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JOHN KING, USA

President Obama Unveils $3 Trillion Debt Plan; Interview with Jacob Lew

Aired September 19, 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: Good evening everyone. Tonight President Obama picks a fight he can't win, at least at the moment, calling on Congress to raise taxes on millionaires to help chip into the massive federal budget deficit.

(BEGIN VIDEO CLIP)

BARACK OBAMA, PRESIDENT OF THE UNITED STATES OF AMERICA: During the usual defenders of these kinds of loopholes saying this is just class warfare.

I reject the idea that asking a hedge fund manager to pay the same tax rate as a plumber or a teacher is class warfare. I think it's just the right thing to do.

(END OF VIDEO CLIP)

KING: Bu what's right to the president is labeled dead on arrival by congressional Republicans.

(BEGIN VIDEO CLIP)

REP. JOHN BOEHNER (R), HOUSE SPEAKER: Giving the federal government more money would be like giving a cocaine addict, all right, more cocaine.

(END VIDEO CLIP)

KING: And the reaction among the Republicans running for president, well, it's unanimous.

(BEGIN VIDEO CLIP)

REP. MICHELE BACHMANN (R), PRESIDENTIAL CANDIDATE: The president's gimmicks in tax increases on the backs of small businesses and the middle class won't grow the economy.

(END VIDEO CLIP)

KING: The White House says its plan would trim $3 trillion from the deficit over the next decade, and in releasing it, the president hopes now to influence that so-called congressional super committee, charged with drafting a big deficit reduction plan. Fellow Democrats for months on this issue and others have complained the president is too quick to compromise with Republicans. Well, today that same president delivered this warning.

(BEGIN VIDEO CLIP)

OBAMA: I will not support, I will not support any plan that puts all the burdens for closing our deficit on ordinary Americans. And I will veto any bill that changes benefits for those who rely on Medicare, but does not raise serious revenues by asking the wealthiest Americans or biggest corporations to pay their fair share.

(END VIDEO CLIP)

KING: The rich, very rich politics of this debate in just a moment.

First, though, let's take a closer look at what the president proposed today. The president, of course trying to influence that super committee, as I said. Here's the main proposal from the president.

He wants to have a mandatory spending cuts, $580 billion over the next ten years. Tax revenues, $1.5 trillion in new tax increases over the next ten years. War savings, the president says he will save $1.1 trillion because the United States will be getting almost all of its troops out of Iraq, many of its troops out of Afghanistan. The president says you save that much. Interest savings, if you are not spending this money that means you're borrowing less. The government would save about $430 billion in, excuse me, in interest over that decade, and this is the August debt agreement to raise the debt ceiling. There's another trillion dollars there, just a couple of things that raise red flags for you. Let's turn this around and look.

The president says he is going to save $223 billion from getting money the government shouldn't be paying doctors, Medicare overpayments. Well, past presidents have promised that. He also promises to restructure government. Again, that's shrinking government, getting rid of waste, fraud, and abuse. Some are skeptical you'll find those savings. Tax revenues, we have a red flag because the House Republicans simply say they won't give the president this. They won't give him these higher tax increases, including letting the Bush tax cuts expire. The war savings, will this really happen? A lot of people in Congress say they're not sure you'll save money that fast. Some also say the president shouldn't count it in something like this. Obviously, the interest savings simply come if you are spending less money.

So, let's take a quick look at how this looks if you want to add it all up. The Obama plan, $3.6 trillion total, that's $1 trillion from the August debt deal, but, remember, the president wants to spend a half, $500 billion here, a half trillion for his new jobs program. So, net you get about $4 trillion in savings over the next decade as the president sees it.

Our chief White House correspondent Jessica Yellin and our congressional correspondent Kate Bolduan are working their sources to get a better sense now of where this fight is going. Jess, I want to start with you. When the president puts out this plan, they have known the meetings, as much as they like the policy idea, the idea of these tax increases, dead on arrival on the hill. Yet, they still put them in there. The president passionately makes the case for them today, more a political statement than a policy hope, though?

JESSICA YELLIN, CNN CHIEF WHITE HOUSE CORRESPONDENT: Clearly a political statement, but, you know, John, that veto threat does have the affect of shaping a little bit what that super committee can do because, look, if the Republicans on the committee were planning to push for entitlement cuts alone without any tax increases, they now have to think twice about that. And it does to some extent tie the hands of that super committee or limit what they can do. The Buffett rule, which was outlined by the president, is in itself a very political statement. We can talk about that separately and defines a little bit about what the president sees as his main mission going forward, defining himself as the champion of the middle class, John.

KING: Well, let's talk about that, because you say main mission going forward. Do you mean going forward as president for the next 14 months, or do you believe going forward as a candidate in the next 14 months? Essentially a more populous taking by a president who many liberals often criticize saying he needs to pick more fights, he needs to - they don't like the term class warfare, but draw distinctions like that.

YELLIN: I think it's exactly it's exactly defining the contours of campaign 2012 and saying that these are democratic principles that the president is standing up for now, much to the enthusiasm of his key democratic base. That this is a man who is now going to say I stand for and fight for the middle class, the working class and will seek to define Republicans as protectors of the wealthy, and if the Republicans allow themselves to be defined that way, then that will be the theme the president will continue to hit on not just through the super committee and through this jobs plan fight, but through campaign 2012 going into next year. .

KING: Jessica Yellin, who is live from New York tonight because the president is heading up to the United Nations. Thanks Jess.

Let's move up to Capitol Hill, Kate Bolduan. And Kate, before I pose the question let's listen to the speaker. The speaker is home in his home district of Cincinnati today. He saw the president's plan and he was unimpressed.

(BEGIN VIDEO CLIP)

BOEHNER: We could get into this tax the rich, tax the rich, but that is not, that's not the basis for America, and it's not going to get our economy going again, and it's not going to put people back to work.

(END VIDEO CLIP)

KING: We know that's the public line from this speaker, Kate. My question, I guess, is privately, when the Republicans see the president out making this case, is there any fear of the Republicans on the committee? Do they believe that he can rally public opinion and force them to do things they might not want to do?

KATE BOLDUAN, CNN CONGRESSIONAL CORRESPONDENT: I see the early reaction John, is they're not fearful. They're down right coming out almost doubling down with more fighting words and more war of words, if you will, and really trying their hardest to dismiss the president's proposals as quickly as they absolutely can. Not only are we hearing many top Republicans calling, accusing the president of class warfare, including House Speaker John Boehner.

You have, I have a flood of statements today from everyone saying that the president still doesn't get it, that this is ill conceived, ill timed, and dead on arrival, so really why is the president pushing for this, saying it's not serious, and that it's disappointing. So, that's what you have from Republicans, of course, but on the part of Democrats, I'll say, as Jessica was saying, Democrats are absolutely applauding this public debate, if nothing else, because it's not likely many of these proposals are going to be able to make it through the gridlock of congress.

The sense that we're getting from Democrats is they are or at least hopeful that this public debate, this war of words the president really using his bully pulpit here will work to influence the debate and influence public opinion and, of course, voters as well as influence kind of the discussion on this super committee, on this deficit committee, because they want to see the debate move away from cuts, cuts, cuts, only cuts, which they think is what the debate has been into looking to other ways of reducing the deficit, because the deficit committee is charged with coming up with something in over $1 trillion in savings, John.

KING: And Kate, has the president, we agree he is not going to get these tax increases, at least not the way he laid them out tonight, but he also said essentially go big. Don't do $1.5 trillion, which is your floor, but shoot for $3 trillion or more. Shoot for a bigger deficit reduction plan. Does the president's proposal at least gain him some momentum in that regard, to convince this committee think big?

BOLDUAN: I definitely received communication from members on the committee that they absolutely especially democratic members, I should say, that they welcome this serious approach that the president has laid out. We've heard from the committee members in their public hearing so far. Democrats and Republicans that they want to go big, but, of course, John, it will be no surprise to you getting past that point is very difficult, getting into the details of how they can reach that big, that grand deal, that big deal is nearly impossible to guess at this point, John.

KING: About two months of negotiations, tough negotiations.

BOLDUAN: And less time with congressional recesses, of course.

KING: Of course, they wouldn't miss those. Not for a minute. Kate Bolduan, on the Hill tonight. Thank you. Thanks again and Jessica Yellin.

Let's get some perspective now from CNN Gloria Borger and David Gergen.

David, do you first. As someone who has helped four presidents, Democrats and Republicans, decide what to say at big moments, is this more of a political statement for the president, or is this a serious policy proposal?

DAVID GERGEN, CNN SENIOR POLITICAL ANALYST: He threw down the gauntlet today, John. It's a very, very political statement. You know, the Republicans had been engaged in a political campaign against him, he feels, for a long time. Now he is joining that fight and coming the other way. Instead of setting up a proposal that might warm the hearts of Republicans and try to invite them to a compromise, something Democrats think has never worked.

He has put up a proposal that warms the heart of Nancy Pelosi. This is exactly the kind of a plan she wanted. It protects Social Security. It protects Medicare, and it sticks it to the wealthy. That's exactly the kind of thing that she thinks will help Democrats and, of course, we're now into a situation. I think its good politics for the president in terms of rallying his base. I do think it is a dampener on the committee actually getting an agreement.

GLORIA BORGER, CNN CHIEF POLITICAL ANALYST: But this is a president who has been accused by Democrats of being too passive of negotiating with himself, of being too much of a compromiser, and it was like today he was Clark Kent who went into the phone booth sort of meek, compromising president. Came out, suddenly democratic superman, very muscular, no cuts in entitlement spending and, you know, you better raise those taxes on the wealthy. So, I think this is al about going back on more comfortable turf for the president and for Democrats, talking about the middle class rather than just spending cuts. It's where he wants to be.

KING: Let's listen to a little bit of his language, and not just the words, but the tone as the president, as Gloria just notes, makes the case that for a deal to be fair, the rich have to pay at least as much if not more than the middle class.

(BEGIN VIDEO CLIP)

OBAMA: Any reform plan will have to raise revenue to help close our deficit. That has to be part of the formula. And anything should be part of another simple principle. Middle class families shouldn't pay higher taxes than millionaires and billionaires. That's pretty straight forward. It's hard to argue against that.

(END VIDEO CLIP)

KING: It is hard, David Gergen, to argue against that, but the Republicans are pretty adamant they won't give it to the president the way he wants it. They won't give it to him in these rate increases. Can the president create the impetus to say, fine then do it the other way? Do big sweeping bold tax reform and do it quickly?

GERGEN: I don't think you are going to see big sweeping tax reform quickly, John. This committee can't resolve all those kind of intricate details that go into the complexity of our tax system. It has to be this is a problem that's going to take a year or two or more. You've got to sort out what the answers might be and much less pass it.

What the president has hit upon is something he thinks works and it shows up in the opinion polls, there are an awful lot of Americans who think it's time to raise taxes on the wealthy. I think when we actually get into the details, I would wager there are probably not very many people like Warren Buffett who are millionaires or billionaires who pay less as a percentage of their income than their secretary, but we'll have to wait and see. There may be people that will come up with figures that will surprise me.

But I think that from, I think this is very, very good politics for Barack Obama and his base, but whether it actually advances us toward getting a real agreement, you know, I think people in the markets are going to be very skeptical that we're going to see a major agreement any time before the election.

KING: So you'll have uncertainty in the markets if David Gergen is right, Gloria, and you'll also have the threat of across the board cuts in the August agreement. Now, they don't take effect right away. Congress will have a chance to revisit that issue, but if they don't get this done by the deadline, the Specter will be across the board cuts.

BORGER: Right. So they do have this hanging over their heads, and nobody wants it. The secretary of defense, Leon Panetta has said that the defense cuts would be completely unacceptable. I assume Republicans would agree with him. So, that is the only light there because it might force them to do their jobs, and so in the end, and I don't know if you agree with me or disagree with me, David, on this and John, but I think that if you could come up with some form of tax reform or the promise of it in which you could kind of muddle what's a tax increase because if you lower a wealthy person's top rate, but you take away their deductions, does it even itself out? And maybe you could play with something like that.

GERGEN: Well, Gloria, you're right. There's an important point. If you did get tax reform that economist would say would increase growth, that will bring more revenue and Republicans would support that.

BORGER: Right.

GERGEN: You know, it would more growth brings more revenue, and that's a good thing, but I have to, I don't know about you, but, and I'm not sure of the feeling in Washington, but don't you think the super committee is a long, long way away from coming up with a serious big plan?

BORGER: I do, but, you know - KING: Yes.

BORGER: But the solutions, you know it's not as if this is a secret. I mean you know, David that Erskine Bowles-Alan Simpson committee came up with a tax reform proposal. The president could have endorsed it in January. He did not do that. I believe that was a mistake. But people know what the contours of this, has to be. It's not as if they haven't been dealing with it for years, right?

GERGEN: Yes, but we're - but we're moving - we've moved into an election cycle.

BORGER: Right. Right.

GERGEN: I today was a political play. Not a governing play.

KING: Let's see if we are surprised by leaders of al parties if they could surprise us into Sunday.

GERGEN: Would love to be surprised.

KING: I would love to be surprised as well. David Gergen, Gloria Borger, Thanks for your help tonight. David, we'll see you in a little bit.

Ahead tonight, Doctor Sanjay Gupta on the rare decision by the United Nations, to put a major help challenge front and center, in its annual general assembly.

And next, why proposed a deficit plan you know will be thrown into the trashy by Republicans. The president's budget director explains the plans and the strategy next.

(COMMERCIAL BREAK)

KING: More on the president's new $3 trillion deficit reduction plan. Half of that amount would come from tax increases, including big changes for more wealthy Americans. As he announced it in the Rose Garden, the president knew just what the Republicans would say about his approach.

(BEGIN VIDEO CLIP)

OBAMA: This is not class warfare. It's math. The money is going to have to come from someplace.

(END VIDEO CLIP)

KING: Let's dig deeper now and just how the president assembled this plan and whether he will compromise with congressional Republicans or fight this one out in the next contain campaign. The Obama budget director Jacob Lew is with us from the White House tonight.

Jack, I want to start on that point. When you are assembling this plan, I know from a policy standpoint, you think these higher taxes on more affluent Americans are the right thing to do. But you know from a political point, it's dead on arrival so, you made the decision to leave it in there. That's more a political calculation than a policy calculation, isn't it?

JACOB LEW, WHITE HOUSE BUDGET DIRECTOR: You know, John, I actually hope that that is not the correct assessment. There's no doubt that there is an almost instinctive reaction on the Republican side to say that, but last summer we saw that there were some openings for a reasonable discussion, and I hope we find that again.

KING: Back in the lame-duck session the president once again agreed to leave the Bush tax cuts in place, so we know back in 2008 he campaigned for president saying he wanted to get rid of the Bush tax cuts for those at $250,000 or above. When he left them in place again in that decision at that time he said, he said look, here's my tough decision. I don't want to raise taxes when the economy might still be in recession or is just barely in recovery. You could make the case the economy is as weak if not weaker now. Why put tax increases on the table?

LEW: Well, we're not talking about raising taxes today or tomorrow. What the president proposed is in two phases, the immediate action is to cut taxes. The American jobs act would reduce payroll taxes for individuals, avoid a tax increase in January, and it would reduce taxes for businesses that hire new workers. So, in the short run he is very concerned, as we all should be, about making sure the economy grows and we create jobs.

As we look out over the horizon at the very difficult choices we have in terms of how to get our fiscal house in order, revenues have to be part of it, and the president's proposals today would take effect in you know in beginning not this year or next year, but after that. I think that if you look at the kind of balance of what the choices Congress faces, in the debt bill that we agreed to together in August, it put in place automatic cuts that would have very deep cuts in defense and in domestic spending that everyone agrees are unacceptable.

The challenge for the joint committee is to come up with a better alternative. What the president said today is we have to raise the bar and do even more because doing the minimum is really not enough. We have to make a statement that we're going to reduce our deficit and our debt as a percentage of the economy so that it is actually helping us to promote long-term growth.

KING: One way you could read this document, and you have been in Washington long enough to know how this works is you know you're not going to get the rate increases, but what the president hopes to do is say go big, number one be as you say, make it a bigger number, and put the pressure on the Republicans since they won't give you the rate increases to actually develop the political will to do comprehensive tax reform and to work with the Democrats on the committee for that so that you lower rates for everybody. You get rid the loopholes and, therefore, you get more money in Washington. That acceptable to the president, forget his rates as long as he gets that in the end, the bottom line? LEW: Well, if the president made clear in the document he sent to Congress today that our goal is tax reform. Our goal is in our principles in tax reform include lowering rates, but we also have to raise revenue while we're doing that. We think that would be the best thing to do for the economy and for the American people and if there's a path there to work together, we should get that accomplished and we should do it as soon as possible.

It is not an acceptable place to go to say that the entire burden for solving our deficit problem should fall on the backs of those who are on Medicare and Medicaid and who are in many ways the least able to absorb it. There has to be a shared burden if this is going to be done fairly, and we can't say that those who get the most benefit out of the tax code and out of the economy are exempt from any impact.

KING: You know full well in the business community a lot of CEOs say well we need more certainty from Washington. We need the bickering to end and what the policy is going to be. Not for the next three to five years. But how about the next three to five years, that would really help us? What the president puts a veto threat out there and, again, you know in your heart you're not going to get those rate increase on more wealthy Americans, do you worry at all that this standoff, if the president holds that line and has to veto something or doesn't get, doesn't even get something and the automatic cuts kick in, that you contribute indirectly to that uncertainty that's hurting the economy and the markets?

LEW: I think that what happened this past summer was a very, very bad thing in terms of the kind of gridlock and kind of dysfunction that the world saw when it looked at government. We need to do better than that. We are now in a place where there is not that threat of immediate default, so one can say that the action forcing event is perhaps less clear, but it's an opportunity for us to work together and show that we can get beyond what that bickering that everyone saw and try to get something important done for the American economy and for our budget.

I think that the notion that taxes are off the table is as much of a nonstarter as any other kind of absolute principle like that might be. So that's not a reasonable, that's not a way of showing leadership. The president I think showed leadership today by saying I'm going to put on the table a host of very difficult policies, reductions in Medicare and Medicaid, reductions in programs from agriculture to federal workers. These are hard policies. The right answer is everything should be on the table. Taxes should be on the table, and we should do this together.

KING: Fascinating and stressful time to be at the White House budget director.

LEW: Certainly is.

KING: Appreciate your time tonight.

LEW: Thanks John. KING: Thank you. Ahead here, President Obama supports creating an independent Palestinian state. So, why is he so upset the Palestinians are asking the United Nations for help right now?

Plus, today's historic U.N. gathering aimed at stopping diseases that account for nearly two-thirds of the world's deaths every year. CNN's Doctor Sanjay Gupta is at the U.N. for us tonight.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

KING: At the United Nations today, health experts from around the globe sharing ideas on slowing the spread of heart and lung disease, cancer, diabetes, diseases that aren't spread person to person, but are caused by how and where you live, what you eat, and whether you smoke. This is a very, very big deal. Only the second time in history the United Nations has devoted such a high level meeting to a health issue. The only other time was to address the aids crisis.

Our Chief Medical Correspondent Doctor Sanjay Gupta is live at the U.N. tonight.

Sanjay, let me start with why the urgency now? What is it about now?

DOCTOR SANJAY GUPTA, CNN CHIEF MEDICAL CORRESPONDENT: Because it's a truly global problem, John. I think that that's what people are starting to realize. You think of these, as they are called, non- communicable diseases, such as the ones that you mentioned as being diseases of the infant (ph), diseases of developed countries, diseases of the elderly, and what you find when you really start to look at the numbers is that in many places around the world it's quite the opposite. In fact, there's a U.N. secretary general said today three out of five people living on earth will die of these chronic or non- communicable diseases. So, it is a global problem. It's also a huge economic one, John.

They say over the next 15 years diseases that could absolutely be prevented in terms of their toll on people's lives and certainly leading to their deaths could cost $7 trillion over 15 years, but about $10 billion to $12 billion to prevent. So, you see the economic. You see the health sort of things coming together. But I think what I learned probably most of all, John, was there are some solutions to addressing these problems everywhere in the world. They used to think cancer it's too complex, too complicated, too costly, to treat in the developed world. Well, you hear quite a different story today at the U.N., John.

KING: And so you seem to see there's consensus, if we get into geopolitical issues there, hard to find there at the U.N. When it comes to the health urgencies, if they have a consensus and they have an urgent global problem, do they have a plan? And I assume you need a one-year plan, a two-year plan, a five-year plan, and a ten-year plan to even make a dent? GUPTA: I think so, and I think mainly because of what you said earlier, John. Ten years ago almost exactly was when the last U.N. general assembly came together to talk about a global health problem, HIV AIDS. And at that point, as you know, John, there wasn't a lot of consensus. There weren't people negotiating lower drug costs. There wasn't a visible evidence of success. In fact, a lot of people said this was going to be an issue that would go no further than the U.N. general assembly. History has proven that not to be true.

There have been a lot of successes when it comes to HIV aids. It's turned into a chronic disease. It's turned in to much more affordable disease to treat for a less than a dollar a day in many places in the developing world.

So, people are saying, OK, let's think of these chronic diseases much in the same model that we thought about HIV/AIDS and see if we can get some sort of traction, some success at using those same approaches, John.

KING: And so when you have this class of diseases -- we're talking about, non-communicable diseases, much more lifestyle-related in the sense that any one government can't necessarily stop them, what are we talking about here -- joint education campaigns, pooling research, resources? What do these governments hope to do collectively?

GUPTA: Well, you know, I think a lot of it is certainly education. I think tobacco, you always have to put on the table very early because, you know, you still have over a billion people smoking in the world, but it's much deeper than that, John. I'll tell you, first of all, look at certain vaccination programs for hepatitis, for example. Hepatitis can lead to liver cancer and chronic disease. Vaccinating people against hepatitis, you can diminish those numbers significantly.

Something that's come up domestically a lot, John, like cervical cancer and Gardasil, using Gardasil as part of the cervical cancer vaccination program in many places around the world. The partners in health organization folks are talking about that.

But, also, the same sort of lifestyle decisions, choices that we've had here in the United States that people talk about all the time with regard to obesity, with regard to diabetes. Those same sorts of things are starting to affect other parts of the world. While it's hard to get the message across to individuals and no one knows this better than me, people don't always listen.

If society starts to move in this direction because of the significant impact on the overall labor force, young people who can't work because they're sick and has the impact on the economics -- $7 trillion I mentioned over 15 years, then people start to pay attention. A lot of people start to unite and do something about these NCDs, these non-communicable diseases.

KING: You mention the progress in the 10 years ago, the AIDS summit essentially at the U.N. There has been remarkable progress. There have been a number of government NGOs and government-to- government cooperation.

As you know, there also were, especially at the beginning and even now, some obstacle, some governments don't want to distribute condoms. Some governments don't want to do certain kinds of education. When it comes to the current challenge, are there any parallels in the sense that certain governments for taboo reasons or, you tobacco being a big crop, or for whatever reasons, might think I don't want to touch this?

GUPTA: Absolutely. I think one of the biggest ones is this idea that, look, this is a lifestyle problem. People did this to themselves. They ate too much. They did things that they could have prevented themselves. Why should the rest of society have to pay the price?

I think that's going to be -- that's been an obstacle, John, as you know. It will continue to be an obstacle. The same could be said of HIV/AIDS 10 years ago as well, where people said, look, this is a lifestyle disease, but you saw those obstacles were eventually overcome. And, you know, in many places around the world, with regard to the foods they eat, people eat, they oftentimes don't have choices to eat healthier foods. We talk about that here in the United States, but the same can be said in places around the world.

So, you know, you start to have governments say we provide healthier food because it leads to a healthier population overall, and we make that much more accessible and affordable. Those obstacles will remain. But, you know, we're talking about what they call best buys. Things they can do for relatively cheap. They can safe millions of lives.

And I think, you know, from listening to the people at the U.N. and the people in the panels around the city, that's where the focus seems to be. Let's grabbing that low-hanging fruit and make it worked for us.

KING: Fascinating challenge. Great to get some perspective.

Our chief medical correspondent, Dr. Sanjay Gupta -- Doc, thanks.

Up next here, new violence leads one of the poorest countries in the Middle East on what a humanitarian official calls the knife edge of civil war.

(COMMERCIAL BREAK)

KING: Welcome back.

Here's the latest news you need to know right now.

An official of Amnesty International warns Yemen is on, quote, "the knife edge" of civil war after a second day of pro-government forces, including snipers -- you can see it right there -- firing on demonstrators. At least 57 people are dead, 550 wounded.

In Libya, a spokesman for the transitional government accuses pro-Gadhafi forces of robbing food stores, leaving civilians to starve and creating a humanitarian crisis in the city of Bani Walid, which so far anti-Gadhafi forces have been unable to take.

A training accident near the Camp Pendleton Marine Base in California killed two people this afternoon. Crews are mopping up a brush fire that started after a Cobra helicopter went down.

Delores Hope, comedian Bob Hope's widow, died today at 102. Back in the day, she would close her husband's USO shows by singing "Silent Night."

Next, President Obama steps into an international showdown that could embarrass him on the world stage, and hurt him politically here at home.

(COMMERCIAL BREAK)

KING: "ANDERSON COOPER 360" coming up at the top of the hour. Let's check in with Anderson for a preview.

Hi there.

ANDERSON COOPER, HOST, "ANDERON COOPER 360": Hey, John.

We're keeping them honest tonight on "360," tonight at 8:00 p.m. Eastern. With the president unveiling his debt reduction plan, we'll take a look at what the plan says, what the Republican response is, and what's not working in Washington, which is compromise because politicians are putting their election prospects first instead of working for the people.

Also, up close tonight, the death of a whale trainer at SeaWorld Orlando. A hearing in Florida today over the death of Dawn Brancheau, who was working on a platform next to the whale tank handling a whale named Tilikum, during a live show.

This is what the audience saw.

(BEGIN VIDEO CLIP)

SUE CONNELL, WITNESSED SEAWORLD ATTACK: He grabbed her by the head and, you know, very hard thrust. She went down, and I screamed, and she screamed, and then I started yelling to the other trainer because he wasn't looking. I said he just took her down. He took her down.

(END VIDEO CLIP)

COOPER: Obviously the wrong tape. We'll show you what the audience saw and we'll talk about what happened at the hearing today. We'll talk to a former SeaWorld trainer about whether these animals should be worked with trainers in captivity.

Also, caught in the across fire in Libya.

(BEGIN VIDEO CLIP) UNIDENTIFIED MALE: I have been shot.

(GUNFIRE)

UNIDENTIFIED MALE: Down, down, down.

UNIDENTIFIED MALE: Get it down.

UNIDENTIFIED MALE: Go, go, go!

(END VIDEO CLIP)

COOPER: This is what happened to our CNN crew. They managed to drive to the hospital. The story didn't end there. We'll show you what happens next, and tonight's "Ridiculist."

All that coming up at the top of the hour -- John.

KING: See you in a few minutes. Anderson, thanks.

President Obama is in New York tonight for the opening of the United Nations General Assembly. But he is also, you might say, between a rock and a hard place.

Even though the president is long on record expressing support for Palestinian statehood, he's also made it clear the United States will veto the Palestinian's application for official U.N. recognition this week if it reaches a vote in the Security Council.

Just now, Secretary of State Hillary Clinton told reporters negotiations are -- in her words -- extremely intensive and ongoing.

(BEGIN VIDEO CLIP)

HILLARY CLINTON, SECRETARY OF STATE: The only way to a two-state solution, which is what we support and want to see happen, is through negotiations. And no matter what does or doesn't happen this week, it will not produce the kind of outcome that everyone is hoping for. So, we're going to stay very much engaged and focused.

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KING: With us now: Shibley Telhami. He's a senior fellow at the Brookings Institution.

And CNN national security contributor, Fran Townsend. She's a former adviser to President Bush, and a member of both the CIA and homeland security external advisory boards.

Professor Telhami, let's start with this. The United States doesn't want this to happen. What is it? What is it in the Palestinian politics that makes President Abbas at this moment decide he needs to push for this even though he knows the United States, who he needs as a partner, so firmly opposes it?

PROF. SHIBLEY TELHAMI, SENIOR FELLOW, BROOKINGS INSTITUTION: Well, it may have started as a bargaining tactic on his side. You know, he may have initially when they started to talk about this move weeks ago, it may have been part of the -- put pressure of Israel and the U.S. to make concessions to come back to the negotiating table. But once the train started moving, it really became out of control, in part, because it's a popular move, and the Arab world expects it. The international community expects it.

And, frankly, there has not been significant movement for two years of administration effort. We're entering into an election year. Something had to be done to shake up the game, and I think right now, people think this might be just the move that might shake the game enough to make some forward movement.

KING: Could, Fran, from a security standpoint, shake the game too much in the sense that across the Arab world, the Palestinian crisis, the Palestinian's grievances, are often the source of tension, sometimes a source of violence at a time when you have so much uncertainty in the Arab Spring unfolding. If the United States had to use its veto in the Security Council to say no to the Palestinians, would you be concerned about what might happen in the Arab street?

FRAN TOWNSEND, CNN HOMELAND SECURITY CONTRIBUTOR: Well, of course, I think there's likely to be a reaction in the Arab street, but you have to understand, the administration is a very difficult position with all the chaos throughout the region right now. There are real concerns about Israeli security. Israel is the only democracy in the region. And you've got sort of -- look at what's going on in Egypt with the rise of the Muslim Brotherhood. There have been protests in Jordan.

I mean, this is a real-time of uncertainty, and the added tension right now really puts the administration in a very difficult position.

KING: And so, Professor Telhami, this afternoon the Israeli prime minister says, no, don't do this. Don't do this. Let's have direct negotiations. And the Israeli P.M. on Twitter, "I call upon Palestinian president to meet with me in New York to resume immediately direct negotiations for peace." Might that -- is that enough, or would the Palestinians think it's a gimmick?

TELHAMI: Well, look, there's been negotiations ongoing for decades, and direct negotiations for a couple of decades. Obviously, they haven't resolved it. This administration put a lot into it at the beginning and said this is a priority issue for the president. He expected to have some agreement by now. Nothing has happened.

In the meanwhile, what do you have on the ground? You've got occupation 44 years. The policies (INAUDIBLE) -- policies have been born under occupation. Israelis have not had security.

So, the reality of it is, there's something that needs to be done at the international level. The U.N. is a good place, but it should be an American resolution. It should be an American-led resolution that would put some outliers. It's not a substitute for negotiations, but there has to be some perimeters out there to regain the confidence. People are losing faith in the two-state solution as it is. You need to generate some international legitimacy for this solution, and I think the way to do it instead of going on the defensive and having a lose-lose is to come with the Europeans to put some reasonable proposition before the Security Council that would reinforce a two- state solution and then restart the negotiation.

KING: Can President Abbas accept some compromise like that, or has he now raised expectations back home that he is coming to the United Nations to get this vote -- win or lose, he can't draw -- win or lose, he's coming to the United Nations to get this.

TELHAMI: But he would interpret a Security Council resolution that included the basic element as a victory for himself, and I think there is something that we could play with. Whether or not the president himself, our own president, can live with that depending -- given where Congress is, given where the Congress is totally opposed to some kind of U.N. action on this, that's another question. But that's really a function of our broken politics, not a function of sensible policy.

KING: Fran, should we mention our broken politics. This is a tough one. It may not be a fair question. But when you are in the White House, and you are on homeland security issues and especially in the post-9/11 world, some of them became very political.

When this is happening, when you have an administration that has its policy plan in front of, it and when it comes to the Middle East, that's complicated and hard enough. And then you have a domestic political environment where, you know, some Democrats are saying, sir, could you lose the Jewish vote, you can't do this. In Congress, Republicans are saying you are turning on our greatest ally, Israel.

How much does the domestic political noise get in the way of national security policy and influence it?

TOWNSEND: There is no question there is tremendous, tremendous pressure on the White House politically right now. And, frankly, they've got -- the Palestinians really rely on the United States for -- and are allies for financial support. And the White House is not going to look kindly on this sort of the brinksmanship of a U.N. Security Council vote and being put in a position, along with our allies, of using our veto.

The Palestinians have to be very careful. If they push the administration politically very hard on this and play this sort of brinksmanship, there are going to be consequences for the Palestinians. And so, while they may be able to get the vote that Abbas seems to so dearly want, there will be long-term consequences to them.

And so, what they ought to be looking to are these intensive negotiations that the secretary of state has referred to, to try and get some progress here without pushing that this to that sort of brinksmanship vote.

KING: We'll follow this closely over the next 48 to 72 hours.

Fran Townsend in New York, and Shibley Telhami -- thanks for coming in. It's a very important story.

Next, a former staffer says the Obama White House was a hostile workplace for a woman. But the treasury secretary says that and other allegations in a new book bear no resemblance to the reality he lived.

We'll explore this publishing controversy. Stay with us.

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KING: A new book about the Obama White House describes the president as, quote, "uncertain and second guessing himself often."

One former top woman staffer is quoted as calling it a hostile workplace. Another says she felt, quote, "like a piece of meat" and reportedly questioned whether men on the senior staff had the courage, shall we say, to make tough decisions.

And what makes this all the more odd is this: the White House aggressively cooperated with the author, Ron Suskind, to the point of giving him a 50-minute interview with the president of the United States. Now, many former top White House aides, even current cabinet secretaries, are saying they can't imagine ever saying the things attributed to them in the book.

It's called "Confidence Men: Wall Street, Washington and the Education of a President."

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TIMOTHY GEITHNER, TREASURY SECRETARY: I haven't read this book. But, to borrow a phrase, I live the reality. And the reports I've read about this book bear no resemblance to the reality we live together -- no resemblance.

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KING: So how damaging are the accounts?

Our chief White House correspondent Jessica Yellin; former presidential adviser David Gergen are back with us.

Jess, some of this is substance that's embarrassing to the president, if true. Some of it is the personal conduct. And I want to start there.

Anita Dunn is the woman Ron Suskind says, called it a hostile workplace. And she said this: "Looking back, this place would be in court for a hostile workplace, because it actually fits all of the classic legal requirements for a genuinely hostile workplace for women." That's Anita Dunn, a former top communications adviser in the White House.

Also, Dr. Christina Romer, the top economic adviser for the long time -- or the number two. This is talking about her boss essentially, the number one guy, Larry Summers, "I felt like a piece of meat. Why is it always the women? Why are we the only ones with the" -- you can read that on your screen if you want -- "around here?"

In covering this White House and in knowing everyone who works here but especially women -- do they describe such a horrible environment?

JESSICA YELLIN, CNN CHIEF WHITE HOUSE CORRESPONDENT: Well, I'll tell you, John, first of all, both women have either flatly refuted or said they have no memory of saying those things. That said, it's no secret that Democratic women around town have for some time talked about the fact that this White House, especially in the early days, was a challenging place for women to work. That is no secret.

They've also said -- from women who have worked there -- that the president became personally involved in this and that it's become an easier place to work and that is changed

I should also say that it's not a secret that this has been true of most White Houses. It's hard to find a White House that's an exception. It's kind of the world we live in, in Washington, John.

KING: That's certainly true.

David, I want to bring you into the conversation as someone who has worked in four White Houses and there's always a lot of grunting, sighing and sometimes panic when books are written. We talked about a workplace environment question there.

I want you to listen to this. This is a policy issue heading into a campaign when the economy is the number one issue. Paul Volcker is quoted on this book and the president has been brought him for some advice.

He's quoted on this book as saying, "Obama is smart, but smart is not enough. Leadership is another thing entirely, about knowing your mind enough to make real decision, ones that last."

That's a pretty damning portrayal by a man who is described by this White House as a senior economic adviser sometimes.

DAVID GERGEN, CNN SENIOR POLITICAL ANALYST: Well, it is, John. As you well know, there are a number of arguments in this book that the president was in over his head, that he had a team of people around him on the economic side who were frequently clashing with each other, had the knives out for each other. And most of the top economic advisers have specifically refuted what's been attributed, led by Secretary Geithner, as you just showed that clip.

What's been interesting about Ron Suskind's book in the past, John, is, he had three about the Bush administration and each case, there attacks on particular lines or what statements of people have made, what was attributed to them, and sometimes it appeared they were wrong. But the main narrative of those books tended to hold up. And I think the danger for the Obama team is -- you can disagree with one particular quote or another, but the main narrative of the book -- here is an amateur coming to the White House who was really struggling with decisiveness and with leadership is one that the president is going to have to face in this campaign because it's one his enemies are using against him.

KING: Jess, do they regret the access he was given, 50 minutes with the president of the United States. That's a hard interview to get. And also, a lot of time with the senior staff.

Do they now think in hindsight that was a mistake?

YELLIN: Well, they're certainly refuting it, aggressively. I mean, they're putting out chapter and verse, pointing out everything that they can find that's wrong from individual names that he's gotten wrong, to titles, even showing where he has quoted Wikipedia instead of doing his own reporting. So, they're doing everything that they can possibly do to tarnish this book and suggest that, by detailed inaccuracies, suggesting that the larger narrative is itself inaccurate.

I think you can extrapolate from that that there's a lot of upset about the book more broadly, John.

KING: Angst in a word as Jess

YELLIN: Sorry. It's very noisy here.

KING: I get it. Jess braving the elements outside.

So, David, in a few seconds, we're almost out of time tonight, but when you're working a senior job in the White House and these proposals come forward, how do you weigh the pros and cons and saying, "Let's even give him the president"?

GERGEN: Look, the Clinton administration made the same mistake. They gave access early on to Bob Woodward. The president met with him. He wrote a book that was very damning and the president was angry that he had the interview. How the hell did my staff get me into this kind of thing?

That happened when you're new and fresh. And you get these early books, and they can be very, very upsetting inside.

KING: We'll watch this one play out.

David, Jess, thanks for your help. We'll see you tomorrow night -- interview with the vice president -- former Vice President Dick Cheney among our issues tomorrow. That's all for us, though.

"ANDERSON COOPER 360" starts right now.