CNN CNN


 

Return to Transcripts main page

JOHN KING, USA

Stocks Soar on European Union Debt Deal; Rick Perry Ducking Debates?; Interview With California Congressman Darrell Issa

Aired October 27, 2011 - 18:00   ET

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


JOHN KING, CNN ANCHOR: Wall Street had a big rally day, the optimism inspired by a deal European leaders struck in hopes of bringing their continent's debt crisis under control.

The Dow rose nearly 340 points and notably climbed back above the 12000 mark, closing at 12208. The S&P, the Nasdaq also closed up. And get this. All three of those indicators now back into positive territory for the year. And the S&P on track to post its biggest monthly gain since 1974.

This cautionary note: The European debt deal still has to be implemented, a fact not lost on President Obama, even as he celebrated it.

(BEGIN VIDEO CLIP)

BARACK OBAMA, PRESIDENT OF THE UNITED STATES: So the key now is to make sure that there's strong follow-up, strong execution of the plans that have been put forward.

(END VIDEO CLIP)

KING: As president and as a candidate for reelection in tough times, Mr. Obama was crystal clear on the domino effect of that Eurozone deal.

(BEGIN VIDEO CLIP)

OBAMA: If Europe is weak, if Europe is not growing, as our largest trading partner, that is going to have an impact on our businesses and our ability to create jobs here in the United States.

(END VIDEO CLIP)

KING: A bit more positive news from the Commerce Department. It reported that the overall U.S. economy grew at an estimated annual rate of 2.5 percent in the third quarter. Now, that's hardly a robust rate, yet it is nearly double the anemic growth back in the April-May- June quarter.

Can this rally be sustained? And can we finally set aside worries of sliding back into recession?

We begin with Alison Kosik. She's live at the New York Stock Exchange tonight. Alison, was this rally all about Europe?

ALISON KOSIK, CNN CORRESPONDENT: It was all about Europe, John. This European debt deal is really what Wall Street has been waiting for, for a long, long time.

Now, this agreement includes a stronger bailout fund. It's going to force European banks to set aside more cash. It also includes a plan to reduce Greece's huge debt load. And it is these debt problems that have literally been hanging over the markets for many months for some time now, causing all the volatility that we have seen in the markets for some time.

And investors have been worried about Greece defaulting and what the ripple effect would be in Europe and here in the U.S. Well, now it looks like Greece is likely going to be able to pay its bills. So that is what brought all the confidence back into the market and investors bought into it in a big way today, not wanting to miss the rally, not for a minute -- John.

KING: And, so, Alison, enough positive data to breathe a sigh of relief or could we be in for another roller coaster?

KOSIK: You know, I talked with some analysts and traders and they say, you know what, if it's this, we really dodged one bullet, but then we have got lots of bullets left.

This plan only tackles debt. It doesn't do anything to boost growth in Europe. Greece still has to go through with its austerity cuts. And Italy is talking about some cuts, too. So some analysts are concerned actually that Italy could be the next shoe to drop because Italy is swimming in its own pool of outstanding debt of $2.5 trillion.

So beyond the details and implementation of how this big European debt plan is going to happen, there is still the big question of how to get these economies overseas moving. And I haven't even mentioned our own debt problems that we have to deal with. That super committee still has to come up with an agreement on cutting $1.2 trillion by November 23.

So, John, what you will see is that is really going to be the next worry to hang over Wall Street -- John.

KING: A lot of worries around the world here in Washington and on Wall Street.

Alison Kosik live for us tonight, thanks.

Let's get some more perspective now. Mark Zandi is the chief economic for Moody's Analytics. David Brancaccio is a special correspondent for American Public Media's "Marketplace."

Mark, I want to begin with you.

A lot of Americans, even now, some are still saying why does this brouhaha, this dysfunction in Europe affect me? Help them understand it.

MARK ZANDI, CHIEF ECONOMIST, MOODYSECONOMY.COM: Well, Europe is our largest trading partner. A lot of our companies have big exposures to what goes on in Europe and our banks have big exposures do as well. They do a lot of business with European banks.

If Europe is struggling, if the European economy is in recession, it's going to have ripple effects on us through trade, through the stock market, through the banking system. You know, we are literally tethered at the hip with Europe. I think we could -- our economy could digest a mild European recession, but it could not digest a severe recession. It would drag us down, too.

KING: And, David, as we watch this play out, we know -- and Alison just mentioned -- there is some dysfunction here in Washington about the super committee, a U.S. deficit reduction plan. We will get to that in a moment.

But we just saw the pictures of the key European leaders Sarkozy, Merkel, Berlusconi. They have an agreement on paper now. Do you have the confidence -- they have had some hiccups in getting to this point -- that they can get it to the finish line?

DAVID BRANCACCIO, AMERICAN PUBLIC MEDIA'S "MARKETPLACE": There is a lot more work to do on this deal.

Implementation is going to be, as they say, a bear. But the fact of the matter is, people by late yesterday as the summit was still going on in Brussels, were starting to get a bit pessimistic. Would Europe actually come up with the -- it's being called a bazooka that would stop this contagion from the Greek debt situation from spreading to Italy, from spreading as far as us here in the United States?

They didn't come up with a bazooka, but they came up with a blueprint for a bazooka. If you stared at it long enough it would start to look like one. That was as we saw in the stock market today enough.

KING: Enough for now, Mark and David.

Mark, let's go back to you. We get these GDP numbers out of the Commerce Department today, 2.5 percent. In a strong economy, we'd be worried about that. In a weak economy, we celebrate it as a hell of a lot better than the last quarter.

MARK ZANDI: Right.

KING: But not enough to deal with the big fundamental problems of unemployment. And if you don't deal with that, how are you going to deal with consumer confidence?

MARK ZANDI: Yes, good point. But I will take it. I mean, if you just think back a few weeks ago, you know, there were some legitimate concerns that the economy would completely stall out and we'd get no growth, maybe even a negative number. So 2.5 percent growth in that context isn't too bad. If you look at the details of the numbers, they're also somewhat encouraging. They suggest that growth going into the current quarter, Q4, is OK.

But you're absolutely right, John. This isn't enough. I mean, if we're going to make any dent with respect to unemployment, we're going to have to have growth that is north of 3 percent on a pretty consistent basis and we're still a long way from that.

KING: So, David, not enough to make us feel better about the jobs situation. Is it enough to make us set aside the script we're keeping, saying we might fall back into double dip?

BRANCACCIO: Well, one thing we now know is that we did not fall into a recession in the last quarter. That's what the numbers showed today.

There were some interesting details as Mark points out in the GDP report. One of them is this. Got a lot of companies around the country sitting on a lot of cash that they have generated from their profits. If we could just get them to spend, because you can't really ask the consumer to spend much more, we're kind of tapped out, if we can get the businesses to spend that would be a good thing.

We saw business investment up 16 percent in the last quarter. That is good news. Consumer spending up 2.4 percent, not bad news. What was a bit disturbing though was income after taxes actually down during the quarter, meaning we have dipped into our savings.

KING: And so if we need that confidence, Mark, to you, as you know, a lot of those businesses have said some stability out of the governments would help.

And we see perhaps progress in Europe. What about these super committee deliberations? The Democrats make one proposal. The Republicans say no way. They have a proposal. It may be behind closed doors they're getting something done, but at least publicly they're not inspiring confidence at the moment, are they?

MARK ZANDI: Yes. You're right. The super committee has to come up with something. I mean, if the process completely fails, if the committee is unable to come up with any kind of deficit reduction, I think that would throw our financial markets back into turmoil and that would be the fodder for going back into recession.

So I don't know that the committee can come up with the goal of $1.2 trillion, at least substantively. I don't think they need to, but they need to come up with $400 billion, $500 billion, $600 billion just to ensure that people feel confident that we're going to follow through on this deficit reduction effort that we're now engaged in.

So this is very key. The coast isn't clear. This is a hurdle we have to get over.

KING: Chrystia Freeland, who is the global editor at large for Reuters, joins our conversation. Chrystia, as we look to the political dysfunction in Washington and for businesses and consumers and everybody looking for some sign that they get it, are you convinced they get it?

CHRYSTIA FREELAND, GLOBAL EDITOR AT LARGE, REUTERS: Well, I do think they get it. But I think what they get more is the 2012 election. And what seems to me to be happening is really a lot more about political posturing and a lot less about coming to the kinds of deals that Mark was talking about.

You know, what I would really like to see and what I think business would like to see, we would see some concrete, practical action on some of those housing proposals that we have heard from the White House this week. I think that would do a lot of good to get the sluggish economy going. And I think the jobs situation is still really a crisis, probably the preeminent one for the U.S. economy.

KING: And, so, David, if you're the average American out there and you're watching this wondering, what about me, if you accept Chrystia's logic that they will cut a deal but it won't be a big, bold deal because politics will constrain that, what is your outlook then over the next year? Should you be changing your behavior at all based on what's about to happen?

BRANCACCIO: Well, they're always telling us to save and this is a period to save, which is the opposite of what the economy needs, but it is exactly what many American families need to do given the uncertainty.

I think what Chrystia said is key, which is something has to be done about the housing market. Federal Reserve Chairman Bernanke talked about Congress, please, come up with some sort of path to the future when it comes to what to do about these foreclosures and the mortgage market in general. That's got to happen. And that could actually happen before you get a budget due.

FREELAND: And if I could just jump in there for a minute, the interesting thing about housing is I do think that there are quite a few things the White House could do that it doesn't need Congress for.

That's what I would really like to see the White House focusing on right now. We know that there is a political logjam, so this could be a great moment for some real tactical steps that the president can just do.

KING: Tactical steps, Mark, beyond what he has done, what he has promised yesterday? What more can he do?

MARK ZANDI: Well, I think he took a tactical step a couple days ago by proposing some changes to a refinancing plan to allow for more homeowners to refinance. I think that's a good tactical step.

But a broader point is I don't think there are any home runs here. There are no policy efforts that you can put into place quickly that will make a big difference. So it's got to be things like he did a couple days ago. One other idea would be, for example, we have got a lot of foreclosed properties that are coming to market over the course of the next several months. That's going to drive down house prices. Give investors a tax break, a temporary tax break to go out and buy those properties, that would be helpful. It's those kinds of things.

This isn't a grand plan, a grand solution. But if we string enough singles together, then it will make a difference.

KING: Mark, David, Chrystia, appreciate your insights on what we can at least say is a positive day. We will hope it's followed by more positive days. We appreciate your help tonight trying to lay out the path for how we could get more of them.

Still to come, tonight's "Truth" looks at Rick Perry's new strategy. Is ducking debates a viable comeback strategy?

And more sharp words and charges between the Obama administration and a top Republican investigating the Fast and Furious gun trafficking debacle.

(BEGIN VIDEO CLIP)

REP. DARRELL ISSA (R-CA), OVERSIGHT AND GOVERNMENT REFORM COMMITTEE CHAIRMAN: She can be very thin-skinned about being asked very legitimate questions and talks in terms of, how dare you ask this question or I don't like your tone.

(END VIDEO CLIP)

(COMMERCIAL BREAK)

KING: More fireworks and tension on Capitol Hill over that botched gun trafficking program called Fast and Furious.

The latest sign of the mistrust between the Obama administration and congressional Republicans came as the homeland security secretary, Janet Napolitano, was before a key House committee.

Operation Fast and Furious was supposed to find out how American guns got into the hands of Mexico's drug cartels -- and actually that program actually allowed U.S. guns across the border. This week, the House Oversight Committee wanted to know why Secretary Napolitano didn't act more quickly when some of those guns turned up at last December's killing of U.S. Border Patrol agent Brian Terry.

(BEGIN VIDEO CLIP)

ISSA: In the case of Brian Terry, he was gunned down with two weapons from Fast and Furious. It has been months. And you tell me that you're not -- you weren't doing it because of an I.G. investigation. Well, let's go through a few questions here, Madam Secretary.

(CROSSTALK)

JANET NAPOLITANO, U.S. HOMELAND SECURITY SECRETARY: Well, wait just a minute. Wait just a minute.

(CROSSTALK)

ISSA: Let me finish my question.

NAPOLITANO: Wait just a minute.

ISSA: Madam Secretary, let me finish my question.

NAPOLITANO: Go ahead, but that insinuation is not...

(CROSSTALK)

ISSA: Madam Secretary, you -- we could have the record read back. It would take a few minutes.

NAPOLITANO: No, it's the insinuation I'm objecting to.

(END VIDEO CLIP)

KING: California Republican Darrell Issa, the House Oversight and Government Reform Committee chairman, joins us now from Capitol Hill.

Mr. Chairman, let me start first with your premise. Do you think she slow-walked an investigation?

ISSA: Well, I think she would like to have us believe that she never talked to Eric Holder, even though she was terribly concerned about the loss of not one but two of her agents in two separate episodes, and she did so because of an I.G. investigation over at Justice.

Well, candidly, there were more than two months that went by between the death of Brian Terry, her attendance at his funeral, and the beginning of the I.G. investigation. You would think there were a few Cabinet meetings and plenty of opportunities to say, oh, by the way, Eric, tell me more about Fast and Furious and how my agent got killed with weapons that you let walk into the hands of drug cartels.

KING: I want you to listen to a little bit more of your exchange with Secretary Napolitano -- a question on the other side.

(BEGIN VIDEO CLIP)

NAPOLITANO: I think your insinuation that...

(CROSSTALK)

ISSA: Ma'am, please answer the question. Don't -- don't -- please don't talk in terms of insinuations.

NAPOLITANO: Mr. Chairman, may -- may I have the opportunity to answer, please?

(END VIDEO CLIP) KING: A couple of points here. Number one, you can see it in her face and hear it in her voice, and then you challenge her back.

Are you concerned here at all that there is a level of mistrust, even enmity that is going to get in the way of this?

ISSA: Well, remember, this is a secretary who, her appointees demanded that FOIA, Freedom of Information Act, request documents be brought to them and then politicized the process of releases to organizations like CNN and others.

So, this is somebody who thought -- started off not wanting to have full and complete disclosure and transparency. And we have already seen that. You saw yesterday she can be very thin-skinned about being asked very legitimate questions and talks in terms of, how dare you ask this question or I don't like your tone.

We are looking at dead people on both sides of the border. An estimated over 200 Mexicans have been killed by weapons that were allowed to walk by our administration, by our government. All we're doing is what we must do constitutionally and she must do and Eric Holder must do, and that is hold people accountable who made mistakes and then make sure those mistakes are not repeated.

We're not getting the cooperation we'd like. We believe that she should be as concerned and as forthcoming as we are. And this shouldn't be a partisan question. This should be, how do we keep something from going so wrong in the future? And right now we're not getting that level of cooperation in this process.

KING: The gravity of this underscores the importance of your investigation and any investigation into this, which is why I ask if you're worried at all from your perspective that the politics of it, the mistrust of it are getting out of control.

Do you, for example -- I know how these things get in the back and forth at a committee hearing, but you called her ma'am. Protocol in Washington would be Madam Secretary. Any regrets for that?

ISSA: Not at all. I did also say Madam Secretary.

I was brought up in a household with sir and ma'am. And certainly Madam Secretary or Secretary or Chair -- I think there was no intention -- I haven't ever called a Cabinet officer by their first name in a formal hearing or anything of that sort.

Look, I respect her qualifications. She was a U.S. attorney. She was attorney general. She was a governor. But I am concerned that she made a statement that an I.G. investigation stopped her from asking her question, but that investigation didn't begin for more than two months after Brian Terry's murder and she characterized it as immediate action.

I don't think two months is immediate action. Remember, Senator Grassley and myself had already opened investigations and been thwarted by Justice before they ever went to their own attorney general or to their own I.G.

KING: The president of the United States was asked about this the other day by ABC's Jake Tapper. Listen to this.

(BEGIN VIDEO CLIP)

OBAMA: This investigation will be complete. People who have screwed up will be held accountable. It's very upsetting to me to think that somebody showed such bad judgment that they would allow something like that to happen. And we will find out who and what happened in this situation and we will make sure that it gets corrected.

(END VIDEO CLIP)

KING: Do you take the president at his word? Do you trust the thoroughness of the administration's internal investigation? And is there any sharing of information? Maybe they have information you would like. Maybe you have information that could help them.

ISSA: I do take the president at his word. I believe that he wants to hold all of those accountable.

I don't take the attorney general at his word, because I get the distinct impression they want to make this go away by blaming low- ranking people, the resignation of the U.S. attorney, rather than realizing that plenty of people knew or should have known to stop this program and didn't.

And we want to know that the safeguards, not just by name, but by position, will really be there in the future, because we can't bring these two agents back to life. We can't recall the 2,000 weapons.

But we can take steps to make sure this wouldn't happen in the future. We owe that to the families. We owe that to the next administration, because this is not a Republican mistake or a Democratic mistake. This is the kind of mistake bureaucracies make. And if we don't hold them accountable, who will?

KING: We were trying to shed some light on this issue a few days ago. We had one of your Republican members, Jason Chaffetz, on the program, along with the ranking Democrat, Elijah Cummings.

And Mr. Cummings make the case -- and again you just saw it there in Secretary Napolitano -- you have received a letter from the attorney general who seems to think there is politics behind this. Listen to the ranking Democrat on the committee.

(BEGIN VIDEO CLIP)

REP. ELIJAH CUMMINGS (D), MARYLAND: I think we have to be very careful as to how we proceed. I mean, I think we need to go where the evidence leads, but we have got a subpoena that has just been issued that is literally requesting tens of thousands of documents from the Justice Department. And many of these documents are totally unrelated to Fast and Furious. So you got to begin to ask the question, what is this about? Is this about trying to score some political points?

(END VIDEO CLIP)

KING: Have you cast too wide of a net, Mr. Chairman? Are you trying to score political points?

ISSA: Well, I certainly hope not.

In some cases, we did things, like we asked for all of the e- mails of one individual for a three-day period. Now, you know, John, if you have e-mails like I do, that could be a lot of documents. But we tried to be narrow. We looked at a window that we had been informed by a whistle-blower correspondence went on, and we asked only for that window.

So sometimes there is a voluminous amount of documents. That's not our intent. Remember that I have a very limited staff compared to the administration. And the last thing I need is more documents than we can go through.

We are trying to be narrow. The other thing is if they would just be forthcoming -- you know, the attorney general told us under sworn testimony that he'd only heard about Fast and Furious a few weeks earlier. He has yet to correct how much earlier.

And when asked to come back before Judiciary, another chairman's committee, he's put it off until December. That by definition slows the process. Elijah Cummings and I do not have a great working relationship. I believe he is there to be stopping, a stumbling block, in his opinion, to try to stop and help and protect the administration. And I regret that, because the last chairman, Ed Towns, and I had a good relationship in which we were willing to go where the facts took us. And that sometimes is a problem here in Washington.

KING: Chairman Issa, appreciate your time tonight.

ISSA: Thanks, John.

Ahead, tonight's number answers this question. Who works more, you or Congress?

And would skipping some debates hurt Governor Perry's presidential prospects? That's tonight's "Truth" -- next.

(COMMERCIAL BREAK)

KING: It's an age-old truth in politics. Struggling candidates throw out their playbook and find a new one.

For Texas Governor Rick Perry, we're told that means fewer debates and more face-time with voters in key early primary states. There are four debates scheduled in the month of November. Governor Perry will be at the first one on the 9th, but after that, well, we can't be sure.

(BEGIN VIDEO CLIP)

RAY SULLIVAN, PERRY COMMUNICATIONS DIRECTOR: It takes valuable time away from campaigning in Iowa as those elections approach.

KING: Do I take that as...

(CROSSTALK)

KING: Are you saying he is going to look over the calendar and scratch some of them out?

SULLIVAN: John, I think there are I think 18 more in the planning phases. There is no way that the candidates can do all those debates.

(END VIDEO CLIP)

KING: Now, we shouldn't be surprised. Governor Perry's history in Texas shows he debates only when he has to. No debate, for example, with his Democratic opponent in his last governor's race.

But here's tonight's "Truth."

What worked in Texas isn't likely to work on the national stage, especially in a GOP presidential race that has been dramatically reshaped more than once by the debates. It was a strong debate performance in June for example that created the Michele Bachmann boomlet, but she quickly talked her way into trouble.

And then Herman Cain on the strength of strong debate performances emerged as the new conservative surprise in the field. And don't forget Newt Gingrich. The former House speaker remains in the middle of the pack, but he has proven himself to be a very strong debater, and those performances have helped him climb into double digits in all of the key early states. He is now a factor in those states.

Cain won't be skipping many, if any, debates. Ditto for Gingrich. And Governor Perry needs now to get past both of them to get where he thought he was at the outset of this race. That would be in the role of principal conservative challenger to the front-runner, Mitt Romney.

Now, Governor Perry was in that spot when he entered the race 10 weeks ago. Not anymore. And he blames the debates.

(BEGIN VIDEO CLIP)

GOV. RICK PERRY (R-TX), PRESIDENTIAL CANDIDATE: I don't think anybody has ever run the perfect campaign. And actually these debates are set up for nothing more than to tear down the candidates.

(END VIDEO CLIP)

KING: He is right the debates are a big factor in his slide, but dead wrong about why.

Governor Perry has torn himself down with honest answers about his record on immigration and a state-mandated vaccine that have just turned off some conservatives. And he's also torn himself down with unfocused or rambling answers that raised doubts of a different kind.

(BEGIN VIDEO CLIP)

PERRY: Is it the Mitt Romney that was on the side of against the Second Amendment before he was for the Second Amendment?

Was it -- was before he was before the social programs, from the standpoint of he was for standing up for Roe vs. Wade before he was against vs. -- Roe vs. Wade?

(END VIDEO CLIP)

KING: A little confusing, right?

Now, Governor Perry has the money to make his case on television and in a Republican primary history suggests this argument from the governor does have some merit.

(BEGIN VIDEO CLIP)

PERRY: As conservatives, we know that values and vision matter. It's not who is the slickest candidate or the smoothest debater that we need to elect.

(CHEERING AND APPLAUSE)

PERRY: We need to elect the candidate with the best record and the best vision for this country.

(END VIDEO CLIP)

KING: Yes, Governor Perry can skip a debate or three. Governor Romney is also hinting of debate fatigue. And, yes, Governor Perry is right that ideology does tend to come first in GOP contests.

But truth is, Republicans see a golden opportunity to defeat President Obama, but they know it won't be easy. And they know the incumbent is a strong debater, which makes ducking debates a dangerous risk for Governor Perry. It would only reinforce the impression he has left from his recent debate performances, which is not a good impression.

The high TV ratings for all these early debates so far tell you Republicans are watching closely. And it's a simple truth that in a close general election race, the debates next October will matter. And Perry's top rivals, based on the evidence so far, seem much more up to the challenge. If nothing else, Governor Perry needs the practice.

There's important news tonight from one of the most important U.S. allies in the Middle East, a country with lots of oil. (COMMERCIAL BREAK)

KING: Welcome back. Breaking news tonight from an important U.S. ally. Saudi Arabia just announced the new heir to the throne. State-run Saudi television reports the new crown prince is Nayef bin Abdulaziz, who met with Vice President Joe Biden today. The vice president, Senator John McCain and the CIA director, David Petraeus headed a high-level U.S. delegation to Saudi Arabia to offer condolences over last weekend's death of the previous crowned prince, Sultan.

A big announcement from Hewlett-Packard today. It's keeping its personal computer division after all, reversing an earlier plan to spin it off.

New urgency in the Occupy Wall Street protests across the country because of what you're seeing right there. Tuesday a former U.S. Marine was seriously injured when police broke up a demonstration in Oakland, California. Scott Olson is in fair condition today with a fractured skull. He was standing next to his friend Joshua Shepard, who talked to us just moments ago.

(BEGIN VIDEO CLIP)

JOSHUA SHEPARD, FRIEND OF SCOTT OLSON: I'm aware of a police investigation, but I'm also aware of, you know, a somewhat ambivalent tone to their responsibility for the entire incident. I think there is a definite need for a serious accountability. This is not an isolated incident in Oakland.

(END VIDEO CLIP)

KING: We'll continue to keep our eyes on that one. An important story.

"ERIN BURNETT OUTFRONT" coming up at the top of the hour. Erin, the S&P 500 on track for its best month since 1974. When you look at the markets, what jumps out?

ERIN BURNETT, CNN ANCHOR: Sorry, I'm just grabbing my piece of paper here, because there was something that jumped out specifically. First of all, John, best -- best since January 1974, as you said. I mean, it's pretty amazing. I mean, you look across the board you saw companies of al ilks going up. We haven't seen days like this.

And a month like this is pretty amazing, because you know, a month ago we were talking about a double dip, and people were worried about it. At that time, companies still didn't see that double dip, but now the proof is in the pudding.

The thing I'd highlight in the economic growth number, John, is consumers. You saw people spending money at a much higher rate than anybody had expected.

So on a relative basis, it was really good news. On an absolute basis, the economy is still not growing anywhere near where it can and where it should. So we have a long way to go.

KING: And big warning signs out there that the politicians have their hands on. No. 1 the super committee here in Washington that has to prove it's serious about deficit reduction. And No. 2, the European leaders, who have had quite a bit of congressional-like dysfunction, I will call it, have to implement this deal they just brokered. Right?

BURNETT: Yes. This deal -- and you know, this deal is interesting, John. Because I know we've all got, and I was seeing something like 14 summits the European leaders have had to try to get to this deal. And we still don't know the details.

But it does appear to be big enough to make a difference, and that what -- that's what matters. Because Europe is the biggest trading partner for the U.S. and for China. So it really is a crucial story here for the U.S.

But when you look at what's happening to Greece, this is a deal that gets Greece's debt-to-GDP, the debt relative to the size of its economy, at 120 percent. Just to put it in perspective, in the U.S., where our super committee is dysfunctional and we're frustrated it isn't acting, we're at 62 percent. So even with this fix, Greece and Europe still have a lot of issues.

So I wouldn't say that this one-day wonder is going to last forever. But it is moving in the right direction.

KING: And you know it's a good day. We'll just celebrate the good day and...

BURNETT: That's right. Take it where you can get it, John.

KING: ... and get back to the other stuff in the morning. Erin, thanks. We'll see you in just a few minutes.

BURNETT: All right. See you, John.

KING: And when we come back here, he's the surprise of the Republican race. He's not just leading in the national polls; he's moving up in all of the key states. So here's the question. Is Herman Cain for real?

(COMMERCIAL BREAK)

KING: The question everybody is asking when it comes to politics today: Is Herman Cain for real? He certainly looks it, if you read CNN's latest polls, which show him in virtual ties with former Governor Mitt Romney in the important early primary states of Ohio, South Carolina -- Iowa is a caucus state, but you get it.

But there also are new reports of chaos within the Cain campaign and controversies over some of his recent campaign ads and Web videos. We're joined by CNN contributor Erick Erickson, the editor in chief of the conservative blog RedState.com; Steve Hildebrand, who was Barack Obama's deputy national campaign manager back in 2008; and our chief political analyst here at CNN, Gloria Borger.

Erick, I want to go to you first. The Cain phenomenon is what everyone is asking. Does he have the staying power? And there are two key questions raised. One, can he keep raising the money? Two, can he build an infrastructure amid a lot of staff turmoil? You have some new information that answers part of that.

ERICK ERICKSON, CNN CONTRIBUTOR: Yes. I was on the phone earlier today with some of his finance guys. They're telling me in this month -- the month is not even over -- they've raised over $4 million online. That doesn't count offline. They've just started some ad campaigns in the last week. They're seeing tens of thousands of dollars coming into the day, directly tied to those ad campaigns. They're growing out their staff in key states. They've just picked up some key endorsements on the ground in Iowa and in Florida.

They feel like they're going to have the money now to be able to put in an apparatus in Iowa, South Carolina, and Florida. I'm not sure they're taking New Hampshire super seriously. They may be. I'm not sure about that one.

One of the keys, though, is that we've got about 60 days. Can you actually, in a caucus state in particular, in Iowa, lay ground game in 60 days?

KING: Mr. Hildebrand is here, and he knows Iowa quite well. So let's put that question to you. You work on the Democratic side. But you know how it works. It's not a primary. It's a very different turnout organization. Can you do it, especially -- Erick says there they're raising some money. That's obviously important. He says they're hiring some people which could help. Hard to build a grass roots organization in Iowa in 60 days.

Can you do it when, if you pick up the "New York Times" today, you read things like this, this from a staff member. "'Everything we try to do is like pulling teeth to get accomplished,' said a former staff member in Iowa who asked for anonymity. 'I've never been involved in a job that was as frustrating as this one. We couldn't get an answer on anything. Everything was fly by the seat of your pants.'"

STEVE HILDEBRAND, OBAMA 2008 DEPUTY ASSISTANT CAMPAIGN MANAGER: They don't have any time, John. They've got 60 days. That's through the holidays, too, and so it's a lot of down time. Iowa is very hard to put together in 60 days. I don't see how he can do it.

KING: He says he doesn't see how he can do it. But let's look at the Iowa polls. Our new Iowa poll shows Governor Romney 24 percent; Herman Cain 21 percent. Then Ron Paul, Newt Gingrich, Rick Perry. That's a caucus state. So be careful about polls in caucus states. They give you a general ballpark. They're not as good as the primary state poll.

But then, if you break this down, among Iowa Tea Party supporters, Herman Cain 29 percent; Mitt Romney next at 17 percent. If you look at evangelicals, they're a key constituency in Iowa. Herman Cain leads with 23 percent. Then Gingrich, Paul, Perry, Romney. So he has the people, at least, to have a credible showing, if not a great showing.

GLORIA BORGER, CNN POLITICAL ANALYST: He does.

KING: The question is can you organize them?

BORGER: Can you organize, because you have to get people out on a cold winter night, right? And also, can the candidate stay on message enough?

I mean, this is a candidate who clearly is being vetted before our very eyes. And he's freelancing along the way. And he's made mistakes on important issues like immigration, abortion, very, very important to conservatives, to evangelical voters. Even 9-9-9 he's had to kind of revise a little bit. So he's got to -- he's got to tighten his message. He's got to get his staff together, and he's got to show that he can lead. He runs on his business experience. If he can't run his staff, that's a problem.

KING: Anybody running for president -- Erick, hang on one second. Anyone running for president for the first time needs help from experienced staff members. The candidate might not think so, but they do. Anybody does, no matter how good you are.

Herman Cain has run for office before, Erick, but never at this level. He's never won when he's run for office before. And yet one more for the "New York Times" story today.

And then there was the e-mail to the staff about traveling in a car with Mr. Cain. "'Do not speak to him unless you are spoken to,' the memo said. 'I found it odd,' said a former staff member, who liked to prep Mr. Cain for appearances while driving."

Now, I've spoken to him for several times. I don't pretend to know him. But he seems like a pretty confident guy. Is he a guy who pushes people away? Erick, you know him better than I do or is this overly protective senior staff?

ERICKSON: I'm thinking this is staff. I know Herman very well. I supported him when he ran for the Senate in Georgia several years ago. I replaced him on the radio here in Atlanta. I know him. He's very gregarious. The staff loves him. He loves the staff.

I think this is a staffing issue; it's not a candidate issue. And I know the campaign has looked at staffing issues. I think there are probably some problems there. They're going to have to shake it out.

But I've got to say, overarching all of this -- money, support -- you can't escape the fact that he is the most likeable guy on the Republican side. And some people are going to vote for him just because they like him.

KING: I was having a conversation with the Democratic pollster Peter Hart. He was here with us last week. He just did some focus groups in Ohio. And that's the point he makes. He says we over obsess about breaking down the 9-9-9 plan, about looking into the structural and other problems he has. He says as a message candidate, Herman Cain is something right now, and he has great appeal. Does it get you to the finish line? That's the big question. But it has him moving right now.

And I think what's especially important about Herman Cain is that, A, he's for real. He has a credible chance at the moment. A lot of obstacles, but a credible chance at the moment. And not only that, he is clear in the path of the guy who was supposed to be the conservative challenger to Mitt Romney now. Rick Perry has to get through Newt Gingrich, Ron Paul, Herman Cain to get back into position, and, Gloria, he says his strategy to do that is to skip some debates.

BORGER: Yes. Well, I think that's a problem. That's a real problem. I mean, why, if you were not doing well at debates, and that was your first introduction to Republican voters, would you then say, "I'm going to skip debates," rather than going to debates and actually having a good debate performance so you could get those voters back on track?

KING: You went through this with then-Senator Obama in 2008. And you know, if we broke out the tape, some of those early debates, I would say, were not his finest moments. But you grow and you learn, right?

HILDEBRAND: You do. And it's an important -- you're preparing yourself for a general election. And if you're not doing that in the primaries, if you're skipping those very important debates, you're simply going to be less prepared for that general election. When you do have to debate a guy as capable as the president.

KING: I do think it's a fair point for any candidate to say, "Well, jeez. How many of these things could we go through? Let's show people what we have." Are there too many debates? In 2004 there were 17 Democratic debates. In 2008, 19 Democratic debates, 15 Republican debates.

This year we've got eight so far, 13 on the books to go. That would be 21. And there are people trying to plot and plan even some beyond that.

So Erick, the governor might have a valid point about debates, but as someone who got in late, could he make this calculation? If he was in the beginning with everybody else, and he had said, "I'm not going to take that debate or that debate," then Governor Romney might not have gone. Somebody else might not have gone. It might not have made it on national television.

But now that we're this far in and in a campaign in which the debates clearly have had high viewership and high impact on the race could he now say, no?

I think there are some he can probably afford to skip. None this coming month, the CNN, the CNBC, those are going to be high-profile debates. Some of those smaller ones in December, yes. I'm not going to hold it against any of the candidates that they say they've got 30 days and holidays to compete for people and get into Iowa and South Carolina.

I actually think the bigger issue here is the lack of message discipline. He announced his economic plan, and instead, we were focused on this birther comment. And now all of a sudden, instead of going back to the economic plan we're talking about debates. Do they have no message discipline in team Perry?

KING: Well, the next debate is about the economy. So maybe they can get back on it there.

Everybody -- Erick, Steve, Gloria -- stay put. Next, today's "Number." Compare the number of days you work with the number of days Congress will be working here in Washington next year. Be prepared to cringe.

(COMMERCIAL BREAK)

KING: I think it's a safe bet to say tonight's "Number" is not going to increase your love and affection for the United States Congress. It is: 109. That's how many working days the Congress will have in Washington in 2012. This is the announcement: 109 working days in Washington. This announcement today from the House Republican leadership. And guess what? The Democratic leader Nancy Pelosi says it's an outrage.

(BEGIN VIDEO CLIP)

REP. NANCY PELOSI (D-CA), MINORITY LEADER: At a time, any time having -- was it six days on the calendar in January, it really makes you wonder about the schedule. But particularly at this time when the American people are feeling so much pain.

(END VIDEO CLIP)

KING: Does she have the right to make that argument? Well, maybe. The Democrats controlled the House heading into the 2010 cycle. They announced 116 working days in 2010. So seven more. Seven more. So the Democrats, I guess we have to give credit for working an extra seven days last time.

So what does all this mean? Let's punch this through. Here's what it works: 109 working days at 40 hours a day, if you think, means $200 an hour; $174,000 a year members of Congress make. That translates into 200 bucks an hour for their time here in Washington.

The average American works 250 days. That's a lot more than 109. The average American salary, $44,000 a year; $22 an hour.

Now Congress will argue, "We're home working in our districts. This isn't a fair comparison." They can make that argument, but I think you take a look at that, even if the math isn't exactly right, you might think you're working a lot more harder than they are.

Let's talk this over. Still with us, Steve Hildebrand, Gloria Borger and Erick Erickson.

Now, Steve Hildebrand, you've worked on races for Congress. And yet -- and yet on Facebook today you started, "Dump Congress 2012" on Facebook. So you're not a fan?

HILDEBRAND: You know, it's disappointing, John. Those 40 hours that we're suggesting they work in a week, they're fundraising 30 of those hours. They're raising anyone PACs, lobbyists, corporate interests, and other moneyed special interest groups.

KING: Democrats and Republicans?

HILDEBRAND: Democrats and Republicans. And the only way we're going to stop that cycle is to start over. Dump them all. Start over.

BORGER: Democrat and Republican?

HILDEBRAND: Democrat and Republican. Get everybody out of D.C. who is so tied to this cycle of special-interest fundraising and start over with a new group of people who refuse to take that PAC money, that lobbyist money, that corporate money. Let's start over, a clean slate, and put people to work here who are really going to focus on solving America's problems instead of solving their problems for the next election.

KING: Delivered calmly, but that's a "throw the bums out" message...

BORGER: Really.

KING: ... from the left.

BORGER: And it could happen. You know, we've had three swing elections in a row. Look, if members of Congress are not doing their jobs, you could argue, why should they be here? There's nothing for them to do. In theory, I love the idea of Congress. I love Congress. I'm somebody who grew up covering Congress.

KING: I'm going to buy you that bumper sticker: "I love Congress."

BORGER: But in practice...

KING: Let's see how many times your car gets keyed when I put that...

BORGER: Don't take the quote out of focus. Look, because in practice, Congress has not been doing its job. Look at what's happening now. They're waiting for the super committee to act, and they're doing nothing.

KING: They're waiting for the super committee to act, and that is important business. And they've been dysfunctional so far. And let's all say a prayer because of the stakes that they figured out. But while they're working on the super committee, Erick, here's some of the things they are doing. First, a little set-up. There's a story in "The New York Times" today about this whole giant controversy about who gets into the Big 12, an athletic conference. You know, and it's important to you if you're a football fan or an athletic fan out there.

"A person with direct knowledge of the situation said it was too close to call between West Virginia and Louisville. Two other people with direct knowledge said that lobbying of the Senate minority leader, Mitch McConnell, Republican of Kentucky, had helped Louisville. Now he's from Kentucky. Maybe that's not surprising.

But here's the senator from West Virginia, Joe Manchin. He's appearing on MSNBC's daily rundown earlier today, and he's mad about this.

(BEGIN VIDEO CLIP)

SEN. JOE MANCHIN (D), WEST VIRGINIA: A press release was issued from the Big 12 to deputy (ph) officials that they would be using on Wednesday. Books -- rooms were booked, flights were booked. And then all of a sudden, Tuesday afternoon, that's not what we should be doing out of Washington. That's not the type of politics to be played. We've got more problems than this.

(END VIDEO CLIP)

KING: He's meaning Senator McConnell shouldn't be lobbying on this. And I would argue if he's right about that, he shouldn't be worrying about it, at least publicly, like this. I know he's got a state representative here with the House floor today. If we're not talking about the Big 12, we might as well talk about the Big East.

ERICKSON: You know, we should be talking about the SEC. It's the only conference that matters, but that's a separate issue. I wish they weren't working 109 days. Maybe 9 days. Look at their track record in the past years, bipartisan. They pass bills. They condemn Wall Street. The Democrats and Republicans both pass laws that benefit the people they're attacking on Wall Street and elsewhere.

I mean, what's the point? I don't believe we need to do like Bev Perdue and just suspend the elections. I think we maybe even need to do more elections, throw them all out.

The sad fact, though, John, is that we're going to have a 90 percent re-election rate in Congress in 2012. We always do. We're going to -- everybody likes their guy. They hate the other guy. So they'll reelect their guy, and we'll all be as cynical next year as we are this year.

BORGER: So even in theory I don't love Congress anymore after you said that. You know, it just isn't working. It's just...

KING: What is the problem? Nine percent is the approval rating in the new CBS viewer poll. Is it as -- is it as bad as that? Are we overly cynical in the media? Are they just bad communicators?

ERICKSON: This is a feature.

HILDEBRAND: ... has a greater approval rating from the American people than Congress does.

ERICKSON: This is the feature, though. It's not about Congress. The Founding Fathers hated democracy. They were deeply suspicious of it. They made it as difficult as possible to pass anything. And we're seeing that the stuff that does get passed gets passed largely with compromise, which everybody wants. So they just -- they threw a monkey wrench in it when they wrote the Constitution.

BORGER: You know, I know you will hate me saying this, Erick, but there is no center in the American in Congress anymore, because of redistricting. And if there were...

ERICKSON: There's not.

BORGER: If there were, they might actually be able to get some thing done.

KING: As a guy named King, I've always been for restoring the monarchy. But I don't think -- I don't think it -- I don't think it's a feasible option.

All right. Four years ago on this very day, the candidate that Steve Hildebrand was working hard for said this.

(BEGIN VIDEO CLIP)

BARACK OBAMA, PRESIDENT OF THE UNITED STATES: The question in this election is not, "Are you better off than you were four years ago?" We all know the answer to that. The real question is, "Will this country be better off four years from now?"

(END VIDEO CLIP)

KING: That's a tough piece of tape to have heading into this election cycle, isn't it? The economy is in such tough shape.

HILDEBRAND: The economy is in tough shape, but that doesn't mean our country isn't better off than it was before.

We're a more stable democracy. We're bringing our troops home from Iraq. We have two dictators that have -- have been gone now as a result of U.S. efforts. I do think we're a better country now. We've got to get our economy straightened out, and I know that's a big focus of the president's.

KING: We'll continue this conversation. Erick, thank you tonight.

Steve Hildebrand, nice to see you in town.

Gloria, we'll see you tomorrow, too. That's all the time we have tonight. "ERIN BURNETT OUTFRONT" about to take it away right now -- Erin.