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JOHN KING, USA

Revolt in Iran; Mubarak's Fate

Aired February 14, 2011 - 19:00   ET

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


JOHN KING, HOST: Thanks Jess and good evening everyone. Tonight the president's new budget stirs a passionate debate about spending cuts and government priorities. Also more talking and more startling progress for Congresswoman Gabrielle Giffords, but we begin with the revolution in Egypt and dramatic news of its domino effect elsewhere.

There were demonstrations across the region on Monday including Yemen, Bahrain and Iran. Let's take a closer look. Here's a map of the region, anywhere a sparkling here, anywhere with a circle is a source of demonstrations over the past few weeks.

Let's take a look at just today. We'll start in Yemen. Take a look here. You'll see the demonstrators in the streets of the capital here, this Facebook posting, what happened in Tunisia and Egypt will not be too far from Yemen and South Arabia.

You see demonstrators here protesting against their president in the streets of Yemen. That's just one. Up in Bahrain off of Saudi Arabian, up on the peninsula there, another you see demonstrations here. This is a YouTube video. Again another Facebook posting very similar to the organizing in Egypt. Give us back a land where we can live peacefully with confidence, that in the tiny gulf nation of Bahrain and everybody watching up here in Iran today, YouTube video here.

Demonstrations out in the streets -- this is in Tehran. This one of the Facebook postings, this organizing of the Iranian opposition. This update, more clashes on Tehran's streets between the security forces and growing number of protesters. Remarkable video there coming out of Iran. It is the Iran demonstrations that are getting the most attention from the Obama administration. Over the weekend it launched a new twitter feed in Farsi to encourage the Iranian opposition and today Secretary of State Hillary Clinton had this message for Tehran.

(BEGIN VIDEO CLIP)

HILLARY CLINTON, SECRETARY OF STATE: We are against violence and we would call to account the Iranian government that is once again using its security forces and resorting to violence to prevent the free expression of ideas from their own people.

(END VIDEO CLIP)

KING: We need to note that reporting from Iran is extremely difficult. The Iranian regime sharply restricts visas for journalists and even journalists in the country legally were denied permission to cover today's street demonstrations. Also the Iranian government has slowed the Internet to a crawl -- that an attempt both to limit protest organizing and to limit what gets in and out of the country.

Add in the chilling effect of citizens jailed in the past for merely talking to international reporters and you get a sense of the difficulty of covering this story in Iran. But our determined Reza Sayah has still been able to piece together some extraordinary details. He joins us from our Iran desk in Islamabad. Reza, what do we know about the activities in the last 24 hours in Iran?

REZA SAYAH, CNN CORRESPONDENT: John, this is the day that's going to go down as a day that Iran's opposition movement made a comeback. A lot of people thought this movement was dead, the so- called Green Movement that burst on to the scene in 2009 after the disputed presidential elections. We hadn't heard much from this movement over the past year because of the brutal government crackdowns, but today they made a comeback and according to witness accounts, at times the numbers swelled into the tens of thousands in the streets of Tehran.

Video clips have been posted on YouTube. Those protesters were confronted with thousands of security forces in Tehran. Once again we saw the cat and mouse games we saw in 2009. Security forces chasing away protesters. We heard the anti-government chants of death to the dictator, death to Ayatollah Khamenei.

That we heard before, but today we heard a new chant that really shows that this protest today was spurred on by the Egyptian uprising. One chant essentially named the leaders of Tunisia, the leader of Egypt, both ousted and the protesters then said now it's time for Iran's supreme leader to go. At times the protests got ugly with clashes.

Witnesses tell us more than three dozen people were detained. Remember, this was a rally that was called for by Iran's opposition figures, the Iranian government warned people not to come out, John, but clearly this opposition movement defied those calls and made a comeback today with a big statement that they still have a heartbeat and a lot of grievances against this regime -- John.

KING: Reza Sayah there -- more on the Iran story in just a few moments, but in Egypt, one of the big questions now is what happens to former President Hosni Mubarak? Another question, just how much of his country's resources did Mubarak funnel off in to personal accounts.

Our senior international correspondent Nic Robertson is in the Red Sea resort town of Sharm el-Sheikh where Mubarak headed after resigning the presidency and Nic, there are so many rumors about perhaps the former president being in bad health. There is so much talk about how much money did he siphon off in to offshore accounts. We know the Swiss have frozen some of his assets. Take us inside your reporting in Sharm el-Sheikh about the former president, his whereabouts and all the talk of his cronies and his money. NIC ROBERTSON, CNN SR. INTERNATIONAL CORRESPONDENT: Well he's holed up in a presidential palace complex or former presidential palace complex as it would be now. We know from looking at the Google Earth images from satellite that there are three large palace buildings inside that area relative to other Gulf state and Middle Eastern leaders. They're relatively modest.

So what has happened to all that money that he's alleged to have made, billions of dollars? Well a lot of people here in Sharm el- Sheikh believe that that money has probably left the country. They don't know where it is. In Sharm el-Sheikh, for example, it's a city that's really boomed over the past 20 years and a lot of money has been made here by property developers who've made money over land sales.

President Mubarak or former President Mubarak is alleged to have been involved in some of those enterprises. A close friend of his, for example, built the hotel that's right next door to the (INAUDIBLE) to the villas that Mubarak is living in today. So that's why those rumors are circulating here. What is he doing inside those walls? What is his health? He is not coming out, so it's very hard to tell, very heavy security around that compound -- John.

KING: And Nic, Sharm el-Sheikh was a place President Mubarak went frequently. He was often there during the week even conducting the business affairs from there. What is the situation there? I remember traveling there in the past for big Mideast peace summits or big Mideast events and you would see his pictures, posters everywhere, billboards of Hosni Mubarak. Has all that changed?

ROBERTSON: You know what? It hasn't and that's really one of the amazing things about Sharma el-Sheikh. When you leave the airport, there's a huge mural of Hosni Mubarak right on the grass (INAUDIBLE) the first thing you see when you leave the airport. As you drive down the road away from the airport, there are his posters hanging from the street lights.

And all other cities around the country, those kinds of posters were torn down on January the 28th. When you reach the end of the strip by the airport, there's a huge mural there with Hosni Mubarak standing next to President Clinton and Arab leaders, as well. It hasn't been defaced. It hasn't been torn down so it seems in this city they're just sort of happy to have him or at peace at least with having him living in the background.

But you're going to see there's build up over demand to find out what happened to his money, where is the money accountability, but also for you know, for all the people who died during this two week revolution, accountability for that. So I think we're going to see the temperature against him rise perhaps here in a way that we haven't seen before as it has across the rest of the country -- John.

KING: Fascinating reporting. Nic Robertson is going to stay on this story, accountability is the key word. Nic thanks so much. Nic is in Sharm el-Sheikh of course where we know President Mubarak left after resigning office. What about the scene in Cairo today? Still so many questions despite the revolution, there are so many questions about what now -- what will the military government do? How long until we get to the elections? Let's just take a look at some of the scenes in Cairo today.

You see more demonstrators today. People are out in the street, some people went on strike. Some people are demanding the military get about the scheduling and you see here -- here's the Facebook page and this is Wael Ghonim. This is the Arabic version.

We showed it to you in English last week. We have built with our hands and our union. This is one of the big questions is how do the demonstrators take the power that toppled their government and turn it now into trying to bring about a democracy.

Ben Wedeman joins us from Cairo. Ben, normally I ask a question, but I want to start this way today. What is your biggest question now about when you look at this new Egypt? What is the biggest question in your mind about whether this arrangement of a military government at least in the short term is (A) going to work and (B) is going to satisfy the demonstrators?

BEN WEDEMAN, CNN SENIOR INTERNATIONAL CORRESPONDENT: Well the question is, is this going to be a short term government. We've seen in the past with the military for instance in 1952 took over and never gave up power. And I think that is the question many Egyptians have. At the moment they're giving the government the benefit of the doubt saying that we understand that this higher military council is just trying to stabilize the situation, is trying to prepare the way for democratic elections.

But I think in the back of the mind, many Egyptians are worry that once these generals get comfortable in power, are they going to actually easily relinquish power to civilians, civilians who have never actually run this country, rather if not never for decades have really been out of power? So I think that's the question Egyptians want to know. Will the men in uniform go back to their barracks?

KING: And what is it like on the Egyptian street right now? A month ago if we were having this conversation, you know you would know the secret police and the interior ministry police would be watching you. What is it like on the streets now walking around? Is the military, for example, are they taking a tougher hand?

WEDEMAN: Well the military I don't think all of them understand that we're in a new era. For instance, today I was in Tahrir Square with Joe Duran (ph), one of our cameramen and we were just -- we were going to meet somebody on the corner for an interview and we got pulled over by the military. They took my press card away. We ended up over at the Egyptian Museum where they were holding several other journalists, as well. After some prolonged discussion, they finally let us go, but I think the military doesn't quite understand that revolution means a certain freedom for the press.

Now driving around Cairo, you see -- I saw today something I have not seen ever here was that basically every state institution seems to be on strike. Ambulance drivers with police, people in a state run theater. Everybody seems to realize that now is a unique moment in Egyptian history where if you had grievances about your boss, if you thought your pay was too low, if you felt you were cheated on a job evaluation, now is the time to come out on strike and everybody is doing it -- John.

KING: So some paralysis going forward -- what about the demonstrators themselves? They're going to have to negotiate with this military government. Do you get a sense that they're working out their own differences and their own tensions and the question of who should speak for them in these high stakes negotiations?

WEDEMAN: Well what's interesting is that now Tahrir Square is full of what you might call revolutionary tourists, Egyptians who played no part in the demonstration but are now down in Tahrir looking at the sights. As far as the young revolutionaries who pulled this off, some are meeting behind closed doors with the leaders of the so- called higher military council. And so far what we're hearing from them is that they are satisfied that the generals are listening closely to them, taking them seriously.

But there -- as I said before, there are doubts about the long term viability of this dialogue between generals, many of them in their 70's and young Internet revolutionaries, many of them who haven't even reached the age of 30. So it's a work in progress as they will tell you. The end result though is something of a mystery -- John.

KING: Ben Wedeman for us in Cairo -- Ben, thanks so much.

Still to come, football season is over, so why then was the word punt the word of the day in Washington?

And next, does the Iranian opposition have any chance of replicating Egypt's revolution?

(COMMERCIAL BREAK)

KING: Those dramatic images are from Iran today. Yes, the video is a little grainy and a little shaky, but consider the risk in taking it and posting it in a country where repression is the rule. So if there is an Egypt domino effect, can it really take root in Iran? And where else should we be looking?

In New York tonight Egyptian journalist Mona Eltahawy and with me here in Washington, Stephen Hadley who was national security adviser to President George W. Bush -- Steve Hadley, I want to start with you. The entire time you're in government and now since you've been out of government, everybody watches Iran and last year after the elections, there was a brief moment -- 2009 actually, there was a brief moment where you see demonstrators in the street and the regime crushed the opposition. Can there be an Egypt domino effect there or is that too much to ask for?

STEPHEN HADLEY, FORMER NATIONAL SECURITY ADVISER: There can be. It will obviously be up to the Iranian people. They have clearly been watching what's happened in Egypt and I think they're saying if the Egyptian people can do this, why not the great Iranian people. They will need some help and I was encouraged to hear Secretary Clinton come out very promptly and say that the use of force against peaceful demonstrators is not acceptable. We need to make clear that we're standing with the people powering these revolutions and that the use of force is unacceptable. That clears some space for people to organize and advance their cause.

KING: Clear some pace (INAUDIBLE) know they have the United States support, but their own government of course will crack down on them if history is any guide, but Mona, let's listen to Secretary Clinton because she not only said the United States would not tolerate or would not stand for the use of force, she tried to give what I'll call a moral boost to the Iranian opposition.

(BEGIN VIDEO CLIP)

HILLARY CLINTON, SECRETARY OF STATE: What we see happening in Iran today is a testament to the courage of the Iranian people and an indictment of the hypocrisy of the Iranian regime.

(END VIDEO CLIP)

KING: When you see, Mona, protests in Yemen, protests in Bahrain, protests in Algeria, and protests even in Iran, what is your sense of the spread and the sense of optimism versus realism?

MONA ELTAHAWY, EGYPTIAN JOURNALIST: I'm hugely optimistic about what's happening in the Middle East, John, because I think at the very beginning you know back in December when the Tunisian uprising started, nobody believed it would work and it worked and then everybody said it's not going to get -- it's not going to spread anywhere else and then it spread to Egypt. And again we had a lot of nay-saying and cold water thrown on it and the incredible courage of Tunisians and Egyptians has really kicked down a big door of fear and has inspired people across the region.

Now you mentioned all those countries where demonstrations have taken place since those two revolutions. There are also protests planned in Libya, a very difficult place to have a -- have any kind of protest. There are protests -- that's on February the 17th -- protests planned for Morocco on February the 20th. So it's like this rally of freedom that is spreading across the region.

And I'm tremendously optimistic. As I said, it interesting to hear the U.S. administration's approach to Iran because of course the Iranian regime is not a friend of the U.S. administration, so they can be much more outspoken. Many of the other countries that we're seeing rising up are friends of the United States, for example, the Yemeni regime, and you know the so-called war on terror and the Bahrain regime and it will be interesting to see how the U.S. administration then takes the side of the people, which it should, because as you saw in Tunisia and Egypt, the side of the people is the right side because it's the freedom and dignity. KING: Mona makes an excellent point. As the administration becomes very outspoken in the past 72 hours about Iran, you know if you were still in your job, you'd know the blow-back you would be getting from the region. And this president just like your boss, George W. Bush when he was president, looks at Yemen, looks at al Qaeda in the Arabian Peninsula, looks at a very impoverished population, looks at a president who has been not always perfect, but a pretty good ally of the United States. Should Secretary Clinton and President Obama say the same thing about the people in the streets in Yemen and in Bahrain and maybe in Jordan than they say today about the people in the streets of Tehran?

HADLEY: We should clearly as a nation be on the stand of freedom and those who stand up for freedom, but one of the things the administration needs to be doing is sending quietly emissaries to these countries that are our friends and allies and say to those leaders you need to get ahead of this. You need to lead the process of political and economic reform, not to be forced into it grudgingly at the end. So the real thing I think -- approach for the administration is to be clear we stand on the side of freedom, but then use our influence in these countries and get their leaders to get ahead of it and start leading the process of political change, not being resistant to it.

KING: How much harder, Mona, is the Iranian challenge in the sense that of all the countries we're looking at on the map that I was just showing behind me, we perhaps know the least about day to day life in Iran?

ELTAHAWY: Yes. I think it's incredibly difficult to get the bad information out because you know what -- I have total faith in the Iranian people. I mean the events of the past few weeks shows me that, you know, when people rise up together for freedom and dignity, they will win and I have total faith in them. But I think what happened in the Egyptian case, for example, in Tunisia it was largely ignored by the western media.

But Egypt I think what also helped was that you had you know CNN there around the clock. You had other international news channel there; Al Jazeera English was covering it as well. And that helps the people in the sense that you bear witness to any crimes that the regime wants to commit against the people. So you know my heart goes out to the Iranian people and I stand with them in solidarity.

It's very difficult to get the bad information out and as you mentioned in the reports leading up to this, those who were taking those videos are incredible courageous. I know from a friend that many of them have to do it you know quickly and secretively because they face tremendous challenges. It takes lots of courage. And I think that even though we can't get information out as journalists on the ground, we must pay attention to all those countries because all solidarity is important.

KING: How much different is it, Steve Hadley, in the sense that Iran is obviously in the neighborhood, but it's not an Arab nation. It's Persian if you will. I want you to listen to Ayatollah Ali Khamenei last week during a prayer service, "developments in North African including Egypt, Tunisia and some other countries have a special meaning for the Iranian nation. This is was what was always referred to as the Islamic awakening created by the victory of the great revolution of the Iranian nation."

So when it was Hosni Mubarak friend of America in trouble, the Iranians loved it. Now that there is some trouble on their own streets, what do you suspect they will do to try to stop it and how much leverage, if any, does the United States and its allies have to help it?

HADLEY: Well it's been interesting to hear the Iranian regime try to champion the uprising of the people in Egypt. It's really quite remarkable. But I think the Iranian people are looking at what's happening in Egypt, they look at the fact that there are free elections in Iraq on one side of it, there are free elections in Afghanistan, and they're asking why not us. They made a bid in 2009. They got crushed. They will try and draw lessons from that.

KING: Can the regime use the support of the United States against, if you will, to gin up, oh this is America (INAUDIBLE) this is the great state in America trying to mess in our affairs?

HADLEY: Well they did that last time to try to suggest that these folks were all influenced by outsiders. But I think what's happened in Egypt really gives the lie to that. It's very clear that this was an upwelling of the Egyptian people. People were on the square carrying Egyptian flags. This was done in the name of Egyptian nationalism. The Iranian people have watched that. I think they will have a set of tactics that will make clear this is an indigenous movement within the Iranian people and it is about Iran.

KING: Steve Hadley, Mona Eltahawy thanks for coming in. We'll stay on top of this one as we go forward; it is fascinating to say the least.

When we come back, Congresswoman Gabrielle Giffords is talking more and her husband says her level of understanding is way up too. Dr. Sanjay Gupta explains the road to recovery next.

(COMMERCIAL BREAK)

KING: Congresswoman Gabrielle Giffords continues what her doctors call remarkable progress, recovering from January's gunshot wound that passed through her brain. She's mouthing the lyrics to simple songs like "Happy Birthday" for her husband, astronaut Mark Kelly. This morning he told NBC's "Today" show Congresswoman Giffords also can put together small sentences and pick out pictures of U.S. presidents.

(BEGIN VIDEO CLIP)

MARK KELLY, REP. GIFFORDS' HUSBAND: The speech therapist was saying to me that a few days ago she was having to get Gabby to speak some more. Now she's trying to get her to slow down and make sure she hears the question first before giving the answer. As an example of that, you know there were three cards laying on the table -- one with a picture of President George Bush, President Barack Obama, President George Washington -- and before she was asked the question, she would just pick up the -- she picked up the card and said -- held it up and said George Bush.

(END VIDEO CLIP)

Joining me now CNN's chief medical correspondent Dr. Sanjay Gupta, who is a neurosurgeon and Dr. Gupta, when you hear that, put this into context for us. Is it about normal? Is it remarkable? Is it somewhere in the middle?

DR. SANJAY GUPTA, CNN CHIEF MEDICAL CORRESPONDENT: It's pretty remarkable, John. I mean clearly someone who has had a significant brain injury, there's a couple of things you can say for sure and that is one of the things is the quicker they recover early on the better their end point is going to be, if that makes sense, so early recovery really means a lot.

The second thing is you know she's shown evidence of you know understanding, being able to follow commands, even verbalizing pretty recently, you know asking for toast, for example, with her breakfast the other day, but now actually showing evidence of memory, you know obviously looking at pictures, recognizing, putting a name to it. That's obviously a very significant sign. What the brain does, how redundant it is changes from activity to activity. What she's showing now is some evidence of some pretty sophisticated brain activity.

KING: So when you hear Mark Kelly say the therapists actually sometimes want her to slow down to let them finish the question before she picks up the card and says George Bush. Why might that be happening?

GUPTA: Well I mean literally sometimes people's mouths can run faster than their brains and in this case that's possible, especially given the nature of this sort of injury, but you know who knows. It could have been a little bit of a lack of attention to you know understanding the question or listening to the question or what not. So it's hard to really deduce anything from that in particular. It could have just been that she was excited to share that she actually remembers these things.

KING: And when you hear humming -- mouthing the lyrics to music, what does that tell you?

GUPTA: You know this is actually very interesting. The idea of using music therapy for people who have a brain injury there's a couple of reasons it's interesting. First of all simply again remembering the words to a song, even a simple song like "Twinkle, Twinkle Little Star", remembering the melody, as well -- remembering words is one thing. Remembering the melodies is another thing.

And they actually use different parts of the brain. Being able to connect them, that's a third thing, actually connecting those two parts of the brain. The reason they use it as part of therapy a lot is you think of the left side of your brain in most people as sort of being the logic area, the speech area. The `right side of the brain is -- it handles more abstract thoughts. Right in the middle is a part of the brain called the corpus callus (ph) and the name is not important, but making sure you get those connections firing across that is important. And you know anything you can do to enhance that is critical and clearly she's showing that she's responding to therapy and actually doing well.

KING: And when they say aggressive therapy at this point, clearly if they're willing to put her through what they call aggressive therapy, they're confident in their course, but what exactly are we talking about?

GUPTA: Well it's intensive, John. It's six hours a day of therapy and this is someone who, you know clearly has been through a lot over the last you know several weeks now, lying in bed for a good chunk of the time. So actually, for example, getting up and doing physical therapy, walking down the hall with a sort of shopping cart like device to help her. There was concern would she be weak on the right side of her body. Seems like her right leg is able to bear weight. We haven't as much about the right arm, but that's certainly part of that therapy.

But the speech therapy as well, you know, the left side of the brain is responsible for speech. So I think that's been a concern and an area of interest for the rehab doctors and the neurosurgeons, everyone that was treating her. Everything from automatic sort of words, can you say words that just come automatically? Can you can learn new words? Can you say those? Can you repeat more complicated sentences? Practicing your tongue to the roof of your mouth. You know, Ta. Sounds like that. Doing it over and over and over again. It becomes tedious for people.

But one way to think about this, John, is it the things that we take for granted, things that are basic this we do every day, walking, saying simple things, the parts of the brain that control those things, they are redundant. They are easier to rewire. When it comes to laying down novel memories, novel thought, doing things that you haven't done before, those are harder. Those are not as redundant. So that will require more therapy and that's why you have to build on the basics, which is what they're going to be doing. And you can have recovery up to 18 months from the time of injury. So there could be a long way of improvement still for her to go.

KING: Dr. Gupta, appreciate all your help.

GUPTA: Thank you.

KING: Thank you.

When we come back, it's a ritual here in Washington. It's the money game, the president's budget. Who is saying he's punting?

(COMMERCIAL BREAK)

KING: Today was budget day in Washington and that is a ritual. The president sends his spending plan up to Congress, then stages some big public even to sell it. President Obama chose a Baltimore school as his stage and his educational secretary as his sidekick. Education is one area of the budget where the president wants to increase spending by $13 billion next year. And this is about countering Republican arguments that the country can't afford it.

(BEGIN VIDEO CLIP)

BARACK OBAMA, PRESIDENT OF THE UNITED STATES: I'm convinced that if we out-build and out-innovate and out-educate, as well as out- hustle, the rest of the world, the jobs and industries of our time will take root here in the United States.

(END VIDEO CLIP)

KING: Overall the Obama plan would trim the federal budget deficit by $1 trillion over the next decade. The top House Republican on budget issues called that way too timid.

(BEGIN VIDEO CLIP)

REP. PAUL RYAN, (R) BUDGET CMTE. CHAIRMAN: Our problem is we are running out of road to keep kicking this can down. And so what did we just get today? We got a punt. The president punted on the budget, and he punted on the deficit, and on the debt. That's not leadership. That's abdication of leadership.

(END VIDEO CLIP)

KING: More on the numbers in a moment. But who enters the battle over government spending and priorities with the upper hand politically? Joining us from New York CNN political contributor, and Republican strategist, Ed Rollins; and here in D.C., CNN political contributor Roland Martin.

Ed Rollins, I want to go to you first. The Republicans just won an election big time in November. They think it was about spending. But the president has made the calculation, those guys, I can go out and say when it comes to education, investing in infrastructure, that the economy needs my way, and those guys are too extreme. Who will win?

ED ROLLINS, REPUBLICAN STRATEGIST: I think we're going win. And I think what the president did today is he put his little toe in the water, in the cold water, he didn't jump in. And I think at the end of the day, we're all going to have to jump into the cold water, to basically, get this budget back on track.

When you're talking about spending over $50 billion on rapid trains at the same time you're talking about cutting the subsidies for AMTRAK, the one railroad system that is rapid trains in the Northeast corridor, there is an inconsistency there. I think he put forth a political document that he can go sell his ideas, but it's dead on arrival.

KING: Is it-remember, Barack Obama came to Washington saying he was not going to play the old Washington games. There are many people, even Democrats, who agree with that on the political document part of it, saying this is a place holder. He wants to let the Republicans go first in the House, let them do Social Security, let them do Medicare, let them take the risks before him. Is that fair?

ROLAND MARTIN, CNN CONTRIBUTOR: I think it's fair because you're making it clear they have to have a hand in it. You can't just stand outside and say, oh, it's all on you. They now control the House, so therefore they also have to make those very tough decisions.

We have to own up to something. The American people love to say we want to see the deficit brought down, we don't want any more tax increases. But we also don't want the stuff that we like cut. So he's going to tell the Republicans, OK, are you going cut defense? Are you going confront Social Security and Medicaid? But Democrats also don't want to touch their favorite two issues, Social Security and Medicaid. Both are going to have to confront that.

This budget also has some serious problems. He's slashing 50 percent of the funding going to community groups, the money going those mayors, community development block grant funds. So he needs them talking up his budget priorities when you're cutting what they also like, that's also a problem locally.

KING: Politically, Ed, he does have some liberals saying how can you cut low-income heating assistance for people in the winter. Obviously the budget wouldn't take effect, but we are in winter now when proposed it. How can you cut, as Roland notes, the community block grants? And so you have some of the left saying, oh, my God, Mr. President, how can do you this? You have some on the right saying he's not doing enough. I suspect that the White House, heading into re-election campaign, they like that spot.

ROLLINS: Sure they do. They're right down the center. At the end of the day, if you're serious about budget cuts, both sides put pieces into these budgets over the years, and both sides will have to take it apart. You can't have one group basically being penalized and the other group not. And I think to a certain extent, just as we did in the early '80s, when we reformed the Social Security just as we did when we did the base closings, which is a very painful decision across this country, you did you it together. And my sense at the end of the day, you'll have to getting some across-the-board cuts, and when you are going to have a revenue change, new tax system, in which there is new revenue added, not necessarily the words "tax increases", but new revenues added.

KING: Can't say that word.

MARTIN: John, I do want to-on the whole issue of, why heat? Because folks have been talking about that, cutting money to the poor. I talked to the White House before getting here.

In '08, 2008, we were spending about $2.5 billion. The Obama administration thought with energy prices going up, they moved had money to $5.1 billion, when the prices stabilized and frankly stayed consistent, that's why they're bringing it back down to $2.5 billion level. So people are saying, oh, you're cutting money for the poor. No, it was dramatically increased expecting energy prices going up, but it didn't happen.

KING: They just want to keep that money there. That is one thing to understand.

I want to shift subjects. I'm going to go over there for a second.

Last week we rightfully so spent most of our time on the political unrest in Egypt and the Middle East. So we didn't spend much time on Conservative Political Action Conference. It happens every year. For this year, because we are heading into a presidential cycle, it was essentially the first cattle call of the presidential election.

Here are the Republicans who spoke to the Conservative Political Action Committee. These are among those who might be candidates for president. Some of them are certain to be, some of them are (UNINTELLIGIBLE) to be. You see, Trump and Santorum and Romney, Perry, Pawlenty, Paul, Gingrich, Daniels, Barbour, they were there.

Here's two big people-have to make that go away, let's turn that off-here are two who were not there. Ed, you are familiar with Mike Huckabee. You were involved in his campaign last time around. Governor Palin also decided not to come.

Among those who were there, they had a straw poll, of course. OK? I want to show you past winners first. No one who has won CPAC straw poll going into a presidential cycle in 1995, Phil Gramm, 1999, Gary Bauer, 2007, it was Governor Romney, no one who has won the CPAC straw poll has ended up being the Republican presidential nominee in the next cycle. It's history. It's history.

So I'll show you this and we'll have a conversation. Here are this year's winners. Ron Paul, Ed Rollins, carried the day with 30 percent, Mitt Romney, 23 percent. You see the rest falling down in there. So it was a big event, Ed Rollins, does it matter?

ROLLINS: No, it doesn't matter. Ron Paul is not going to be the nominee. He has a dedicated group of people who, if he runs again, who will be out there supporting him. Kind of an anti-war, younger, very libertarian, but at the end of the day, he's not going to be a viable candidate.

Romney may come in second again. That's what he did, came in second in this poll, came in second, or third depending on how you count to Huckabee, to McCain last time. I think he can be a viable candidate. But I think the bottom line, if Huckabee gets in this race, if Palin gets in the race, Haley Barbour, Mitch Daniels, that's the front field. The guy who may have faulted a little bit here, which this historically has been a strong group for, was Newt Gingrich. New Gingrich used to be the darling of the CPAC. Didn't do very well this time.

MARTIN: It also doesn't matter, John, because you don't have to go to groups like this if you really want to make waves when it comes to the primaries. You can now go directly to the people, you can raise money online. You don't need the blessings of a group like CPAC or even on the liberal side, you don't need the traditional groups to bless you. If you build up a following with the people, frankly, they really don't matter.

KING: It is a new world with technology.

The one thing you can get there is some younger people who might knock some doors for you and help you with the e-mails and the organizing. But it's not as important as it used to be. I think that is a fair statement.

Roland Martin, Ed Rollins, thanks for a coming in.

Still ahead, for us, a Valentine's message from Pete Dominick. Really?

But next, how can we get serious about the government spending problem if the debate avoids the source of the problem?

(COMMERCIAL BREAK)

KING: This just in to CNN. A senior administration official telling us Egypt has asked the United States to freeze the assets of some Egyptian officials. The official spoke on the condition of anonymity because he was not authorized to speak on the record.

Egypt's revolution appears to be having a domino effect. There were anti-government demonstrations today in Bahrain, Yemen, and Iran. In Tehran tens of thousands took part in a demonstration. Iranian security forces used tear gas in an effort to disperse the crowds.

As we told you earlier in the program, it's a big day for the budget here in Washington. The president releases his budget, he sends it up to Capitol Hill; $3.7 trillion, that is the bottom line in the president's budget. Let's take a look at some of the issues here.

If you look here, green is revenue. Gold is spending. Orange is the deficits. Here is where we start out here. And it's the first few years you want to worry the most about because politics and debate will change it all.

Here's what the president is trying to do. You see his spending is up here. Government revenues down there, which means the government will run more red ink, budget goes down, deficit goes down a little bit, a little bit. But all deficits throughout the president's pick right there. What is the president cutting here? The president's propose some cuts, some cuts, but they're all in this slice of the budget. See the darker green right here? 12 percent of the budget is nondiscretionary security spending. I'm sorry, non- security discretionary spending. I'll get that right. But this where all the cuts come from, but this is the big part of the budget, right here, mandatory spending makes up for most of this.

This is Social Security. This is Medicare, and all that. That's where most of the money is in the budget. Here is what you look at the deficit picture if you're concerned about red ink, the Congressional Budget Office had projected, based on existing budgets, that this essentially was the deficit as a share of GDP through 2021. We start here. Deficits started to come down a little bit. They run out here. The Obama budget would get it a little below the 3.1 percent, more than a percentage point down, from where we stood coming into the CBO.

Here is the one thing that has many people saying the president's budget is not a serious document. Republicans are saying that today. This is debt held by the public. Public debt, as a percentage of GDP, the '50s, the '70s, the '80s, the '90s, here's where we are now. The president's proposal, over the 10-year period, would add $7 trillion to the long term debt. That is why many people are saying-remember that pie? You can't just cut the 12 percent. You've got to get to the big picture, Social Security, Medicare, and more.

The budget perhaps predictably is being viewed through the polarized partisan prism. The Democratic president sees it as fiscally responsible. But Republicans say it ignores red ink and the voters demand for less spending.

(BEGIN VIDEO CLIP)

OBAMA: Because of our budget, this share of spending will be at its lowest level since Dwight Eisenhower was president. That level of spending is lower than it was under the last three administrations, and it will be lower than it was under Ronald Reagan.

SEN. MITCH MCCONNELL, (R) MINORITY LEADER: The president's budget is the clearest sign yet that he simply does not take our fiscal problems seriously.

(END VIDEO CLIP)

KING: Let's get some perspective from two veterans of Washington spending wars. Robert Reich was the Labor secretary in the Clinton administration, and is the author of "After Shock: The Next American Economy and America's Future". And David Walker is the former U.S. comptroller general and founder of the new Come Back America Initiative, whose top concern is deficit spending.

Gentlemen, I want to try to do something very rare in television and get a yes or no answer to this will question first, then we'll move on.

Can we have a serious conversation about Washington's spending problems without dealing with Medicare and Social Security? Mr. Secretary, to you first.

ROBERT REICH, FMR. LABOR SECRETARY: No. Medicare especially, we have to deal with rising health care costs and that combined with the baby boomers is probably the most serious underlying issue in the budget over the long-term.

KING: David Walker?

DAVID WALKER, FMR. U.S. COMPTROLLER GENERAL, COME BACK AMERICA INITIATIVE: No.

KING: OK, that was good, a one-word answer. That is very rare in television. I appreciate it.

(LAUGHTER)

And so, then why are we playing this silly game in Washington? And I'll call it, who goes first. The president refuses, in his budget, to say let's deal, here's my proposal on Medicare and Social Security. Because he wants to see what the House Republicans do. The House Republicans, of course, are waiting and they say no, the president has to lead and go first. Why does Washington have to get lost every time in that same game?

WALKER: John, the president is the chief executive officer of the United States government. He is also the political quarterback. He has a responsibility to lead, but unfortunately as it relates to our escalating deficits and debt, he punted.

KING: Mr. Secretary, did the president punt?

REICH: I wouldn't go so far as to say he punted, John, but I think it is very difficult in this political climate for either the president or for the Republicans to take the lead on dealing with programs, Social Security and Medicare, that are so popular. They are the third rails of American politics, the president did deal with Medicare substantially in the health care bill, that became law, and he paid for it in terms of Republicans accusing him of cutting Medicare.

KING: But he's the president now, Mr. Secretary. I want to stay with you as the Democrat in the conversation. Should he have put forward something? Even if he took his own deficit and debt commission and put that plan forward, and said to the Congress, there are things in this I don't like, but I'm going to start the conversation by introducing this plan before the United States Congress, so that I can at least force the conversation?

REICH: Not on Social Security, but I think, on Medicare, particularly with regard to containing health care costs over the long term. The president could have gone further than he did under his health care law. And he could have continued that conversation, yes, indeed.

KING: David Walker, how do you get the conversation out of this, literally, it's a who goes first game?

WALKER: Frankly, neither the president nor the leadership in Congress is dealing with 85 percent of the problem. Which are Medicare, Medicaid, Social Security, interest on the debt, et cetera. What we need to do is have a civic education engagement program over the next couple of years to educate the American people on the facts and truth and tough choices. And we need to bring back tough statutory controls as part of the debt ceiling increase that will force these type of choices, starting in about 2013. Because right now there's no consequence for doing nothing, and doing nothing is driving us over a cliff.

KING: Let's focus now on what is before us. The president budget, Mr. Secretary, puts forward what he calls a cut and invest plan. He says he's making some tough choices, Republicans clearly, they argue he's not making many tough choices any way, if any tough choices. But you've raised some concerns that you think the president's proposal, because he has to find some cuts would hurt those who need it most.

REICH: Indeed, if he's just dealing with-as the president is, as are the Republicans-just the nondefense discretionary spending, which is a relatively small portion of the entire federal budget, then we are cutting into home heating oil. We're cutting into community service block grants. We're cutting into things that poor people, particularly the most vulnerable members of our society, now at a time in our economy when many of these people are more vulnerable than ever, are going to be hurt, and it's just not necessary. You don't want to hurt these people.

We're still coming out of the worst economy, the worst recession we have had since the Great Depression. And we shouldn't even be putting these things on the table right now.

KING: So, David Walker, how do you then, if you accept the Secretary's argument, how do you cut spending and it has to be some spending in Washington you can cut, without hurting those who at this moment maybe do need that help?

WALKER: They really need to focus on the disease, not the symptoms. The symptoms are short-term spending, we need to be able to deal with the deficits that are going to be here after economy recovers, after unemployment gets down. Bring back the tough budget controls, force decisions starting about 2013, that deal with the 85 percent plus of the budget that's the real problem.

KING: And Mr. Secretary, do you see anything on the horizon in terms of your outlook on the economy? A strong economic growth would make these conversations a lot easier to have if the government was taking it a lot more in revenue, number one, it would put the line down on the deficit a little bit. But it would make the other conversations easier. Is that going to happen over the next three or four years, or do they have to deal with this tough environment right now?

REICH: My own concern, quite frankly, is that all of this focus on the budget deficit at a time when we are still deep in the throws in the gravitational pull of the great recession-is going to distract us from the job of getting jobs back, getting the economy rapidly growing. It's not going to grow rapidly, jobs are not going to come back, if we simply cut public spending and also cut taxes. That's not the way to get jobs back.

KING: That a fair point, David?

WALKER: Yes, I think we have to separate between the short-term challenge and the structural one. We can actually have more tolerance for deficits and debt in the short-term, if it's combined with a means forward to deal with the 85 percent plus spending problem, and frankly, to reform our tax system in ways that will make it simpler, fairer, more equitable and generate more revenues.

KING: David Walker, Bob Reich, appreciate your time today.

WALKER: Good to be with you. Thank you, John.

KING: Here's a question: Is there any way to sugar coat the president's new budget? Look at this guy. Pete on the Street, he's next.

(COMMERCIAL BREAK)

KING: Red is the color of Valentine's Day. Unfortunately it is also the color of debt. And our Offbeat Reporter Pete Dominick had the idea to combine this day of love and the president's budget.

Hello?

PETE DOMINICK, OFFBEAT REPORTER: Well, John King, I guess the first lady said Valentine's Day doesn't have a lot of significance in their relationship.

But I'm with them. A real romantic guy does the spontaneous thing. I don't think the President Obama got too many Valentines today when he released his budget. John Boehner sent him the classic, "You're new budget will destroy jobs" Valentine. And last week John Kerry asked him not to cut the subsidies, for folks with home heating subsidies for low-income folks. So not too many Valentines. I hope he wins the center, because I don't know if he's going to win the future on this budget. We'll see.

KING: A lot of cheer and love there, Pete. Say happy Valentine's Day to your bride.

DOMINICK: I'd better.

KING: I'm going to go say the same to mine. That's all for us tonight. We'll see you right here tomorrow. PARKER SPITZER starts right now.