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White House Staff Shake-up

Aired January 4, 2011 - 19:00   ET


JOHN KING, CNN ANCHOR: Thanks Wolf and good evening everyone. Tonight Washington is on the verge of dramatic and historic change. Republicans take control of the House tomorrow and they gain more power in the Senate as well. Reason enough for the president to delay his return from vacation until the last possible minute and reason enough for him to make an Air Force One appeal for a bipartisan beginning.


BARACK OBAMA, PRESIDENT OF THE UNITED STATES: You know, I think that there's going to be politics. That's what happens in Washington. You know they are going to play to their base for a certain period of time, but I'm pretty confident that they're going to recognize that our job is to govern and make sure we are delivering jobs for the American people.


KING: To be sure, Republicans are opening with a bold political move, quick action in the House to repeal the Obama health care law even though the repeal movement doesn't stand a prayer in a Capitol where the Democratic president still has veto power, the idea Republicans say is to keep a campaign promise and to make a statement.


JOE WALSH (R), ILLINOIS CONGRESSMAN-ELECT: This is an example of the Republicans very seriously following up on what we said we were going to do, so I mean most importantly, it's why we were sent here.


KING: I've been here 22 years now, so not a lot shocks me anymore, but this was a telling moment on her last day as speaker of the House, after her party lost a whopping 63, 63 seats in a landslide election, no introspection from Nancy Pelosi and no second guessing.


REP. NANCY PELOSI (D-CA), HOUSE SPEAKER: No, we have no regrets.


KING: Maybe you think what happens in Washington or who controls Washington doesn't matter, but this big shift in the balance of power is a big deal, setting the stage for major debates about health care, spending and the role in the reach of the federal government not to mention a host of Republican investigations of the Democratic administration. So let's begin with two members of the House who have a big say in what comes next.

Republican Marsha Blackburn of Tennessee is a leading conservative voice and a leading advocate of repealing that new health care law, Debbie Wasserman Schultz of Florida is a member of the Democratic leadership team and calls the repeal effort both wrong and a waste of time. Congresswoman Blackburn, I want to go to you first because you've just come out of an important meeting with your Republican colleagues preparing for this transfer of power here in Washington.

I want to get to some of the details in a moment but I want you to assess for yourself and for the American people the significance, what do you think it means when John Boehner and the Republicans take that gavel from Nancy Pelosi and the Democrats.

REP. MARSHA BLACKBURN (R), TENNESSEE: What it means for the American people is that we're going to take action on what they told us they want us to take action on -- the economy, jobs, repealing this health care bill, getting the American people back to work and creating the environment where jobs growth can take place. And it will be a focus. You're going to see us united on that. We are hard at work on making good on fulfilling what the American people want to see done. They have spoken loudly and we are ready to go to work.

KING: Let me ask you this question before I bring in your Democratic colleague, you know you remember two years ago, most Republicans, and even many Democrats who supported the health care overhaul, said my god, Mr. President, what are you doing? The American people care most about jobs and jobs and jobs and jobs, and I've talked privately to some of your Republican colleagues who cringe a bit saying yes, we promised to repeal health care but why don't we wait a week or three and do some growth initiatives first.

BLACKBURN: Because small business in this country and for that -- the matter of fact, large and small employers are telling us, this legislation, Obama care, is driving up the cost of insurance. It is something that is going to restrict access. It was poorly written and the implementation on this is going to be very difficult. And you know, in addition to this, John, I have talked to so many of our state legislators, individuals from around the country, and they're going, do you all have any idea how expensive this is going to be to the states? Indeed, from my state, our Democrat governor, who is outgoing, wrote a book called "Fresh Medicine" that outlines a myriad of reasons of why you don't want to do this, why it is not health reform, and why it is important that we approach addressing health care delivery in a different way.

KING: You're shaking your head as the congresswoman speaks. Why does it matter to you as a Democrat, knowing, I understand, they made a campaign promise, we could have a debate about the timing, but the Republicans made a campaign promise to do it (INAUDIBLE) full understanding of why they would do it, but you know they can't succeed. That they can't get it through the Senate and even if they could the president has a veto pencil, why do you even care?

REP. DEBBIE WASSERMAN SCHULTZ (D), FLORIDA: Well, because what we've been working on is trying to make sure we can continue this economic recovery and what the Republicans are going to do, by trying to repeal fruitlessly health care reform beginning tomorrow, is potentially short circuit that recovery. And what they're doing is they spent a lot of time during the campaign talking about job creation being a priority, turning the economy around being a priority, and yet tomorrow they'll take the first hypocritical step at going in the opposite direction, exploding the deficit which -- because health care reform cuts the deficit in the first ten years by $143 billion, a trillion in the second 10 years.

What they're going to try to do is deny people coverage who have preexisting conditions, prohibit people who are young adults from staying on their parents' insurance, increasing senior's prescription drug costs. That's what they're going to spend countless hours of staff member and leadership time on instead of focusing on creating jobs and turning the economy around. The opposite of what they said they would do.

KING: Congresswoman --


KING: You're shaking your head -- you're shaking your head, Congresswoman Blackburn, because you believe the health care bill increases costs. And I understand and I respect your position --


KING: However, however -- hold on one second -- hold on one second. I understand and respect your position, however the official referee here, a lot of people sometimes disagree with referees, whether it's sports or Congress, but the official referee, the Congressional Budget Office, does say the health care law would have a positive impact on the deficit.

I know you disagree. But can you change the referees in the middle of the game, if the Republicans are going to repeal this, should they put forward saying we don't think we need this, but here are the tradeoffs. Here are the cost savings as we do this?

BLACKBURN: Well, for the record, CBO, 10 years of revenues for six years of expenses. That's how they get to that number. And that is not apples to apples. It is apples and oranges, so little bit of budget trickery there. But here is what the American people want to see. They want to make certain that individuals have access to affordable health care. They want to make certain that we respect that doctor/patient relationship.

They want to make certain that they are in charge of their health care decisions. They don't like a bureaucratic mish-mash of all of these new agencies and rules and laws. That is not what they wanted. And whether it is a state legislator, whether it is our individual constituents, whether it is our employers in our districts, they are telling us that it was poorly written. It is going to be a nightmare.

This is not what we want. Get it off the books, let's start over, and do things right. And you know, I think it is really a wonderful expression from the American people that they are saying, we know that you all, Congress, that you can do better than this.


KING: But it's a political statement, is it not? You know the president has a veto pen.


KING: You know they can't get it through the Senate.

SCHULTZ: That is all it is. That is all it is.

BLACKBURN: And -- and we've got the votes to repeal this in the House. I think that when all is said and done, as Chairman Upton from Energy and Commerce said on Sunday, I think we're getting very close to the votes to override a veto. I think that we're going to be able to get this off the books. I fully believe that.

KING: Let me -- come in on this. I want to get to a few other points before we lose our time, but go ahead.

SCHULTZ: Well I agree with Marsha on the first few things she said, which is that we need to make sure that people have the opportunity to get the health care coverage that they need. We need to make sure that patients and doctors are in the driver's seat. Repealing health care reform puts insurance companies back in the driver's seat, yanks health care decisions away from doctors and patients and puts insurance company bureaucrats back in the driver's seat. That's the direction the Republicans want to take.


BLACKBURN: Insurance companies are in the driver's seat now --


KING: All right, we'll continue the health care debate I believe for a at least a few weeks if not a few months --


KING: -- or longer. But Congresswoman Blackburn, I want to come back to you. As a prominent member of the Republican Party, you know the responsibility of your party is about to assume here and in any new relationship what you do right out of the box sets a tone. People will watch Speaker Boehner take that gavel tomorrow. They will listen to him when he makes his remarks and they will watch what the new majority does in the early days in office.

In that regard I want to ask you if this troubles you at all. Darrell Issa from California is the chairman of the Government Oversight Committee and he has sent a letter to 150 trade groups, business groups, corporate groups around town, asking them for ideas. Here's a quote in his letter.

"As a trade organization comprised of members that must comply with the regulatory state, I ask for your assistance in identifying existing proposed regulations that have negatively impacted job growth in your members' industry."

Now on the one hand I understand if you want to talk about regulations and you want to reduce regulations you would ask the people who are being regulated. But in the world of politics that you and I live in and Congressman Wasserman Schultz lives in that's pretty easy to say look at this, they haven't even taken power yet and the Republicans are asking corporate America tell us what to do to make your life easier.

BLACKBURN: We have spent the entire past year holding listening sessions across our districts. We have --

KING: If you've listened why do you need to send a letter to trade groups though saying tell me what to do?

BLACKBURN: Because we are continuing to seek input from people saying, tell us what it is that is affecting you most. What we hear, what we hear regularly is regulation is a stranglehold. Well let's pinpoint some of those regulations. Health care, what you're doing with Obama care makes it unaffordable. What they want to see is taxation reduced. They want to see some certainty.

I can't tell you the number of town halls and roundtables that I did with employers, large and small, in my district throughout the mid south who would say time and again, you have got to do something about the uncertainty that is there. The regulators, the agencies, the way whether it's the EPA or the FCC, the way they are taking authority, that they really have not been given. This is something that is creating regulation that makes it very difficult for us.

What I think you're going to see, whether it is the Government Oversight Committee or whether it is oversight and investigations from Energy and Commerce, where I'm a member, we are going to be very diligent in working at looking at the impact that legislation and regulation has. Indeed in our pledge, we have said if any regulation or law has more than a $100 million impact on the American economy, it has to come back in for review. That's what the American people want to see.

KING: I want to give you the last word here and respond to that. But as I do so, I don't just want to ask tough questions of the Republicans. What about the Democrats? For two years you said the Republicans are just being the party of no, just being the party of no. We would not break that. You're in the minority now. When the Republicans have ideas you don't like will you just say no or will you say here's our plan?

SCHULTZ: Here's our test of whether we're going to be able to work with the Republicans or not and it's all up to them. We're going to measure everything they do by whether it creates jobs, whether their proposals reduce the deficit and whether they help the middle class. So far the yard stick that we're using to measure them by on those three things they are failing miserably. But tomorrow seems to be the first day that we're giving the keys to the candy store back to big business, back to corporations, actually asking corporations how we can loosen their regulations. That's how we --

KING: Democrats ask labor unions how to do --

SCHULTZ: Well that's how we sent the economy over the cliff in the last couple of years.


SCHULTZ: Excuse me, Marsha --


SCHULTZ: Marsha, I let you finish --

BLACKBURN: Job creators.

SCHULTZ: We sent -- not allowing there to be appropriate balance of regulation is how we almost sent the economy over a cliff and we had to rescue it and turn the economy around. If we're going to go back to that place then we are going to have real problems for consumers and real problems for this economy.

KING: All right, Congressman Wasserman Schultz, Congresswoman Blackburn, this is the beginning of a new day in Washington, is the beginning of some of them are familiar, but new wrinkles to these debates. We'll have you both back throughout the days and weeks ahead. We appreciate your time tonight on the eve of this historic change in Washington.

When we come back after this quick break, big breaking news out of the White House. The president on the verge of a major staff shakeup and our Dr. Sanjay Gupta will help us break down where does the politics of health care meet the road out there in the real health care delivery system (ph).


KING: Last night we led the program with news the president was considering a major staff shakeup at the White House. Tonight our senior White House correspondent Ed Henry has new details on the who's and the what's and the timing -- Ed.

ED HENRY, CNN SENIOR WHITE HOUSE CORRESPONDENT: That's right, John. We just learned a whole series of new details from senior Democratic sources. First of all I'm now hearing the president wants to move very quickly on this as early as Friday in fact. He took a long holiday break in Hawaii. He mulled this over and he's now telling people privately he wants to pull the trigger. He wants to get going. You've got the House Republicans about to take power Wednesday. He's got a big State of the Union address at the end of the month. He wants a new team in place. Secondly I'm also told that some reports suggesting Bill Daley, the former Clinton commerce secretary, is sort of a shoo-in for this job, not true. That it's basically Bill Daley but also Pete Rouse, the interim chief of staff is still very much alive. In fact one senior Democrat tell me the president has told Pete Rouse if he wants to keep the job it's his for the keeping and that Pete Rouse is now just deciding privately whether or not it's more in the president's interest to have a more prominent person like Bill Daley.

A third that this is a two-man race between Daley and Rouse, that some of the other names, Tom Daschle, Leon Panetta, John Podesta, they've all consulted with the president, talked to him on the phone about this, but none of them are interested in the job. This really is a two-man race.

Fourth that Robert Gibbs is likely out as part of this -- all these changes and that the replacement will either be Bill Burton, his current deputy or Jay Carney, who has become popular in some quarters of the administration, seen as very seasoned as a communications director for Vice President Biden. That's going to be interesting.

And finally hearing that Gene Sperling, a former Clinton administration official, is very likely the president's pick to replace Larry Summers, head of the National Economic Council. So there's going to be a lot of movement but a lot of these folks are faces we've known for a long time. In fact Gene Sperling, not just in the Clinton administration, but as you know, is a counselor right now at the Treasury Department. So there's going to be a lot of movement and it's going to be quick, but a lot of the faces are pretty familiar -- John.

KING: Fascinating stuff, a little post-election shuffle from the president. Ed will be back with us later to talk a little bit more about this. Let's move on though and move back a bit here. Much of the new health care law the new Republican House majority is trying to repeal doesn't take effect until 2014, but some of the provisions kicked in last year.

Several more took effect just this week at the first of the year including medication coverage for those in the so-called Medicaid "donut hole", free preventive services for seniors, improved care for seniors after hospital stays and insurance companies must now spend 85 percent of the premium money they take in on health care. Here's some of what kicks in three years from now, a mandate that most Americans get health insurance.

The new insurance exchanges, they're designed to boost competition, middle class tax credits for health care, annual insurance caps and no denials due to preexisting conditions. So is the health care marketplace impacted by the renewed political debate? Let's ask our expert CNN chief medical correspondent Dr. Sanjay Gupta.

Sanjay, you know in the tax debate everyone said you have to extend the tax cuts because of so much uncertainty in the economy. What about health care? When you go to the hospital and you're about to perform surgery you're dealing will a patient, does the threat of repeal affect how you do business?

DR. SANJAY GUPTA, CNN SR. MEDICAL CORRESPONDENT: Well let me tell you this. Everyone's talking about it as you might imagine, John. I mean all the hallway conversations, all the side bar conversations are about this topic, and you know, I mean as you said earlier, it's really, you know, the trenches as far as all these discussions go. I can tell you that, you know, from our perspective, a lot of doctors perspectives because there are so many people who are uninsured in this country, patients come in later to the hospital with more severe illness, whether it be a later stage cancer or a more advanced heart disease or, you know, a more prominent back problem, whatever it might be.

And that's a significant issue. I think medically and financially and just about any way that you can measure it. Those patients are less likely to be able to recover from those illnesses, oftentimes the costs of taking care of them can be -- far outweigh what the costs would have been had they come in sooner with these medical problems. So I think you know certain hospitals around the country, John, including county hospitals, one that I spend a fair amount of time in, they say 60 to 80 percent of the patients right now are self-pay, meaning that they're uninsured and the hospital sort of know that for the vast majority of those patients the -- you know, getting the payments back from those patients is going to be very unlikely.

So these are sort of the discussions that are taking place. But you know, again, this -- the Affordable Care Act as it stands a lot of it just now being implemented as you just outlined so it's been hard to see the impact of that so far.

KING: And Doctor, they say if they can't repeal it they may try to defund some of it. Could that have an impact on how you do your job -- your other job?

GUPTA: Well, you know this is sort of where the politics hits the medicine and it's a little bit hard to say. I mean there are certain things that I think a lot of doctors are paying attention to. Again, some of them you outlined, but with regard to prescription drug costs, I write a prescription for a patient, the expectation is that patient is going to be able to get that medication so as to be able to treat that, you know their problem.

Right now, we know that a lot of patients simply don't do that. They don't subsequently fill their prescriptions in part because they may be inside that donut hole where they're not given any sort of cost savings on those medications or cost offsets on those medications or they simply you know just don't have the money. They have to make decisions between getting those medications and getting something else that they need.

So I think, you know, that's one way that it's sort of affects them. But also a lot of the patients who we see, and I'm a specialist as a neurosurgeon so a lot of patients that come see me have some sort of, as you say, preexisting condition. And as a result, you know have been very hard to get insurance for those patients and get them their care subsequent. So you know it's -- again, it's tough to say what the impact has been so far but I think people have felt it, what the impact has been up until now.

KING: Dr. Sanjay Gupta, we appreciate your time and insights tonight. Sanjay thanks. We need to work in a quick break, but before we do, I want to get a quick thought, quick thought and then we'll talk more on the other side on the moment.

We have the health care debate. We have the spending debate. We have with us right here Rich Galen. Rich you were around for the Republican revolution back in 1994, Republican strategist, Democratic strategist Cornell Belcher, our CNN contributor Roland Martin. Let me start with you first since the Republicans are taking the gavel tomorrow, assess the moment. We'll talk about the details in a minute, but this moment means what?

RICH GALEN, REPUBLICAN STRATEGIST: Well I think what this moment does is it the -- what Boehner wants to do is to establish his turf, the vote next week on health care will help do that, and then everybody will sort of take a couple of weeks and they'll begin to actually work out the designs and the directions they need to go.

CORNELL BELCHER, DEMOCRATIC POLLSTER: The moment is that now Boehner and the Republicans have to take some responsibility for governing. Some of this mess they're going to have to take responsibility for. They can't simply say no. It's an important moment.

ROLAND MARTIN, CNN POLITICAL CONTRIBUTOR: It lays down the marker and that is you're going -- if you thought you've seen the differences between these two parties in the last two years, you're really about to see it in the next two years.

KING: All right, we'll have a follow-up conversation on this point in a minute and something other interesting -- something else interesting in politics. We know Sarah Palin likes to make news on Facebook and Twitter. Ahead one retweet that set off a debate about whether Governor Palin is moderating her views on gay rights.


KING: Is Sarah Palin moderating her views on gay rights and if so, why? The question stems from a Palin retweet of a gay activist message about repealing the military's "Don't Ask, Don't Tell" policy. That activist, Tammy Bruce of GOP Proud (ph), tweeted this about critics of the repeal.

"This hypocrisy is just too much, enough already." Palin then retweeted that message to all of her followers on Twitter, which made Tammy Bruce very, very happy. She issued a follow-up tweet, suggesting it was Governor Palin's first comment in the "Don't Ask, Don't Tell" debate and what Bruce called quote, "attempts to marginalize us". In fact it isn't, is not Palin's first comment on the issue. Eleven months ago she said this on "FOX News Sunday". (BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: Should the rule "Don't Ask, Don't Tell" for the military be repealed?

SARAH PALIN (R), FORMER GOVERNOR OF ALASKA: I don't think so right now. And I say that because there are other things to be worried about right now with the military. I think that kind of on the back burner is sufficient for now, to put so much time and effort and politics into it unnecessary.


KING: But why what appears to be a change of heart and a change of policy? Roland Martin, Cornell Belcher, Rich Galen are still with us.


GALEN: We used to called that a non denial denial.


UNIDENTIFIED MALE: What did she just say?


UNIDENTIFIED MALE: I'm trying to figure out what that --

KING: What she said was -- what she said was an argument many conservatives made and some have said it's cover or whatever, it's cynical, but what she said was not now. We're in the middle of two wars. Let's talk about this later, but --

MARTIN: OK, that's clear.

KING: But now she has said --

UNIDENTIFIED MALE: That's not what she said.


KING: Well I think that's what she -- I think that's what she was saying. But Rich Galen, you know "A", number one, she brilliantly, some people are critical of her positions, but she brilliantly captures attention by using social media. Number two though, if you look at the polling and people would say well the knock on Sarah Palin from a Republican standpoint would be fascinating, character, great politician, great support of the Republican base, loses in the moderate suburbs among people who think either she's not qualified or she's too conservative. Do you see this as a deliberate moderation?

GALEN: No, I -- well it might be. I don't know. Anybody who tries to get into Sarah Palin's head I think is probably headed for the great Alaskan outback or whatever they call it up there. But the -- but I think what it is, is it's typical Sarah Palin in 140 characters, just whatever came into her head came out of her thumbs and I don't think it means anything --

KING: You don't think she -- that's an interesting point. Do you see her as someone who just says I like that and retweets it which doesn't take any characters, by the way. You just fire away and retweet or do you see --


KING: Do you see it, whether agree or disagree, I know you disagree with most of Sarah Palin's positions, but as somebody who drives message --

BELCHER: Well just as pure politics aside, I admire her for what she's done politically. She is the most formidable, political person, probably on the Republican side easy. Look what she's done -- I hear people sort of make the argument about how she's not electable in the general but you know what, we have got to get through a caucus and the primaries first and there's a lot of people who made it through the caucus and primaries who people say weren't electable in general being the guy who I used to work for.

But right now if you look at what she was able to do in the last sort of round of primaries and caucuses on the Republican side of things she clearly speaks to the base in a way that Pawlenty or none of those other guys -- I mean they can't get out of her shadow. If she runs I think she will be awfully hard to beat in the Republican primary or Republican caucus because those moderate independent voters they are not Republican caucus goers.

MARTIN: It is a mistake for us to assume that when you retweet something that means that you're in full agreement. It very -- look, I do it all the time. People say oh, my god that's your position. No, but it could be an interesting argument. And so if she actually comments on this, likely on the FOX News, never to any of us, it probably will be with that kind of response but clearly as a part of her strategy, this keeps her ahead of the news cycle because every move that she makes, OK, if she decides to pop off to the bathroom somewhere, we're going to sit here and report it. And so from her standpoint it serves her well. Retweet something, it blows up --

UNIDENTIFIED MALE: She's crazy like a fox.


BELCHER: She's crazy like a fox.


KING: Lets us stay ahead of the news cycle. I wanted to talk about the new Congress, but we have some days to do that. I want to -- let's focus for a minute on the breaking news that Ed Henry was just talking about, does the president, Cornell Belcher, need a new White House chief of staff? Does Mr. Gibbs need to go whether it's because he wants to make more money or does the president need a new spokesman, a new message?

BELCHER: Well look, you know Gibbs is a personal friend of mine. He's a great guy. And you know they turn around chiefs -- they turn around those people all the time. Look, Pete has got a lot of the backing of the people who were part of the campaign. A lot of my friends who are now in the administration, who were part of the campaign, they love Pete. And the president and Pete decides to stay on that job, Pete Rouse, as chief of staff, he should probably -- you know, there will be a lot of support from the people who were part of that campaign and that administration now for him to do it because he's a likable guy. He gets along well with people and he's a really good manager.

MARTIN: Campaigns and the White House are two separate things and that is you need somebody who can take your staff, pull them together and drive your pieces forward and also how do you bring in your base, I go back to the whole notion of the Obama movement versus (ph) the moment. How do you pull your people who put you in office?

As it relates to Robert Gibbs? Yes, he does need to go. I think Robert is great guy. But I also believe from that podium you need somebody who can better communicate the president's policies. But also Gibbs has been an important senior adviser to the president. I think it's very difficult to have that role, a senior adviser to the president, and being the press secretary, because frankly, you're conflicted and torn. So pull him inside, have somebody else, Jay-


KING: What does it tell the Republicans?


KING: Quickly.

BELCHER: I have to defend Gibbs on this. You can't put all that mess that was the Democrats messaging, over the year, on Gibbs. I think Gibbs was effective at saying what the president wanted him to say. He cannot take the blame for the mess that was --

MARTIN: There is a lot of blame to go around.


KING: As a Republican who studies what they're doing -


UNIDENTIFIED MALE: He can't get away with this, by the way.


KING: As a Republican who studies what the other side is doing, what do you see here? What is the calculation?

GALEN: It is clear, two things. One, people get exhausted in the White House.

KING: They do.

GALEN: They have to -- you need new blood. I think it makes a lot of sense for the president to be bringing in people as, Ed pointed out, people that know where the bathrooms are, that know how the place works, that understand that they have to have sharp elbows.

KING: In Bill Daley's case, someone who has pretty good relationships with the business community and Republicans?

GALEN: Yes, and I think that having somebody as chief of staff who is not a personality in his or her own right is better, because you have the rest of the staff that can work their magic behind the scenes.

BELCHER: Let me be cynical, really quickly here. At some point you're not going to get change from the same group of people who keep going around in circles. So, if there is one central criticism here, if you want change and you want to do things differently, maybe you should bring in people who aren't --

KING: Which job are you asking for?


UNIDENTIFIED MALE: I'm going to be raking leaves over there.

MARTIN: If you are going to be hosting an NBA show, a smart coach says, I'm not going to bring in a rookie, I'm going to bring in a veteran coach who can get the people moving. So that's what-


KING: Larry Brown is available. Roland, Cornell, Rich, thanks for coming in.



KING: When we come back the captain of the USS Enterprise relieved of his command today. When we come back, a conversation, a follow-up on the raunchy video story, with a petty officer who served with him, and his former navy lieutenant who trained him.


KING: Captain Owen Honors, the officer responsible for the raunchy and offensive videos on the USS Enterprise, was relieved of his command today. While the Navy initially defended the videos as morale boosters, the service announced today that a later, more thorough review determined the sexist and anti-gay themes found in many of the videos shown to the 6,000-member crew of the ship demonstrated honors was unfit for command.


ADM. JOHN HARVEY, CMDR., U.S. FLEET FORCES COMMAND: He is being held accountable for the poor judgment and inappropriate actions repeatedly demonstrated in those videos. It is a fact that as Naval officers we are held, indeed we must be held, to higher standards of performance and conduct.


KING: How will this decision go over in the Navy and across the armed services? And what are we learning about the military's culture from this episode. Joining me are former Petty Officer Phillip Ciesla, who was on the Enterprise back when these videos were shown, and in Memphis former Navy Lieutenant Carey Lohrenz.

Petty Officer, I want to begin with you, because you were on the ship at the time. The Navy says "conduct unfit to be the commanding officer," Mr. Honors relieved of his command, was that the right decision?

PHILLIP CIESLA, FMR. PETTY OFFICER, USS ENTERPRISE: In my personal opinion, I don't think it was.

KING: Why?

CIESLA: Why? When these videos were first made three or four years ago, it wasn't a big secret. It was on the ship. Everybody knew about it. We all laughed.

KING: Not being a big secret doesn't make it right.

CIESLA: I'm not saying it made it right, but why wasn't he -- why wasn't this brought up three or four years ago? I mean obviously, you know, his higher ups had to have known about it. The captain at the time and the admiral on the ship at the time had to have known about it. Why wasn't anything done at the time? Why is it coming up now?

KING: Lieutenant, the petty officer makes a valid point. Let me ask you first, do you think it was the right decision to relieve of captain of his command, or did he deserve a hearing or longer process?

LT. CAREY LOHRENZ, FMR. NAVY LIEUTENANT: Well, I think it's unfortunate. Probably because of the fact that this is now taken on a life of its own and essentially gone viral. I'm not sure the Navy had much other choice necessarily to do that.

To the petty officer's point, though, this was four years ago, five years ago. Essentially it was dealt with at the time. What we need to look at is from a culture, and knowing that an aircraft carrier is unlike any other culture really in the world, it's this really complex industrial worksite. There are things that you do when you're deployed for months and months at a time, to lift the morale of your crew. From all accounts Captain Honors was very effective at maintaining the morale of the crew. KING: Let's just show one piece of the video, here, this is one of the more controversial pieces of the video, that critics would say shows he is both homophobic and sexist.


CAPT. OWEN HONORS, U.S. NAVY: Let's get to my favorite topic and something foreign to the gay kid over there, chicks in the shower. This is certainly the most popular video of any of the XO movie videos. It's also the one that's landed me with the most complaints.


KING: I can't pretend to understand what you do and the life aboard these ships. I was on the USS Nassau, briefly, during the first Gulf War. I was on the Eisenhower when the aircraft carrier was used to send troops, our Army troops, actually into Haiti, during the Clinton administration. Can't pretend to understand it, but I'm sorry, if I shot that video, or said those things around this work place I would be fired. Why is it OK on a ship?

CIESLA: I never said it was OK.

KING: You never said it was OK. If it's not OK.


KING: Jump in Lieutenant. If it's not OK, how can this guy keep his command?

LOHRENZ: Well, and that's a great question, right. It's kind of a -- it's a hard place to be in. Is it OK to ever use racial slurs or slurs of any kind? It's not appropriate, as the XO of a large nuclear aircraft carrier, we do better than that. We have a culture of excellence and we hold each other accountable, you know, through debriefing and through constantly learning. That part I don't think is OK.

Me, personally, I'm not really offended by the chicks in the shower thing. But only because if you're deployed for months and months on end, what people don't realize, there's not an endless source of water. And you're constantly having to drive home the point of water conservation. Maybe he got to the point where how do I get people's attention that we're running out of water. So, you know, I'm not condoning the tapes, please don't think that I am. But I understand part of where it came from.

KING: I want you both to listen to another part. There is another snippet from the tape. He says those above him are not aware of what he's doing, or the content of the videos, then addresses his critics.


HONORS: Over the years I've gotten several complaints about inappropriate material during these videos. Never to me personally, but gutlessly through other channels.


KING: You were on the ship at the time. Were people complaining? Were fellow ship mates saying I don't like this, I find it distasteful. I find it, you know, either anti-gay slurs, I use the term homophobic, if that's not appropriate please say so. You know the commander.

CIESLA: General consensus on the ship, at the time, was it was pretty well received. Most people took it with a grain of salt. They took it pretty lightly, they didn't take it to heart. They just took it as a -- maybe not an appropriate, but took it as a little sense of humor. As far as complaining goes, you can't please everybody.

KING: You can't please everybody all the time, but if you're in a position of responsibility you do have a higher bar of accountability.

CIESLA: Yes, you do.

KING: What does it tell us, Lieutenant, about the culture. You were one of the first women to fly the F-14, the Tomcat. You were criticized by some at the time, saying a woman does not belong in that role. That was I believe 16 years ago. If we're still having this debate now, what does it tell us about the military culture? And does the military have a right to draw a different acceptability lines than I can draw in my work place?

LOHRENZ: Well, great point. So let's go back to the Tailhook part, where women were accepted, I believe, were things handled differently at times and was everything perfect? Absolutely not. I don't believe that the military can say we have a different standard than we can allow in corporate America, because really I think from an accountability perspective, we have a higher standard. Using slurs, it's never appropriate. Do we push the envelope? We do at all times. What I think we need to do, again, this was four years ago, five years ago, was the war fighting capability of that ship impacted? That's the bottom line. Was it? Apparently it was not and they've done a great job and he led them through some very, very trying times.

KING: That's a great point the lieutenant makes about was the war fighting capability of the ship ever undermined? And her answer is no.

I believe your answer is no. But there is another standard as well, you're a petty officer on the ship at the time, he was the XO. Part of his responsibility is to build you, mold you, and the thousands of others on that ship into future leaders.

CIESLA: And he is held to a higher standard.

KING: And to mold you into future leaders. If that is his example, is he not telling you when you're promoted, when you are in charge of people, you can do the same things? CIESLA: By that logic, I can understand where you're coming from on that. I don't necessarily agree. Maybe his way of teaching wasn't exactly the best, but it was effective.

KING: I believe it's unlikely, but were Captain Honors to get another command would you serve under him again?

CIESLA: I would.

KING: You would? Why?

CIESLA: Why? He was the kind of leader you could look up to. Obviously he was a captain, you know, we were enlisted, so there was a difference there. He was our higher up and we respected that and we treated him as such. We said sir, yes, sir, no, sir, and such.

But he -- it was also like he was one of the guys. He would, you know, come up and joke with you every now and then, if you saw him in the hallways, you know, he would say good morning to you, and we'll say good morning to him.

KING: Lieutenant, the tradition, whether General Stanley McChrystal or whether you are Captain Owen Honors, when you are relieved of a command, you tend to go away quietly, does he deserve a second chance?

LOHRENZ: I guarantee that there's going to be a huge lesson learned. That certainly we're not going to see any more videos from here forward, that anybody from a leadership perspective wouldn't be afraid to show on CNN.

I don't think we should just scuttle a 30-year career. I think that's a huge loss to us as taxpayers and figure out what we need to do. But be very careful as we move through this process, you know, within the media and publicly, to not attribute this to the military in general. That this is the entire culture. It was a mistake that was made five years ago. It was addressed then. And now all of a sudden we're feeling the fallout from it.

There are people doing really, really good work, and working hard in the trenches day in and day out, 24 hours a day. And it's a great culture. It's a culture of discipline and performance, really unlike any you'll ever find in the world.

KING: Excellent perspective. Lieutenant Lohrenz, Petty Officer Ciesla, appreciate your time. We'll stay on top of this. I really appreciate your-you can give us a unique perspective and I really appreciate you sharing it with us.

When we come back headlines, plus it is a long wait in line tonight, still a few hours left, but there might be more than 350 million reasons why it's worth the wait.


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


When we come back we'll follow back to the breaking news out of the White House; word of an imminent major shakeup. And the moment, the transfer of power on Capitol Hill.


KING: Let's reflect on the big moment. The transition on Capitol Hill from Democratic control to Republican, and the breaking news at the White House. With us, our Senior White House Correspondent Ed Henry, Senior Political Analyst Gloria Borger and our Senior Congressional Correspondent Dana Bash. I won't make my usual senior moment joke.


KING: Ed Henry, you say it's either Bill Daley or Pete Rouse as chief of staff. But interestingly Robert Gibbs likely to leave soon. Is that a burn out, time to go, is that a push out?

ED HENRY, CNN SR. WHITE HOUSE CORRESPONDENT: I think it is a combination of burn out-I mean, Robert Gibbs has not just been at the White House for two years. He was on the campaign for two years. The guy deserves a break. And I think he is looking at other opportunities. He interested in maybe staying on as a senior adviser. But amid all the shuffling they are kind of running out of chairs in the West Wing, frankly.

And number two, I don't think it is a push out. I think it is more, this president really likes Robert Gibbs. It is not just a staff principle thing. They are friendly. He trusts his counsel. And what I'm hearing is that he wants to use Robert Gibbs on the outside. He'll give him a chance to recharge his batteries. But then make him sort of an uber spokesman out there who is not tied down by the podium.


HENRY: Maybe.

You don't have to talk about the government. You could be out there and just talk all politics. Because they are concerned at the White House that all of these Republican candidates will start getting out there in a few months. And they won't have anybody pushing back. So they want Gibbs out there pushing back.

KING: What's striking as the moment is upon us. It is Nancy Pelosi's last day as speaker. She is the first woman speaker, she made history. And then you asked her a question about do you have regrets about, you know, doing health care and other things, and not doing jobs, jobs, jobs. She says no regrets.

Gloria, that kind of strike you as-I guess I understand and respect her position but you just lost 63 seats. Aren't you supposed to have a little bit more humility?

GLORIA BORGER, CNN SR. POLITICAL ANALYST: You might. You might think so. But this is politics. And she is tough. And if she said she had regrets people would say why did you run again then for that leadership job? If you thought you made mistakes when you were speaker. So I think she is right at-looking straight ahead. You know Nancy Pelosi. I mean, this is who she is.


BORGER: Vintage Pelosi.

BASH: Vintage Pelosi.

I also I tried to get a little bit of a moment of reflection from her, about the fact that look, she made history four years ago. She is the first female speaker of the House. Did she have any reflections on that? No. I don't look back. I only look forward.

BORGER: Jobs, jobs, jobs.

KING: I don't do introspection with you either, so I don't blame her.

Campaigning is different from governing. We talked about that, about the president, quite a bit. He said he would do immigration reform his first year, it hasn't happened. He said he would close GITMO his first year. It hasn't happened. Governing is hard. Campaigning is not easy, but it is not as hard as governing.

One of the people during the campaign we paid attention to was Ben Quayle, the son of Dan Quayle, the former vice president. Ben Quayle is now-he will be this time tomorrow, a Republican congressman from Arizona. He had that classic campaign ad we talked about a lot during the campaign where he looked straight into the camera, in a 10- person Republican primary, said Barack Obama is the worst president in history.

You got a chance, Dana, to see the about-to-be congressman today and he sounds a little different.


BEN QUAYLE, (R) ARIZONA CONGRESSMAN-ELECT: I still stand by that. However, I do like the way that he's starting to move more to the center and getting away from the ideological bent he was going through when he had massive majorities on the Democratic side in the House and in the Senate.


KING: A tad more diplomatic there.

BASH: A bit more diplomatic. But it's kind of incredible to talk to him and to so many of the other incoming freshmen who are walking the halls. They still -- they haven't been sworn in, but they still insist they are going to stick to their guns. They know why they were sent here. They know that they have come to cut spending and stick to their conservative principles. It's going to be one of the most fascinating story lines to watch and see how-as you say they go from campaigning to governing.

KING: Will this be as dramatic? I remember it. In 1994 the Republican sweep.

BASH: Yeah.

KING: In 1995 in January saying this Rolodex-Rolodex, we used to have those-this is no good.



KING: And you throw that away. But it was dramatic.

BORGER: Yeah, I think this is.

KING: I'm not sure people quite understand what is going to happen.

BORGER: I think this is going to be very dramatic largely because the Republicans are making sure there's a lot of symbolism in the first act to repeal health care reform. This is a new day. We're going to cut our budgets, but we've seen this rodeo before. And so, we'll have to see how it plays itself out.

HENRY: The big caveat, of course, is that the Democrats still control the Senate.

BASH: Absolutely.

HENRY: It's hard to control it, quote unquote.

BASH: Not to mention the White House.

HENRY: It's not a full sweep.

KING: Not to mention where you go to work every day.

All right. More on this in the days ahead. It is a fascinating time. Stay with us. This is just a fascinating time in Washington, D.C. And when we come back, expecting any big changes when that new Congress is sworn in tomorrow? Pete Dominick is finding out. You trust him.


KING: Congress is back tomorrow with a new speaker and a new party in charge of the House. So our Offbeat Reporter Pete Dominick went out to ask you what you are hoping your representatives will get done. PETE DOMINICK, OFFBEAT REPORTER: That's right, John King. Congress is back tomorrow. I wanted to go out and ask people if they thought anything would get done. And if so, what should they work on first?


UNIDENTIFIED MALE: Frankly, I'd probably say no.


UNIDENTIFIED MALE: I don't think they ever get anything done.

UNIDENTIFIED MALE: Don't seem to get much done. Why would it change now?

UNIDENTIFIED MALE: Well, I don't think the coming two years are going to be any worse than the past two.

UNIDENTIFIED MALE: Yeah, they might, if they cooperate. It's a new year, a new Congress. Yeah.

DOMINICK: They did make a New Year's resolution to cooperate.


DOMINICK: They didn't, actually. I just made that up.

UNIDENTIFIED MALE: OK, but I think it is possible.

DOMINICK: You think they will?


UNIDENTIFIED MALE: I think its-I think things will get done. And if they don't get done it will be more the Republicans fault, because they want to govern and now they got their chance. So let them do-let them get some things done. But let them get things done that really matter. Not just for corporations and for the rich.

UNIDENTIFIED MALE: For the economy.

DOMINICK: The economy?


DOMINICK: Jobs, jobs, jobs.


UNIDENTIFIED MALE: I heard they're discussing putting a freeze on taxes.


UNIDENTIFIED MALE: OK, I think that's very important. DOMINICK: OK?

UNIDENTIFIED MALE: The economy is extremely tight for everyone.


UNIDENTIFIED MALE: And I think because every dime, every nickel is important.

UNIDENTIFIED MALE: Speaking of that, can I borrow a quarter?

UNIDENTIFIED MALE: I can't. There's a freeze on that.


DOMINICK: You think Congress should work on blowing your nose?


DOMINICK: Yeah. You think they'll be able to get that done? Or do you think argue about it.




DOMINICK: Well, there you go, John King. These folks has some pretty good ideas out here. Hopefully Congress and the president are watching. Back to you, sir.

KING: Pete Dominick, thanks.

That's all for us tonight. We'll see you tomorrow. PARKER SPITZER starts right now.