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Senator Joe Lieberman Says He Will Not Run for Reelection; Bill Clinton in Chicago Campaigning

Aired January 18, 2011 - 19:00   ET


JOHN KING, HOST: Thanks Wolf and good evening everyone. Tonight at the White House two presidents are sharing a private dinner. One is a Nobel Peace Prize winner. The other is holding a Nobel Peace Prize winner in prison. The China challenge shakes our times and tonight we'll break down your stake in President Obama s high-stake summitry.

Plus how often do you fight a fight you know you're going to lose? Keeping a promise is one good reason, sticking to principle another.


REP. MICHELE BACHMANN (R), MINNESOTA: We aren't just going to check the box off and say that we've had one vote and we're going to move on to other topics. We're staying full square behind the repeal of Obama-care and our commitment to defund it going forward.


KING: But where is this debate heading? We have new CNN polling tonight on the health care repeal question and we'll talk to one of the most powerful members of the new House majority, the Budget Committee chairman, Paul Ryan, about whether he sees compromise or gridlock ahead.

And Sarah Palin is, if anything, defiant.


SARAH PALIN (R), FORMER GOVERNOR OF ALASKA: I will continue to speak out. They're not going to shut me up.


KING: But former House Speaker Newt Gingrich says Governor Palin needs to choose her words more carefully. It's a topic he does know something about and new numbers out today put the former Alaska governor's political standing at a new low.

A packed hour ahead as you can see and we begin with dramatic breaking political news. CNN has learned that Senator Joseph Lieberman of Connecticut will announce tomorrow he will not -- emphasis on not -- seek re-election in 2012. Lieberman is an Independent and for all our talk about the vital center in American politics, he's not running in large part because he is a man without a home.

That's remarkable, because just a decade ago he was Al Gore's running mate and he came within just a few hundred votes in Florida of being the Democratic vice president of the United States. Our senior White House correspondent Ed Henry is working his sources on why Senator Lieberman is bowing out and why it matters.

Also with us Democratic strategist Cornell Belcher, Republican strategist Jim Dyke and from New York founding member of the centrist group No Labels, John Avlon -- Ed Henry to you first. I was just having a conversation with a Lieberman aide who confirmed this news. You were working sources earlier and of course their line is he believes he could have won but Senator Lieberman has wrestled with this for a very long time. He had no promise that they would clear the Republican field. He wasn't quite comfortable running as a Republican anyway and he certainly knew he would again face a challenge from the left in the Democratic Party.

ED HENRY, CNN SENIOR WHITE HOUSE CORRESPONDENT: That's right. Several Democrats already thinking about getting in regardless of what Senator Lieberman was going to do and look at his poll numbers. They have just plummeted in Connecticut and that's remarkable for someone who's been seen for so long as a statesman. I think it's yet another sign clearly that this fever that swept through, you know, seats and states all around the country is even affecting someone like Joe Lieberman.

People are angry and they're ready to toss people out. And Joe Lieberman looked at those numbers in part. That wasn't the only part of the decision but he looked at those numbers and decided he's not -- he doesn't have the stomach to do it again. And I think it's very clear that even as the president has now hired Bill Daley as his chief of staff. He's got this op-ed in "The Wall Street Journal", an outreach to the business community about trying to wipe out regulations to try and create jobs, to try to reach out to the middle. The center is gone.

KING: You're shaking your head --

JIM DYKE, REPUBLICAN POLITICAL CONSULTANT: No, to me the interesting thing is he was a few hundred votes away from being the Democratic vice president. He was probably many fewer votes away from being the Republican vice presidential nominee. And I think that's probably more than this uproar across the country his problem. He comes from a Democrat-leaning state. He dodged it last time becoming an independent after losing his primary and he's in a tough spot.

KING: So John Avlon, you work with a new group that says you know we need to encourage this vital center of American politics. Well sure, there are some extra reasons, but Charlie Crist was a popular Republican governor, ran for Senate in Florida as an independent, blown out. Michael Bloomberg has looked at the question of running for president as an Independent, has come to the calculation it won't work. I want you to listen to Senator Lieberman because I asked him about this a couple of months back, you know Senator, will you go back and run as a Democrat, will you run as a Republican or will you try to run in the middle. Listen to this.


KING: You're up in 2012. You have said you're more likely than not to run again as an Independent where you won last time. Have you ruled out running as a Democrat? You've said in the past you might possibly run as a Republican.

SEN. JOSEPH LIEBERMAN (I), CONNECTICUT: Yes. Frankly, and this is what's great about being an Independent, you're free to consider any and all possibilities. So I would say that I feel good about being an Independent at this moment in America's political life. And it's probably most likely I would run again as an Independent, but I wouldn't rule anything out. And that is running on either of the other parties.


KING: John Avlon, now we know he won't run at all. That's the decision he came to, but I feel good as an Independent. You can feel good as an Independent when you're in office but there is no home for Independents in American politics today despite all our talk about the vital center.

JOHN AVLON, CNN CONTRIBUTOR: Well and that's one of the biggest problems there is. Because there are more Independent voters in this country than there are Democrats or Republicans. That's true among registered voters in Connecticut. So the fact that Joe Lieberman is politically homeless in this political environment says more about the polarization of the two parties than it does about the electorate at large.

It's very tough for an Independent to run again as an Independent. But we saw just this cycle, we did see Lincoln Chafee win as an Independent in Rhode island. We saw (INAUDIBLE) come within 2.2 points in Maine of becoming governor. Lisa Murkowski effectively won as an Independent write-in candidate, although of course she's affiliated with Republicans.

Joe Lieberman has been an honorable Independent voice in the center. He's really been the last of the 9/11 Democrats. He easily wiped the floor with Ned Lamont and token Republican opposition six years ago and I think he probably could have won. But he's four terms in. He's made a different decision. But I think we should honor the fact that this is a guy who is respected across the aisle as a profile in courage. And he not only was vice, as Jim Dyke said earlier, not only was Al Gore's V.P. nominee, but was seriously considered as John McCain's nominee just two years ago. That is an extraordinary individual in American politics. We need more like him.

CORNELL BELCHER, DEMOCRATIC POLLSTER: Can I jump in real quickly? KING: Yes you can sir.

BELCHER: One also of the problems here is structural. I mean just to be truthful it is also a structural problem and Jim, you know this. The problem with Independents is if you're running as a Democrat or a Republican, you have a structure and there is the Republican senatorial campaign, there's a Democratic senatorial campaign. They're going to build structure around you. They're going to raise millions of dollars around you. They're going to (INAUDIBLE) around you. It is hard for you to run as an Independent because there's no structure and so structurally our system is built for the two-party system.

KING: Let's remind people of the transformation of Joe Lieberman. Let's go back August 16, 2000; this was a guy who was Al Gore's running mate who was dreaming, dreaming of moving into the White House.


LIEBERMAN: Tonight I am so proud to stand as your candidate for vice president of the United States.


LIEBERMAN: Only in America, right? Only in America -- I am humbled by this nomination.


KING: Maybe only in America. Eight years later could you be at the other party's convention saying this.


LIEBERMAN: What, after all, is a Democrat like me doing at a Republican convention like this? Well, I'll tell you what. I'm here to support John McCain, because country matters more than party.



KING: So here's one of my questions. I want to go to the map in a minute and look at the broader 2012 calculations for the Senate races, but here's my question. Here you have Joe Lieberman, 24 years in the United States Senate, 40 years in public service. Now he says he's going to leave after 2012.

You know, the president right now is looking for a defense secretary, Ed Henry. The president if he wins re-election might be looking for somebody down the road. Maybe Joe Lieberman's chances are better if the Republicans win the next presidential election. But remember in that speech we just showed you I'm John McCain's friend. I'm here for that. But he essentially said to Barack Obama, and I'm paraphrasing at home -- this is not exactly what he said -- but he essentially said nice young man, not ready to be president of the United States. Is there any chance they will forgive and forget --

HENRY: Highly, highly unlikely. He has the credentials for it, you're absolutely right, but after giving that speech in Minneapolis/St. Paul basically saying he's not ready to be president, he's not ready to be commander in chief, how do you make him your defense secretary. And I mean look, for Democrats, as you talk about the map, I mean you also had Kent Conrad, another more centrist Democratic senator today from North Dakota.

He bowed out as well and said he's not going to run for re- election. Well when North Dakota, the other Senate seat was up in November, that went big-time for the Republicans, like 75, 76 percent of the vote. So the map is going to be difficult and challenging for the Democrats like it was in 2010.

KING: All right let me -- John and Cornell and Jim are going to stay with us the next block. Let me get a final thought on this block on this map because Joe Lieberman -- stay right here -- he's the yellow up here, Independent in Connecticut. Bernie Sanders, again he stays with the Democrats but he runs as an Independent from Vermont. Red states are Republicans up in 2012.

Kay Bailey Hutchison has already decided she won't run. That one, safe to say especially in a presidential election, that will stay in Republican hands, but Kent Conrad decided today -- that's someone Ed Henry was just talking about -- let me get this to light up a little bit -- there we go -- he's not going to run in North Dakota. You would have to say today you favor the Republicans there.

Obama didn't carry that state. That's Claire McCaskill, Florida, Republicans just won big this year. That's a tough one for them. Republicans just won here, just won here, just won here, just won here. Cornell Belcher, since I just -- I just circled all those. I mean look it's a presidential year, so it's different from a midterm election year. But if you're just looking at the energy and the results this year and you're looking at this map, you've got to be thinking, whoa, that's a steep hill.

BELCHER: Well I -- a friend of mine, Guy Cecil, just took over at the Democrat Senatorial Campaign Committee, and Guy, you have your work cut out for you. The truth of the matter is there's going to be competitive states. We're going to build infrastructure in all those states and is a presidential year that also helps us. Look, the Dakotas are tough.

(INAUDIBLE) seems that we've had (INAUDIBLE) there before. We're going to be competitive. Florida is a state we've got to put in play. Missouri is a state that barely escaped us by what, a point or so last time around. Democrats are going to be in play in all these states, but it's going to be about what I talked about earlier, it's about infrastructure -- infrastructure and money.

KING: Obviously again a presidential year is different than a midterm year. We don't know exactly what the economy will be like, but having one in those blue states for the first time in a long time. Republicans have to look at this map. If you're Mitch McConnell you're thinking I could be the majority leader.

DYKE: Well it definitely has to make you smile if you're a Republican, but it's important to remember that elections -- and this may sound simplistic, but it's all too often true are a choice between two candidates and a lot is going to depend on the candidates that the Democrats put up in those states and that the Republicans put up in those states. I think you look back at the cycle that we just have and based on candidate choices, there may have been some different outcomes on both sides. And I think that's the unknowable at this point.

KING: How diplomatic, based on candidate choices -- I like that. John Avon --


KING: We've got to work in a break, John Avlon, but quickly for the work you're trying to do at No Labels, does a Joe Lieberman packing it in make it harder to go out in the country and say run in the middle because as Cornell just noted, the infrastructure is on the edges. It's with the ideologues.

AVLON: Well that's the push back. I mean you know the parties are more polarized than ever before. That's where the infrastructure is, but that's not where the voters are. So what we're trying to do is create an alternative architecture and encourage Senate candidates and gubernatorial candidates not to run against each other per se, but to run in the center in their primaries. Want to strengthen the center rather than having this RINO hunting and DINO hunting we've seen at least unrepresentative candidates that don't represent their constituents --


KING: Run in the center in your primaries, good luck with that.


KING: I'd love to see it. Those are great races to cover, but good luck for that.

All right, we're going to take a quick break. When we come back, still to come a close look at the China challenge. But up next, the president's political standing is on the rise and Sarah Palin says don't expect her to sit down and shut up.


KING: Tough diplomacy for the president tonight, but if the guy across the table to the president of China is wondering, what's this guy's political standing here at home. Good news for the president today. Our new CNN/Opinion Research Corporation poll says the president's approval rating is now up to 53 percent. That's up five points from just last month in December.

And here's one of the reasons it's jumping. The president up above 50 percent in part because Independents like the job the president is doing. Fifty-six percent of Independents now approve of how Barack Obama is handling his job as president. That's up from 41 percent just last month.

Cornell Belcher, to the Democratic pollster in the group first, some of this we assume because of when we took this poll is people like the president's reaction to the Tucson shooting. We saw a drop among liberals when he cut the tax cut deal. His support among liberals also jumped back up in this poll. They seemed to be OK, we were mad last month. We're going to forgive you now. At 53 percent heading into a very critical time of divided government, how important is it the president is above 50?

BELCHER: It's fantastic. I mean look, you remember when I was on your show about a month or so back when we were talking about this tax cuts and all the, sort of the left pundits were pooh-poohing it and I came on and I said look this is exactly the place he ought to be. It's the middle of the road. Americans don't want -- don't think Democrats --

KING: Are you John Avlon or Cornell Belcher?


BELCHER: This is exactly sort of the middle of the road place to be and get out of -- and sort of get above this and sort of get above the fray on this and be right in the middle of the road on this and compromise on this because Americans don't think Democrats and Republicans have all the answers. This is going to be the perfect place for him to be and guess what? He's being rewarded for being a bipartisan leader and looking like he's above the fray here.


AVLON: When Cornell is singing from the centrist hymnal, you know Democrats are listening and looking towards 2012, and it's great. It's great to hear and it's smart stuff. Look, that 15-point jump among Independents that is a huge deal. That is a huge deal for governing over the next two years. That is a huge deal pivoting to 2012 because I mean that's not incidental.

It's a reaction to how the president led during the lame duck and that flurry of legislation that got passed, the tax cut deal, START, "don't ask, don't tell", et cetera, and then his reaction to the Tucson shooting and that speech.


AVLON: That is not a blip. That is a big jump.

KING: You say it's not a blip. It is a big jump, but it is also, is it not, a reflection of the volatility in American politics that he can take such a big jump in one month. So if you're the Republicans now and you're in the middle of this health care confrontation, then a spending confrontation you have to be more careful if the president is above 50, but how do you change that number?

DYKE: Well for one the president was drug kicking and screaming to do the tax deal, remember? Republicans were hostage takers. That's how that got done. We're now saying it was a good thing for him --

KING: You're letting facts get in the way --


DYKE: Another thing on the health care debate, Resurgent Republic (ph), which I do a little bit of work for, was out with a poll today on Independents. And Independents have not gone back to President Obama on health care. Health care is going to continue to be an issue. It's not the symbolic one-shot deal.

Republicans to your question have to stick to the facts, have to continue to implement the things that they were elected to do and do it in a way that is factual and substantive. And the president will either come along or he won't.

KING: But at the White House, Ed, they have to assume heading into this now they need to hold that number. They need to hold that number and the volatility is what's interesting in our politics right now. He could drop that 17 points if he does something that drives the Independents away. However, they must think heading into health care and spending it gives him a bit more leverage to think you know that people are on my side.

HENRY: It does and now you've got Republicans talking about repealing health care instead of talking about creating jobs, which is something they said they were going to do back in November. They were beating on the president for not spending enough time on that. They haven't put an economic plan on the table yet. And guess what, a week from tonight the president will have the megaphone yet again for the "State of the Union" address where he can build on this number and build on the tax deal that he had in late December and working with Republicans, the New Year's resolutions he talked about on January 1st about working with the other side. The staff appointments like Bill Daley (INAUDIBLE). He can build all on that --

KING: He better have some serious spending cuts in that speech if he wants to hold the Independents. We're going to run out of time, so I want to move on. I don't know what fascinates me more, Sarah Palin going on television last night saying I won't sit down. I won't shut up. And whether you like her or don't like her politics you have to like her defiance.

She gets into a fight, she stays in. She fights it where this morning on ABC, Newt Gingrich, a guy who's been known to trip over his own tongue once or twice in his career saying she needs to be more careful. She needs to be more careful in how she speaks about this. I want to go to the Republican here first. She's a fascinating political figure. She dominates discussion in your party right now. Where are we going here? DYKE: She has been in an intense communications mode, the likes of the ending of a presidential campaign ever since the presidential campaign ended. She's done it all by herself. She tweets. She posts, blog posts.

KING: Can she sustain it?

DYKE: Someone like that with that high a profile needs an apparatus around them. Call it whatever you want, but you need people around you who can help you think these things through and help put them together so that they make sense when people see them. I think to Mr. Gingrich, the trouble there is when a potential also candidate comes out --


UNIDENTIFIED MALE: Trust me, I'm on your side.

DYKE: And plays commentator that can get you into people interpreting things that you didn't really mean. And I think he caught himself and tried to correct it at the end though she's still very powerful --



KING: You have half a sentence. Go ahead.

BELCHER: She's a (INAUDIBLE) Republican Party right now and they're going to find -- have to establish -- have to find out whether to box her in because she is not helping them. Her numbers are shrinking, she's shrinking. She's the most vocal voice out there right now for them and she is not helping their cause.

KING: All right, Jim, Cornell, John, thanks. Ed, thanks for coming with the breaking news.

When we come back up next another great political drama -- President Clinton in Chicago trying to help a friend and a bit later, the China challenge.


KING: Former President Bill Clinton was on the campaign trail today in Chicago. And the tragedy in Tucson was among the issues on his mind. During the Clinton presidency, Congress passed an assault weapons ban that outlawed large ammunition magazines. But that law expired and the weapon used in the Tucson shooting was a nine- millimeter handgun with an ammunition clip holding more than 30 rounds.


BILL CLINTON, FORMER PRESIDENT OF THE UNITED STATES: I still believe it may not be popular today, I still think it's wrong to be able to carry a gun around that will fire 30 bullets in no time. I think that's not right (INAUDIBLE).


KING: The former president was on the trail, though, not to make the case for gun control but to back his former aide, Rahm Emanuel's bid to be Chicago's next mayor.


CLINTON: He was always fearlessly honest in meetings with me. He was never -- he never shirked to say, sometimes in extremely colorful language, when he thought I was wrong. If you want the windy city to have a gale force of leadership, Rahm Emanuel is your mayor.


KING: Now there's no doubting the former president is popular in Chicago, but there are complaints from some African-American leaders in the city that Mr. Clinton is making a mistake. Let's get the take of two veterans of Chicago's rough and tumble politics.

Andy Shaw is a veteran political reporter in the city who is now executive director of the watchdog group Better Government Association and with me here is CNN contributor Roland Martin. Roland, the complaints from African-Americans, or is it just because they support another candidate or do they have legitimate complaints about Rahm Emanuel's positions in the community?

ROLAND MARTIN, CNN CONTRIBUTOR: Well first of all, they do have legitimate complaints. What is very interesting is that, I mean look, he has virtually no relationship with the Congressional Black Caucus. I'm very surprised that Carol Moseley Braun's campaign frankly they have not reached out to folks who again do not speak highly of Rahm Emanuel.

And I've talked to many of them and they have nothing good to say and so a lot of the critics are saying where has been your urban agenda all of these years. Were you paying attention to us when you were a member of Congress? Also I find interesting Bill Clinton talks about that, Bill Clinton did not mention that he actually fired Emanuel over the health care debacle, but I guess they got over that.

KING: Bygones are bygones. Andy, Andy, before I bring you in, I want you to listen to Carol Moseley Braun. She's a former United States senator and now she's running in this race. And she believes she can get some support in the African-American community. But I want you to listen to her case here saying I have the most credentials. We'll talk on the other side.


CAROL MOSLEY BRAUN (D), CHICAGO MAYORAL CANDIDATE: I have the most credentials and the most qualifications and experience of all of the candidates running. And so they just chose the most qualified candidate for the job. This is building momentum; this is getting our bandwagon going. You know we like to say we're getting the band together again.


KING: That was at a unity rally with other African-American leaders in the community, but can she make the case -- you can say Rahm Emanuel you don't want him as mayor, but he's been a congressman. He's been a White House chief of staff. He's been a White House aide. Carol Moseley Braun have more experience, more credentials?

ANDY SHAW, EXEC. DIRECTOR, BETTER GOVERNMENT ASSN.: Well, I think, John that Carol Moseley Braun can rightly say that her resume suggests a few more positions. She was a state senator, a U.S. senator, an ambassador, recorder of deeds in Chicago, but remember she basically had a disastrous single term in the U.S. Senate and was defeated by a virtually unknown Republican.

I think Bill Clinton's visit today probably burnishes Emanuel's front runner status and probably -- basically -- I think it basically guarantees that Emanuel makes it into a runoff after February 22nd. The battle now is between Carol and Gery Chico, the former Chicago school board president for number two, because once you get into a runoff, then anything can happen.

There is a strong anti-Rahm sentiment, but there is also this sense of inevitability, which is basically promulgated largely by the media. On the ground it could be different. The voter registration in black wards in Chicago is up appreciably. Gery Chico is on the air with a full-blown ad campaign. And Rod is in both of their -- I'm sorry -- Rahm is in both of their cross-hairs, so even though he is likely to survive round one, he's certainly not a cinch to win this race.

KING: And so here's my question, I want to listen to a bit more of the former president. I first met you back then, Andy, covering campaigns and I remember, I was covering Bill Clinton. I worked for the AP at the time when Rahm Emanuel, he's a former ballet dancer. He signed on. It was the governor of Arkansas, Bill Clinton was at the time and he needed to know if he could raise money and he got this fund raiser from Chicago, Rahm Emanuel. I want you to listen to Bill Clinton describing his relationship with Rahm.


CLINTON: I'm the governor of a small state and I had a policy of not doing out of state fund-raisers when I was governor. And I didn't know if I could raise the money to run until I met him. And I thought finally I met somebody that makes me look laid back.


KING: Andy, there are some cities where you would think or some races where you would think you don't want to have that reputation as being a volatile guy who shoots out expletives, who's -- you know Bill Clinton saying he makes me look laid back. But in your city, your city, does it help that Rahm has this sort of larger-than-life reputation? SHAW: I think in this particular climate it's extraordinarily helpful because Chicago is a city in deep crisis, financially in terms of public safety on the streets, in the schools. Remember, the mayor here for the past 21 years, Richard M. Daley was hardly a warm and fuzzy individual. He is a very volatile, sometimes angry, temper- ridden individual, and yet he's been an extraordinarily popular mayor over the years.

I think there's the sense in some areas that the only way you can tame the beast of Chicago is with a butt kicker, and that's Rahm's reputation. So I think in this peculiar political environment, his worst personal attributes, this volatility, the four-letter words and the fact that he's not a particularly nice individual may work to his advantage because that's what people may be looking for.

MARTIN: Well that's the mistake his opponents are making, John, and that is a lot of the criticism of Daley is that he ruled with an iron fist. When you look at the parking meters deal which people say was an absolute debacle, they're saying wait a minute, you have far too much control. And so it's interesting, the argument with Emanuel should not be oh I have enough experience. It should be do you have the temperament to be able to pull people together to deal with the budget shortfall in Chicago? So the arguments I think that Chico and Braun are making are absolutely wrong if they really want to get at the heart of how to beat Rahm Emanuel.

KING: It is a fascinating race. Roland, Andy, appreciate your time tonight. We'll stay in touch as this one goes toward the finish line.

And when we come back, this is a huge generational challenge. You will deal with it now and you will deal it probably for the rest of your life -- the China challenge.


KING: Just a short time ago, Chinese President's Hu Jintao's motorcade pulled up at the White House. As we speak the president of China having a private dinner with the president of the United States. Vice President Joe Biden was waiting at the bottom of the stairs when the Chinese leader arrived at Andrews Air Force base to begin his state visit. They'll pull out all the stops tomorrow. White House meetings, a joint news conference, a visit with U.S. business leaders, a formal state dinner; amid all this pomp some thorny issues will be discussed, many.

A little bit ago I talked with CNN Contributor David Gergen who served four U.S. presidents and watched this relationship evolve.


KING: So David, I view this as the defining relationship of the next generation. As the president of the United States sits down tonight for dinner, and he has the big formal state dinner tomorrow night. I'll start with this irony, you have a Nobel prize winner sitting across the table from a president who is holding a Nobel prize winner in prison, and would not let him go and accept his award. Starting with human rights, how tough does the president of the United States need to be? And how risky is it that he be tough with the guy that essentially is America's banker?

DAVID GERGEN, CNN POLITICAL CONTRIBUTOR: John, the Chinese are going to be tough. The president has to be tough in return. While both of them have to avoid making the other one the rival and some sort of enemy. You're right about this. This is the first time a president of the United States has entertained another head of state who has got a Nobel prize winner for peace sitting in jail. So the president has to bring up human rights. He's also got this large economic agenda where many in America think we've been wronged. And he's got a growing national security military agenda because China is flexing its muscles.

But the Chinese are coming in with their demands, too, John. They have many, many complaints as well. I think underneath it's going to be a tough meeting. I bet on the surface, they'll paper it over.

KING: And that seems to be the great disconnect. Secretary Gates goes to China. Secretary Clinton has given a very assertive speech. Secretary Geithner gives a very assertive speech. On the military, human rights and economics issues, the administration says, China, it's your turn to give. If you look at the Chinese media, I'm looking here at "The Global Times", the state-run newspaper, affiliated with "The People's Daily", it says it's the recent activities by the United States that are causing the problems, including trying to improve our relations with South Korea and with Japan. So they want concessions from us. We want concessions from them. What happens in the end?

GERGEN: Well, that's what diplomacy is all about. You'll are going to have to make some trades here and you are going to have to say, look, I will do this if you will do that. I think the president may have enough strength now, political strength at home that he could make a couple of concessions. But I can guarantee, one of the things he'll come out, one of the things the United States will come out of this with is business people will get more deals in China. It's going to sound big, but the amount of money that's probably involved is tiny, compared to the trade deficit we have with China.

David, you have served four U.S. presidents and watched from the outside with good contacts, several other U.S. presidents. Back in the day you started in government, it was the Cold War, the Soviet Union, and then the Russians. Is this now not the defining security and economic relationship and in some ways superpower showdown?

GERGEN: Well, it's become the single most important bilateral relationship, single most important country-to-country relationship in the world, as many have said. John, I do think it's going to define the 21st century, not just this generation, but much of the 21st century. What we know is the most dangerous periods in history is when one country is rising and another great power is declining. They often conflict. As we saw with Germany and Britain and the United States, we have seen this before. What's going to be really, really important is all these underlying issues. But to manage the relationship in a sensible way that it doesn't come to blows, it doesn't become a military rivalry. And there is some danger of that. That danger is growing a little bit.

KING: And the American people seem to get it. When I was traveling in the last campaign, a lot of people talked about the China challenge and the economic anxiety and they traced it back to China. Whether it is the decline of U.S. manufacturing or even now the rising price of gas, David Gergen, it is the growth of the Chinese economy, and the demand of that economy for crude oil and other crude materials, raw materials that is in essence driving our economic condition as well.

GERGEN: That's right. One of the main reasons that the gasoline at the pump in the United States is going up is the demand by China and other nations in Asia for more oil and for more gasoline. The demand is going up. It's driving up our gas prices. You know what that higher gas price is for us? It is a higher tax on the American income. So we have some strong interests here to deal with. But I can't -- this is -- this is so important. We in the media need to be spending a lot more time understanding China, understanding the U.S./China relationship and what we've got at stake.

And I do think, John, that this meeting this week is a prelude to the president's State of the Union next Tuesday night, when my expectation is he's going to come down really four square in terms of American competitiveness, American innovation an keeping this a great nation so we do not go into decline.

KING: It is a fascinating visit and a fascinating relationship. David Gergen, appreciate your insight.

GERGEN: Thanks, John.

KING: We'll spend a lot of time on this, this week. As the president of China and the president of United States have their summit, maybe you're sitting at home saying why does this matter to me. Why do I care? We'll try to give you reasons to care all week long.

Here is just one tonight. Look at this, the blue line, that's the economy of the United States. The red line, that's the economy of China. Look at this, the projections now say in 2019 of the strength of the Chinese economy will pass that of the U.S. economy. That's one reason this is a very important summit. There are many more. We'll cover them in the days ahead.

When we come back, the day's top headlines, including another story we're hearing about time and time and time again. A city out there in America cutting vital services, like police officers because there's little money.


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

JOE JOHNS, CNN NEWS ANCHOR, JOHN KING USA: And in Camden, New Jersey, which has the nation's second highest crime rate, the mayor laid off almost half the police force and nearly one third of the firefighters today, blaming her city's budget deficit. And looking around the country, you can't help but wonder whether this is just a sign of the times for other American cities.

KING: Great point you make. Let me walk over here to show you, Joe. Because we have talked about this story in the past and it is only spreading. It is not getting better as states and cities deal with fiscal crisis. Here is a map of the country. Watch this. Watch this. You talk about Camden police layoffs? It is happening everywhere, in cities large and small. Portland, Oregon, San Francisco, California, across Texas, back up the East Coast, here medium-sized cities, small cities, large cities, all deal with fiscal crisis. No more stimulus money, still a tough economy.

Cities are cutting services. What are they cutting? Let's take a look. The orange is the 2010, budget year; the blue color that is the 2009 budget year. Personnel cuts, like police. That is the big one right there. Delayed and cancelled projects, cutting other services, modifying healthcare benefits, public safety cuts, again police department, comes in there. Across the board services, renegotiating debts and pension. Joe, you see this happening in states and cities all across the country, and of course, it is the big debate coming to Washington right now, as well, what do you cut? It is always hard.

JOHNS: Well, yeah. Well, you know, when New York had the big storm, and there weren't enough employees out on the streets or whatever. It seemed like that was just that story all over again. Cities don't have enough money to work with.

KING: It's a tough one, a tough one.

Before we go to break, I want to make a quick point. We were just having a discussion about the Chicago mayoral race, just a moment ago. My friend Andy Shaw, who now works for a good government group out there, used the term "in the crosshairs" in talking about the candidates out there. We're trying-we're trying to get away from that language. Andy is a good friend, he's covered politics for a long time, but we're trying to get away from using that kind of language. We won't always be perfect. So hold us accountable when we don't meet your standards.

When we come back, more on the health care debate and the other big debates in this town. One of the more powerful new members of the Republican majority, the House Budget Committee Chairman Paul Ryan, with us when we come back.


KING: For most of the afternoon the House of Representatives debated the Republican proposal to repeal the Democratic health care reform law. The final vote is tomorrow and we already know the outcome. Repeal will pass the House and then go nowhere.

Here's how you feel about it: 50 percent of Americans want to repeal all provisions of the new health care law. But there's a huge generational divide; 57 percent of Americans 50 and over favor repeal, while 45 percent under 50 favor repeal.

One of the key Republicans in this fight and just about every big fight on Capitol Hill these days is the Budget Committee Chairman Paul Ryan, of Wisconsin.


KING: Mr. Chairman, let me ask this question. As we all wait to see how this divided government works, I completely understand and respect why House Republicans say we will vote to repeal the health care bill. You campaigned on it, it was a central promise, but you can't do it. You can't get it through the Senate. The president has a veto pen, even if you could. What is round two? Will it just a continued political confrontation, or will there be, OK, we can't get our way, let's have serious conversations with Democrats about some with incremental changes.

REP. PAUL RYAN, CHAIRMAN, BUDGET CMTE.: Well, if we use that standard to measure what we do on the House floor, whether we can pass it out of the House, out of the Senate and the presidency, they we ought to just go home. We do believe it's incumbent upon us to define ourselves with our actions. And that is why, like you said, this was a campaign pledge. We're fulfilling that pledge. And really do believe this law should be repealed. So going forward with respect to fiscal policy, I would argue health care policy is the biggest driver of our debt and deficits. I just have a hard time seeing that we're going to come together on health care policy.

It's because the architecture of the president's new health care law is so disastrous from our policy perspective. It's so wrong that I have a hard time seeing how we would agree to tinker around the margins. We really do believe this health care system should be replaced with a patient-centered health care system. We believe you can have universal access to affordable health insurance, including for people with pre-existing conditions, without this kind of law takeover, and without a huge government-run program, without all these tax increases and Medicare cuts.

Hopefully we can get something on other areas of fiscal policy. Hopefully on discretionary spending, other entitlements, we can get some reform. My hope and goal is we can find some agreement with the president on some things that to get us in the right direction, to get this debt under control. But his health care law, my guess is he's not going to agree us, and we're not going to agree with him on that, and that one might just go to the next election.

KING: All right. Let's get to those other issues in a second. You say health care might go to the next election. What about between now and then? Will you vote over and over again to repeal? Or is it possible we'll get gridlock on the budget process because a number of your colleagues said let's defund it. Let's deny the funding for what the administration needs to implement the healthcare law. If the house doesn't put it in its budget, and the Senate does, then you have gridlock. You either give in or what, we don't have a budget, we shut down the government?

RYAN: Well, so, budget is different than shutting down government. These are different things. Shutting down government in your language is discretionary spending. And that means do we put riders in appropriation bills to defund aspects of this Obama care? And that those don't get signed into law. Then we'll see what happens. I can't answer what the budget showdown will be on discretionary spending.

But on the budget, which is the budget resolution, we will be advocating for repeal of this health care law. What I'm trying to say is hopefully there are other aspects of fiscal reform, maybe in the area of Medicaid reform, maybe in the area of Social Security and hopefully maybe in the area of cutting discretionary spending. I would like to think we can get some agreement in those areas to make a dent in our problem, even though we have such a difference of opinion on whether this new health care law should stand or not.

KING: Answer the critics, saying you're trying to change the referee in the middle of the game. Or saying you won't listen to the referee, in the middle of the game.

RYAN: Yeah, the CBO.

KING: Yes, CBO. You-


KING: Sir, you got an award just the other day, you said, you are doing a great job at CBO.

RYAN: And they are.

KING: I understand you disagree with the Democratic bill, you disagree with their assumptions, but the CBO says the bill you're about to vote on to repeal the health care law, would add $230 billion to the deficit. They're the referees. There are a lot of calls we don't like, we are both sports fans.

RYAN: Right.

KING: But they are the referees today. How can you say, never mind?

RYAN: So our quarrel is not with the CBO at all, or with their methodology. I differences of opinion on their methodology, but our quarrel is not with CBO themselves, our quarrel is with the Democrats who wrote the bill that the CBO had to score. Here is how the CBO works. You put in front of them whatever you want to put in front of them, and they have to score it. So, what do they put in front of them? They put in front of them a bill that double counts Medicare money, that double counts Social Security money, that double counts class act money, that omits discretionary spending, that omits the doc fix.

If you take away the double counting, all the money they didn't count. It is about a $700 billion deficit. The reason I say, $700 billion deficit is we asked CBO to look at this bill without all the gimmicks, without all the smoke and mirrors. And that was their conclusion.

Let me say it this way, CBO, when they look at the debt, they can look at everything, not just this narrow piece of legislation. They say this health care bill increases the debt. So how can it be that this legislation reduces the deficit but increases the debt? The reason is because in this bill which is scored, which gives you that score that you just mentioned, they have all this double counting, all these smoke in mirrors. That's not CBO's problem. That's the problem of the people who manipulated CBO by putting all these budget gimmicks into the legislation that they have scored.

KING: I suspect Democrats will be saying the same thing about you in the near future. But let's move on to another issue. You're making a lot of new friends. You have 63 new seats, the House Republicans picked up in the last election. Many of those new members are Tea Party members, who is say, no way, sir. We will not vote to give the government more lending authority, to raise the debt ceiling unless they see a serious and significant package of spending cuts attached to that legislation.

RYAN: I agree with that.

KING: How much money are we talking about?

RYAN: I'm not interested in negotiating through the media. I don't think that's good strategy. But we didn't ask the American people to give us the majority to be rubber stamps for big government. We do have to get this thing turned around. Yes, I think this is an opportunity to get serious spending cuts and controls in place in order to prevent default--

KING: How much are we talking about?

RYAN: I'm not going to get into that because I don't think it's smart to negotiate through the media. But we want something significant because this debt situation is really getting out of control. And we're not interested in rubber stamping all the spending that's taken place over the last two years. We want to get this thing turned around in the right direction.

KING: I hope we spend a lot of time in the weeks and months to come, deep in the leaves (ph) of the budget. And I mean that, going through specific programs -

RYAN: I'd love to.

KING: How this is going to affect. But I want to close today by asking this question: You won't give me the number of spending cuts you want to attached to raising the debt ceiling. What about, has the climate changed at all? You said you hope to agree with the president on many of these things. As we know you didn't have any conversations with the president the first two years. Are you already in contact with the administration? Are you trying to work some of these things out? Or are we going to do this the old-fashioned way? Republicans have a proposal, you have your vote, the Senate Democrats have a proposal, they have their votes and it takes months and months to get to what we know is going to have in the end, you will have to get in the room, with the president, with the Democrats on the Senate side, and cut some sort of deal?

RYAN: The people I knew in the administration, Larry Summers, Peter Orszag, Rahm Emanuel, they're gone. There's new people from the fiscal standpoint. I'm just beginning to get to know them. I did reach out to Jack Lew, the new OMB director. We have gotten to know each other a little bit. Gene Sperling was kind enough to call me to talk. And I'm getting to know Tim Geithner a little bit. So we are having those preliminary conversations. Nothing but good things come out of those from my perspective.

So, yes, look, I don't want to do nothing for the next two years. I hope what is going to happen is the president is going to say, I agree with you Republicans on A, B and C, let's get those things done. But an X, Y and Z, and his healthcare bill is probably one of them, we'll have to agree to disagree. And that's fine. That is just how it is going to go. But I do believe for the sake of our country, for the sake of our debt situation, that we're going to make some good dents on spending. Spending, after all, is the source of our problem, we have to get started on it.

KING: Paul Ryan, chairman of the House Budget Committee, one of the most powerful figures in Washington at the moment. I hope you have those grown-up conversations as you just described. And we'll keep in touch as we go forward.

RYAN: Thanks, John. Nice to be with you.

KING: Mr. Chairman, thank you.

So what's got Pete so jumpy tonight? Oh, no. He's not on the caffeine again, is he?



KING: I'll confess, I'm a big coffee fan. I think the technical term is addict. But our OffBeat Reporter Pete Dominick, well, he is you might say boiling mad over Starbucks' new 31-ounce cup called trenta.

Ha, finally!

DOMINICK: Oh, John King, I am absolutely outraged. I too like my coffee. But where does it end, John King? Where does it end? Today Starbucks introduced their new Trenta size.

John, I have the venti. This is their largest size right now. But today they introduced the trenti, which is 10 ounces too big. John King, do you know what trenta translates into in Italian?

KING: Tell me.

DOMINICK: It translates into too much coffee in your stomach at one time.

KING: No it doesn't.

DOMINICK: Enough, John. We have an addiction in this country to work and to energy. Where does it end? My daughters are six and three years old. I'm afraid when they enter the workforce, this is going to be them, John King. This is what you would call a noventa, and it has a carrying strap and everything. They're just going to carry this around on them. This is the future of America.

I say, John King, where does it end? That's the debate I'd like to see you have on JOHN KING USA tomorrow night. How much caffeine is too much?

KING: We'll have that debate. I'm going to send you first, a little English to Italian dictionary. See if you can get trenta. See if we can get you up to 30.


KING: How do you drink your coffee?

DOMINICK: John King, I drink my coffee as lame and mild as I possibly can be. It represents my own personality. But I don't drink a bucket of it.

KING: What do you mean? Whoa, whoa, what do you mean? You mean like, a lot of milk and the sweeteners, and everything else? Do you get froufrou drinks or real drinks?

DOMINICK: I don't get a froufrou drink. Although, I do use quite a bit of half-and-half and lots of sugar. I'm not exactly a black coffee drinker myself, John.


DOMINICK: How do you drink yours?

KING: How do I drink mine? I either do espresso shots. I have a nice little espresso maker in my office. It is a great thing. Or I get what we call, do you know what an Americano is?

DOMINICK: That is an American espresso.

KING: Espresso and a little hot water in there, just a little hot water.

DOMINICK: You gave me an espresso in our office one time. John--

KING: That was back when I was being nice to you. DOMINICK: Back to -- I want another one of those.

Back to politics for a second, the question of the day for me is, will Joe Lieberman, now that he's leaving, will he get a job in the private sector?

KING: In the private sector, if he wants, there will be many opportunities for him. My big question is whether the Obama administration would reach out to him. Since he is staying in the Senate through the end of 2012. I suspect if he runs his term out, then it depends on who wins the next presidential election.

Look, it is an interesting time. He's an interesting guy. Tough choice for him to make. He's been at the middle of some big debates. I don't think he would drink coffee out of one of those.

DOMINICK: I have to get going. My strap just broke.

KING: Yeah, OK.

DOMINICK: This is it, John King.

KING: Espresso on me. Peter Dominick, we'll see you tomorrow. That's all for us. We hope to see you tomorrow right here. PARKER SPITZER starts right now.