimulus spending to stimulate more job growth right now?

GROVER NORQUIST, PRESIDENT, AMERICANS FOR TAX REFORM: No. Look, it took the Soviet Union 70 years to explain socialism doesn't work. It took Obama, Reid, and Pelosi to explain the Keynesianism stimulus doesn't work. They spent trillions and have made the economy worse. Unemployment has gotten worse, not better. We need to stop the spending. The idea that you take money from some people and give it back to the economy makes us richer is silly. It makes some people poorer and helps people politically who get paid off. Let's stop the spending.

KING: Grover, question to you, then. In the wake of this report by the president's commission, should deficit reduction be a priority right now?

NORQUIST: No, spending reduction. The cost of government is spending. The deficit is the tip of the iceberg, bring spending down, the deficit will fall.

KING: Now, Secretary, I assume you will join those on the left who say that essentially is a Trojan horse for extending the Bush tax cuts indefinitely, which would benefit some middle class Americans, but also create $4 trillion, I think, in ten years in more deficits.

REICH: Yeah, I don't understand something, John. And that is many of the same people who are saying we cannot afford to extend unemployment benefits to millions of people who are now in danger of running out because of very, very high unemployment rate and long-term un -- record high long-term unemployment, many of these same people are saying, well, we have got to extend the Bush tax cuts to the richest people in our society and we don't need to worry about the budget deficit when it comes to them. I'm sorry, I think they have it upside down. I think we have to help people at the bottom, people who don't have jobs. We've got to not only get them benefits but also get them -- I said before -- a kind of neo WPA, works project administration. We've got to put them to work, get them money, trickle down doesn't work. If you provide tax breaks to the people at the top, nothing trickles down. We've seen that over the past -- certainly over the past ten years. Certainly, in fact, in many respects the past 30.

KING: About 2 million Americans, 1.9 million Americans lose their unemployment benefits. They've been on emergency. They've had extensions in the past. Do they deserve another extension in the holiday season? Or is it time -- do you take the position the government has tried to help you enough, you're on your own?

NORQUIST: The government hasn't been helping them. The government put them in that unemployment position by having the tax increases in January loom over the economy. Step one is take that hammer away from the economy and have a growing economy. What happened to the economy is not the jobs were lost, but that the new jobs that are generally created in a healthy economy have not been created because of the regulations, the spending, and the taxes that Obama, Reid, and Pelosi have put through. They created this unemployment, it didn't come out of nowhere. When the Democrats took the Senate and the house in 2006, we saw the economy turn sour because they knew that the trial lawyers, the labor unions, and the big spending organizations in the cities were going to do exactly this damage to the economy. Exactly what they did.

KING: Let me ask you both, I believe both of you oppose this report put out by the president's deficit reduction commission. Secretary Reich, I think I'm right in saying you're among those on the left, you don't want to cut spending so much right now because of the state of the economy. Number two, why should you force major changes there? And Grover, your position is this thing in the end, even though it would take a lot of loopholes and deduction, in the end has more revenues which means more taxes. So if the left says dead on arrival and the right says dead on arrival, how does Washington solve any big problem?

REICH: John, first of all, I don't like to be put in a box called the left. I think that the deficit commission has some very good ideas over the long-term. All I'm saying is that in very short- term right now, we don't want to cut back on the deficit, we don't want to embrace austerity because there's no other way to counteract the fact that consumers are pulling back, businesses are not hiring for governments to help people. In the longer term, yes, I do think we have to do something about the long-term deficit. I think that the most important long-term factor in terms of growth of that deficit and growth of, really, all of the deficits we're going to be facing is the rise in health care costs. And there are many ways of dealing with rising health care costs that were not dealt with in the health care bill that was passed. And I'd love to have a conversation about that. But that's the number one issue over the long-term with regard to the mounting deficit.

NORQUIST: Look, there was nothing in the president's health care package to reduce the cost of health care except rationing, which they claim isn't there. We do need to have more competition in health care, but the -- look, there are a number of serious proposals put forward by this commission. Reducing marginal tax rates, simplifying the tax code, those are not bad ideas. There's spending restraint, looking at military spending the way we look at all other spending because we need to save money there across the board. Those are all good ideas. Just take the $1 trillion in tax increases that got stuck in the middle of the package, set that aside. Much of the rest of the package is acceptable.

KING: All right. We'll continue the conversation another day and get to that health care conversation, Mr. Secretary. It's a conversation worth having. Thanks for being with us.

When we come back, we woke up in Washington to a surprise today. The president wasn't here, he was in Afghanistan. David Gergen breaks down the president's trip after this.


KING: A white house photo there of the president of the United States. Barack Obama with the troops in Afghanistan today, a pre- Christmas holiday visit by the president that was a surprise. I checked the president's schedule every night. And last night at 10:00 at night, the president's schedule said he would be here in Washington today, delivering in a statement this morning on jobs. But guess what? Just before 10:00 last night at Andrews Air Force Base, air force one took off. It's a 13-hour trip across to Afghanistan. You see it going half way around the world to Afghanistan literally. It arrived at the air force base and touches down after a 13-hour flight at 8:35 Friday night local time there. What does he do? He has an intelligence meeting with the top generals on the ground. You see them all there. That's one thing he does. The president also takes some time while there, again, at Bagram air force base to meet with the troops. He awards five purple hearts to troops. He awards three purple hearts. And a quick phone call to President Karzai. Flight back to Andrews. When you wake up tomorrow the president will be back at air force base. Why be on the ground for just three hours? Good question for our senior political analyst David Gergen.

David Gergen, the president three hours on the ground in Afghanistan seemed clear in his speech to the troops, yes, he was there to boost morale a bit but to deliver a message to people back home in the United States who might be getting tired of this war. Listen to one of the things the president said.

PRES. BARACK OBAMA (D), UNITED STATES: We said we were going to break the Taliban's momentum. That's what you're doing. You're going on the offense. Tired of playing defense, targeting their leaders, pushing them out of their strong holds. Today we can be proud there are fewer areas under Taliban control and more Afghans have a chance to build a more hopeful future.

KING: How important is that part of it, David, talking to the audience, the skeptical American public?

DAVID GERGEN, SENIOR POLITICAL ANALYST: It's important, John. I think he did a much better job rallying the troops and thanking them for their sacrifices than he did persuading people back home. Americans are going to say, yes, it was nice to go to Afghanistan and thank the troops. That's an important thing to do for a president, but you're out of town on a day we get the worst economic news on the unemployment front in a long, long time. A deficit commission struggling to get a report out on the big problem facing the country and Congress trying to get tax cuts passed for next year. Why aren't you here on the home front?

KING: It seems like you're saying they seem a tad tone deaf to the politics of the moment?

GERGEN: You plan these trips out in advance. If you don't recognize how many things are going to come together on the same day.

KING: The unemployment report is always released on the first Friday of the month. The debt report commission was scheduled for weeks if not months.

GREGEN: Well, so that raises the question, does the right hand know what the left hand is doing? That's one question. I run into the cynic who says, I think we'll get the hell out of town when the report comes out, let's change the subject to Afghanistan. Come back to this, John. We both agree, I think, it's a matter of judgment on national security and you do need to do things. Be able to walk and chew gum at the same time, go thank the troops. It was important to do before Christmas. But to do it on this day and this weekend with so much going on that's so critical to the wellbeing of millions of Americans, you know, I would have voted to postpone the trip. I must tell you. I appreciate why he went.

KING: And to add to the oddness, if not the awkwardness of the whole thing, he's on the ground in Afghanistan and spends no face to face time with President Karzai. First he was supposed to helicopter to Kabul. They say dust storms prevented that. They were supposed to have face to face on a secure conference but a hiccup line stopped that. The president of the United States has a call with the leader of Afghanistan at the end of the week in which the world read diplomatic cables from U.S. diplomats on the ground says he's paranoid, erratic, can't be trusted, he's corrupt and not setting his feet into the business of nation building.

GERGEN: Given all that John don't you think he would welcome the fact he couldn't go see Karzai? Would you rather have a picture on John King of him sitting there with Karzai or talking to the American troops? I think you'd talk to the troops. Maybe they chose a day they thought there would be bad weather.

KING: We also haven't heard a word from him about the Wikileaks.

GERGEN: Exactly. I think this white house is still struggling with the aftermath of the election. They really haven't settled on what's their strategy, what are their priorities, what are they trying to do for the next two years? You have a sense they're rolling with the punches now rather that grounding control of their destiny and asserting themselves in a way I think they have to if they want to go.

KING: A lot of Democrats are nervous about that, saying where's the president, why isn't he speaking out about the unemployment, extended unemployment benefits. Why is he perhaps, many Democrats think he's in a room about to cut a deal with Republicans on taxes that they won' will like.

GERGEN: The Democrats and country are looking for him to stand up and say this is what I believe in, this is where I want to go, I'm willing to compromise, but this is have I stand on a number of issues. We have no idea on where he stands with most of what the deficit commission has proposed. He's come out with this modest proposal on freezing pay for the federal workers for a couple years. That's a tiny part of the big picture. I had thought by now we'd have a much more assertive president sort of trying to shape his destiny and the destiny of the country in the aftermath of a shellacking to be sure. You have to rebound from that and what people look for is get off the mat and take charge. Don't be sitting there on the sidelines and why are you going to Afghanistan?

KING: David Gergen, as always, thanks.

GERGEN: Thank you.

KING: Up next, a sad night tonight. "Pete on the street" has lost a few things that are very, very close to him. He'll give us the details when we come back.

(COMMERCIAL BREAK) KING: I misplaced my Blackberry earlier today. True story. Part of me was really happy but part of me was worried about not being so attached. Turns out our offbeat reporter Pete Dominick also is suffering from a bit of technology withdrawal. Pete, what happened?

DOMINICK: Last night John King I was robbed. Someone broke into my car and took my backpack. Are you ready for this; in my backpack was my laptop computer, my Mac book, my iPad about a week old and my Droid phone, a mini HD camera and my iTouch. John, I was devastated, mostly because, listen, those are just things, but I'm going to get a little emotional here. This is weird. I couldn't tweet. I couldn't tweet for an hour and a half. I couldn't update my Facebook status. And it just -- I'm sorry. I wasn't prepared for those emotion emotions. It's hard to be without those things.

KING: If there are such things as pay phones, next time call me and I'll take care of it for you but you'd have to give me all your passwords. I know you're sad. We want to help you out. Sometimes when we lose our things we need to be reminded. Take a peek, Pete.

DOMINICK: What do we have? John, if the robber could just -- I don't want the iPad. Just send the pictures of my daughters back for goodness sakes. The good tip is, you can download apps to track those things. Of course, I didn't do that, though, John. Next time.

KING: You'll get that next time. Pete, have a good weekend. Thanks.

DOMINICK: Have a good weekend.

KING: Thanks for spending time with us. You have a great weekend, too. We'll see you Monday. "PARKER-SPITZER" starts right now.