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STATE OF THE UNION WITH CANDY CROWLEY

Interview With Madeleine Albright; Interview With Alan Simpson

Aired February 6, 2011 - 09:00   ET

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


CANDY CROWLEY, HOST: Protesters are still in the square. Egyptian President Hosni Mubarak is still in the presidential palace, and the U.S. approach to this crisis is still evolving: a delicate changing dance.

(BEGIN VIDEO CLIP)

JOE BIDEN, VICE PRESIDENT OF THE UNITED STATES: Mubarak has been an ally in a number of things. I would not refer to him as a dictator.

(END VIDEO CLIP)

CROWLEY: But as the violence escalated in Cairo this week, the rhetoric in Washington got specific and urgent.

(BEGIN VIDEO CLIP)

PRESIDENT BARACK OBAMA: And what I indicated tonight to President Mubarak is my belief that an orderly transition must be meaningful, they must be peaceful and it must begin now.

(END VIDEO CLIP)

CROWLEY: For a while, it sounded like they wanted Mubarak to go, until yesterday when Secretary Clinton seemed to suggest there is a way around Mubarak.

(BEGIN VIDEO CLIP)

SECRETARY OF STATE HILLARY RODHAM CLINTON: I think it's important to support the transition process announced by the Egyptian government actually headed by now Vice President Omar Suleiman.

(END VIDEO CLIP)

CROWLEY: What does the U.S. want?

Today, standoff in Egypt: we begin with former secretary of state Madeleine Albright, then two diplomats who know the region and the players former ambassador to Egypt and Israel Edward Walker and former deputy secretary of state and a former director of national intelligence John Negroponte. And tough love for a country addicted to red ink, with co-chair of the debt commission Alan Simpson.

(BEGIN VIDEO CLIP)

ALAN SIMPSON, DEBT COMMISSION CO-CHAIRMAN: The god here in Washington is the god of re-election.

(END VIDEO CLIP)

CROWLEY: I'm Candy Crowley and this is State of the Union. Before we get to our first guest, we want to get an update on the latest from the ground in Egypt. CNN's Ivan Watson joins me now from Cairo. Ivan, tell me what's going on right now.

WATSON: Well right now, we're in Tahrir Square, which is the epicenter really of defiance, popular defiance to the presidency of Hosni Mubarak. Really an enclave fortified by barricades that have withstood assault from Mubarak supporters for several days. Now we are just seeing a peaceful period. And as you may be able to see behind me, at the very least, tens of thousands of people again out in the streets in a joyous festival, dancing, singing, even joint prayer services, Muslims standing next to Egyptian Christians, holding crosses and Korans aloft.

We've heard a statement made on Nile state television that a meeting is taking place between representatives of the Muslim Brotherhood and the new vice president of Egypt, Omar Suleiman. And state television saying that there was a joint agreement was put forth, calling for a number of committees to be formed to help push through changes in the constitution, for example, and an end to emergency law, which would be really dramatic if that were to take place for the first time in 30 years, to liberate the media which is heavily censored, which state television itself has been terribly propagandistic and very one-sided throughout this political conflict that has taken place over the last nearly two weeks here.

The question, though, is whether the demonstrators here from many different economic classes, from different faiths as it's pointed out, who are all coming together with one united goal and that is to bring down the regime and end the presidency of Hosni Mubarak, whether they would be in agreement with representatives of these opposition parties and any deal they may work out with the new vice president who has long been a right-hand man of Hosni Mubarak -- Candy.

CROWLEY: Ivan Watson, thank you so much for joining thus morning.

And joining me now here in Washington, former secretary of State Madeleine Albright, chair of the National Democratic Institute. Thank you for being here.

ALBRIGHT: It's good to be with you, Candy. Thank you.

CROWLEY: Does the U.S. want Hosni Mubarak to resign?

ALBRIGHT: The U.S. wants to have a process that provides a peaceful transition. President Obama has said that the transition process had to begin. It didn't begin particularly well in terms of the mobs on the streets. Secretary Clinton has made very clear that the transition has to be pursued and that it has to have certain elements to it. It does have to be a -- a rapid process, it has to be democratic, it has to be inclusive, and I think that we're very clear that there has to be a transition process that represents the will of the Egyptian people.

CROWLEY: Which they have been saying, and I understand that, and then they have to be diplomatic. Look, from the very beginning, it was like we can't insult Mubarak. He's been an ally, albeit a flawed one. He might have survived. We didn't know what was going to happen in the beginning. Now it's pretty clear. He's not going to run again at the very least. I mean, he is going to be gone when and if there is a next election.

But the question here is the signals seem to be getting a little mixed up. But I want to -- I want to play you first from a man you know well, former Ambassador Wisner, who was talking about Mubarak yesterday I believe. And I want you to just listen to a little of what he said.

(BEGIN VIDEO CLIP)

FRANK WISNER, FRM. U.S. AMBASSADOR: The president must stay in office in order to steer those changes through. I, therefore, believe President Mubarak's continued leadership is critical. It's his opportunity to write his own legacy. He's given 60 years of his life to the service of his country. This is an ideal moment for him to show the way forward.

(END VIDEO CLIP)

CROWLEY: Now, he was a special envoy who went to Egypt on behalf of the Obama administration last week to give a message to President Mubarak, and the State Department has pushed back a little bit, saying he's speaking for himself. He said that. Nonetheless, this is a pretty high profile guy. If you add that up with something that Hillary Clinton said recently and I want you to listen to that, and we'll see what we have in terms of what the message is. Here she is.

(BEGIN VIDEO CLIP)

CLINTON: There are risks with the transition to democracy. It can be chaotic. It can cause short-term instability even worse than we have seen it before. The transition can back slide into just another authoritarian regime.

(END VIDEO CLIP)

CROWLEY: So it sounds to a lot of people as though the U.S. has now gone, okay, there is a way in which Suleiman can run the transition. Mubarak keeps his title symbolically until he can leave with some dignity. And I hate to do this to you, I don't -- I want to read you one last thing. And this came from ElBaradei who is -- who is seen as an opposition leader. And here was his response particularly to Wisner.

"If the message coming out from Washington is that Mubarak can continue and his head of intelligence will lead the change this will send a completely wrong message to the Egyptian people."

So I'm not the only one confused here about what the U.S. wants.

ALBRIGHT: Well first of all, I think we all agree this is an incredibly complicated and delicate situation changing very, very rapidly. And if I may just take a minute, I think the opposition groups in Egypt are very interesting, they are not monolithic. They had some tactical differences in them, there are some personalities involved. They are also trying to figure out how to operate together. There is a desire I believe on behalf of some within the government to split the opposition, so that you have a variety of voices coming out of Egypt.

The United States I think cannot micromanage the process. What we have to do, however, is make clear that the process itself is important and arriving at a democratic solution is important which is, in fact, inclusive democratic, peaceful, and rapid. And I think that the administration has been walking a very delicate line quite well. It's difficult.

Now, as far as Ambassador Wisner is concerned, I think he had an assignment to go there. I don't know how the rest of the relationship has gone, but he clearly -- that was his view. It is not the administration view. And I think that what we're going to have to do is to be really good analysts in terms of seeing what's happening on the street.

What is interesting from Ivan's report is that there are the negotiators who are creating themselves in a variety of groups, and then there are the people on the street who have been remarkable, Candy, terms of their stick-to-it-iveness and sometimes joy and sometimes helping themselves against rock throwers. But what is going on is a revolution that we're seeing unroll, the Egyptian government as well as the protesters, as well as the opposition groups are looking for some kind of a mechanism to have a transition. And the problem here as Secretary Clinton said is how you work it out so that you develop a set of institutions that can deal with this important problem, and not have extremists take advantage of a chaotic situation.

So the process is important, but it has to move specifically and the tactics may differ a little bit among the opposition groups.

CROWLEY: President Mubarak said a couple of days ago to Christiane Amanpour, if he just left, if he just resigned -- he's like to, but if he resigned, there would be chaos. Would there be right now if he came on and said, okay, enough, I'm out of here, would there be chaos?

ALBRIGHT: I think that's very hard to say. I think that my own personal opinion is that there are a variety of other structures in place. The question is what the army would do.

ALBRIGHT: As has been pointed out in a lot of the reports. I think that it must be very hard after you've been a leader for a long time and everybody has told you how wonderful you are, is that your time is up.

And I think we are about to be in a different era in Egypt. And I think that what is the chaos scenario has been held out there for a very long time. It is what the Mubarak government has said would happen all along if there were real parliamentary elections.

And by the way, one of the things that really triggered this were the completely fraudulent parliamentary elections. And so the people in Egypt are knowledgeable. This is a very interesting group out there. These are young, educated people to a great extent. The media has played a very large role.

And so the chaos scenario is one that has been held out there to say it's either Mubarak or an Islamist Muslim Brotherhood and nothing in between. And the problem has been is that the nothing in between is not true, that there are rising groups within Egypt that are working out a mechanism to go to the next phase.

CROWLEY: If I were to read these tea leaves now, from what various people are saying and add them up, would I be wrong to come to this summation? The U.S. thinks the probable scenario is that Mubarak is sidelined, but stays in that -- with that title, while Suleiman works with these various opposition groups to set something in place, and then Mubarak resigns somewhere down the road, a couple of months.

ALBRIGHT: I think that's obviously part of the discussion, but I think it's very hard. It tells a little bit, you know, what's going on is like driving a car and you've got one foot on the brake and one foot on the accelerator. And they are trying to get the right speed.

And what is hard here is when you have got people out on the streets, then there is a dynamic that develops even...

CROWLEY: And they don't all listen to one person...

ALBRIGHT: Well, they don't.

CROWLEY: ... isn't that the problem?

ALBRIGHT: That's the problem. And so I have studied, I have to tell you, revolutions and uprisings for a long time. They are all slightly different, but what they all look for is some kind of a mechanism to go from an authoritarian system to an open, democratic system. And that's what's going on here.

CROWLEY: I want to ask you about the region in general, but this last question on Egypt specifically. What do you think Mubarak should do? Should he quit? If it were up to you and you could say, I've known for you a long time, Mr. President, here's what you should do, do you think he should quit?

ALBRIGHT: Well, I think that the timing -- you know, in some ways, if he had made the speech that he made a few days ago earlier, I think it might have helped. I think that there is never an indispensable leader, you know? I think that there is a time with dignity that one needs to leave. But it is not -- they have to make the decision there. I think that the Mubarak era, my own personal opinion, is the Mubarak era is over and the question is how to have a process that really works properly, that allows these various voices to come together and not disagree on some of the tactical aspects.

CROWLEY: Have you by chance talked to him since this started?

ALBRIGHT: President Mubarak?

CROWLEY: Yes.

ALBRIGHT: No, no. I am not an official of any kind.

CROWLEY: I just know you know him. So that's why I asked. Let me ask you about the region, specifically Israel. Is Israel worried? And should it be worried about what's going on?

ALBRIGHT: Well, I think that it's hard -- you know, Israel has every reason to be anxious. They knew -- have known forever that they live in a very dangerous neighborhood and they clearly are concerned. And I think that Egypt has played a key role in terms of a peace with Israel. And they have reason to be anxious.

But I think we all care about the security of Israel, and my own feeling is that it's very hard for Egypt to play the important role that it has to if it is not moving into a -- this transitional phase and developing a democratic system that allows it to be a stable country.

So I can see why Israel is anxious, but I think Israel has to deal with its neighborhood, why I have believed in the two-state solution, and I hope that the peace talks go forward.

CROWLEY: Secretary Madeleine Albright, it is a pleasure to have you here. I appreciate it.

ALBRIGHT: Thank you, Candy. Great to be with you.

CROWLEY: Up next, what the U.S. should and can't do as the upheaval in Egypt plays out.

(COMMERCIAL BREAK) CROWLEY: Joining me now here in Washington, Edward Walker, former U.S. ambassador to Egypt during the Clinton administration; and John Negroponte, former U.S. ambassador to the U.N. under President George W. Bush.

We had you here last week, and I love the continuity of having you back, because a lot has changed in the last week, and you think something important has changed. To me it looks the same. Demonstrators are in the square and Mubarak is still in the presidential palace. What has changed?

NEGROPONTE: Well, I think the key thing that has changed is that Vice President Suleiman has started meeting with the opposition leaders and they issued this several point plan this morning on a roadmap forward towards political transition. So this is good.

CROWLEY: My -- and as I noted, but it says absolutely nothing about Mubarak. And when our reporters go down to that square, they go, no deal, Mubarak has to go. So if you have got a process to move forward, but you've got, you know, hundreds of thousands of demonstrators who say, we're not going forward unless Mubarak is gone, how does that move you?

WALKER: You can't ignore the factor of Mubarak, but we can fixate on it too much.

CROWLEY: Which you think we have?

WALKER: I think we have, yes. I think that the administration has to really start focusing on this kind of document they came out with this morning. This came from the government and it's revolutionary. It's what Madeleine was talking about, the fact that they are changing.

And we have got to recognize the Muslim Brotherhood has started talking and they had refused to talk until Mubarak had left. So he is becoming less and less a factor in this thing.

CROWLEY: And why did the Muslim Brotherhood -- which has said, until Mubarak goes, we are not talking; and then this week yesterday I think they said, OK, we'll start talking, why is that? Is that pressure from outside or acceptance of reality?

NEGROPONTE: I don't know what exactly has gone on behind the scenes, but part of it perhaps a tribute to Mr. Suleiman himself, who is a very respected and intelligent gentleman.

Secondly, I think maybe they are starting to take yes for an answer. Mubarak is not going to run again. His son just stepped down from the party, the ruling party yesterday. And now we're talking about the modalities of transition.

Sooner or later this has to move to a negotiating phase from a demonstration phase. It has got to move off the television screens and into the back room, so to speak.

WALKER: There's another factor too, and that is that the economic situation in Egypt is deteriorating on a daily basis, and the Muslim Brotherhood doesn't want to be seen as holding up any chance for resolving them, they are then getting blamed for economic disaster.

CROWLEY: Now you do have another player in this, which is ElBaradei. I'm assuming both of you at least know of him and probably know him. And the question is, he's still saying no our first -- before I sit down with Suleiman, Mubarak has to go. Is he a big deal? If he doesn't sit down, as that a major component, because I keep hearing that, well is the biggest face of the opposition.

WALKER: ElBaradei is a foreigner. He hasn't been in Egypt for years. He's not really of the people. They haven't really adopted him as a leader in that sense of the word. He's a convenience. I have great respect for the man, he's done some really amazing things, but I don't think he's the next leader of Egypt.

CROWLEY: Well no, and he has said -- but he seems to be playing a role in the process. And so I'm wondering if he won't go in there and sit down with Vice President -- does that matter?

NEGROPONTE: I know Mr. ElBaradei quite well from my days at the United Nations, and when he was at the International Atomic Energy Agency. He's a fine gentleman, very well educated. And I think he's played kind of a spokesman role. But he's not the only player. He has got his point of view, and that is that Mubarak must step down. But it seems to me that the momentum of events now may have a shift. We may have just had an inflection point today with the agreement that the...

CROWLEY: With the agreement that came out with Suleiman. We should just say to remind our audience, that the vice president appointed by Mubarak recently in the last couple of weeks, sat down with a number of opposition groups, including the Muslim Brotherhood, youth groups and others and did come up with a document about -- OK, here's what we're going to do that was then issued by the Egyptian government.

NEGROPONTE: Correct. And it addresses many of issues that the demonstrators have been raising, other than the question of the immediate resignation of Mr. Mubarak, like modifying the constitution, freedom of the press, lifting certain kinds of emergency measures. There's a very broad agenda there, and if it's addressed seriously I think it's going to go to many of the problems that people have had with the regime.

CROWLEY: But in some ways, are some of the leaders riding the tiger simply because you have a very diverse group of people out in that square who say most of the time, we're not leaving until Mubarak goes. How -- who is going to be there to say, okay, we've al discussed this with the vice president. It's OK. You can go home. We are on our way. Who is going to stop those demonstrations? There doesn't seem to be one big powerful voice.

WALKER: I don't think there is one, big powerful voice. And it ultimately will come down to a couple of key factors. One, is the constitution amended. Second, what will happen to Mubarak, because that will be the end of it. But before the Mubarak exit if you will, there has to be a number of things pinned down so there is no collapse into chaos, or there's no new military figure coming up as the leader in Egypt.

So I it's very important, you go through the agenda it's got a whole set of practical measures to put into place, these agenda items.

CROWLEY: You have said last week that I don't think we should be in a real big hurry to replace Mubarak right now. What is the definition of a big hurry?

NEGROPONTE: First, in general terms, I would say that the demonstrators and to some extent the media, have been treating this as a sprint rather than a marathon. And I do think this is going to take time. These transitions always do, and there's -- things never happen as quickly as people would hope them to. The important point is the path that they are on, the direction they are going in, and whether some kind of progress is being made.

But I don't think we can be in too much of a hurry here.

CROWLEY: The two of you know Hosni Mubarak. Tell me if you were sitting down with him, like if they said to you, go on over there I would like to ask each of you, what would you be saying to him right now today?

WALKER: I think I would be saying that he really has to think of a way he can gracefully leave the scene, and he has to take some initiatives in this regard and support constitutional reform.

He's a man who has led his country for 30 years, and he's done a great many things, terrific things for the country and for us. We don't want to just see him discredited and al of his past accomplishments thrown down the drain such as sustaining the peace of Israel. So he needs to go out with honor. And if we can help him with that, that's what we should be doing.

NEGROPONTE: This goes back to what Ambassador Wisner said yesterday. Ambassador Wisner is a very distinguished diplomat. And he knows the Arab world and the Middle East extremely well in addition to having of course been ambassador to Egypt. I think he was trying to create a little bit of space for Mr. Mubarak so that he can reflect on his legacy. And I guess the main message I would say if I had a private meeting with President Mubarak in one sentence is, Mr. Mubarak, please help facilitate the success of this transition.

CROWLEY: So where we saw former Ambassador Wisner seeming to say that Mubarak needs to stay in office, you see a man saying find a good way to exit, sir.

NEGROPONTE: Well, he made a reference to his legacy and the role he could play to ensure it just didn't end up in shambles.

CROWLEY: We're going to come back. We want the ambassador to stand by, because when we come back, we want to find out if there were warning signs about the size and scope of this crisis in Egypt.

(COMMERCIAL BREAK)

CROWLEY: Did anybody inside the vast and expansive U.S. intelligence service see any indication of the depth and breadth of the crisis in Egypt. At confirmation hearings this week for the number two job in national intelligence, two leading senators worry that no one did.

(BEGIN VIDEO CLIP)

SEN. DIANNE FEINSTEIN, (D) CALIFORNIA: I have doubts whether the intelligence community lived up to its obligations in this area which is an issue the committee will continue to examine as time passes.

SEN. RON WYDEN, (D) OREGON: When did the intelligence community first alert the president and policymakers that protesters were likely to threaten President Mubarak's hold on power?

STEPHANIE O'SULLIVAN, NOMINEE, PRINCIPAL DEPUTY DNI: We have warned of instability. We didn't know what the triggering mechanism would be for that, and that happened in the last -- end of the last year.

WYDEN: I do want to get a general sense of when you all told the president that we were faced with something that's -- that was as serious as what we have seen in recent days?

O'SULLIVAN: I'm afraid I'm not going to be able to satisfy your specific question.

(END VIDEO CLIP)

CROWLEY: When we come back, we'll talk about this with John Negroponte, the former director of national intelligence and Edward Walker, former ambassador to Egypt.

(COMMERCIAL BREAK)

CROWLEY: We are back with former ambassadors Ed Walker and John Negroponte.

The intelligence running up to this: you get the feeling that the administration was caught by surprise when hundreds of thousands of people showed up in that square in Cairo. Why didn't we catch it? NEGROPONTE: Well, I mean, I think it is cliche, but hindsight is 20/20 vision and any surprise you look at from Pearl Harbor to 9/11, when you reconstruct events, things look a lot more obvious and a lot more inevitable, at the time they are happening what you get is you get signals, no question about it, but they are lost in a lot of noise and sometimes picking the right signals out of all of that noise isn't that easy of a thing to do.

CROWLEY: A lot of people say it was all over the Internet. You could tell something was happening.

WALKER: Yeah, I think there's no question, you could. And we've had a lot of signals of the economic problems, unemployment, and so on. But what we didn't have, maybe we were too much mired in the past. We didn't have the feeling that any demonstration could unseat one of these great leaders, that it would actually have that impact. And I think Tunisians were absolutely flabbergasted that it did. And that was a signal to the Egyptian people, hey maybe we can do the same thing. They had never even thought of it when they started this thing.

CROWLEY: So they surprised themselves and us? And do you think it hurt the initial reaction not having any kind of warning that the Egyptian -- the Mubarak government was about to be shaken to its roots and off its roots? NEGROPONTE: I mean, politics inherently quite an unpredictable thing. And so I -- I just wouldn't want to see this labeled as some kind of an intelligence failure on our part, perhaps not as good analysis as -- of trends and events as we perhaps could have had, but I wouldn't call it an intelligence failure.

CROWLEY: Call it lack of imagination?

NEGROPONTE: Lack of imagination...

CROWLEY: Not being able to see what is possible.

NEGROPONTE: That's what they said about 9/11, right?

CROWLEY: Let me turn to you the region, because you mentioned, this started really with a fruit and vegetable seller in Tunisia, who set himself on fire because he was arrested or his goods were taken away because he wasn't licensed, and he set himself on fire, and, boom, the Tunisian government is out the door, we're about to see the Egyptian government out the door. What next?

WALKER: Well up next, you have got to take another look at the whole region and what is the knockdown affect of this, because when people start to realize they have capacity to make changes and to take command of their own lives and futures, have you a different situation than we've had in the Middle East up until now and that can happen in Jordan, in can happen in Syria, it can happen in Algeria, and in some sense, it's already happening. You are seeing change take place in Jordan.

As the regimes that are in place are trying to adapt to the new situation which is just a surprise for them as it is for us.

CROWLEY: But the question is, one thing I know is that people tend to be change averse, governments are really change averse. Because we have upset the apple cart in the Middle East here, is there a danger?

NEGROPONTE: Yes, as long as these countries have governments which do not have structures that provide for peaceful transition for one government to the next, you're going to have this kind of -- of a danger, but exactly what form these changes will take are hard to tell.

Look at Iraq today where Prime Minister Maliki, just announced that he's not going to seek a third term. And yet I don't think the Iraqi government is threatened particularly by this kind of unrest. It remains to be seen.

WALKER: You want a prediction? I will predict within five years King Hussein has turned his country over to a constitutional monarchy in reaction to this kind of thing. And you'll have some of the same trends taking place in Morocco.

I don't think that will happen in Saudi Arabia. But there will be more participation by the people in governance. CROWLEY: But some of these countries have been our friends and allies and more importantly, Jordan and Egypt are the only two countries that have made peace with Israel. Is that threatened?

WALKER: Not in my view. The peace with Israel is based on self- interests from both parties. Both parties, the Egyptians and Israelis, have gained a great deal from this, and they don't want to see it turned over.

CROWLEY: Do you agree with that?

NEGROPONTE: Well, we'll have to see how this negotiation between the vice president and the committee that's being formed unfolds, but hopefully there will be consensus going forward on at least this very, very fundamental issue to peace in the region.

WALKER: And you notice, Israel hasn't figured in the developments.

CROWLEY: No, they have been very quiet, that's for sure.

WALKER: They have been quiet and the rioters haven't really -- they haven't been burning Israeli flags or anything like that.

CROWLEY: Edward Walker, John Negroponte, thank you to much. I hope you'll come back.

Up next, we'll go to Fareed Zakaria, who just interviewed opposition leader Mohammed ElBaradei.

(COMMERCIAL BREAK)

CROWLEY: Joining me now from our New York bureau, Fareed Zakaria, host of CNN's "Fareed Zakaria: GPS."

Earlier, Fareed, you spoke with opposition leader Mohamed ElBaradei, and here's a bit of that interview.

(BEGIN VIDEO CLIP)

MOHAMED ELBARADEI, EGYPTIAN OPPOSITION LEADER: You hear -- you hear different -- different voices. I mean, the U.S. was very clear that he should go. Frank Wisner yesterday came with this statement saying that Mubarak must stay, which created a lot of confusion, a lot of disappointment, I should tell you, here in Egypt. People were very happy with Barack Obama's statement that the time for transition is now.

(END VIDEO CLIP)

CROWLEY: So, Fareed, we had a lot of translations on our side here, on this show, about what exactly Ambassador Wisner meant when he talked about how Mubarak must stay. Is that how you interpreted it?

And what else did he say in this interview about it? ZAKARIA: Well, I think what Ambassador Wisner was trying to do, and I do think the administration needs to get its -- its story exactly right, though I don't think there's that much disagreement, is that the -- the circumstances that would be precipitated by an immediate resignation of Mubarak are not ones the United States is really that comfortable with.

The speaker of parliament becomes the president, not the vice president, under the current Egyptian constitution. Elections are triggered in two months.

So for all those reasons, they would rather some kind of transition process that is slower, where Mubarak is still the figurehead. It doesn't seem that ElBaradei is comfortable with that. It doesn't seem that much of the Egyptian opposition is comfortable with that.

They really do see -- there are two things, Candy. One, they see Mubarak as the symbol of the regime. The second, they say, and ElBaradei said this to me in the interview, is, look, we're trying to get rid of a military dictatorship; we don't want the military negotiating their own departure and negotiating the new system; we've got to have a transitional government that has some nonmilitary elements as well.

CROWLEY: And this is complicated, is it not, by the fact that, yes, you have ElBaradei, but then you have any other number of factions, all of whom seem to want slightly different things.

So is it a little hard for the government, at this point, the Egyptian government, to negotiate something that would return all of these protesters to their homes?

ZAKARIA: The -- the best thing going for the Egyptian government, or the Egyptian military, which really is now running the government, is two things. One, they can outlast these -- these movements. I think they feel as though people are trying to get back to normalcy; people need to get to work.

And the other one is, of course, that the opposition is divided. And they're playing both cards. They're trying to get life back to normal and they're negotiating separately with the various opposition parties.

CROWLEY: And, Fareed, when you look at this entire situation, what do you see as the most likely outcome?

Are we going to see Mubarak in there for another several weeks while they get their act together? Or is this something that's going to continue for months?

ZAKARIA: My sense is the military will be able to prevail in this. Mubarak will stay. I don't know that the street will be happy, but Mubarak will stay.

CROWLEY: Fareed Zakaria, thank you so much. At the top of the hour, a lot of great interviews. We appreciate your time.

ZAKARIA: A pleasure.

CROWLEY: Turning now to America's fiscal health. The United States is $14.1 trillion or so in debt. When the number hits $14.3 trillion, probably by April, Congress will have to approve an increase in the debt ceiling. That's not going to happen without a lot of arguing about ways to stop spending.

The debt commission the president appointed came up with a lot of ideas: increase the retirement age, reduce initial benefits for wealthier retirees, reform Medicare, cut defense spending, increase the gas tax.

Be careful what you ask for.

(BEGIN VIDEO CLIP)

PRESIDENT BARACK OBAMA: I don't agree with all their proposals, but they made important progress, and their conclusion is that the only way to tackle our deficit is to cut excessive spending wherever we find it.

(END VIDEO CLIP)

CROWLEY: The difference between excessive and necessary spending is where the argument will be, and at the moment, the American public is not on board with much.

Asked what's more important, reducing the deficit or preventing cuts in Medicare, 81 percent wanted to protect Medicare. Similarly, 78 percent chose to protect Social Security.

When we come back, an earlier conversation I had with the outspoken former senator Alan Simpson, who served as co-chair of the debt commission.

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SIMPSON: And if you don't do anything with Social Security, when you waddle up to get your check in the year 2037, you'll get 22 percent less.

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CROWLEY: Joining me now here in Washington, Alan Simpson, co- chair of the National Commission on Fiscal Responsibility and Reform, which is a mouthful, and it was a pretty big report.

How optimistic are you that anything close to the kinds of cuts and revenue enhancements that you'd like to make are going to come -- become a reality?

SIMPSON: Well, the reality will come very soon and will come when the debt limit extension comes up, and that will be before April 1st.

But the next time you hear any politician, in the range of my lovely voice, mellifluous voice, croaking -- if you have a career politician get up and say, "I know we can get this done; we're going to get rid of all earmarks, all waste, fraud, and abuse, all foreign aid, Air Force one, all congressional pensions," that's a sparrow's belch in the midst of a typhoon. That's about six, eight, 10 percent of where we are.

So I'm waiting for the politician to get up and say, there's only one way to do this, you dig into the big four, Medicare, Medicaid, Social Security, and defense. And anybody giving you anything different than that, you want to walk out the door, stick your finger down your throat and give them the green weenie (ph).

CROWLEY: Isn't there a big selling job to be done here before you can get these politicians, who, after all, owe their jobs to the American people, to move?

SIMPSON: Well, the god here in Washington is the god of re- election. And I think that god is a little tarnished. I think the feet are crumbling. I had -- I won't say who it was, a Democrat senator last -- well, I won't use the time. It was said to me, I'm ready to go out this time by carrying the ball on this program. In other words, I'm ready to do this even if it defeats me.

CROWLEY: So when you look at the president saying, I want a discretionary spending freeze for five years -- three years, and you see the Republicans saying, we want to go back to -- and I can't remember now what level...

SIMPSON: 2008.

CROWLEY: 2008 spending levels, peanuts both?

SIMPSON: Peanuts. If you don't do something with the ones that are on automatic pilot like Medicare, then it crushes out all the discretionary spending. It just wipes it out. I say to people, now what do you love? Well, I love education, I love whatever culture. Great. Don't do anything then and then it just crushed out.

And if you don't do anything with Social Security when you waddle up to get your check in the year 2037, you'll get 22 percent less. We're not balancing the budget on the backs of Social Security. We're trying to make it solvent for our children and grandchildren.

If they don't make the hard stuff on Medicare and Medicaid, and don't forget what we're doing with Social Security, we're taking care of the lowest 20 percent and taking care of people over 80, changes in the COLA, we're not talking about privatization.

These jerks who keep dragging that up are lying. We never suggested that. We're talking about doing a hideous thing, to change the retirement age to 68 by the year 2050. And hear people howl and bitch about that. Well, what do they care about their kids or their grandkids? CROWLEY: Let me ask you, I was talking to a historian on the 50th anniversary of Eisenhower's "military-industrial complex" speech. And he said that was a generation that understood sacrifice. And, you know, the historian said he got it and there are few people, you know, now on the public scene that understand the idea of sacrifice when it comes to Medicare, Social Security, and Medicaid because they had become -- especially Medicare and Social Security have become sacrosanct, as had, until recently, the defense budget. Do you agree with that?

SIMPSON: Oh, yes. And I think what we were -- we were stunned, we're like the people who know too much, the 10 months that all of us spent there. And I'll tell you, we saw things -- we asked the defense -- we asked Conrad and Durbin, what do you hear from the Defense Department when we talk about cutting contractors?

They don't know how many contractors they have. It's something between 250,000 and a million. So our proposal is to cut 250,000 contractors out of the game. Let me tell you, guys, nobody is going to hurt the military. We're not going to hurt Iran and Iraq. But this is the first war in our history where we never had a tax to support a war, including the Revolution. And nobody has sacrificed in this country, nobody, except the people in the military. And in our report we use words like "sacrifice," "self-sacrifice," we used words like "going broke." And it's written in English. It's not written for pundits or parliamentarians or journalists. It's written for the American people.

CROWLEY: It is as every bit as much our fault, it's not like, oh, those darn politicians on Capitol Hill won't do anything. It really is that there isn't the will out there among the American people to say, yes, I'll take that hit.

SIMPSON: Well, there's not much of that...

CROWLEY: Is that where the fault lies?

SIMPSON: Well, yes. I'll tell you, they sent these people in Washington to bring home the bacon. I mean, they sent the -- they elected these people who could get them the dam, who could get them the new money, who could get them the downtown redevelopment, who could get them more and more and more, and they re-elected them every time.

And now, you can't get guys to get on the Appropriations Committee, that's a switch, because it's not going -- it's going to be the "disappropriations"...

CROWLEY: There's no fun there.

SIMPSON: But they asked me if I had any regret. And I'm going to say it to you because of the delightful person -- you have always been real. And I'm not toadying up. You're authentic.

But I had one regret. I meant to say that America was a milk cow with 300 million teats and not just Social Security. CROWLEY: Senator Alan Simpson, rare and real, we could use a little more of that in Washington.

SIMPSON: Well, but there are people, let me tell you, that commission, I respect every one of them completely and we all agree that deficit denial is dead as a dodo bird. And if they want to keep playing the violin, well, deficits mean nothing, well, I'll buy the drinks.

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CROWLEY: When we come back, thoughts from Alan Simpson on his relationship with Ronald Reagan.

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SIMPSON: He was a man of passion. He was who he was. No facade.

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CROWLEY: This country's 40th president, the late Ronald Reagan, was born 100 years ago in Dixon, Illinois. Nobody loved to tell and hear a story more than he did. And often Reagan gathered friends around to swap a few, friends like Alan Simpson.

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SIMPSON: Well, I'll tell you about Ronald Reagan, when Nancy would go down to visit with her dad, he would say, come on over, we're not going to talk about anything tonight. We're just going to tell stories.

And so off we would go. And he would have this pink turtleneck and a pink sport coat and those pants with the ducks, you know, the green pants with the ducks, and he would pour the wine and we would sit until about 10:00 and just laugh and tell stories. Did that three times. What a country.

But he was real. He came in one day without a note and just chiseled us on highway legislation. He didn't -- he was a man of passion. He was who he was. No facade, just him. And he was rare and real.

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CROWLEY: CNN will have complete coverage of the Reagan centennial celebration. John King is anchoring live from the Reagan Library in Simi Valley, California. Coverage begins at 2:00 p.m. Eastern.

Thank you so much watching STATE OF THE UNION. I'm Candy Crowley in Washington. Up next for our viewers here in the United States, "FAREED ZAKARIA: GPS."