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PIERS MORGAN TONIGHT

Dow Drops Despite Debt Deal; Gabby Giffords' Recovery; Interview With Brad Thor

Aired August 2, 2011 - 21:00   ET

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


PIERS MORGAN, CNN HOST: Tonight, done deal.

SEN. DICK DURBIN (D), ILLINOIS: The motion is agreed to.

MORGAN: But at what cost?

BARACK OBAMA, PRESIDENT OF THE UNITED STATES: It shouldn't take the risk of default to get folks in this town to work together and do their jobs.

SEN. MITCH MCCONNELL (R), MINORITY LEADER: Never again will any president from either party be allowed to raise the debt ceiling without being held accountable for it by the American people.

SEN. HARRY REID (D), MAJORITY LEADER: The Tea Party direction of this Congress the last few months has been very, very disconcerting and very unfair to the American people.

MORGAN: Is the Tea Party really calling the shots? I'll ask the people who started it.

And the emotional moment that everybody is still talking about. Tonight the astonishing, unexpected return of Gabby Giffords. I'll ask her best friend in Congress what's next.

DEBBIE WASSERMAN SCHULTZ (D), FLORIDA: Gabby melted everybody's heart last night.

MORGAN: And Glenn Beck said this also could be assassinated of what he wrote in his last book. So what's he written now? I'll ask him.

This is PIERS MORGAN TONIGHT.

Good evening. President Obama signs the debt deal. The country dodges a bullet avoiding the frightening specter of a national default. So why is nobody in Washington or Wall Street or anywhere else for that matter happy about all of this?

And is a battle made compromise a dirty word on Capitol Hill? Here to explain, my CNN colleague John King.

John, I've never it seen a more miserable reaction from almost everybody in the world to what is supposed to be a good deal. JOHN KING, HOST, JOHN KING, USA: Well, Piers, I like to use the Goldilocks rule of politics. Is it too hot, is it too cold or is it just right? And you have this compromise. Is it just right because nobody loves it or is it just awful? And I think that's the question we're going to deal with going forward.

But there's no question, on the left in American politics, they think it cuts too much already and they're worried this new super committee will touch Social Security and Medicare, and they're mad President Obama didn't get a tax hike.

On the right, they think it doesn't cut enough. They're worried it could cut defense more in the super committee. And they're worried there's still a door open to tax increases.

So nobody loves it. Everybody calls it a down payment. What it does do is what you said. The president who lives in this house will not be the first American president to ever have this country go into default. Now we're going to have, though, another round of this debate over taxes and spending and the role of government with the super committee first, and then in the 2012 election campaign.

Make no mistake, this issue is not dying down.

MORGAN: No. I mean in it terms of the politics here, John, the real winners appear to be the Tea Party. Who else do you think can come out of this genuinely feeling it's been a good period for them?

KING: In an odd way, the president of the United States wins even though he loses. When I say loses, remember he said he wanted $4 trillion over 10 year deal. He got a little more than half that. He wanted this done one installment, raise the debt ceiling, he'll have to do two. The second one comes through that super committee.

He said it had to be balanced, and by that the president means tax increases. He didn't get tax increases in the first sweep. There's no guarantee he'll get tax increases in the second.

So he did not get what he said he wanted setting into this. In fact, what he signed he described pretty much as unfair just a week or so ago. And yet he does not default. He's not the president who gets that stain.

And look at all the other economic data, Piers. Unemployment, growth, consumer spending down confidence, consumer confidence down. The last thing this president needed as a candidate for reelection is another piece of turmoil in a very fragile recovery.

So the president wins even though he loses a bit.

The other person I would mention is Mitch McConnell, the Senate Republican leader. He is the guy who came in at the last minute through the backdoor, negotiated this deal first with the vice president, then the president. He's feeling pretty good about it.

MORGAN: I mean the president said an interesting thing today. He said the voters may have chosen divided government but they sure didn't vote the dysfunctional government. There is this rising sense that although they've been pretty victorious through this period, the Tea Party, they've not done it in the conventional Washington way and they have attacked the very fabric, if you like, of the way that government is done in America.

KING: And they've done that on purpose. I've seen you going at it with them over the past few nights and some of them don't answer the questions the way we expect to because they're not traditional politicians.

They view it this way. They view it as a Democratic president who doesn't want to do what they want to do. They don't like much of their own Republican leadership because they view them as establishment dealmakers, the guys who were here for the last 10 or 20 years. And in their view, again, got us into this mess.

They also view it as they won the last election in the United States, therefore they believe -- maybe public opinion has changed since then, but they believe the public is on their side. And here's the wild part. It's not often in Washington you meet a politician who says, I don't care if I lose the next election. And most of these guys actually seem like they mean it when they say it.

So they're willing to do battle on the spending issue. If you go back to their speeches, back to their campaign ads in 2010, this is where they said they would draw the line. It makes for very interesting politics. And there's no doubt the conversation, the tone in Washington, it's not about a health care plan with the government intervention anymore. It's not about government spending to stimulate the economy.

It's about shrinking the government, cutting taxes, less government involvement. That you have to declare at least in the short term as a tactical victory for the Tea Party.

MORGAN: John King, thank you very much.

KING: Thank you, my friend.

MORGAN: Has the ugly debt battle already done serious damage to this country's economy? My next guest says a firm yes. He's Mohamed El-Erian. He's the CEO of the investment management firm PIMCO.

Mohamed, the markets reacted very unfavorably to this deal today, continued to tank after a very long hard week. What's your assessment of where we are with this deal?

MOHAMED EL-ERIAN, CEO, PIMCO: It's very simple, Piers. Both the deal and the one after the deal was such that we are worse off today than we are before. We're worse off in terms of economic outlook, growth will be lower, unemployment will be higher. And ironically we're worse off in terms of medium term fiscal solvency because we haven't done much to the debt but we're undermining our ability to grow out of the debt. And that's why the ratings agencies are keeping us on watch, on negative outlook. Everybody knows that at the end of the day we actually haven't improved things but we've made them worse.

MORGAN: And also, given the nature of the global economy now, this is not just America's problem, is it? You've seen very worried people in places like China saying this process that we've been through in America to try and get to where they've gotten and the results are not satisfactory, but the process alone has been doing untold damage to the global economy, this uncertainty is very damaging.

El-ERIAN: It is. You know, the global economy, Piers, is built on the assumption that the core, which is the United States, is strong, has good economic governance and knows what it's doing. And what we have shown to the rest of the world is we have weak economic governance, we have political squabbles and even when we get something done, we don't get it done properly.

So the rest of the world is saying, wait a minute, this was a self-inflicted crisis, and you couldn't get your hands around it. What about all the other economic challenges you face?

So what you're seeing are countries nervous that they are part of a system that assumes that the U.S. is a AAA and the U.S. today is not behaving like a AAA.

MORGAN: But Moody's have just come out and said that the AAA rating remains but they have a negative outlook. It's not that encouraging, is it?

El-ERIAN: It's not. And a negative outlook means that there's a possibility of a downgrade. S&P has taken a further step. They have put the U.S. on a negative watch. A negative watch means that they will downgrade the U.S. unless good things happen. So the market is very nervous about what S&P is going to say. And they expect it to say something in the next few days.

MORGAN: And we've got job reports coming on Friday. If they are negative, if they've gone down again or unemployment has gone up, what kind reaction could we see from the markets to that?

El-ERIAN: If the unemployment number comes in weak, this will supplement already some horrible data. So last week we've got some very bad GDP numbers. We've got bad manufacturing numbers. We've got bad consumer numbers. So if we get also bad employment numbers, markets are going to get very nervous and the sell-off is going to continue.

We need to stabilize it. And at some point people are going to look to Washington and say, what can you do? And there's a fear that Washington can running out of bullets.

MORGAN: Mohamed El-Erian, as always, thank you very much.

El-ERIAN: Thank you. MORGAN: The other big story, of course, tonight is the extraordinary return of Gabby Giffords. Congresswoman Debbie Wasserman Schultz was by her side last night on the House floor for those remarkable scenes. And she joins me now along with Congresswoman Giffords' chief of staff, Pia Carusone.

Let me start with you, if I may, Debbie Wasserman Schultz. Quite a remarkable thing to watch. No one was expecting it. Everyone kept it very, very quiet. And then the whole House erupted.

What was it like for you to be with the congresswoman?

SCHULTZ: Well, it's always wonderful to be with Gabby no matter -- no matter what opportunity you have to spend time with her. And the chance to help her triumphantly walk back into that chamber and see the electrification of the House floor erupt as you said. Members weeping tears of joy. Just the exhilaration that ran through people.

You know, this was a time of very -- a lot of tension of frozen hearts. And Gabby Giffords melted even the most frozen heart in that chamber yesterday. It was amazing.

MORGAN: It was. And it was pretty ironic, of course, given the extreme partisan nature of this debate for the last few weeks and the general sense around the world of Washington losing its marbles that suddenly you had in this -- in this one frail recovering woman you had a moment of real unity that brought everyone together and perhaps, and I say perhaps -- let's give them the benefit of the doubt -- made everyone realized what the priority in life ought to be.

SCHULTZ: Exactly. Gabby showed all of us, reminded all of us, where our priorities should be because hers are well placed. She wanted to make sure that she came back to Washington. If she needed to be the pivotal vote that decided whether we were going to default or not, she was going to make sure the country didn't default.

And then she decided that she should come to Washington and on what is likely the most important vote we'll cast this whole Congress that her constituents have their representative's voice there. It was remarkable from a remarkable woman.

MORGAN: Pia Carusone, you obviously know the congresswoman very well, too. You're her chief of staff. What a day for all of you, I would have thought, yesterday.

PIA CARUSONE, REP. GABRIELLE GIFFORDS' CHIEF OF STAFF: Oh, it was. It was incredible. I mean, you know, it was a moment that we had all been thinking about, praying for, hoping for. But you know we weren't really sure when that day would come, and yesterday was -- it was a moment that I'll never forget. And you know, Gabby was really proud to be able to make her way back for this important vote.

MORGAN: It's probably very easy for us all to assume that she's perfectly OK again, given the remarkable resilience she showed yesterday. But that's clearly not the case. How would you describe her condition at the moment? CARUSONE: Well, I mean she's in this rehab program for a reason. She was seriously injured less than seven months ago. But her progress to date has been remarkable, and her doctors continue to feel very optimistic about, you know, the next couple of months and what her -- the future holds for her.

But she's still, you know, going to her therapy program all day, five days a week. You know it's as busy a schedule as most working folks. And she at the end, you know, will hopefully be in a very good place, a place that allows her to enjoy her life in the fullest extent.

But where she's at now is, you know, she's come a long way, well enough that she's able to understand everything. Her speech is getting better. Her physical therapy has greatly improved her ability to walk on her own. So we feel very good about where she's at.

MORGAN: And Debbie, let me ask you. What was her reaction afterwards? What did she say to you?

SCHULTZ: Well, on the way in and the way out, she just was emotional. I think she -- it was clear that she was overwhelmed by the outpouring of affection from her colleagues. And she definitely was thrilled to be back in the chamber casting a vote and being in the midst of what she loves the most, which is public service. Besides Mark, her husband. It was an incredible moment for her.

MORGAN: It's funny -- it's funny you mention that. It's funny you mentioned that. I have just gotten a tweet which has come out from Mark and which I'll read it to you. "Gabby, I'm so proud of you for everything you have done and continue to do to make this country a better place." And there's a hash tag, "lucky husband."

SCHULTZ: That's right. Their love story is just incredible. You know, our families are very close and have spent lots of time together. It is -- they're an amazing couple, and we are all thrilled that Gabby has made this remarkable progress with Mark by her side. You know without the strength of a husband like him, it would be, you know, even tougher.

And she's very fortunate. And her constituents, Piers. Think about this. Gabby knew how important it was to make sure that her constituents in Arizona 8 were represented on that -- on that decisive vote, and they are quite fortunate. It's clear that they made the right choice in sending Gabby to be their voice.

MORGAN: And Pia, let me come back to you. I remember being on a flight to Los Angeles and reading as a fact that Gabby Giffords had been killed. And that was what the media first thought. Here we are seven months later. She's made this astonishing recovery.

And frankly, if the American public were voting late last night for their next president, I'd imagine she'd win by a landslide. So what -- what is her political aspiration now?

CARUSONE: Well, you know, that's flattering of you to say, but, you know, for Gabby it's day by day right now. And she's focused on what -- you know, what she's got ahead of her tomorrow and next week. And the decisions about 2012 and her political future are just -- they're just -- you know, we're not there yet.

They will come at some point, but it's not now. And at this point, we're all fortunate to have her still with us and doing as well as she's doing. So you know I think a lot of people are asking and wondering, but you know it's just -- you know, she's not ready to make that decision yet.

MORGAN: Well, if you could both just I think on behalf of all of us just thank her for what happened yesterday, congratulate her, and I think also salute the Congresswoman Gabby Giffords for bringing a bit of humanity back to a place that had been severely lacking it for quite a while.

SCHULTZ: Badly needed. We'll do that for sure.

CARUSONE: Absolutely.

MORGAN: Thank you both very much.

CARUSONE: Thanks. Thanks, Piers.

SCHULTZ: Thank you, Piers.

MORGAN: Senate majority leader Harry Reid today called the Tea Party's influence unfair to the American people. Coming up, I'll talk to the people who started it all.

(COMMERCIAL BREAK)

MORGAN: Not many winners in Washington after this debt deal, but the Tea Party, they have come out on top.

Joining me now is Jenny Beth Martin and Mark Meckler, co-founders and national coordinators of the Tea Party Patriots.

And let me start with you perhaps, Mark Meckler. Is this the Tea Party's finest hour?

MARK MECKLER, TEA PARTY PATRIOTS: You know, I think the finest hour actually took place back in 2009 when the Tea Party started and the uprising began. But I think it definitely shows that the movement has progressed. It shows that we've matured and it shows that we're a political force to be reckoned with.

MORGAN: Let me refer to you, Jenny, but, I mean part of the problem here is although the Tea Party clearly had a good few weeks politically, no one can really seem to decide if you've been heroes or villains in all this in terms of the way you have handled the political process.

JENNY BETH MARTIN, TEA PARTY PATRIOTS: We're working to empower citizen-driven government and we are doing that. Whether we're the heroes or the villains, it's crazy to ask that question about citizens who are concerned about our country's economic future.

We're about to be -- after this money is spent that was just approved today, $17 trillion in it debt in the next two years. Who -- wouldn't be asking their politicians if this is the appropriate next step to take?

MORGAN: But my problem, I guess, Mark Meckler, is that it's very easy to run into government on a ticker that we want to cut spending. I mean obviously everyone is going to nod and say that's a good idea. It's a bit like saying I want to put all terrorists in prison.

The problem comes when you actually have to govern a country and you can't do it, I would argue, with the kind of very extreme behavior the Tea Party has shown this week, where you basically shoved the president into a corner, threatened him with all sorts if he doesn't do a deal, and then actually take on your own party and embarrass the speaker in the process.

MECKLER: Well, Piers, you consider it extreme behavior. What we consider extreme behavior is the fact that Congress can't cut any spending.

Let's look at the reality. Here the GAO, the General Accounting Office, over six months ago came out with a list of hundreds of duplicative programs, billions of dollars of spending that a nonpartisan government entity says are an absolute waste of taxpayer dollars. We haven't cut one penny of that spending.

When you look at the extremes, the extremes are practiced today in our Congress and by our president who can't seem to find a single dollar to cut from the current budget. That's extreme.

MORGAN: Jenny Beth Martin, you've been called hobbits and terrorists by the other side. Do you feel you're either of those things?

MARTIN: I think it's crazy that the other side calls us so many names. We've been called names from the very beginning so we're used to it. But to go to the extreme that the vice president is saying that we're terrorists or at least hearing that we are and saying, no, these are just American citizens who are expressing their First Amendment rights, it really ratchets up the tone in Washington and it's not what we're looking for.

Just after Gabby Giffords' shooting they said that we needed to have a new tone and needed civility in Washington. Calling American citizens terrorists is not civil.

MORGAN: I mean, the other side in relation to the hobbit claim was, of course, the Republican Senator John McCain, who is also opposed to you. So you have this division within your own party, don't you?

MARTIN: To say it's within our own party is incorrect. We're not part of either party. We are standing up for the American people. We don't care whether it's Democrats who want to stand up for fiscal responsibility, constitutionally limited government and free markets, or Republicans.

We just want elected officials to do that regardless of party. So yes, we're making Republicans angry, we're making Democrats angry. But we must be doing something a little bit right because we certainly have their attention right now.

MORGAN: You certainly do.

Let me come back to you, Mark Meckler. I mean it's an interesting point. If what your colleague just said is true, then is the ideology of the Tea Party that you don't really care if there's a Republican or a Democrat president? And could we see a scenario potentially following that argument where you would support Barack Obama in the next election?

MECKLER: Well, that is a fact. We don't care whether the president is a Democrat or Republican. We don't care whether any elected official is a Democrat or Republican. We care whether they stand for fiscal responsibility, constitutionally limited government and the principles of the free market. The things that have made this country the greatest country on earth. Those are the things we care about.

Would we support Barack Obama's reelection? Right now I can't see any scenario under which he stands for those three things. Right now he stands for bigger government, (INAUDIBLE) spending, fiscal irresponsibility, disregard of the Constitution, and he certainly is no supporter currently of free market principles.

So if he made a stunning reverse, anything is possible, but right now I don't see that happening.

MORGAN: And Jenny Beth Martin, I mean, you talked there about your despair at the angry rhetoric of the Republicans and Democrats in all this process. But let's face it, people like Michele Bachmann or Sarah Palin, they're not shy in coming forward with a bit of sharp rhetoric themselves, are they? So it's a two-way street, this.

MARTIN: It is. And we understand that. But we -- it's time for people to quit throwing names, quit worrying about whose team they're on, whether it's the Republican, the Democrat, Congress, the White House. It's time to stand up for the American people.

Our country is so deeply in debt that we're in a precarious situation right now and it's time to pay attention to that and quit the name-calling and focus on the problem at hand.

MORGAN: Jenny Beth Martin, Mark Meckler, thank you both very much.

MARTIN: Thank you.

MECKLER: Thank you, Piers.

MORGAN: Coming up, I'll ask a former majority leader how he would be feeling right now if he were John Boehner. (COMMERCIAL BREAK)

MORGAN: Is the bruising debt battle a sign of things to come in Washington?

Joining me now is Dick Armey, former House majority leader and chairman of the Freedom Works, and Hilary Rosen, Democratic strategist and CNN political contributor.

Dick Armey, let me start with you. If you were John Boehner, how would you be feeling right now?

DICK ARMEY, CHAIRMAN, FREED WORKS: I'm sure John Boehner feels very frustrated and unappreciated.

You know, I know John well. John Boehner understands the problem, what must be done, and the magnitude of it all. And he's having to negotiate with an incompetent White House and an indifferent Senate with over half of his conference saying you've got to go further, you've got to do more, and another group in his conference, just saying, whiney, whiney, you're doing too much.

And he's working very hard. He also understands that what we've got here is only a tow hold in the right direction. There's so much more work to do, and I imagine he's kind of wondering, will I get some others to pitch in with me for another round? And maybe if we all are trying to work towards the same common objectives, maybe we can make a little bit progress.

MORGAN: Hilary Rosen, do you agree with that?

HILARY ROSEN, CNN POLITICAL CONTRIBUTOR: The reason John Boehner didn't get more done was because unfortunately people like Dick Armey were out there sending out e-mails to groups of conservatives and -- and criticizing him, don't compromise with the president.

So, you know what Barack Obama started with at the very outset was we need to secure some economic certainty here. We need to have shared sacrifice and everything will be on the table as long as we have shared sacrifice. That's the principle he operated from.

I think that's where John Boehner wanted to start from as well, but the radical elements of his party would just not let him do it. So yes, he's probably frustrated, but it's certainly not because of the White House. It's because his own people wouldn't let him do what he actually had tried to do.

ARMEY: Hilary, I understand your concern, your frustration. The American people are speaking very clearly and loudly a message that you and your party don't want to understand. But I have no doubt that John Boehner understands it and understands it well.

ROSEN: Well --

MORGAN: Part of the problem, though, Dick, if I may just jump in here between you, is that you've got the Tea Party faction now causing a real division in the Republican Party. The Tea Party, by common consent, are the political winners in all of this, aren't they?

ARMEY: Well, first of all, there's nobody that I know that's a Tea Party activist in America that sees themselves as part of a political party. In fact they are quite disdainful of both parties. Nor do they see themselves as winning and losing on political grounds.

Their whole orientation is about policy, in the long run, how do we get this government built back down to a size that doesn't choke off the American economy, rationalize it, get it doing more, and more efficiently the things it ought to be doing in accordance with our Constitutional mandates and our good common sense, and have it do less of the things that are just wasteful and unproductive and counter- productive oftentimes.

ROSEN: This deal will actually be the beginning of the end of the Tea Party because what we've seen is that approval ratings for Congress are lower than they've ever been since the Tea Party majority got elected in the House. And they're going to bring the Republicans right down with them.

They took John Boehner hostage. They forced him to do a plan that was unrealistic politically. And then the grown-ups in the Senate, Republican Senator Mitch McConnell and Senator Harry Reid, had to kind of take over and come up with a compromise with the president and force it on the House.

I think the Tea Party has shown that they cannot govern, that their goal is not growth in America, that they are just -- they've gone to this ideological place that has actually become destructive.

MORGAN: Dick Armey, let me put it to you about the Tea Party. Tea Party have clearly had a good couple of weeks. But there's a reality check, isn't it? When you get to government, you can't just pretend you're not affiliated to a political party. They are affiliated, whether they like it or not, to the Republicans, to the GOP.

ARMEY: Well, let me just say -- first of all, again let make the point, without exception -- a very few exceptions like Bernie Sanders, either you are a Republican or you are a Democrat if you hold office in Washington. There is a large group of American citizens that have read and believe in, understand the miracle and the magic of our Constitution, want our government in compliance with our Constitution, understand from the point of view of economics of how the world works, that this government is so big and massive and clumsy and screwing up markets and so forth, that they are the impediment to the prosperity of the American people.

And we must gain control of this. Now, Hilary is coming from an ideological perspective that says America is the government and what's good for the government is good for America. That's the big contest that's go on there. We've just seen her side of the wishful thinking. Wouldn't it be lovely if America didn't listen to the Tea Party activists.

Her problem is, quite tragic for her, America is the Tea Party activists or the Tea Party activists are America. They're not the Washington establishment.

ROSEN: You know, first of all --

MORGAN: Hillary, let me give you the final word here.

ROSEN: As a practical matter, the Tea Party got elected to Congress because hundreds of millions of dollars of corporate dollars from banks and insurance companies, who are angry that President Obama was reining in their profit structure, put money into the campaigns of people who really they thought had no chance, but were put out there to try and defeat Democrats. And they succeeded in it.

And right now we have a president who has said this is not a debt crisis in the country. We have an unemployment crisis. We have to grow our way out of it by people coming together. Since the Republicans have taken over the House, we have dropped our economy for two straight months. When the Democrats were in control, we had 14 straight months of economic growth.

So what Dick Armey is saying is simply not true. What we are going to find in the next several months is that the country is sick of sort of this radical notion that the Tea Party is trying to bring. And they want people to come together and support economic growth and find jobs.

MORGAN: Hilary, hold that thought. We're actually going to continue this after the break, because I want to know what you both think this particular process on the debt crisis has done to the 2012 election campaign. >

(COMMERCIAL BREAK)

MORGAN: Back now with Dick Armey and Hilary Rosen. I was enjoying the debate so much, you two, I thought we'd carry it on for another segment. So Dick, let me put it to you that there is another way of looking at all of this, that the real winner is President Obama because he's managed to shelve this now, this debt ceiling, until after the next election.

And he's moving, as he said today, to possibly introducing some tax increases for the rich and so on. I mean, it's not been a disaster for him by any means.

ARMEY: No. Actually, he got the only thing that he could understand that he wanted out of these negotiations, which is to not have to deal with this issue until after the next election, which guarantees and must be very comforting for him to know he'll never to have deal with this issue again.

But the fact of the matter is he has also demonstrated beyond anybody's ability to ignore his total incompetence and inability to work in this process. He was AWOL through the entire process. And of course that did not escape the notice of the American people.

MORGAN: But right now -- most people would argue right now that the problem for the Republicans is there's no apparent, obvious candidate. And the split between the Tea Party members -- whether you say they're attached to the GOP or not, people perceive them to be. This split in that party isn't helpful, is it?

You've got to say that at the moment, who takes on Obama?

ROSEN: You know, and you've got the major Republican presidential candidates who, if they had their way, would have brought the country into default. That's not going to be a very popular thing for them to run on. I think it's going to be tough for them to go into a campaign one-on-one against President Obama, who is telling the American people, I want solutions, I want jobs, I want -- you know, I've been moving this economy forward to disaster.

That's not going to fly.

MORGAN: Dick, what is your response? Who stands right now? Who stands right now?

ARMEY: Well, quite frankly, my own view is that President Obama has demonstrated himself to be -- first of all, he's so ideologically defined, he virtually understands nothing but income redistribution, and he's incompetent at even doing that, to the frustration of the --

MORGAN: I get your feelings, Dick. Let me stop you. Dick, I get your feelings about the president. It's obvious. However, what is the answer to my question, which is, which of all the candidates right now -- and there's a clear split ideologically between the Michele Bachmann end of things and the Mitt Romney end of things -- which of the candidates who have declared an interest so far do you believe could beat the president?

ARMEY: All of the above. The fact of the matter is this -- politics in America has changed. And it's now about principles, objectives, goals, and policy, not about narrow-minded, short-sighted, parochial political things. Nobody is running on bringing home the pork anymore. It's all about the big ideas that will allow America to recapture its greatness.

President Obama has demonstrated he has that. There are a variety of big ideas out there being talked about by other people, someone of whom will emerge as his opposition.

ROSEN: I think it's clear --

MORGAN: with the greatest of respect, Dick, it does sound like you can't think of a name, which is slightly worrying for the Republicans. I mean, what would you say, Hilary?

ROSEN: I think that no matter who they nominate, they're going to coalesce around the candidate and try and spend the billions of dollars to try and defeat the president. But what they're rooting for is for the economy to get worse, and they're acting irresponsibly.

I think the American people will not stand for that in these Republican candidates. They don't want to see a candidate tear down the economy just for their own political gain. That's why President Obama, you know, looking like he's the guy who wants to compromise, bring people together, show that we can work on things, and focus on jobs and the economy and not on these partisan battles, is going to be what the American people want. I will again --

MORGAN: Well, one thing's for sure. The Republicans are going to have to find somebody and they're going to have to get behind that person. I repeat to you, Dick -- I don't want an answer to this. It's more of a statement. Until they do, until they make a point as to which way they're going to go, whether it's Tea Party or moderate, you have a problem.

Anyway, Dick Armey, Hilary Rosen, thank you both very much. >

Coming up, should America be afraid of homegrown terror like the attacks in Norway? I'll ask a best-selling thriller writer. >

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MORGAN: My next guest is an author with a dubious honor. Glenn Beck told him he could be assassinated by Muslim extremists for one of his previous books. He's Brad Thor and his latest book is "Full Black," another tub thumping thrill, Brad.

Big fan of your stuff. They're always great reads. What is particularly apazi (ph) I guess about having you as a guest today is it comes on the back of a kind of think the unthinkable terror attack in Norway, something that nobody I guess could ever have imagined, the double-pronged attack by a lone guy, it seems, maybe with help.

When you heard about what had happened, as somebody that concocts these outrageous plot lines yourself, were you surprised by what you heard?

BRAD THOR, AUTHOR, "FULL BLACK": I wasn't surprised by what I heard. I was actually surprised by who the perpetrator was, in the end. I think I, like many people who pay attention to terrorism, thought that this had all the fingerprints of an al Qaeda-style attack. One of the terrible things we see now is the two-pronged attack or multi-pronged attack, whether it's the Bali bombings or what happened in Mumbai.

So the idea of a bomb going off one place and that taking all the resources of police and first responders, and then that horrible, horrible massacre of those children on that island. So that's what immediately had gone through my head when I heard that.

And I'm sorry to say that it didn't surprise me. It surprised me that, yes, it was Norway. But the attack itself? It's unfortunately the kind of world we live in where this stuff is happening.

MORGAN: Were you critical at all of the time it took the authorities there to get to that island?

THOR: Absolutely. An hour and a half? Way too long.

MORGAN: I thought it was pretty extraordinary, given that Norway has been a target for al Qaeda because of its presence in Afghanistan with troops. They've been warned before about a possible al Qaeda attack. And they ought to have been thinking the unthinkable.

I think since 9/11, it's been incumbent on every country, whether it's America or European country, whatever, to have people who sit around all day conjuring up -- what struck me -- I floated this notion of this being a pretty unacceptable delay on Twitter and was amazed by the reaction that came back of people saying, how dare you criticize the security forces?

But actually when you study the facts, the Norway prime minister was due on the island I think within 12 hours. You would have imagined there would have been hyper-reactive security around. Wouldn't you?

THOR: You would think so. This is part of a psychology that is referred to as normalcy bias, where people don't think something like this -- because it's never happened, it never will happen. It's not until a Black Swan event, if you will, which is what this is for Norway, happens that people look back and say, we should have seen this coming, we should have been more prepared. Just like we did with 9/11.

And unfortunately, I think this is going to change things in Norway. I hope not. I hope the Norwegian people don't allow this to change their culture. But the equivalent I heard someone speaking saying, with these people, the numbers being kind of revised down a little bit -- it's still horrible. Even one death is horrible.

But this is equivalent to thousands and thousands of American citizens, when you kind of look at it proportionally. So this is going to be the 9/11, the 7/7, if you will, for Norway.

MORGAN: Tell me about the book "Full Black". What is the plot here?

THOR: Well, my books -- I think one of the hallmarks of my thrillers is that they're based in reality. I try to put them there as much as possible. For this book, I went to people I knew in the special operations community and the intelligence community and I said, what keeps you up at night?

And one of my folks came back to me and said, have you heard about this blueprint called unrestricted warfare? I said what is it? Is it a book people wrote? They said no. It's actually a white paper written by a foreign military that realized they could never take America on the conventional battlefield,

and they had a very sophisticated plan for how to collapse America from within. It was written in the late 1990s. As I started studying this, I saw a lot of the things in that blueprint were actually taking place in America right now. And I said, you know what? This is unfolding on our doorstep today. I want to base my new thriller on that. And that's what I did.

MORGAN: Where do you come up with this stuff? What makes you, Brad Thor, an apparently normal guy, have these incredibly weird, random thoughts?

THOR: Steven King had a great line. And Steven King said, "a writer is someone who has trained their mind to misbehave." I think that's very much the case with me. I look at something and say "what if?" If we talk about the glass being half empty or half full, I want to know what does the glass look like from underneath the table?

I always have a different way of looking at things. One of my thrillers, I had something banging around in my head. I said, what if the Cold War didn't really end? What if the Soviets rolled over and played dead? What might that look like once they decided they were done playing dead? That was my third book "State of the Union".

So I think it's just -- I don't know. I think there's something that either is plugged in differently or not plugged in with thriller authors. And that's definitely my case.

MORGAN: We'll take a little break. When we come back, I want to pick up on that precise point, which is the day the White House called and wanted you to join their think the unthinkable brigade.

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MORGAN: Brad, in 2002, not long after 9/11, you get this extraordinary phone call. Tell me about it.

THOR: I was living in the mountains of Utah at the time, Park City. It was like a scene out of a movie. I'm running in the mountains with my dog. I'm in an area where the cell phone never works. And suddenly my cell phone starts ringing.

I get asked if I would consider coming to D.C. to be part of something that the Department of Homeland Security was standing up, called the Analytic Red South Program. What this was -- even before the 9/11 Commission came out, the powers that be in Washington said 9/11 happened because of a failure of imagination on our part.

They were determined to never let that happen again. So to do that they realized they needed to break out of the way that they'd been thinking. So they invited creative thinkers into D.C. from outside to help them brainstorm potential terrorist attacks.

MORGAN: This is like your sort of fantasy world come true.

THOR: Absolutely. I mean, to be asked to serve your country not by picking up a rifle, but by bringing in your creative talents and your knowledge of terrorism and that kind of a thing, it was an incredible, incredible opportunity.

MORGAN: Did you have any ideas that you then saw implemented or not? Or happen?

THOR: Well, I always joke around that the Red Cell Program is the Las Vegas of government programs. What happens in the Red Cell stays in the Red Cell. That was one of the things they told us. What I did see happen was some of the attacks that I predicted, that we were working on there, we saw them implemented. I would be watching CNN and all of a sudden, this attack would pop up in Iraq or someplace else, or Afghanistan, and I would say -- I call my guy, my contact. He'd say, I know you saw it on the news, but you can't go out and say you worked on dreaming up that attack.

MORGAN: You wrote a very contentious book, "The Last Patriot." It was banned in Saudi Arabia because it fictionalized a lost Islamic text. What was the fallout like for you personally after that?

THOR: We got a lot of threats, which was not easy for me as a husband and father. Because I take the safety and security of my family -- it's the one thing I hold dear and most important to me above all else. So we had to sell our house. We had to move. We had to pick up extra security.

I can't go and do book signings now without security at the book signings.

MORGAN: You were actually warned before publication that you would be assassinated by Muslim extremists if you published that book. But you still did it.

THOR: I still did. Glenn Beck said, I implore you -- I had given him an early copy of the book. He read it and he said I'm begging you. Do not publish this book. You will be assassinated within a year.

I'm still here. He was wrong, thank God. My goal is not to demonize Islam. But I say, at the end of the day, we're not at war with the Irish right now. If this was 30 years ago, I'd be writing about the Soviets.

MORGAN: It's still a gutsy thing to do because you are potentially making yourself a target even by talking this way about it.

THOR: I think it's imperative upon us who live in free and democratic societies to not shy away from taking these on. I had great idea for a book. Why should I sublimate my art because I'm afraid of reprisals? I think that what is going to help good, peaceful, moderate Muslims around the world -- and that's the majority of the Muslim population -- is to have people like me writing this book, shining the light on the radicals.

Because when we make apologies for Islam, when we try to explain it away, we actually weaken the voice of the good Muslim reformers who are trying to change their religion from within. And they need our support. So I feel this is important.

MORGAN: Two or three years ago, on a block ops mission in Afghanistan, you shadowed a team.

THOR: I shadowed a team.

MORGAN: What was that like?

THOR: That for me was as great as it was -- being part of the Red Cell Program, that for me was a dream come true. That was like pitching for the Yankees or being a quarterback for the Dallas Cowboys. It was so exciting for me to travel with these men, the best of the best, and see how they do what they do.

But it also gave me a deeper appreciation for Muslim culture, particularly the Afghan culture. Every village we went to, we had the permission of the village elders to be there. So we had the protection of the Pashtunwali (ph), the code of honor that they had there. They would have fought in that village to the death of every man to keep us safe.

Try to find someone to help you change your tire when you've got a flat on the way to that airport. Yet here they would have fought to the last villager to keep us alive.

I didn't want to leave. I actually had one of the greatest, most eye-opening experiences of my life.

MORGAN: Do you think it's a more dangerous world now than it was in 2001?

THOR: Absolutely. I think it grows every single day. I think the death of Osama bin Laden puts al Qaeda in a position where they have to prove without their CEO that they're still capable of spectacular attacks. I think that's why we saw kind of a knee jerk on Norway.

So yeah, I think every day we go without an attack it gets more dangerous.

MORGAN: Brad Thor, it's compelling talking to you. And the books are a great read.

THOR: Thanks.

MORGAN: I recommend this one. It's another storming, unthinkable thriller of mayhem and complexity. Thanks for coming in.

THOR: Thanks, Piers.

MORGAN: Take care. That's it for us tonight. " AC 360" starts right now.