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JOHN KING, USA

Cyber Attacks; Terror Arrests; "Don't Ask, Don't Tell"; Double Dip Warning

Aired December 8, 2010 - 19:00   ET

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


JOHN KING, HOST: Thanks Wolf and good evening everyone. A busy and consequential day in politics, busy night, too -- the president is more confident his new tax cut deal will pass the Congress, that despite fierce liberal opposition. Tonight we have new evidence the vote count is trending the president's way.

Also big developments tonight in a contentious debate about immigration and this is important -- CNN is told supporters of allowing gay Americans to serve openly in the military believe they are on the verge of making history, on the verge of winning the final votes needed to make that landmark change.

First, though, updates on two important security challenges. One involved cyber attacks on the corporate Web sites of Visa and MasterCard and supporters of the WikiLeaks Web site are taking credit. They say it's payback because both Visa and MasterCard stopped taking payments on the WikiLeaks site after it released thousands of classified U.S. military and State Department documents.

So is your credit at risk or your privacy? Let's check with Joe Johns -- Joe.

JOE JOHNS, CNN SENIOR CORRESPONDENT: John, supporters of the WikiLeaks organization and its founder Julian Assange are suspected of launching attacks on a number of targets including Mastercard.com and Visa.com. Right now authorities are suggesting the motive of attacks is retaliation because the attacks seem to be directed against companies that took action against WikiLeaks after its release of sensitive American documents. These are being referred to as distributed denial of service attacks, basically, a bunch of computers accessing a Web site all at once with request for service.

On a Twitter page identified as "operation payback", activists, numbers unknown, wrote about getting unspecified weapons ready and now here we are. A statement was issued by Visa saying, "Visa's processing network, which handles cardholder transactions, is functioning normally and cardholders can continue to use their cards as they routinely would. Account data not at risk. Visa separately said its corporate Web site, Visa.com, is experiencing heavier than normal traffic."

The company is taking steps to restart the site to full operations within the next few hours. It is not, John, just Visa and MasterCard. PayPal, the online money transfer company, reports a similar experience and there are other reports coming in.

KING: We'll keep on top of that one, Joe, a fascinating subplot to the WikiLeaks drama. Now to an alleged terror plot in Maryland. A 21-year-old Muslim convert is charged tonight with plotting to bomb a military recruiting station near Baltimore. Our homeland security correspondent, Jeanne Meserve, has late details on the alleged plot and the FBI sting operation -- Jeanne.

JEANNE MESERVE, CNN HOMELAND SECURITY CORRESPONDENT: John, this is just another in a long string of domestic terror cases involving a 21-year-old U.S. citizen, a recent convert to Islam. His name, Antonio Martinez, but he also went by the name Mohammed Hussain. He is facing two counts of terrorism for allegedly plotting to blow up a military recruiting center in Catonsville, Maryland, outside Baltimore.

But because of a tip from an informant, the FBI was on to him. They provided him with a fake bomb. When he went to detonate it this morning, it did not go off and he was arrested. Although on his Facebook page he expressed admiration for on Anwar Al-Awlaki, the U.S. borne cleric who is now a key figure in al Qaeda in the Arabian Peninsula, U.S. authorities say they believe he was acting alone. They do not expect any additional arrests -- John back to you.

KING: Jeanne Meserve thanks for following that important story. Tonight history could be in the making. The odds of repealing the "don't ask, don't tell" policy that bars gays from serving openly in the military are improving significantly. One key Democrat in the search for the necessary 60 votes, Senator Jim Webb of Virginia, tells me he supports bringing the issue to a vote this week. And our senior congressional correspondent Dana Bash is working her sources on the biggest question now, are there any enough Republican votes for repeal -- Dana.

DANA BASH, CNN SENIOR CONGRESSIONAL CORRESPONDENT: Well the answer to that is unclear but what is clear is that supporters of repealing this military policy are more hopeful than ever. Earlier today, we thought there would be a vote tonight to -- a critical vote tonight to repeal "don't ask, don't tell" that we thought was going to fail. But Harry Reid, the Senate majority leader, decided to delay that vote because negotiations do seem to be going well.

We're specifically talking about negotiations with Republican Senator Susan Collins. She is somebody who supports a repeal but has said you know what; I don't want to start debate on this whole idea until I am sure that there will be ample debate and ample amendments. Well they're getting closer on that right now and that's why they decided to continue negotiations.

Now I should mention that Susan Collins, if they get that Republican vote, it won't be enough to actually get the 60 they need, but what Democrats who I'm talking to say is that they hope, John, they hope that Susan Collins, if she agrees to at least start debate, that that will bring other Republicans along, that they need. Another Republican, Lisa Murkowski of Alaska, she too announced today that she supports the repeal so they're hoping that she and maybe a few others could be that magic 60 that they need if they finalize negotiations with Susan Collins.

KING: Dana Bash keeping track of those sensitive negotiations, Dana, thanks.

And the White House is lobbying fiercely tonight for the tax cut deal many liberals call an unconscionable sellout. In addition to again sending Vice President Biden to Capitol Hill, a top presidential economic adviser today issued a dire warning. Our senior White House correspondent Ed Henry has that -- Ed.

ED HENRY, CNN SENIOR WHITE HOUSE CORRESPONDENT: Well, John, you're right. It's Larry Summers. He's about to leave at the end of the year as the president's top economic adviser, but on the way out the door he had a shocking claim today, coming out and telling us that he believes if this tax cut deal fails, there will be a double-dip recession. Basically where you have a recession, then a little bit of anemic growth, and then, bam, a second recession.

What's shocking about that is in recent days top White House aides and even the president himself have suggested that that was not going to happen. We wouldn't have a double-dip recession. So the question now will be will Democrats on the Hill think that this is just an exaggeration to shock them into voting for a plan that they're reluctant to jump on board with? White House aides privately say they think they're getting some momentum.

They think that both in the House and Senate they're, in the end, going to have the votes to pass this tax cut deal. But just in case, we're starting to hear rumblings tonight, they may send the president up in the next few days up to Capitol Hill to sell this just as he did on health care reform. To roll him out shows they think there's going to be a nail-biter -- John.

KING: Ed Henry for us at the White House making an important point right at the end. The president may have to go to Capitol Hill. Let's get a first impression now from our contributors -- Roland Martin, conservative Erick Erickson, with me here in Washington and in New York John Avlon, who is the backer of a new group -- the new centrist group, no labels.

I want to pick up where Ed left off. The president of the United States himself may have to go to Capitol Hill to get some Democrats some votes on this and before I get your take, listen to the president earlier today. He caused a huge stir by saying some liberals were being, in his words, sanctimonious because they're putting perfection ahead of a good compromise. The president today tried to, shall we say turn down the heat a bit.

(BEGIN VIDEO CLIP)

BARACK OBAMA (D-IL), PRESIDENT OF THE UNITED STATES: I think it is inaccurate to characterize Democrats at large as feeling, quote/unquote, "betrayed". I think Democrats are looking at this bill, and we've already had a whole bunch of them who said, this makes sense. And I think the more they look at it, the more of them are going to say "this makes sense". (END VIDEO CLIP)

KING: Roland, I guess it depends how you define (INAUDIBLE) large.

ROLAND MARTIN, CNN CONTRIBUTOR: Also, if that's the case, you wouldn't need to go to Capitol Hill. The fact of the matter is if you're having these kind of issues and you have to go to Capitol Hill, you have a problem on your hands with your own party. And also the president -- remember, he is the leader of the same Democratic Party he's talking about.

KING: Why did it get so testy publicly? I understand the president being frustrated. He takes a lot of you know harpoons from people in his own party. They feel he's not committing to their principles, but one way to do it is to call them it into the White House and say, ah, ladies and gentlemen --

MARTIN: And that's one of the criticisms of this administration that you do not have somebody who is widely respected on the left, a Howard Dean-type, who is inside the White House, who has those relationships. When I talked to senior officials in the White House, they made a point look, we beat these folks in 2007. I pushed back by saying yes (INAUDIBLE) now the leader of those same people? And so they still hold some grudges against the very critics they have today.

KING: John Avlon, how important is it -- how important is it that the president get decent support among the Democrats? He can do this with only some support among the Democrats if all the Republicans or most of the Republicans stay with him. But how important is it going forward that he not lose his party on this vote?

JOHN AVLON, CNN CONTRIBUTOR: I think if he loses the far left, it's not the most important thing. The point is the president is not just leader to the Democratic Party. The president is leader to the nation. And he's trying to forge a compromise and then making a strong case for the need for practical progress. And that's the voice he's making. That's a good voice for the president to have right now.

MARTIN: Last I checked you are the leader of the Democratic Party when you control the DNC --

UNIDENTIFIED MALE: Pretty much.

UNIDENTIFIED MALE: Trust me.

KING: So as you watch this play out, the focus has been on the internal Democratic fighting. This is not a 100 percent issue though on the right.

ERICK ERICKSON, CNN CONTRIBUTOR: No, it's not a 100 percent issue on the right. You have people like Tom Coburn and Jim DeMint voicing concern to the Senate, some in the House. It is very interesting if you look at the coalition of (INAUDIBLE) support the tax compromise, it is with the exception of (INAUDIBLE) who opposed TARP, the mirror image of the coalition that supported TARP and in fact I've heard that several members of Congress today are saying you know the pushback we're getting -- the concerns we're getting are the same ones that were there for TARP and we're not sure they're legit.

KING: All right, everybody stand by. I wanted that first impression there. When we come back, we'll pick up on that point because a key voice in the Tea Party movement today told our Wolf Blitzer, "I'm not so sure about this."

And the New York City Mayor Michael Bloomberg, we often think would he run for president as an Independent candidate? Well today he said it's critical, critical the country find a middle way.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: This is the greatest nation on earth.

(END VIDEO CLIP)

(COMMERCIAL BREAK)

KING: Let's pick up where we left off before the break. The president is trying to sell his new tax cut deal to the left of his party. But how is it going over on the right of the Republican Party? I want you guys, John Avlon, Roland Martin, Erick Erickson are still with us. I want you guys to listen.

Rand Paul was on THE SITUATION ROOM with Wolf Blitzer in the last hour and listen to this. You get the impression it's not just the president that wanted to do this deal before the end of the year when he has more Democrats around him. The Republican leadership might have wanted to do this deal before the end of the year too before they get all these Tea Party people around him. Rand Paul says, huh-uh, I don't like this.

(BEGIN VIDEO CLIP)

RAND PAUL (R), KENTUCKY SENATE-ELECT: The other thing is one of my biggest concerns is the deficit. So I think if you're going to extend and add new tax cuts, you should couple them with cuts in spending. Instead, we're coupling them with increases in spending and I think that's the wrong thing to do.

(END VIDEO CLIP)

KING: He will be the senator of course from Kentucky in January. Erick, the spending increases he's talking about is extending the unemployment insurance benefits, which would add to the deficit. Some people would say it's the right thing to do in a bad economy, but if you don't offset the costs for it, you're adding to the deficit.

ERICKSON: Right, you know remember the big hoopla several months ago when the Republicans wrote out their "Pledge to America" where the promised to cut spending and do all these things with unemployment benefits. If they vote for this package, they've broken their pledge before they even take the majority. I don't know how they're going to do it. Rand Paul, you're absolutely right, Mitch McConnell wants this vote now because not only does he think he can't get as good a deal in January but he --

(CROSSTALK)

KING: He can't get as good a deal when there are more Republicans around --

(CROSSTALK)

ERICKSON: Yes, he can't get as good a deal because you know, they're afraid -- the Republicans, particularly the senator, are desperately afraid that the Tea Party guys like Rand Paul and Mike Lee are going to make them look bad.

MARTIN: This is the same thing, if you go back to health care, remember, Democrats had the numbers. Scott Brown wins in Massachusetts. It was like, oh, my god, what's going to come down? But his victory actually forced those conservative Democrats to get in line and actually back it. So this is the same thing in reverse.

(CROSSTALK)

KING: Is there any evidence, John, that Washington is any different after the election? You could argue the president seems to be moving to the center a little bit. That is different. But in terms of, here's some candy, tax cuts for you, spending -- again, maybe important spending, unemployment insurance benefits for people who need it. That might be important spending, but you're not cutting anything in the government to pay for it. It is deficit spending.

AVLON: Right -- right. There's no tough decisions here. It's forging bipartisan compromise with $900 billion in taxpayer candy isn't exactly something for a victory lap. And I appreciate Rand Paul actually being consistent. We had a big debate about the deficit commission all last week. That it was immediately forgotten conveniently in Washington.

We do need to be consistent about focusing on the deficit and the debt. And I hope the folks on the right who are opposing this bipartisan compromise on tax cuts aren't just motivated by a no-Obama impulse, but actually are serious about the deficit and the debt. Let's see them start doing something about that when they enter Washington in January.

(CROSSTALK)

MARTIN: Be interesting, John, John Avlon just said he appreciates Rand Paul being --

KING: I was just -- I was just going to (INAUDIBLE) Mr. Erickson is taking notes. Mr. Erickson is taking notes. He's going to save that one for another day.

(CROSSTALK)

KING: I want to return for a moment to the tension between the president and his team and the left, the base of the Democratic Party. Congressman Gary Ackerman of New York was among those criticizing the tax cut deal. He used strong language. Here's the president's top political adviser, David Axelrod, this morning, using that language again in his retort.

(BEGIN VIDEO CLIP)

DAVID AXELROD, SENIOR WHITE HOUSE ADVISER: I say the people who are going to get screwed, as Congressman Ackerman says, are the American people, if we don't act to prevent their taxes from going up on January 1st. The typical family in this country would see a $3,000 tax increase on January 1st. Unemployment insurance would end. And two million people would be -- see their lifeline cut.

(END VIDEO CLIP)

KING: Roland, they made a -- just a pretty bold political calculation at the White House and a bold economic calculation. They thought if they strung this out, any uncertainty caused maybe turmoil in the markets, which would hurt people, hurt people. So it was an economic calculation, but also a guy's on a path right now that for all his troubles, most of the models tell you he's in pretty good shape for reelection if the economy starts to grow that we're not going to mess with that.

MARTIN: Of course not. But look, you remember when Congressman John Boehner said if I really have to vote for it, I'm going to vote for the unemployment benefits? Then the right said, hey, man, shut up, please, you're screwing our positioning here. And so when you have folks on the left saying look show some type of fight, the White House response is, well, the president, he gave these speeches.

They're saying that wasn't a fight. There were people who were saying, you still had three weeks. You still had time to really press Republicans, put their backs up against the wall. They chose not to. That's the criticism that you're actually seeing. And the White House can't just blow off, saying, oh, this is professional left, they don't mean anything. No, you're going to need a lot of these people to raise money come 2012.

ERICKSON: This article out today in "The Politico" isn't going to help where the White House apparently views the congressional Democrats as losers and they don't really want to be associated with them. Whether or not the article is right or not, you've got to imagine there are some congressional Democrats out today who are reading that the White House has a disdain for his own party --

(CROSSTALK)

MARTIN: Nancy Pelosi, John, because like it or not, she carried the president's water more than anybody else, more than anybody --

(CROSSTALK)

UNIDENTIFIED MALE: Yes, she did.

MARTIN: The White House should be careful attacking Nancy Pelosi.

KING: Go ahead, John.

AVLON: Yes, the perspective is on this for Democrats is that if they didn't make this deal this time with the clock ticking, there wouldn't be action on things like "don't ask, don't tell" or possibly the DREAM Act or the START Treaty. So that's an important reason to make this deal now, not only to try to re-center the conversation, but to get those things done during the lame duck. That should be pretty compelling to the professional left.

KING: OK, re-center the conversation. That's an excellent point to get to this next one. I'm just going to play it. This is the New York City mayor. He was once a Republican. He was once a Democrat. Now he's an Independent. He says he has no interest in running for president -- then why this?

(BEGIN VIDEO CLIP)

MAYOR MICHAEL BLOOMBERG, NEW YORK: In the face of the current economic weakness, government must act decisively, responsively and immediately. We need our federal and state governments to chart a middle way, between a government that would wash its hands of the problem and one that seeks to supplant the private sector, between a government that would stand on the sidelines and then one that would take over the game.

(END VIDEO CLIP)

KING: Just some friendly advice, John Avlon?

AVLON: Look, I think he's exactly right, but it's about setting up an argument for a third way, for a middle way in American politics, which is ultimately where the politics and problem solving gets done. Not on these activist extremes that exist in these sort of -- these isolated debating societies that aren't concerned with progress, but more with being absolutists --

(CROSSTALK)

UNIDENTIFIED MALE: No, it's not.

(CROSSTALK)

UNIDENTIFIED MALE: No, we don't need a third --

(CROSSTALK)

MARTIN: We could buy a third party. The problem --

(CROSSTALK)

MARTIN: No, no, no, John, John, this -- let's be real. We saw the possibility of a third party with the reform party and Ross Perot after 1992. Of course that whole thing splintered. The only way you're going to get the third way, the middle way, is if you have somebody with about 2.5 billion who says we have to create an infrastructure to do it.

(CROSSTALK)

ERICKSON: -- actually do that, no.

(CROSSTALK)

ERICKSON: You're going to get a Democrat or Republican elected.

KING: OK, (INAUDIBLE) a quick time-out. I know John wants to jump in. We'll continue this conversation because this is a fascinating thing to watch. Can the middle find a way to emerge as an organized force, not just as a voice and not just as swing votes?

(CROSSTALK)

KING: -- swing votes --

(CROSSTALK)

KING: It's a big important question. We'll stay on it as we go. But when we come back, we've got more ground to cover including we're going to have a very interesting conversation with Democrat Jim Webb of Virginia. He's up for election next time. He not always with his party, what does he think is a quote, "clear act of leadership in Washington right now"? You won't want to miss Senator Webb.

And the president said at his news conference yesterday, judge me by the promises I made in the campaign. Am I keeping them? James Carville, Mary Matalin right here. Promises, promises, does the president pass or fail? We'll put them to the test.

And "Pete on the Street" tonight noticed Governor Mark Sanford, you remember him, well he said the scandal involving him personally helped him, his rebirth as a politician. Pete will check that one out.

(COMMERCIAL BREAK)

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

JOHNS: John, we told you about those cyber attacks by backers of WikiLeaks. Well, now, Sarah Palin is claiming she was a victim of those attackers when her Political Action Committee Web site was briefly brought down this week. This, after Palin accused WikiLeaks founder Julian Assange of having blood on his hands.

A provision in a must-pass spending bill before Congress would bar the transfer of terrorism suspects from Guantanamo Bay to the United States. It's seen as a blow to the Obama administration's efforts to prosecute terror suspects in criminal courts. The Justice Department says it strongly opposes that measure.

And it's another giant step into the future of space travel. For the first time, a commercial spacecraft splashed down safely in the Pacific Ocean after flying a low orbit around the earth. The Space X program could lead the way to a new generation of commercial launches, just in time for the NASA space shuttle program --

KING: This is an interesting decision. The president has pushed this, privatizing space essentially. Let's walk in -- let's get a closer look at this launch going up. This is going up. This is a private -- it's usually a NASA rocket, but this is a private rocket going up into space, you see it going up into the air. And whether this works -- this is the test.

Whether this works, will tell you whether you get into this whole new generation. Now let's look over here -- here's where it took off from Cape Canaveral right down here. So let's watch exactly what happened here. Here's the flight pattern, up into space of course and the plan for this one here, essentially here's your capsule it gets up into space. The plan is to take two laps.

That's all they wanted to do just test out the systems. Just two orbits today and then -- because this does not have landing gear, no landing gear here. The idea is to go straight down, boom, and plunk, right there. Here's the point, if this plays out. You watch it hit right here -- let's show you the photo again. We have a photo I think of the splashdown. You get a photo of the splashdown there, no landing gear.

Ultimately, this will be a craft that can land on the surface. What is the goal of the Space X program? The goal is to shuttle supplies and to shuttle astronauts to the International Space Station, a private company. Another private company, Virgin Galactic, run by the entrepreneur Richard Branson. He wants to take passengers up into space so you can experience weightlessness. That's his short term goal, looking into the future, listen to Richard Branson.

(BEGIN VIDEO CLIP)

SIR RICHARD BRANSON, CHAIRMAN, VIRGIN GROUP: I think, within the next decade, there will be a Virgin Space hotel. And I think within, you know five or six years, we'll be offering not just sub orbital flights but orbital flights. And I think that quite quickly we'll be able to offer people -- offer schools their own satellites, universities their own satellites at a fraction at a price that's happened in the past.

(END VIDEO CLIP)

KING: So you heard that, within a decade maybe, start work on the space hotel. Joe, what do you think? Frequent --

(CROSSTALK)

KING: You get a lot of points at the space hotel?

JOHNS: A whole new meaning to frequent flyer that's for sure. That's just amazing. Also those graphics you did, those were pretty amazing too.

(CROSSTALK)

KING: You know our guys -- I want a bartending job at the space hotel. How do you hold down --

(LAUGHTER)

KING: We're getting a little ahead of ourselves. All right Joe thanks. When we come back, "One-on-One" with Senator Jim Webb, Democrat of Virginia, one of the Democrats up in 2012 in a tough state. What's he think of the tax deal? We'll be right back.

(COMMERCIAL BREAK)

KING: Liberals are angry at President Obama for cutting a tax deal with Republicans the left says abandons Democratic principles and some moderate Democrats are complaining too because the new deal would add an estimated $900 billion to the federal deficit. But our next guest calls the agreement, quote, "the ultimate stimulus plan". That positive review came from a Democrat often critical of the Obama White House, Senator Jim Webb of Virginia.

Senator thanks for joining us. Let me begin on that point. We've had conversations in the past about how the president has handled the health care debate. How the White House has handled other things and you have been very critical. Why do you see this as such a good deal when many of your colleagues say, I don't know about that?

SEN. JIM WEBB (D), VIRGINIA: Well I think first of all it's a true act of leadership. I think the president has spent a little bit too much time inside the base and the base has been a dwindling base, as you can see from the last election cycle. And what he's done here is tried to put together a package that actually can pass at a time when we want to make sure that the tax cuts at some level continue.

But also if you look at the TARP program and the first stimulus program, they basically went to institutions. We put 700 billion in TARP. It went to financial institutions and corporations. They held on to the money. They recapitalized. They took care of their executives. But it really didn't get down to where we were going to have people actually having money in their hands.

What we're doing here in this one, what he is proposing here in this one is getting money actually into the hands of people who are going to spend it. And at the same time, he's taking care of the unemployment insurance situation, which was a big issue for the Democrats. He's taking a clear active leadership. He's stepping forward with something that I believe will help invigorate the economy and actually put money into people's hands.

KING: And then what is the challenge? As you know some critics say this is typical Washington. It's candy. We cut taxes. You continue spending through the unemployment insurance benefits. They may be necessary, an emergency, but it is still spending at a time of deficits. And it adds $900 billion to the deficit over two years. What must be done next to deal with that? WEBB: Well you know, what we've seen from both sides of the philosophical spectrum, from all sides of the philosophical spectrum is people calling for some sort of stimulus to the economy. This is one that puts money actually into people's hands either on the unemployment side or small business side. And the tax cuts that people are going to get from this program, they're going to spend it. They're going to recycle that money through the economy. It's going to help invigorate the economy.

There are other provisions in here such as the 100% write off for equipment, business equipment, that's going to encourage businesses to, in a short term, buy more equipment for their businesses. So I see this actually as something that's going to start recycling this money and potentially could reduce the deficit that we're talking about just through a more vigorous economy. I just happen to think that this is a very smart and courageous thing that he's doing.

KING: Answer the critic who would say, listening to what you're saying about this plan, that what Jim Webb really sees is a state of Virginia that has moved back towards the right and he's on the ballot in 2012 and there's no way -- he just wants to keep taxes low and move to the right.

WEBB: I've always been my own person on every issue since I've been up here. There have been times when I've agreed with the administration. There have been times when I really, as you know, strongly disagreed with them. I take each one of these issues in terms of the values that I put forward when I ran. And first of all, there's nobody who has been stronger up here in terms of issues of economic fairness. I simply believe this is a good way for us to reinvigorate the economy and that's more important to me than whether I'm a Democrat or a Republican or whether I'm a senator or simply an American.

KING: What's the state of the democratic family right now, in your caucus on the Senate side, there are a lot of people who don't like this deal. Over in the House, it's even worse, liberals critical of this. I want you to listen to something the president said in his press conference. When he got most animated was dealing with the criticism from with his own party. The president said sure, he could fight. Sure, he could threaten vetoes. Sure, this could carry on into next year, taxes would go up. Listen here.

(BEGIN VIDEO CLIP)

BARACK OBAMA, PRESIDENT OF THE UNITED STATES: We will be able to feel good about ourselves and sanctimonious about how pure our intentions are and how tough we are. And in the meantime, the American people are still saying to themselves not able to get health insurance because of pre-existing conditions. Or not being able to pay their bills because their unemployment insurance ran out.

(END VIDEO CLIP)

KING: A lot of people on the left took fierce offense at that because they thought the president of the United States, the leader of their people, was saying that they're sanctimonious.

WEBB: Well, there's a strong debate inside the Democratic Party as to whether taxes should have been -- the tax increase should have been precluded or kept in place for higher income folks and there are a lot of people who are purists inside the party.

Everyone is entitled to their own view. I happen to think what he's doing is putting together something that's realistic and is going to help the country. As you know, I don't always agree with the proposals that have come out of this administration.

KING: To that point, you support him on this. You say it's leadership and it's a great stimulus for the economy. You've supported him on the South Korea trade deal. Do you think this president is reading the election and shifting in a new direction? Do you see a new Obama, not the guy you were, much more critical of before?

WEBB: I think what we have to do is to adjust to the realities that came upon us during the late 2008 period. I don't think this White House was quick enough. I think there are some members in the Democratic Party who haven't been quick enough to do that. We have to see the economy with the reality as it exists today and do what we can to invigorate it. This is an American issue. It's not a Democrat or Republican issue.

KING: You face an important vote today on another subject, you're a military veteran. You're a former secretary of the navy and the Defense Authorization Bill will include a proposal to repeal don't ask, don't tell. There's a big question, and you are viewed as one of the most critical votes as to whether the Democrats can get 60 votes to proceed. How will Jim Webb vote?

WEBB: I was a strong proponent of making sure we had this survey of the people who are in the military and their spouses before we took any action on this. I'm the chairman of the personnel subcommittee, the Armed Services Committee. And we got a survey that I think is very important for us to understand the military viewpoint on it. I think that was a respect issue for the military. So I'll vote to proceed. And we'll see where it goes from there.

KING: Senator Jim Webb, Democrat of Virginia, sir, thanks for your time.

WEBB: Thank you.

KING: Thank you. Tax cuts and don't ask, don't tell, those aren't the only big debates before the Congress. Another piece of legislation, they call it the dream act. It deals with illegal immigration. Some say it is justice, others say it's amnesty. We'll debate that, just ahead.

(COMMERCIAL BREAK)

KING: The House could vote in the next hour, the Senate most likely tomorrow, on a bill that could affect the lives of hundreds of thousands of young illegal immigrants in this country. It's known as the Dream Act. It would allow them to become legal citizens if they enroll in college or the U.S. military.

Now critics reject it as a mass amnesty program. Let's take a little look right here at just what it does. As we noted, you can get conditional permanent resident status if you graduate high school. And make this point before we continue, you would have had to come to the United States before you were age 16, so essentially being brought in by your parents or a family member.

You can permanent resident status if those immigrants complete two years of college or military service. And states would be allowed to give instate tuition regardless of immigration status. Those are the key provisions of the Dream Act.

Where is the illegal immigrant population in the United States? This is not just the young students. This is everybody. The darker the state, the more illegal immigrants. So you see Texas and California, and here down in Florida this way, those are the highest states. This is from the Pew Hispanic Center.

Here's one of the reasons supporters of this bill think it is so important. The Latino high school dropout rate is higher than the rest of the population. That's one reason supporters say it's important.

Here's another reason supporters say it's important. About 40 percent of the unauthorized immigrant community has a less than high school education. So supporters say this would help get people into the education system and support that. But those are the numbers. Those are the demographics.

Let's talk now, Mario Solis-Marich, he's a Democratic campaign consultant and radio host. And J.P. Freire of the "Washington Examiner." Mario, you track the politics of this and the vote count pretty closely. They decided to delay the Senate vote tonight because they wanted the House to go first. That vote will take place probably in the next hour. But in the Senate, they're still saying they're probably, probably shy of 60. You feel any different?

MARIO SOLIS-MARICH, DEMOCRATIC CAMPAIGN CONSULTANT: I think that it was good the house kind of took its time today because the Senate does need some more time. It's going to be very, very close. At last count, we only had two GOP senators that were willing to step forward and vote. And keep in mind, Kohn, this is a vote just to have the debate. This isn't even a vote on the bill. For some reason, the GOP is scared of even having the debate. They're afraid to let the American people -- what's at the core of this particular bill.

KING: Are the Republicans are afraid to have they debate? Is that the issue?

J.P. FREIRE, WASHINGTON EXAMINER: No, I think actually Republicans would probably be very happy to have the debate because there are a lot of things that show how unserious this bill is. There are a bunch of problems with it. For instance, you have the fact that it was -- you know, it was originally attached to a defense bill which is what you do when you realize that you don't really have the sort of currency that you need to be able to push something through. But then you also look at the fact that it would provide in-state tuition and federal aid to illegal immigrants that wouldn't go to normally legally immigrants. My father was actually raised in a very poor town, a very poor part of Argentina. And he would have loved to get this kind of benefit. That sort of thing would still be denied to him.

KING: So Mario, on that point --

SOLIS-MARICH: You know --

KING: Go ahead, just come on in.

SOLIS-MARICH: Let me say something. First of all, it's not true, this bill does not provide anything for undocumented students that anybody else doesn't get.

You know, this is the problem, and this is why the GOP is afraid to have this debate. Because the fact of the matter is like, for instance, "The Examiner" today did an editorial about the Dream Act. It was full of fallacies, misinformation, bad innuendo.

The fact of the matter is that under this bill, there are no special provisions, no special rights given for any undocumented students. Some of the people that support this bill -- it's not only Latinos, it's not only immigrant communities, not only Democrats. The fact of the matter is that Secretary of Defense Gates supports this bill. Actually, in "The Examiner" editorial, the "Examiner" editorial said that this was actually some kind of security breach. The Pentagon has called for the passage of this bill -- the secretary of defense has asked for the passage of this bill --

FREIRE: Hold on a second Mario, let's just be clear about what the bill actually does --

SOLIS-MARICH: This is not a security breach and that's what your editorial said today. And you guys should take it back because it's absolutely false.

FREIRE: One of the things -- the reason for us bringing up the security concern -- by the way, that editorial didn't run today, it ran I believe on December 2nd. It's OK, though, I don't expect you to be reading "The Examiner."

SOLIS-MARICH: I read it, I read that today.

FREIRE: The reason that we brought up the security -- the reason that we brought up the security concern is that anybody who applies for this benefit, in order to be able to go to college and so on, they wouldn't -- the government is prohibited from actually deporting them. The Department of Homeland Security can't get that information. Nobody can get that information. Now I can understand why that would be. I get why that would be -- SOLIS-MARICH: Once again, that's misinformation. If somebody breaks --

FREIRE: Anytime I bring up facts, Mario --

SOLIS-MARICH: -- they can be deported --

FREIRE: -- you interrupt me and --

SOLIS-MARICH: Well, now --

FREIRE: Lust let me finish instead of just coming here and tell me how my facts are totally wrong --

SOLIS-MARICH: Well, number one, do you honestly believe that the secretary of defense would support a bill that would lead to a security breach? Do you actually believe that the Pentagon --

FREIRE: There's a security problem already when we have illegal immigration, Mario --

SOLIS-MARICH: -- that would lead to a further security problem, do you believe that?

FREIRE: Mario, when -- I mean, if we call it illegal immigration, that's because there's a genuine problem. We're trying to fix it, right? I mean, that's what the purpose of this bill is. But I'm saying that it is so flawed because if you look at the amount of money we have to spend to fix this problem and also the way that it would provide sort of a blanket amnesty for people, I mean it doesn't seem like it's very serious. It doesn't seem like they're actually making a real effort.

KING: Is your core disagreement that it would reward -- they were under 16 when they came to the United States, so you could say in most cases, somebody brought them. These kids not make a decision to get here. But is your core disagreement you're rewarding somebody who broke the law?

FREIRE: That's one half. The other half is the oversight on actually regulating this and making sure that people are following the letter of the law is going to be so difficult to do that you don't know that it's actually going to do anything positive.

KING: The flip side is -- excuse me one second, Mario. The flip side is --

SOLIS-MARICH: Let me get in here, John, for a second.

KING: Go ahead.

SOLIS-MARICH: If in fact the GOP and conservatives have a problem with this bill, then they should do is they should allow for debate. But no, they're not doing that because they don't want to fix this bill. They want to stop the dreams --

FREIRE: They're interrupting people the same way you've been.

SOLIS-MARICH: -- of millions of people, of millions of young people who were brought here under no volition of their own who want to serve their country. You know what's interesting? Over this last couple of days, there was a decision made to give billionaires a tax cut that they don't need. We have millions of young people who are protesting because they want to be taxpayers.

FREIRE: -- struggling American families shouldn't be asked --

SOLIS-MARICH: -- it absolutely makes no sense. And let me say this --

KING: Quickly, quickly.

SOLIS-MARICH: This bill cuts the deficit by $1.4 billion.

KING: In the short term it does. There is our projections that over the next 10 years, it would cost money. But gentlemen, I need to call a time out here. But we'll continue this conversation. I appreciate both of you coming in. We'll come back in. The House will vote later tonight. The Senate will probably vote tomorrow morning. We'll keep this one up to the vote. Gentlemen, J.P. and Mario, thanks so much for coming in.

When we come back, the president said yesterday, judge me on whether I have kept my campaign promises. James Carville, Mary Matalin, right here, we'll have a report card.

(COMMERCIAL BREAK)

KING: President Obama's firing back at criticism from liberals in his own Democratic Party got more than a little feisty yesterday and then laid out a straight-forward test.

(BEGIN VIDEO CLIP)

OBAMA: I don't think there's a single Democrat out there who, if they looked at where we started when I came into office and look at where we are now, would say that somehow we have not moved in the direction that I promised. Take a tally. Look at what I promised during the campaign. There's not a single thing that I've said that I would do that I have not either done or tried to do. And if I haven't gotten it done yet, I'm still trying to do it.

(END VIDEO CLIP)

KING: So let's take the tally, judge the president as he asked to be judged, based on his record, keeping those big campaign promises.

Here to help, our exclusive duo, CNN contributors James Carville and Mary Matalin. All right guys, let's look. Here's the big picture. The website PolitiFacts.com tracks more than 500 promises Obama made as candidate and president. He says -- it says he's kept 123 and struck compromises on 39 more. PolitiFacts scores 24 Obama promises as broken and another 85 as stalled. In the works or incomplete, 232 promises.

Now here's a closer look at some big ones. Promises kept -- health care reform, the troop draw-down in Iraq, the troop surge in Afghanistan, reversing stem cell restrictions, a credit card bill of rights and expanding Pell grants for college students.

Here, promises broken. And these are big ones. He promised to introduce an immigration bill in the first year. Didn't happen. Promised to let the Bush tax cuts for the wealthy Americans expire. He's cutting a deal right now that won't do that. A cap and trade bill didn't happen. Closing the Guantanamo Bay terrorist detention center, still open. Reducing earmarks to 1994 levels hasn't happened. And allowing prescription drug imports hasn't happened.

Now both of you have worked with presidents. Both of you know very, very well, governing is a lot harder than campaigning. Does the president pass this test?

JAMES CARVILLE, CNN CONTRIBUTOR: Again, you'd have to put that in context of what other presidents have done. Most of the academic research shows that they actually do most of the things -- or try to do most of the things that they say they're going to do. I don't -- the question is not did he promise some things and sort of do some things. The question is, here we are, in this terrible recession that was not of his making for sure and that they just had a total capitulation in a budget deal with the Republicans and people are not happy about it.

I understand that he's frustrated. But you can't make these guys happy about something that they're not happy about, that they feel like he gave in on everything.

MARY MATALIN, CNN CONTRIBUTOR: Well, the conundrum for the president is the big promise that he kept. His signature promise of passing health care was one that the overwhelming majority of Americans opposed. And it was a cornerstone of -- what happened in this last election. The promises he broke as far as Democrats cared were the ones that people wanted. So he's actually moving to where he needs to be, but he's going to leave his party behind.

But Gitmo is open. These are -- Afghanistan is now his. These are all Bush policies as the architect Karl Rove has been ready to point out, including the signature Bush domestic policy of tax structure.

KING: Is this why, James, the president got very riled up at the press conference, at criticism from within his own party. He said we can be sanctimonious if you want. A lot of liberals took offense. He said that compromise is supposed to be a good thing. And he said liberals apparently think they only get the perfect. Is this, in part, because the left, if you look at the promises broken and kept, the left is especially mad because there was no public option in health care because he sent more troops into Afghanistan because Gitmo is still open. So the left seems to think that it has, of all the interest groups out there, all the slices of the political pie out there, that maybe it has more grievances with this guy it worked hard to elect?

CARVILLE: I don't know. I think they have a good point on the public option. On this, I just want a compromise. It's capitulation. This wasn't like somebody got a half and half deal here. This was a rout for the Republicans. I think what the Democrats should do is say, you got 75 percent of what you wanted, you deliver 75 percent of the votes, we'll give you enough votes to go. But don't portray this as sort of an even deal between the two parties. The Republicans are out publicly laughing that they got stuff they didn't even ask for. This was done -- boy, we just going to spend $900 billion. I mean, I'm sorry, but we shouldn't vote for something that they want. Let them vote for it if they think it's so nifty.

KING: Do you see a new Obama? Do you see after the election, whether it's this deal or he cuts a deal with Republicans -- James calls it capitulation. Some other liberals do. He certainly came the Republican way. He's going to let the Bush tax cuts for the wealthy stay in place. Do you see a new president? Do you see him maybe reading the election results and moving substantially?

MATALIN: The punditocracy is obsessed with this. Is he going to triangulate? Is he going to do a Clinton, the era of big government is over? Personally, I don't think it's in him. I don't think he has Clinton's DNA. Clinton actually at the end of the day was a centrist, from a centrist state, had a very powerful team, had a centrist Congress to work with.

KING: But if the liberals are so mad at him, have the conservatives overplayed that this guy is so far left? This guy is a socialist? This guy is way out there? The people who seem most mad at him are the people on the left.

MATALIN: That is true. I want to go back to your point about form because what has been his claim to fame and his superior skill set has been political, calling his home team sanctimonious, calling his -- the people with whom he has to work for the next two years, hostage-takers, implying they're terrorists, the guy's lost his political mojo.

He has to get his head in the game so to speak. It's going to be a hard two years. We've got a presidential election in front of us. He's got a very angry caucus that is going to impede his progress. And he's got -- the Republicans are going to remain humble because they know how we very close to having been wiped out four years ago. But he's got to -- you've got to get your head right after something like this.

CARVILLE: I just think the whole thing -- I mean, it's the deficit. So if we add $900 billion to the deficit. This was not, let's just spend everything, give everybody everything they want. There's a strategy here. I don't know, this is not over. If there's a strategy, where is it? And by the way, the single biggest failed economic policy in history are the Bush tax cuts. Why are we extend something that demonstrably didn't work, that didn't grow incomes, that left us with our economy bad, it exploded the deficit, it gave us $4 trillion more deficit? That's what I don't understand. MATALIN: Which produced for all but one year 5 percent unemployment, we're at double digits. It produced one-fourth of the deficit, one-fourth of the debt we now find ourselves confronting. Did work towards Medicare entitlement, did put on the table Social Security reform. This is why, in our own polls we were showing yesterday, Bush is now -- this doesn't mean anything because Bush is never going to run again. His favorability is greater than this president.

CARVILLE: Again, it's demonstrative that the tax cuts were a fiscal disaster. It's for a fact that we're doubling down on a fiscal disaster that didn't work economically. By the way, why did they cave on the estate tax? It's not going to grow a popsicle in the economy. I have no idea.

KING: We'll call a time-out there. I can never call a truce with you two. Mary and James, thanks for coming in. Can disgrace make you a more effective leader? One former rising star in the Republican Party seems to think so. We'll tell you who it is, what it's about -- our off-beat reporter Pete Dominick, well, he's got something to say about it.

(COMMERCIAL BREAK)

KING: The outgoing South Carolina Governor Mark Sanford had some pretty interesting thoughts about his once promising political career. They came in a local TV interview. One comment particularly caught the ear of our off-beat reporter Pete Dominick. Pete, what was it?

PETE DOMINICK, CNN CORRESPONDENT: That's right, John King, thanks for letting me do this one tonight. It was just the idea that he said apparently the -- Mark Sanford said the affair helped him in the end do a better job as governor, took the political target off his back. And I don't know if it helped him do a better job as a father and a husband but all I have to say, John is, if it helps you be a better governor, why not have about two affairs, maybe three affairs? Which is why I'm here tonight, to ask you John, I know I haven't necessarily hit it out of the park every night for you and I'm thinking maybe if I announce I'm having an affair, maybe I can do a better job as Pete on the Street. What do you think, John King?

KING: Why don't you go home tonight and ask Mrs. Pete what she thinks of that and we'll have a conversation about it tomorrow. I don't think --

DOMINICK: Actually --

KING: I don't think I'm the jury on that issue.

DOMINICK: I actually just got a text message from my wife, which includes a picture of a pair of scissors so I'd like to announce I'd like to take back that comment if it's OK with you, John, if I'm doing a good enough job, I'd like to stay devoted to my wife.

KING: I don't want to call you Pete Bobbitt. DOMINICK: John, the greatest thing about that story, the greatest thing, and you know news cycles, the Michael Jackson thing, that helped him out, yes?

KING: All right, we'll talk about that one later. We've got to go. "Parker Spitzer" starts right now.