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STATE OF THE UNION WITH CANDY CROWLEY

Interview With Mitch McConnell; Afghanistan Review

Aired December 19, 2010 - 09:00   ET

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


CANDY CROWLEY, HOST: Turns out that lame duck congress waddled its way into history.

(BEGIN VIDEO CLIP)

SEN. HARRY REID, (D) NEVADA: The yeas are 65, the nays 31. The motion to concur is adopted.

(END VIDEO CLIP)

CROWLEY: With a handful of Republicans helping break the impasse the Senate voted yesterday to repeal Don't Ask Don't Tell, opening the door for gays and lesbians to serve openly in the military, and giving President Obama the opportunity to fulfill a campaign promise. It was his second political victory of the week, his first, a tax cut deal.

(BEGIN VIDEO CLIP)

BARACK OBAMA, PRESIDENT OF THE UNITED STATES: I don't believe that either party has cornered the market on good ideas and I want to draw on the best thinking from both sides.

(END VIDEO CLIP)

CROWLEY: The president had to back off his vow not to continue tax breaks for the wealthy and stare down angry members of his own party but with the help of Republicans the president got what amounts to a major stimulus package, billions to help the middle class and an extension of benefits for the long-term unemployed. And today the Senate will work on START, a new missile reduction pact the president wants approved before the end of the year.

Pretty good week for a guy who got shellacked a little over a month ago. One conservative columnist dubbed Mr. Obama the new comeback kid and he couldn't have done it without Republicans.

Today a key player in cutting the break-through deal with the Obama administration, Senate Republican leader Mitch McConnell.

(BEGIN VIDEO CLIP)

MCCONNELL: The American people are seeing change here in Washington. They can expect more in the New Year.

(END VIDEO CLIP) CROWLEY: Then the Afghanistan surge, a mixed review of the state of play and growing public opposition. We're joined by former ambassador, Zalmay Khalilzad, former CENTCOM commander Admiral William Fallon, and former chairman of the Joint Chiefs of Staff General Richard Myers. And digesting the week's news and what it bodes for the new year with Matt Bai of the New York Times and A.B. Stoddard of "The Hill."

I'm Candy Crowley and this is "State of the Union."

What happened this week is quite the turn-around for everyone. Just before the elections, Senator McConnell said the single most more than thing we want to achieve is for President Obama to be a one-term president. Friday when the president signed the bipartisan tax package Senator McConnell stood to the president's left. The top two Democrats on Capitol Hill, the Speaker and the Senate majority leader did not attend.

Joining me now is Senator Mitch McConnell. Thank you so much for being here. Appreciate it.

MCCONNELL: Glad to be here.

CROWLEY: Let me just talk a little bit about your new relationship with the president, and I want to bring up something that Senator Lugar told me in a recent interview with him. We'll play it for you.

(BEGIN VIDEO CLIP)

SEN. RICHARD LUGAR, (R) INDIANA: I think that perhaps Senator McConnell, our Republican leader, and the president may see more eye to eye on how we ought to wind up this lame duck session than maybe do others in this situation.

(END VIDEO CLIP)

CROWLEY: So given what you said before the election about your political priority, given this tax package that you and the administration worked out, are you now BFFs with the president?

MCCONNELL: Well, the fact that the Republican leader of the Senate would like a Republican president a couple years from now shouldn't be particularly surprising. What the American people are interested in of course is what we're going to do between now and then. And I think we demonstrated on the tax package there are some business we can do. And the president's willing to come and adopt positions that frankly I and my members hold anyway, why would we say no?

This tax package was 76% Republican policy, 12% Democratic policy and you can argue about the policy, the balance of it. It was called a stimulus package in the intro. If you consider letting people keep their own money in stimulus, we plead guilty. I think it was a good package which settled tax question for two years now. CROWLEY: Well, how did you find working with the president? Does it feel different now or was this business? You've got an agenda, he's gotten an agenda and somehow you both have to move the country forward. MCCONNELL: Well, on this particular matter, I worked closely with the vice president and subsequently with the president. And I found working with them is just fine. As I said, we weren't sent here to do nothing and if the administration believes they need to go in a different direction, and it mirrors the things that I and my members believe is good for the country we're going to do it. And this was a good example of that.

And I think the overwhelming Republican majorities in the House and Senate indicate that our members thought it was the right thing to do.

CROWLEY: You know, there has been some flack as you know from Republicans, conservative Republicans, Tea Party and others who do look at this and say listen this is a stimulus plan, because it does maintain some of the things that were in the original stimulus bill, and it was, the president was being sparked because he couldn't have come up and said I need this much money to stimulate the economy. So, let me just read you something that Charles Krauthammer wrote recently, calling President Obama the comeback kid.

If Barack Obama wins re-election in 2012 as is now more likely than not historians will mark his comeback as beginning on December 6th the day of the great tax cut deal of 2010. He went on to say that Republicans were sprinkling the president's path sprinkling it with rose petals.

So you're sort of caught in this thing where people say well, now the president looks good. He's being bipartisan and this will help him get reelected?

MCCONNELL: Well, let me give you another point of view. I think Charles Krauthammer is very smart but on this he's totally wrong. The Tea Party group Freedom Works that put hundreds, thousands of people on the Mall, they supported the bill, Ron Paul the most famous Tea Party type member of Congress supported the bill, The Wall Street Journal, the National Review, The Weekly Standard, a majority of the presidential candidates of our party all supported this deal. Why do you think they did that? Well they did it because it was essentially Republican policy.

Let me make a second point, Candy, what we have done by ending the tax debate for two years, we know what taxes are going to do for the next two years, is that we will not allow the Democrats to link tax cuts and spending cuts. Back in '95 and '96, when we would send packages to President Clinton that had a combination of tax reduction and spending reduction, our good friends on the other side would say, oh, they're taking food out of the mouths of babes in order to give tax relief to people who don't deserve it. We've ended the tax debate for two years, going to concentrate, we're going to now on reducing spending and debt and I hope the president will join us in reducing both spending and debt CROWLEY: On the political side, though, do you concede that the president is having a really good month and in part he is doing it with the help of the Republicans, so everyone, political goal, and you're right it's not surprising you'd like a Republican president but it's helped him kind of get up off the mat?

MCCONNELL: Well if the president is willing to listen to the voters who expressed themselves pretty overwhelmingly on November 2nd, and pivot and do things that the voters approve of, why would we say no to that? The final point I would make about this tax deal between the president and us, 70% of the American people thought it was a good thing to do -- 85% of Republicans, 52% of Democrats and 60% of independents liked it. Why would we not want to do what the American people would like us to do?

CROWLEY: One of the things that Republicans did in banded together was also to kill the so-called continuing resolution, it was a big omnibus spending bill, sorry, that just said OK here's $1.1 trillion, here's how we're going to spend the money, boom in lieu of the separate spending bills that were not attended let's say during this past year. There were earmarks in it, some of them were yours over $113 million worth, looked like the Republicans were on board, suddenly you guys say no, we're not going to go with this, way too much spending, it's just pork barrel spending. The Tea Party is all over it. And the Democrats say this is hypocrisy. We had the Republicans on board that you specifically he said agreed to the $1.1 trillion figure, and suddenly you backed off. This looks like you're buckling to the Tea Party.

MCCONNELL: Look, what the message was here is the public doesn't want us any longer to pass 2,000 page bills that haven't gone...

CROWLEY: But had you agreed to it before?

MCCONNELL: May I finish?

CROWLEY: Sure.

MCCONNELL: All we agreed to was the top line, the total amount that was going to be spent in all the discretionary accounts. What we did not agree to is not taking a single bill across the Senate floor. What we did not agree to is adding up 2,000-page bill, putting in there funding of the health care provisions that were passed last year, which we overwhelmingly opposed, and passing it right before Christmas.

Look, the public is sick and tired of doing business that way. So we decided to defeat it. I think we got to quit doing business that way, if we're going to listen to the American people and the message they sent us on November 2nd, we quit doing that. There are 12 appropriation bills that fund the government, they ought to be done one at a time and the fact that this was the first time in modern history, Candy, that not a single appropriation bill went across the floor of the Senate and gave anybody a chance to amend it or look at it. CROWLEY: Are you and the majority leader close to coming to some understanding on how you're going to fund the government until the next Congress session?

MCCONNELL: Yes. We're going to pass a short-term continuing resolution over into March.

CROWLEY: Into March. So that's -- you all have agreed to that?

MCCONNELL: Yes.

CROWLEY: OK.

Let me ask you about S.T.A.R.T. which is being taken up on the floor today. What is your position on approving this treaty?

MCCONNELL: well, I've decided I can not support the treaty. I think the verification provisions are inadequate. And I do worry about the missile defense implications of it.

MCCONNELL: The McCain amendment yesterday, regarding missile defense was defeated. And I know the administration actually sent a letter up yesterday, indicating they're committed to missile defense.

But an equally important question is, how do the Russians view missile defense? And how do our European allies view missile defense? And I'm concerned about it. I think if they'd taken more time with this -- rushing it right before Christmas, it strikes me as trying to jam us.

I think if they'd taken more time -- and I know that the members of the Foreign Relations Committee spent a lot of time on this, but the rest of us haven't. And so all of the sudden we're once again trying to rush things right here before Christmas Eve. I think that was not the best way to get the support of people like me.

CROWLEY: Will it come to a vote before you recess?

MCCONNELL: It will be up to the majority to determine that. My assumption is we're doing it now because they intend to try to get us to vote on it before Christmas. I think it's not clear yet whether that will happen.

CROWLEY: And do you -- you have a pretty good handle on the pulse of your caucus. Are there enough Republicans to join with the Democrats and approve START?

MCCONNELL: Well, we're going to find out here in the next few days. A lot of our members who are not on the committee are getting deeply involved in this for the first time, as I just indicated, at the risk of sounding -- of being redundant.

I don't think this is the best time to be doing this. Members are uneasy about it, don't feel thoroughly familiar with it. And I think we'd have been a lot better off to take our time. We would have been willing to give them a time certain to complete this early next year. They turned that down. They want to do it now. We'll see what happens.

CROWLEY: But you are committed to voting against it.

MCCONNELL: Yes, I'm going to oppose it, yes.

CROWLEY: OK. Health care strategy, are you still committed next year to making some sort of move in the U.S. Senate to try to repeal health care? MCCONNELL: I'm hoping we will receive from the House of Representatives a full repeal of "Obama-care." It will be hard to get that through the Senate, but we will be working to try to get a vote on that, and hope that among those who have had maybe second thoughts in the Senate, including the 23 Democrats who are up for re-election in '12, there will be some openness to revisiting what I think was the single worst piece of legislation in my time in the Senate.

CROWLEY: And, finally, I mean, that -- we'll say that you and the president are going to disagree on that, but in our last 30 seconds, what's the next big thing you can see yourself working with the Obama administration on in terms of legislation?

MCCONNELL: Entitlement reform can only be done on a bipartisan basis. It can't be done one party only. We have enormous unfunded liabilities, Medicare, Social Security. I would love to sit down with the administration and see if we can do something to make certain that we leave behind the same kind of country for our children and grandchildren that our parents left behind for us.

CROWLEY: Senator Mitch McConnell, Republican leader in the Senate, if we don't see you again, have a good holiday.

MCCONNELL: Same to you.

CROWLEY: When we come back, what we learned and what was missing from President Obama's Afghanistan war review.

(COMMERCIAL BREAK)

CROWLEY: The administration's review of the war in Afghanistan was released this week, giving the president a chance to trumpet progress made one year after his decision to send in 30,000 more troops. Critics say the picture is more of a mixed bag.

Here is President Obama outlining his goals a year ago and what he says now.

(BEGIN VIDEO CLIP)

BARACK OBAMA, PRESIDENT OF THE UNITED STATES: I set a goal that was narrowly defined as disrupting, dismantling, and defeating al Qaeda and its extremist allies.

In pursuit of our core goal, we are seeing significant progress. It must be clear that Afghans will have to take responsibility for their security and that America has no interest in fighting an endless war in Afghanistan. Targets for the growth of Afghan security forces are being met.

There's no imminent threat of the government being overthrown, but the Taliban has gained momentum.

In many places, the gains we've made are still fragile and reversible, but there is no question we are clearing more areas from Taliban control and more Afghans are reclaiming their communities.

We will strengthen Pakistan's capacity to target those groups that threaten our countries and have made it clear that we cannot tolerate a safe haven for terrorists whose location is known and whose intentions are clear.

Progress has not come fast enough. So we will continue to insist to Pakistani leaders that terrorist safe havens within their borders must be dealt with.

(END VIDEO CLIP)

CROWLEY: In the balance of success and setback, which weighs most heavily, when we come back, we'll ask former CENTCOM Commander Admiral William Fallon, former Chairman of the Joint Chiefs General Richard Myers, and former Ambassador to Afghanistan Zalmay Khalilzad.

(COMMERCIAL BREAK)

CROWLEY: And now Ambassador Zalmay Khalilzad, Admiral William Fallon, and General Richard Myers, gentlemen, thank you all for joining again.

MYERS: Good morning.

FALLON: Thank you.

KHALILZAD: Good morning.

CROWLEY: So we get this new report on how the war in Afghanistan is going. Basically they say there's progress since the surge of the 30,000 troops. It's in fragile because there are still safe havens in Pakistan, there's still corruption in the Afghan government. And I'm thinking, we have played this tune before.

CROWLEY: This is -- it seems to me, for the past several years, we've been talking about how Pakistan won't go and rout out the Taliban and Al Qaida from North Waziristan, and the Afghan government has been corrupt.

Has it been worth the 30,000 troops?

MYERS: Well, I believe it has. I think -- I mean, I think what we're seeing is -- is progress for sure, at least in my view. And I've talked to some of the military commanders that are involved over there right now and they -- they're pretty positive, at least about -- I think people have to realize it's -- the progress in that country is uneven, and it's different in different areas around the Helmand province and Kandahar -- actually, progress is pretty good.

I talked to the Marine division commander that's operating there today and he's pretty optimistic that the government down there is solid; the people are being protected. Taliban influence has waned considerably. But if you go closer to Pakistan and some other provinces, then it's a little bit more problematic. But, no, I think -- I think we're making progress.

CROWLEY: But isn't the problem that, yes, we could make -- the troops always do their job, it seems to me...

MYERS: Sure, right.

CROWLEY: ... that we always -- you know, they can do it. That's not the problem. The problem is they do it here and then they have to move here and everybody moves back in, that we can't -- and that really, at the base of it is Pakistan?

FALLON: Candy, I think it's wise to keep in mind that we've gone through several phases of our activity in Afghanistan. And in the last year, year and a half, there's now a concerted effort to try to get a better handle on security in the south, where things have been most problematic.

At the same time, things in Pakistan have changed, too. And it seems -- one of the things that I noted is, in Pakistan, just about every time it looks like there might be things getting ready to make some progress, something else happens that's distracting; for example, the floods and the natural disaster this year, I think, had a big effect on pulling resources away.

It's a challenge. I think progress is being made right now. CROWLEY: Let me ask you, Mr. Ambassador, because I want to read you something. A man you know well, Hamid Karzai, in a mid-November interview in The Washington Post, as I'm sure you read -- part of what he said was "The war on terror" -- which is why we went to Afghanistan -- "cannot be conducted in Afghanistan because that isn't here. It is somewhere else. We are only reaping the consequences of it here."

Again, we have what has been continuing complaints of corruption with the Karzai government. Worse, we have a populous that doesn't trust the central government in Kabul. And it hasn't seemed to change. What moves that dime?

KHALILZAD: Well, I think what Karzai was saying reflects a big problem, which is first our relationship with him. There is a trust deficit. And the trust deficit is because of not only the way we have handled him in recent periods...

CROWLEY: By criticizing him openly, that kind of thing?

KHALILZAD: And the perception that we opposed him during the presidential election; we supported his opponent, and being too public in our criticism.

But at the same time we have complaints with regard to governance, his government not performing. Because success requires that he does his part.

And the second disagreement between us, a significant disagreement, which has narrowed now, over Pakistan -- he has complained for years that the sanctuary is -- needs to be addressed. It hasn't been addressed. There is some progress Pakistanis are doing in some areas more, but I think, while our military is doing its part, no doubt, we need a big diplomatic effort to make Pakistan from being both adversary and friend to being less adversary and more friend. And this hasn't happened yet.

CROWLEY: And it hasn't happened. And isn't it key?

I mean, I just -- I feel as though, you know, are we pushing Pakistan too hard? Are we not pushing them enough?

Because every year it's like, well, what we really need here is for these safe havens in Pakistan to be destroyed. We need Pakistan to move in. Once again, Pakistan is now saying to us, yes, this next year is going to be the year that we move the troops in.

It seems to me that it is all about Pakistan at this point and we haven't been able to move them.

MYERS: And it...

(CROSSTALK)

MYERS: Well -- go ahead.

FALLON: There's been longstanding finger-pointing across the Durand line, both from Islamabad and Kabul -- you know, if only they'd fix this, then we wouldn't have a problem, and vice versa.

And the reality is they both have to move forward. But there's some fundamentals here, in my opinion, that need to be addressed on both sides of the border, and they have a lot to do with economics and development.

If you look at the people both in Afghanistan and Pakistan, they need a lot of help and they're not getting it, frankly, from either government. And for us to be successful there in the long term, it seems to me that we're going to have to recognize that we need to do -- make a major effort in development. And this is something that can be done...

CROWLEY: Goodness. Haven't we given millions to Pakistan?

FALLON: I'm not talking -- I'm not talking about governments. I'm talking about investment. I think there's a lot of potential for private investment, particularly in Afghanistan, with a reasonable amount of security. And I think that's what we're trying to establish in the south, and maybe use this as a foundation to move forward.

KHALILZAD: I don't think the problem of what we're seeing in Pakistan is an issue of development, with all due respect to Admiral Fallon. It is the government of Pakistan. It is the military institution of Pakistan. It is the Pakistani intelligence agency that's tolerating, supporting, allowing these sanctuaries, so it requires a huge diplomatic effort.

We have to work with not only ourselves with Pakistan, in my view. We have to work with others who have influence over Pakistan, such as Saudi Arabia, such as China and others, to bring about this change.

We should put, in my view, both more positive on the table to incentivize Pakistan to change and more negative; consider pressure, indirect or direct, to bring about a recalibration in Pakistan, for without that, it will take a long time for us to succeed, and I don't know whether we have the political timetable available.

CROWLEY: Enough time left to actually do that? This is a long- term project...

KHALILZAD: It's a long-term project.

CROWLEY: ... redoing that relationship.

General, I want to bring you in, but I want to read you something first and then have you say what you want to say here.

This is from a David Sanger article, in which he's talking about Pakistan. "Pakistan remains a far more vital strategic concern for the U.S. than Afghanistan will ever become."

MYERS: I think -- I think you get them as a pair. I think that the situation over there, it's -- you're not going to have a stable Afghanistan without cooperation in a stable Pakistan and vice versa.

So I think -- I think they go together. There are different concerns in both places.

CROWLEY: One has nuclear...

MYERS: Nuclear weapons, of course.

But let me just go back to the -- I don't disagree with anything the ambassador said, but I would align myself with Admiral Fallon that I -- you know, you've got to have economic progress in Pakistan as well. They have a -- their economy is suffering right now. If we would just open up our markets to their textiles, something they've talked to me about, going back many years, it would really help them come to...

CROWLEY: Why haven't we?

MYERS: You know, I don't know the answer to that, but we -- you know, you've got to have economic progress for the people to feel good about themselves, to think their government's doing the right thing, to give them the resources then to use against the militants in their country. And just one other point: while the Pakistanis, maybe, have not been as aggressive in the tribal areas as we would have liked, we're aggressive in there, and have had quite an impact.

CROWLEY: Far more -- well, both positive and negative, correct? I mean, there's drone attacks that...

MYERS: No, but -- but -- and then, you know, there are -- there's downsides to that, but the upside is that the leadership, both Taliban and Al Qaida, you know, have been slowly eroded in the...

(CROSSTALK)

KHALILZAD: ... and Pakistanis have been focussed more on Al Qaida, which is important, but neither of us, not us, nor the Pakistanis have moved against the Taliban leaders, who are fighting us in Afghanistan.

And I believe we ought to be considering to do more for Pakistan, including on the economic front, but it has to be very much contingent with timelines in terms of what they will do.

Because we have been positively engaging in the hope that they would change. That has not worked. We need to be much more linking our assistance to change in behavior with timelines, for otherwise, I think we've already been doing this for nine years, and frankly, time is running out. They understand it. That's why I think they'd be reluctant to change unless we change our calculus by putting more negative and more positive on the table for them.

CROWLEY: Admiral...

(CROSSTALK)

CROWLEY: Go ahead.

I was just going to ask you, it seems to me, when I read those -- the excerpts -- we certainly don't see the whole of the report, but the excerpts from the report, that this is just part of the march to June, right? This was, to me, justification. You say it's real. I take you at that, of, OK, now we're going to have -- start the drawdown in June.

How -- looking at what you're looking at now, can I get from each of you what you think the totality of that beginning drawdown will be?

Are we talking about tens of thousands of troops? Are we talking about, sort of, a minimalist thing just to show we're pulling out? What do you think?

FALLON: Candy, I think -- first, who knows the numbers, but the reality here is that different people focus on different things, and it seems to me the most important thing is what's going on over there in the region.

On the ground in Afghanistan, it appears that progress is being made and that we're making very concerted effort to work particularly in the southern areas, but as has come out here, there are many aspects of this that need to be addressed simultaneously.

The governance issue -- certainly very, very important. You can't deal with just Afghanistan. You've got to deal with the region. And this is a place where we can play a role.

FALLON: I agree with the ambassador that we have got to continue to keep pressure of a sort on the Pakistani government to do things that would be helpful to ourselves and to them and the Afghans and the region. And maybe we can play a role -- a larger role in the region.

One of the problems in Pakistan is the longstanding focus on India and the security between the two. And I think that is a huge detractor from the things that we would like to see going on in western Afghanistan, because it's just really -- it seems difficult to get them to get their focus off of India.

It seems to me that it's -- we're past that time. We ought to be able to get over it. But that's a thing that we might be able to help in the larger diplomatic area to build confidence so that we can continue to make progress in Afghanistan.

CROWLEY: I have to quickly move you on to something else, because it's just on the front pages, and that is Korea. The U.N. Security Council about to take up -- Russia is asking to tell North Korea to back off. North Korea is pretty much immune to that sort of thing, are they not?

KHALILZAD: Yes, they're very difficult to understand what motivates them. It seems like regime survival is the only thing that really focuses their attention. And the diplomatic effort, the U.N., the only power that really can influence them would be where China comes down on this. And the Chinese need to do more, because they have the necessary leverage to shape the behavior of North Korea.

CROWLEY: And I have two questions for both of you, if I could get really quick answers. How dangerous is Korea right now?

MYERS: I think this is a lot of bluster on the North's part. And so I mean it depends in part on the Republic of Korea's reaction, but given the stakes and given how tragic any incident could be or further escalation, I think it's a hot spot but I don't think there's a real worry of it breaking further.

CROWLEY: In a word?

FALLON: The focus, I believe, of the regime in the North, certainly regime survival. Certainly there's a transition that's about to occur. And the other longstanding goal, I believe, of their policy is to get us, the U.S., to sit down and...

CROWLEY: Pay attention to them. FALLON: ... and pay attention to them and have a one-on-one. That's really what they want.

(CROSSTALK) MYERS: I think it's about regime survival.

CROWLEY: "Don't Ask/Don't Tell" is going to be repealed, the president's going to sign this bill. In a word, will it hurt unit cohesion in the battlefield?

MYERS: In the long run, no. In the long run, no. As we start to implement it, I think it remains to be seen but in the long run I think we can do that.

FALLON: Our commanders have -- they're going to carry out the policy, they'll figure out how to do what they need to do.

CROWLEY: All right. Always one of my favorite panels, Admirals William Fallon, thank you so much. Ambassador Zalmay Khalilzad, thank you. General Richard Myers, thank you so much for being here.

MYERS: Thank you, Candy. Thank you.

CROWLEY: Up next, will President Obama's legislative wins give him more political leverage going into next year?

(COMMERCIAL BREAK)

CROWLEY: Joining me now here in Washington, A.B. Stoddard, associate editor for The Hill newspaper; and Matt Bai, author of "The Political Times" column for The New York Times. Thank you both.

I have to play you something that John McCain said on the floor yesterday in the midst of "Don't Ask/Don't Tell."

(BEGIN VIDEO CLIP)

OBAMA: And the final product proves when we can put aside the partisanship and the political games, when we can put aside what's good for some of us in favor of what's good for all of us, we can get a lot done.

(END VIDEO CLIP)

CROWLEY: OK, well, that's -- for all of our viewers, that was not John McCain, that was the president. But it gets us to what I wanted to talk about, was this bipartisanship, which feels a little faux to me at this point, and I'm not quite sure why. Is this lasting or was it just opportunistic bipartisanship that we've seen.

STODDARD: Well, I think it was amazing to see these two days back-to-back on Friday of signing -- President Obama signing the tax cut deal, a bipartisan issue of great consequence, and then the following day a bipartisan vote on the repeal of "Don't Ask/Don't Tell." I do look at the tax cut compromise as bipartisanship that might evaporate. There was a looming deadline, neither party wanted to be responsible for allowing those tax -- that tax relief to lapse. And then you look at "Don't Ask/Don't Tell" and that was genuine. I mean, you know, once -- when it was attached to other vehicles, you could hide behind procedural votes. Once it was a clean up or down vote, there were some surprises, eight Republicans crossing the aisle to join with Democrats on an issue that the top brass in the Pentagon had asked them to weigh in on and urged them -- they backed the repeal.

That's the kind of thing that is -- that's truly bipartisan. I just don't know in terms of these -- the issues of deficits and debt and these terrible facial matters they are going to have to deal with in the early months of the winter of 2011, I don't know whether we're going to see the same type of thing.

CROWLEY: Matt, I think that the president has done surprisingly well in December. And we're now beginning to see a number of columnists, not always happily, saying the president has really bounced back. Do you...

BAI: Yes.

CROWLEY: ... buy into that?

BAI: I think he's at beginning of something. I certainly think it's possible. And I'm going to be more of an optimist on the bipartisanship thing. I think it's possible. And look, he has been given a pretty difficult mandate here by the voters, right?

They want him to cut spending. They want him to create jobs. They want him to work with Republicans. But they don't want to work with Republicans too much because they haven't actually endorsed the agenda that much, right?

So he has got a difficult path to navigate, but I think he has in some ways a better climate for bipartisanship for this kind of cooperation than he had under a Democratic House, because now there's room to build coalitions.

Now you can't get anything done unless you build those coalitions. That is, I think, where he temperamentally lives. And I think you saw some of that comfort when he came out and took credit for this agreement this week and seemed very confident in doing so.

CROWLEY: And in fact, there's no choice really on either side, is there? Because the president is going to have to move a little away from his left, because he can't govern there, because there aren't the numbers.

BAI: Right.

CROWLEY: And the Republicans are going to have to move a little away from the tea party, this is going to be sort of at them sort of over the course of the whole thing. So there kind of is room in the middle for coalitions.

STODDARD: I don't know on the Republican side. I think when President Obama comes out and says the mandate from this election was -- the message was that the voters want the parties to work together.

Actually, the angry grassroots conservative voters, the tea party movement that was really definitive in this election, doesn't necessarily -- they do praise gridlock, and they don't necessarily want bipartisan cooperation.

CROWLEY: But you heard Mitch McConnell say the voters want us to do something.

STODDARD: They want them to do something...

CROWLEY: So isn't that an actual tension?

STODDARD: I think on raising the debt ceiling. You know, the Republican leadership will resist that. But there will be other times throughout the next two years where there will be some great fights and gridlock will continue, I think.

BAI: The core question here, and A.B. alluded to it earlier, is self-interest. Right, bipartisanship happens when both sides can benefit from an agreement, as I think they did this week, where the cost of doing nothing is greater than the cost of doing something that people are going to disagree with.

I think we've probably have at least a nine-month where they can do more of that. Once you get in the presidential primary season, as you know, Candy, we tend to get into earlier and earlier.

CROWLEY: Last year.

(LAUGHTER)

BAI: Right, right. We're already there. Once you get into that season now then it becomes, I think, harder to build these kind of coalitions because now the parties have to turn inward toward the bases that will be active in that process.

CROWLEY: And I want to see if we have the John McCain bite here when he was talking about a kumbaya moment on Capitol Hill.

(BEGIN VIDEO CLIP)

SEN. JOHN MCCAIN, (R) ARIZONA: You think what this Bizarro world that the majority leader has been carrying us in of cloture votes on this, votes on various issues that are on the political agenda of the other side, somehow think that beginning next January 5th we will all love one another and kumbaya? I don't think so.

(END VIDEO CLIP)

CROWLEY: So, there are some unhappy, they were unhappy about Don't Ask, Don't Tell, they are unhappy about the forcing of the agenda as they see it on the missile treaty as well as on Don't Ask, Don't Tell.

So I'm just trying to figure -- to me this has been cranky bipartisanship.

STODDARD: You know, it's true and I think what Matt points out about self-interest, I do think it is easier now the Democrats having lost the House for President Obama to come to the middle. He is a free trader. He wants to work out deals for free trade pacts with Panama and Colombia. The Republicans are also interested in doing that. They will all come together on budget reform. When they get to the specifics, lord knows what will happen but it is in the interests of President Obama and the Republican majority in the House -- the new Republican majority to get to tax reform and budget reform. And so I think that he will meet them in the middle on their issues, whether or not you can end up with an agreement is another story.

But there's going to be definitely a time with regard to trade and with regard to tax reform and budget reform, I believe, where they will be working on the same issues with the same goals, and if the nominating process impedes that, that's another question. But I don't think he's going to start in on energy reform again or immigration in March of 2011.

CROWLEY: Although he'll probably have to get to immigration at some point before the election just to give it the college try for the voter turnout.

STODDARD: Yes.

CROWLEY: But nonetheless, do you see the friction coming up this year? Do you see a friction developing between the left and the president? Because there's two schools of thought. One is they'll sit home and they're so angry at him, he hasn't done this and he hasn't done that. And the other thing is who are they going to vote for?

BAI: Right. It's already a well developed friction. It doesn't have to develop because it's already there. And actually there's a history there, Candy. There is no Democratic president, you'd have to go back, you can go back to John Kennedy, I've written about this, the liberals called him the great hipster president and by 1962, Norman Mailer, the great voice of the hipster movement was declaring himself to be a traitor for having written in support of Kennedy in 1960.

So, the Democrats always disappoint the left, this president has at this point several decisions from Afghanistan to the fiscal commission to this latest tax deal disappointed the left. But thus far, his support among liberals is very strong. You see it in the polling. He's not at this point drawing a primary opponent, there's nobody on the horizon. They have to be mindful of it, it's part of what a president does but I don't think it's an existential threat to his presidency right now.

CROWLEY: Matt Bai, A.B. Stoddard thank you so much for coming. I appreciate it.

STODDARD: Thank you.

CROWLEY: Up next, CNN's Wolf Blitzer will join me for the latest on growing tensions on the Korean peninsula. (COMMERCIAL BREAK)

CROWLEY: Time for a check of today's top stories. The U.N. Security Council is scheduled to hold an emergency meeting later this morning to address the crisis on the Korean peninsula. Meanwhile New Mexico Governor Bill Richardson is in North Korea on a mission to try to defuse the crisis.

CNN's Wolf Blitzer is the only broadcast journalist traveling with him. He joins us now by phone from Pyongyang. Wolf?

WOLF BLITZER, CNN ANCHOR: I'm here with Governor Bill Richardson. He's doing his best to try to calm the situation although I have to tell you, it's very, very tense right now. Everybody's waiting to see what happens at the United Nations Security Council to see if they can come one some sort of resolution that will calm the situation, but it's by no means a done deal. North Koreans are making it abundantly clear every possible way they can that if the South Koreans go ahead with the live fire exercise at this island, Yeongpyeong, which the North Koreans attacked back on November 23rd, even if they're firing shells into the waters south in a southerly direction as opposed into a northerly direction, they will see this as a violation of what they regard as their territorial waters, and they'll respond, they'll probably respond militarily.

And one miscalculation could trigger all-out war. There are still over 30,000 U.S. troops along the demilitarized zone in South Korea. There's a million North Korean troops north of the DMZ, hundreds of thousands of South Korean troops, thousands if not tens of thousands of artillery pieces and missile launchers. This could be a real disaster. Let's not forget that the North Koreans now have nuclear weapons as well.

So the stakes are clearly enormous right now. Everyone's hoping that the situation calms down a bit but it's unclear what the South Koreans are going to do. If there's a strong resolution emerging from the United Nations Security Council, a resolution that urges restraint and in fact the South Koreans back down and don't go ahead with this exercise, that will calm things down.

Richardson put forward some specific proposals on creating a hotline between North Korea and South Korea on creating a U.S./North Korea/South Korea military commission. Unclear if that's going to get anywhere. But the North Koreans are not necessarily rejecting the ideas. They've also told Richardson they discovered in recent weeks the remains of a few hundred U.S. soldiers killed during the Korean War and they want to make the remains available to the United States. That's a gesture that Richardson sees potentially as significant. We'll see how it all unfolds but I have to tell you, I'm here in Pyongyang and the situation is very, very tense right now.

Candy.

CROWLEY: Thanks, Wolf. Keeping us up to date from Pyongyang.

Up next, does less mail necessarily mean less business for the U.S. Postal Service? (COMMERCIAL BREAK)

CROWLEY: So when you send off your seasonal good wishes this year, is it stamps or cyber-space? Snail mail or e-mail? The U.S. Postal Service is really hoping for the former because it may be that neither snow nor rain nor heat nor gloom of night can keep your neighborhood post person from appointed rounds, but the Internet might.

Tomorrow is the busiest mail day of the year. In all, letter carriers will deliver three billion cards and letters this holiday season. But still the Postal Service lost $8.5 billion last fiscal year. Mail volume dropped 23% in the last three years. That does not scream job stability for your post person, the guy or gal who delivers to your mailbox six days a week. And with more than half a million employees, the USPS is the second largest civilian employer in the country after Wal-Mart.

Self-funded and broke, the USPS is considering dropping Saturday mail delivery, a move strongly opposed by the Postal Workers union. In this age of instant and constant communication, do we really need the postman?

Up next, the president of the National Association of Letter Carriers who says absolutely and in ways you may not have thought about.

(COMMERCIAL BREAK)

CROWLEY: Joining me now, Fredric Rolando, president of the National Association of Letter Carriers. When we were getting ready to do this segment, someone in our office said, you know what I think of when I think of the Post Office, I think of that scene in "Miracle on 34th Street," with Natalie Wood when they're trying to prove that Santa Claus exists and all these postal workers come in carrying all the mail addressed to Santa Claus and pour it into the court and say, see, the U.S. Postal System thinks there is a Santa Claus so, therefore, there is.

(BEGIN VIDEO CLIP)

JOHN PAYNE, ACTOR: Your honor, every one of these letters is addressed to Santa Claus.

(END VIDEO CLIP)

CROWLEY: And then I was looking online, another one of our staffers showed me a videotaped letter to Santa Claus.

(BEGIN VIDEO CLIP)

UNIDENTIFIED FEMALE: I don't know what I want for Christmas, so give me anything you want, but not boy stuff. That's the only thing I can say. So Dear Santa Claus, bye.

(END VIDEO CLIP) CROWLEY: My question here is can the post office possibly survive the age of the internet?

FREDRIC ROLANDO, PRESIDENT NATIONAL ASSOCIATION OF POSTAL CARRIERS: Oh, absolutely. What the Postal Service has to do is adapt to the change as a result of the Internet. They've adapted to so many changes over the years. What you have here, if you take the mail out of the equation, you've got this incredible universal network for the American people, probably the only universal network that goes to every home and every business six days a week.

The mail is changing. You're seeing less letter mail, you're seeing more parcel post as people shop online and so forth. We're seeing the postal service as the...

CROWLEY: But there's FedEx and there's UPS and there's places like that.

ROLANDO: Let me tell you that FedEx and UPS probably the fastest growing division in both of those companies is the Postal Service delivering the last mile for them, taking their parcels door to door because it makes more sense for us to do it because we go to every house. They may go to every 50th house, every 100th house. So in fact, we're doing their last mile delivery and that's the last part of business for them.

CROWLEY: Take me forward ten years, what other uses do you see for the U.S. Postal System?

ROLANDO: In ten years from now I'd like to see the Postal Service in partnership with other companies as the only delivery vehicle on the street going door to door. They could serve the many businesses that work out of their home now, they could be doing thing with the vehicles, with sensors on the trucks, doing things for the Red Cross, they could be reading meters.

CROWLEY: Expand on that a little bit for me, the sensors on the truck.

ROLANDO: To look at -- they would be the first ones on the scenes for disasters and so forth, weather issues, because they're the first ones in there. They're the only one who can get into every neighborhood on a daily basis.

There's things they could do with sophisticated scanners because they go everywhere. CROWLEY: So if a tornado were coming and there happened to be a postman, which there probably is most times in nearly every community, it would be able to pick that up and send it back to an appropriate authority. Is some of that in use now?

ROLANDO: Not yet. It's something we'd certainly like to start testing rather than the shortsightedness of cutting out a day of delivery.

CROWLEY: And there's kind of this pilot program going on that interests me about delivering drugs and anti-anthrax drugs, for instance, in an emergency. Tell me about that as a possible use.

ROLANDO: Yes, that's known as the City Readiness Initiative. We do that in conjunction with Homeland Security, the city and law enforcement. What happens there is the letter carriers are given the emergency medicines for themselves and their families, and should an emergency come, they would deliver these medicines door to door in the community and set up in advance.

CROWLEY: Can that relationship and is that relationship being used -- is it more than just "here's your mail?"

ROLANDO: Very much. Letter carriers have a very unique privilege of going to every neighborhood, being part of every community, they know the people, they watch the children grow, they know when something's wrong in a neighborhood. And as a result of that, they have the opportunity to look in on the elderly and know when something's wrong. They're usually the first one on the scene. They're out saving lives, stopping crime. They're just an integral part of every community, not because they're supermen but because we're everywhere every day, and we know our communities. We have that relationship.

CROWLEY: Fredric Rolando, thank you very much for being with us, appreciate it.

ROLANDO: Thank you.

CROWLEY: Thanks for watching "State of the Union." I'm Candy Crowley in Washington.

Up next for our viewers here in the United States, Fareed Zakaria GPS.