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STATE OF THE UNION WITH CANDY CROWLEY

Interview with Ryan Crocker; Interview With Robert Gibbs; Interview with John McCain, Lindsey Graham; Interview with John Hofmeister; Interview with Hillary Clinton

Aired February 26, 2012 - 09:00   ET

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


CANDY CROWLEY, HOST: Simmering anti-western sentiment in Afghanistan boils over into nearly a week of violent protests and 30 deaths including 4 Americans.

Today is it time for the U.S. to go? A conversation with the U.S. ambassador to Afghanistan, Ryan Crocker in Kabul.

Then, gas, taxes and 2012 with Obama campaign adviser Robert Gibbs.

And

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: Good to be back in Michigan.

UNIDENTIFIED MALE: It's great to be here in Tucson.

(END VIDEO CLIP) CROWLEY: Eye on Michigan and Arizona, Republican politics with Senator John McCain and Lindsey Graham.

Plus, their recent trip to Afghanistan.

Then the rapid increasing gas prices. How high and how long with former CEO of Shell oil, John Hofmeister.

I'm Candy Crowley and this in is State of the Union.

The Afghan government says the man who killed two American soldiers inside a highly secured Afghan government building is an Afghan intelligence officer. President Hamid Karzai has offered condolences to the families of the four Americans killed since news that U.S. personnel apparently inadvertently burned copies of the Koran at an air base in Afghanistan.

Karzai called for calm in his country, but insisted the U.S. must prosecute those responsible for burning the Muslim holy book.

Joining from me Kabul, the U.S. ambassador to Afghanistan Ryan Crocker.

Mr. Ambassador, let me ask you, first, the U.S. over more than ten years has spent half a trillion dollars in Afghanistan, almost 2,000 American lives have been lost, and the American people wake up this morning to find that two high military officers sitting inside a secured Afghan government building were murdered basically by someone who was, you know, freely walked into that building and the burning of the U.S. flags, two soldiers killed in trying to combat protests. Why in the world shouldn't Americans be waking up saying we've got to get out of there? CROCKER: Well, Candy, a terrible event, strongly condemned by Secretary Panetta and others. General Allen and I are just back from the ramp ceremony for the two fallen heroes in which we saw them off on their last journey home, so we all feel it out here.

That said, and as President Obama said yesterday, we remain committed to a partnership with the Afghan government and people as we seek to achieve our shared goal of disrupting, dismantling and defeating al Qaeda and strengthening the Afghan state and we're doing that so that Afghanistan can never again be the refuge for terrorists who would strike the American homeland.

CROWLEY: I understand that but the question is, why do we still have this relationship with a government that is either too weak or unwilling to do some of the things we need it to do so U.S. troops can come out? I think it took five days for President Karzai to get out there and say to the folks on street, calm down here. He's demanding the prosecution of military officials.

It just doesn't seem like the best atmospheric for putting together some of the agreements you're going to need from the Karzai government.

CROCKER: I think we need to bear in mind that the Afghan security forces, throughout this whole process, have been seeking to quell these demonstrations. They've done so with loss of life on their side as well as some of the protesters, and they have been defending U.S. installations. So they are very much in this fight trying to protect us.

And I'd also point out that President Karzai's statement today was by no means his first. President Obama, in his statement yesterday after he spoke to General Allen, praised President Karzai for his calls for calm which he's been doing almost since the beginning.

Look, Candy, this is hard. I opened this embassy here more than a decade ago and there was nothing, no institutions no ministries, no police, no army, no nothing. Coming back after almost a decade, while the challenges are huge, the achievements are pretty considerable, too, and the stakes again, as I said, remain high. If we decide we're tired of it al Qaeda and the Taliban certainly aren't.

CROWLEY: One of the things that we're told from our reporters in Afghanistan is that today's Sunday, there were attacks in the north, seven more U.S. personnel injured. How does this end? This is the sixth day of the violent protests.

CROCKER: Candy, I've seen this kind of thing before when I was ambassador to Pakistan. Religious sensitivities run very, very deep in this part of the world and several times while I was there we saw countrywide violence. At a certain point it tapers off and I think we're all hopeful that the appeal for calm that President Karzai made today and he did so with the backing of the entire political leadership of the country will create a condition in which this diminishes. There were some tough attacks up in the north. The rest of the country, though, was pretty calm today.

CROWLEY: And yet, Mr. Ambassador, NATO and the U.S. have pulled all their personnel out of the Afghan ministries. So basically you have a situation here where the U.S. is working with a government but we don't trust the security inside the ministries of that very same government. We won't put U.S. personnel in there because we don't think it's safe. How do you reach agreements under that kind of tone?

CROCKER: Again, you just keep pushing ahead. The very prudent step that General Allen took yesterday mirrors my own. I pulled embedded civilians out of the ministries. Tensions are running very high here and I think we need to let things calm down, return to a more normal atmosphere, and then get on with business.

And it doesn't mean that we're not doing business now, we are, with both military counterparts and civilian counterparts. Again, these are terrible tragedies. And very worthy of the condemnation they received. But this is not the time to decide that we're done here. We have got to redouble our efforts. We've got to create a situation in which al Qaeda is not coming back.

CROWLEY: We have heard over and over again that from various U.S. officials that this was inadvertent. They did not know, in fact, that they were burning the Koran when they emptied out a detainee library essentially. What I'm wondering is, privately, does President Karzai accept this was inadvertent?

CROCKER: Candy, both privately and publicly President Karzai has said he recognizes this was an inadvertent mistake.

CROWLEY: And yet he's calling for the prosecution...

CROCKER: That was very early statements.

We have said on our side that there's an investigation under way and people will be held to account.

CROWLEY: And finally, could I ask you a slightly different note, do you think that the continuing presence of enemy sanctuaries, particularly for Haqqani in Pakistan is undermining U.S. strategy in Afghanistan?

CROCKER: Well, I think there's no question that the safe haven have been and remain a problem. It's difficult for the Afghans and ourselves and our NATO allies to decisively defeat an enemy who can take sanctuary and maintain its headquarters in another country. We've been clear about that. We've been public about that. The Pakistani government needs to take action for their own sake as well as Afghanistan's and ours.

CROWLEY: U.S. Ambassador to Afghanistan, Ryan Crocker, thank you so much more your time this morning.

After the break, President Obama seems confident about his re- election chance but was will rising gas prices get in the way? Obama campaign senior adviser Robert Gibbs joins us. And later, Secretary of State Hillary Clinton emerges in a new interview as the president's biggest advocate. We'll have that later in the hour.

(COMMERCIAL BREAK)

CROWLEY: Joining me now is Robert Gibbs, former White House press secretary and a senior campaign adviser for President Obama -- re-election campaign adviser, I guess I should say. I want to just continue a little bit in this talk about Afghanistan, what's going on there, and play for you something that Newt Gingrich said on Friday.

(BEGIN VIDEO CLIP)

FORMER REP. NEWT GINGRICH, R-GA., PRESIDENTIAL CANDIDATE: Candidly, if Hamid Karzai, the president of Afghanistan, doesn't feel like apologizing then I think we should say goodbye and good luck. We don't need to be here risking our lives and wasting our money on somebody who doesn't care.

(APPLAUSE)

(END VIDEO CLIP)

CROWLEY: Now I imagine that, in a lot of ways, Gingrich is voicing what a lot of people are thinking at this point, the Koran was burned, we think inadvertently, by U.S. personnel and in response four U.S. military personnel are dead, including two sitting in an office in an Afghan interior ministry. Doesn't that capture the public mood, like what are we doing there, let's just get out?

GIBBS: Well, I think it's important to understand why we went, and that is to, as Ambassador Crocker said, make sure Al Qaeda doesn't have a safe haven.

CROWLEY: We were told Al Qaeda's is gone. They said they're in Yemen and --

(CROSSTALK)

GIBBS: But, Candy, let's be -- let's be clear. So they don't have a safe haven by which to plan a terrorist attack like on 9/11, that killed 3,000 Americans. We disrupted and dismantled a large amount of Al Qaeda's network.

As you know, and your viewers know, Osama bin Laden is dead. And what the president's trying to do now is get us to a point where we can hand off the security of Afghanistan to the Afghans and that we can bring our troops home.

I think what he's trying to do now is diffuse the tension that's there. And you know, quite honestly, I'm not sure many people are looking to Newt Gingrich for foreign policy advice. If there's a problem on the lunar colony, he'll be among the first we call.

CROWLEY: OK. There you go. Back at him. Let me move you to some domestic issues. Right now gas prices. And the president has said, and a lot of economic advisers and gas experts agree, there's very little that a president can do to immediately effect what's going on at pumps. It doesn't mean it doesn't go out on the campaign trail, I just want our viewers to take a listen to this.

(BEGIN VIDEO CLIP)

FORMER SEN. RICK SANTORUM, R-PA., PRESIDENTIAL CANDIDATE: Under our administration we will drill for oil in Alaska.

BARACK OBAMA, PRESIDENT OF THE UNITED STATES: Anybody who tells you that we can drill our way out of this problem doesn't know what they're talking about.

FORMER GOV. MITT ROMNEY, R-MASS., PRESIDENTIAL CANDIDATE: I think the easiest decision this president has faced was whether or not to build the Keystone pipeline, and he flunked that easy question, it's unbelievable.

OBAMA: There is no silver bullet. There never has been.

(END VIDEO CLIP)

CROWLEY: OK. So it's clearly on the political agenda. A lot of the economists I talked to this week said $4 is kind of the magic number, that once the national average gets to $4 a gallon -- it's already there in some places -- it begins to affect the economy.

People have less money in their pockets, and businesses, their overhead goes up, so they don't really want to hire. So we're looking at a fragile economic recovery that might get hit fairly soon. Does the president have anything left in his quiver that he can use to try to bring some of this down?

GIBBS: Well, look, as you mentioned, Candy, oil is a global commodity. It's at the whims of a world using more and more oil and, because of that demand, pushing the price up. What the president talked about this week is we have to employ an all-of-the-above strategy.

We cannot have 2 percent of the world's oil use 25 percent on a daily basis and think that the only thing we can do is drill. That's not going to solve our problem.

But yet you just had Rick Santorum mention drilling in the Arctic. About a week or so ago the president approved more permits to explore drilling in the Arctic. We just signed an agreement with Mexico to develop areas -- excuse me -- in the Gulf of Mexico that span the two countries' borders. So --

CROWLEY: In the immediate --

GIBBS: -- we're doing all that we can because we're using less foreign oil than we have in the past 16 years and we're drilling more and producing more than we have in the past eight years.

CROWLEY: Some of the Republicans argued that all of those things were sort of set long before the president came to office.

GIBBS: Don't they always say that, Candy?

CROWLEY: Beyond that --

GIBBS: Those are the same people, I'm sure, that when gas hit a record high in 2008 were blaming George Bush. Don't look hard for that video because it's not there, because there are a series of people that want tell you that there are very easy magic bullet solutions to the problems that we face. We know that's not true.

CROWLEY: It isn't true. But the president last year, when gas prices got pretty high, did let loose some of it that's in the strategic oil reserves. Do you see him doing that?

GIBBS: You know, Candy, I'm no longer in those meetings. I know that the White House is going to look at every available option in the short and the long term. But, again, we're not going to magically make this problem disappear.

We're going to have to increase our domestic oil production, increase our exploration for natural gas. This president is the first in 30 years to approve a new nuclear reactor. We have once-in- a-lifetime fuel efficiency standards. All of these things are what we're going to need to make progress on a problem that's been with us for decades.

CROWLEY: On the campaign trail, I want to -- and this is a brief sound bite -- I want to play something that President Obama said this week.

(BEGIN VIDEO CLIP)

OBAMA: My presidency's not over. I've got another five years coming up. We're going to get this done.

(END VIDEO CLIP)

CROWLEY: So, you guys sitting back at the re-election thing, it's done.

GIBBS: Look, I'm glad the president thinks we're going to win. I'd be worried if he didn't. But obviously, look, this is going to be a close election, Candy. There's a lot of people working very hard to make sure that the president gets back.

CROWLEY: Listen, we asked -- Quinnipiac had a poll out, asking, do you think President Obama deserves to be reelected, which may be why this five more years may be a little premature. Right now 45 percent, only 45 percent of people say, yes, he deserves to be reelected, 50 percent say no. It really hasn't changed since November, why is that? GIBBS: Well, look, they're going to be -- there's 100 different polls that will tell you 101 different things, Candy. I think virtually every poll I've seen in the last three months shows you the terrific damage that the Republican primary is doing to the Republican candidates.

CROWLEY: Their numbers have gone down.

GIBBS: People like Mitt Romney are watching their approval ratings and their favorable ratings with independent voters, their unfavorable ratings skyrocket.

You know, in his home state of Michigan, a public poll just a week ago showed him trailing the president, in what should be a battleground state, by 16 points. It's because they're rushing to the right to try to convince conservatives that they're conservative.

CROWLEY: Democrats and the reelect -- and the DNC have been taking a little time looking at Rick Santorum. Size him up for me as a possible rival to President Obama.

GIBBS: Well, look, I think, you know, I don't think Tuesday's going to be a clarifying event in the Republican primary. I think because of the way delegates are apportioned, this is going to go on for weeks and weeks, and I think he's got a legitimate chance to be the Republican nominee.

He's clearly somebody who has a very different economic background than Mitt Romney. He's somebody that is, you know --

CROWLEY: (Inaudible) he's blue collar.

GIBBS: -- blue collar, he's from Pennsylvania. He's not worth $250 million and I assume his wife doesn't have several Cadillacs.

So I think he clearly brings a little bit different challenge, but I will say this, if you look at their economic plans and you look at the economic plan that Mitt Romney put out this week, in many ways they are very much similar, in the sense that they have tax cut plans that would add trillions and trillions and trillions of dollars to our debts and our deficits. Not one of those candidates is serious about controlling government spending.

CROWLEY: So at least you won't have to change your message regardless --

(CROSSTALK)

GIBBS: No, it's more of the same from them.

CROWLEY: Robert Gibbs, senior adviser to the reelect campaign, thank you for joining us.

GIBBS: Happy to do it.

CROWLEY: After the break, President Obama does seem pretty confident about his re-election chances, but do rising gas prices get in the way? Certainly we'll be continuing to talk about that with our next up, and that in fact is Senator John McCain and Senator Lindsey Graham.

(COMMERCIAL BREAK)

CROWLEY: Joining me to talk about the state of the Republican presidential race as well as the latest developments in Afghanistan, former Republican presidential candidate and Romney supporter, Senator John McCain; and Senator Lindsey Graham, who has yet to pick a horse in this horse race.

Thank you, gentlemen, both, particularly after your long trip for joining us this morning. I want to play something for you that Jeb Bush, who, you know, lots of people think he ought to get into the race, here's something he said about the race itself.

(BEGIN VIDEO CLIP)

JEB BUSH (R), FORMER GOVERNOR OF FLORIDA: I think, though, it's important for the candidates to recognize, though, that they have to appeal to primary voters and not turn off independent voters that will be part of a winning coalition.

(END VIDEO CLIP)

CROWLEY: Basically, Senator McCain, let's start with you, what Jeb Bush has said and is saying is that he thinks these candidates have been pushed too far to the right to actually appeal to independents. And we see that in a fallout of the number of independents that have moved back to President Obama. Have they moved too far to the right?

MCCAIN: Well, I think that these continuing debates and the tenor of the debates, which have turned into mud wrestling, have certainly raised the unfavorables of the candidates. I don't think there's any doubt about that.

And then you throw in these quote "super PACs" where one casino mogul will inject $20 million into a political campaign, most of it in negative campaigning, then it is predictable.

And by the way, the United States Supreme Court's disgraceful decision on Citizens versus United (sic) has made this possible. And the United States Supreme Court displayed a level of ignorance and arrogance that I don't think is with precedent.

CROWLEY: Senator Graham, let me put up for our viewers a graphic here, these are head to head polls, President Obama against those in the race. Basically it's President Obama 51, 52 percent, and everybody in the race right now, Santorum, Gingrich, Paul, and Romney, are all around 42 and 43 percent.

Is this not a sign, since they were polling better before, that this long race and the tenor of this race that Senator McCain is talking about, have come to hurt the Republican Party? GRAHAM: I think the number to look at is the president's re- elect number that you were mentioning before. But yes, primaries you do bruise people up and your negatives go up. But eventually there will be a one-on-one contest to talk about the president's pathetic budget, the budget he's going to send to Capitol Hill got no votes last year. It's not going to fare much better this year.

And every time you go get your car filled up, it's going to be because of President Obama's inaction. From 2012 to 2017, his offshore drilling plan by the Obama administration opens up a whopping 3 percent of offshore drilling, areas that are subject to offshore drilling, and they take off the table 50 percent of areas already leased for offshore drilling.

So this will be a big issue. I like our chances, we just need to get the primary behind us.

CROWLEY: Senator McCain, and then to you the same question, Senator Graham. Do you -- I know you support Governor Romney, but do you foresee the possibility of a brokered convention or a knight in shining armor that comes in next month or the next to kind of wrap this all up? Do you see either of those two scenarios, Senator McCain?

MCCAIN: No, I don't. Could I just mention also the pipeline? Once the president canceled the pipeline, the prime minister of Canada said they would be selling their oil to the Chinese. Interesting.

I don't see a brokered convention. Almost every time there has been contested primaries, people predict it. The system doesn't lend itself to it. I'm confident that Mitt will do well on Tuesday night in Arizona and in Michigan and hopefully that will move this process forward so we can concentrate on the real adversary.

CROWLEY: How about new entries in March or April, somebody that can come in...

MCCAIN: No.

CROWLEY: ... everybody will love?

MCCAIN: There are only, I think, 10 states left where you can still have your name on the ballot. These things are always talked about but I have -- the system is really set up so that it almost precludes that entirely. CROWLEY: Senator Graham, do you see any possibility of a brokered convention? And while I have you here, would you like to pick a horse in this horse race?

GRAHAM: Well, I appreciate the invite. But, no, I don't. If Romney had lost Michigan, and he's not going to lose Michigan, that would have thrown things into the ditch. But I think he's going to win both states.

And let me tell you, Governor Romney is a better candidate today because of the primary process. In South Carolina, Newt beat Romney. He beat him bad. He just dominated the state. And he dominated the debates.

But by the time Florida came around Romney really took it to the field and he's getting better and better. So the upside of the primary process is our front-runner, Mitt Romney, really has sharpened his skills, and I think that will pay dividends if he gets the nomination.

CROWLEY: Senators, I want you both to stand by. After the break we are going to turn to Afghanistan, the burning of the Muslim holy book and the fallout that has followed. Afghan President Hamid Karzai has called for calm. Has the U.S. mission there been jeopardized?

And later, Secretary of State Hillary Clinton has some choice words for President Obama's critics.

(COMMERCIAL BREAK)

CROWLEY: We are back with Senators John McCain and Lindsey Graham. Let me start off, both of you, on the subject of Afghanistan.

We are now in a situation where the U.S. does not want its personnel in ministry buildings of the very government that we're working with, the Karzai government, because we think it's not safe for U.S. military personnel. How does that bode for these agreements that we need to get with Karzai in order for U.S. forces to begin moving out?

Senator Graham?

GRAHAM: Well, the strategic partnership agreement that we're trying to negotiate with the Afghan government is very important. It's the last card to be played. What we're trying to do is have an enduring political, economic and military relationship.

The hope is after 2014 to have somewhere around 20,000 troops, several air bases with Special Forces units and air power so the Taliban can be permanently defeated. The Afghan security forces will always have the help of the U.S. American military to ensure that Afghanistan never fails.

This episode with the Koran burning is terrible to watch. Ambassador Crocker has got it right, keep your eye on the ball. Is it very sad that four Americans would lose their lives because of an inadvertent burning of the Koran. I do my reserve duty in that prison (ph), Candy, there is a lot of sensitivity to Islamic religion but it's a dangerous place. They're a lot of -- they're not choir boys being held there.

And Karzai, President Karzai's insisting that we turn over all 3,044 prisoners to the Afghan legal system as part of the strategic partnership agreement, I cannot agree to that. The legal system in Afghanistan is very immature and porous.

And he's also insisting we stop night raids. We're putting Afghans in the lead in night raids. But that's how we're catching and killing these people. It's a very successful military operation. General Allen says continue night raids. So I will be backing up Allen. We're not going to turn over everybody in that prison to the Afghans at this moment. They're not ready for that.

But we need a strategic partnership agreement. And this Koran burning shows the world in which we live, a world in 2012 where people can lose their lives because of inadvertent burning of a holy document. And things have to change in the Mideast.

CROWLEY: Senator McCain, though, can -- looking at it, I think most Americans sort of, as I asked Ambassador Crocker, they wake up and there's this inadvertent burning of the Koran by U.S. personnel on the base. And then there are riots and protests, violent protests for six days, and two Americans are murdered inside the interior building.

Can you see why Americans go, speed up this withdrawal and let's get the heck out, it's been half a trillion dollars, 2,000 lives and 11 years. Like, when is enough enough?

MCCAIN: I can certainly understand the anger and frustration and sorrow that the American people feel. And this is a terribly unfortunate situation there.

I also think we have to take the long view and that is that a strategic partnership agreement -- by the way, the original idea for that was Senator Graham's -- is the way that we can leave Afghanistan, but in a secure environment, and a chance for a democratic government to remain in power.

Look, they just saw the United States leave Iraq completely and Iraq unraveling. If we'd had a strategic partnership agreement there and a residual force -- which this president did not want -- things would be a lot different. They watch what happens in the Middle East and they are starting to make their own arrangements because they have to remain in the neighborhood.

And we still continue to have this very looming problem that Ambassador Crocker pointed out and that is sanctuary in Pakistan for the Haqqani network, Taliban and others. But have no doubt, that if Afghanistan reverts to a chaotic situation, you will see Al Qaeda come back and it again be a base eventually of attacks on the United States of America.

CROWLEY: I have two more countries I want to cover here, if I can, in the couple minutes we have left.

Senator Graham, first to you, I want to talk about Egypt, which is not allowing, I think, about seven Americans to get out of there because Egypt, the Egypt military government has wanted to try them. These are NGO folks, non-government organization, including Secretary LaHood's son.

When will we -- when will this come to some fruition? And the administration says we're talking, we're talking, we're talking. When is this over?

GRAHAM: Well, I'm hoping it will be over soon. They're being charged under NGO law, a holdover law from the Mubarak administration, that kind of clamped down on any efforts to spread democracy. The Army did not bring this case. It was brought in the judiciary, and it's a politically motivated case with no foundation at all. The NGOs have done a great job over there helping the Egyptian people. But here was the breakthrough on the ground. Senator McCain and myself and our delegation met with the Muslim Brotherhood. They got a large number of votes.

They're going to be conservative, Islamists judge will them by what they do, not by what they say.

But here's what they did do. While we were there they issued a statement condemning the NGO law, promised to reformed it -- to reform it in the future and that was a very positive sign because the Muslim Brotherhood, the largest block in the new parliament, basically said they don't like this law, they think it's unjust and unfair and they want to change it. That should give everybody the political cover they need to let our people come home.

CROWLEY: Senator McCain, I've got 30 seconds left. I wanted to ask you about Benjamin Netanyahu, who is coming over here next week. And I'm wondering whether you believe that the relationship between President Obama and Prime Minister Netanyahu is complicating the U.S. longstanding relationship with Israel.

MCCAIN: I think so. And I think the prime minister has every reason to be upset. The chairman of the Joint Chiefs of Staff that calls Iran a rational country and the American -- and the national security adviser go to Israel and then leak that they are trying to urge the Israelis not to attack Iran, that clearly weakens the Israelis' position vis-a-vis Iran, and in a region where they have numerous enemies dedicated to wiping them off the map.

CROWLEY: OK.

MCCAIN: So I can understand why relations are in very bad shape right now.

CROWLEY: Thank you so much. Senator John McCain, Senator Lindsey Graham, thanks for joining us.

After the break, Secretary of State Hillary Clinton on the violence in Afghanistan and campaign politics. And later, will $5.00 gas be the norm in the coming months? We'll ask former Shell CEO John Hofmeister. We'll be right back.

(COMMERCIAL BREAK)

CROWLEY: Secretary of State Hillary Clinton was in Morocco earlier today where she sat down with CNN foreign affairs reporter Elise Labott to talk about the outrage over the Koran burnings in Afghanistan and her assessment of the 2012 presidential election.

(BEGIN VIDEOTAPE)

ELISE LABOTT, CNN FOREIGN AFFAIRS REPORTER: President Obama's apology has become very controversial. I mean, obviously Newt Gingrich and others have made this apology part of the campaign, but other experts in Afghanistan are saying this apology sends the wrong message, it gives the Taliban the excuse to go against us, to help use our enemies against us, and also a lot of these attacks that are happening against Americans, these horrible attacks, seem to be in retaliation for something the U.S. is taking responsibility for.

HILLARY CLINTON, SECRETARY OF STATE: Well, I find it somewhat troubling that our politics would inflame such a dangerous situation in Afghanistan. I well remember during the eight years of President Bush's administration when something happened that was regrettable, unintentional, as this incident was, President Bush was quick to say, look, you know, we're sorry about this, this is something that, you know, we obviously did not mean to do.

That's all that President Obama was doing. And it was the right thing to do, to have our president on record as saying, you know, this was not intentional, we deeply regret it.

And now we are hoping that, you know, voices inside Afghanistan will join that of President Karzai and others in speaking out to try to calm the situation. It's deeply regrettable but now it is out of hand and it needs to stop.

LABOTT: You said yesterday that President Obama will be re- elected. It raised a lot of eyebrows. It's not really the secretary of state to say anything about an election, and it seemed to be kind of a campaign statement.

CLINTON: Well, remember the context of it, you know. I was asked whether the comments in the primary campaign, some of which have been quite inflammatory, represented America. And I represent America.

And I know what happens in campaigns, I've been there, done that. And I know that things are said that, you know, are not going to be into practice or policy. But I did think I needed to point that out to the audience.

And probably, you know, my enthusiasm for the president got a little out of hand.

(LAUGHTER)

LABOTT: No political juices flowing there?

CLINTON: Well, you know, I'm trying to dampen them down. I've tried to have -- you know, I've tried to have them taken out, you know, a blood transfusion. But, you know, occasionally they rear their heads.

LABOTT: Does that suggest maybe going back in at some point?

CLINTON: No, no, it just suggests that I want what's best for my country.

(END VIDEOTAPE)

CROWLEY: More of Elise Labott's interview can be found on CNN's Security Clearance blog.

Up next, the economics and politics of high gas prices. Politicians sure know how to get applause.

(BEGIN VIDEO CLIP)

MITT ROMNEY (R), PRESIDENTIAL CANDIDATE: I'm going to give licenses to people to already approved to drill, and finally get our oil and our gas out of the ground.

BARACK OBAMA, PRESIDENT OF THE UNITED STATES: It's time to end tax-payer giveaways to an industry that has never been more profitable, double down on clean energy industries that have never been more promising. That's what we need to do.

(END VIDEO CLIP)

CROWLEY: But will those solutions work? We'll talk with a former oil insider, John Hofmeister, who once ran Shell Oil.

(COMMERCIAL BREAK)

CROWLEY: Joining me now, John Hofmeister, former CEO of Shell Oil. He now heads up the non-profit Citizens for Affordable Energy, which is really not at the moment affordable.

I want to talk about gas prices and, first, show our viewer -- show our listeners where it is. Right now the national average for gasoline is $3.67 a gallon. That's just the national average. There are many places where it's selling for $5 a gallon.

So, let's start out with some basic questions. How high is it going to go?

JOHN HOFMEISTER, FORMER CEO, SHELL OIL, CITIZENS FOR AFFORDABLE ENERGY: Well, my concern is that the crude oil price could hit $120, $130 a gallon. It's $109 today. That's up about $10 just in the last two weeks. And it's going to get worse, Candy, because what has changed dramatically from before, and nobody talks about it -- are the actual statistics of China's demand. Ten years ago, 4 million barrels a day. Last year, 9 million barrels a day. By 2015, 15 million barrels a day.

CROWLEY: So they're competing in the world market for oil, which naturally -- or will be -- which naturally drives up the price of oil.

HOFMEISTER: They have played their ace on us. What they have done, they have granted loans, $120 billion in loans, in the last three years alone, to state-owned oil companies so they get first oil. That oil is not going to come on the global trading market.

CROWLEY: (Inaudible). HOFMEISTER: Our demand is down 6 percent year-over-year, and prices are skyrocketing. It's going to stay that way, and it could get worse in 2014, 2015 as well.

CROWLEY: Well, can you translate $120 per barrel oil crude or $130 into a price at the pump?

HOFMEISTER: In the more expensive states like California, New York, and some other places, it could get beyond $5 a gallon. I don't know if the national average would get to $5, but it could, because in addition to the crude oil price, there are three refineries closing on the East Coast.

That's going to put the middle Atlantic states and New England in even greater jeopardy of having to bring in high cost imports from elsewhere, because these refineries are closing, because they can't make money. What we need is a fix-it plan.

CROWLEY: And let me ask you how long you think these prices will stay elevated. I know it's very early. Usually prices go up in the summer. We see that because demand is higher, et cetera. But how long do you think these high prices, $4, $5 a gallon, will last?

HOFMEISTER: In 2011 we paid the highest average price throughout the year in our history. 2012 will beat that average price of 2011 by some factor. 2013 could get even worse. And so we really have to get on with fixing the problem and I would take four different steps.

One, we use 20 million barrels a day every day in a full economy in this country. We only produce 7 million. We used to produce 10. Let's go back to 10. We know how to produce 10. Let's go back to 10. We know how to produce 10. We have the oil to produce 10 for decades to come.

Two, pay attention to what the U.S. Energy Security Council is talking about, which is turn our natural gas into methanol and ethanol with fixed -- with the flex fuel engines. That could deliver about 4 million to 5 million gallons per day equivalent. We're now at 15.

If we then use higher efficiency vehicles to save two, that's -- we're at 17 equivalent, and if we use oil that's in Canada and Mexico, 3 million barrels a day, we're at 20. We could tell OPEC to take a hike, and that's what we should be doing in this process.

How long would it take? Between now and 2020. We could be on our way, and that could well be an all -- an all-the-above type plan.

The president hasn't been specific. We have to get specific about it. We've got to stop the blame game from happening, and the people who represent the citizens of this country have got to get their act together because we could be in gas lines in addition to high prices if we don't fix this problem.

CROWLEY: Let me play it -- for you something that Secretary Geithner said earlier this week about what the administration might or might not do. (BEGIN VIDEO CLIP)

TIM GEITHNER, SECRETARY OF THE TREASURY: There's a case for the use of the reserve in some circumstances, and we'll continue to look at those and evaluate that carefully.

(END VIDEO CLIP)

CROWLEY: Talking about the strategic oil reserve, which the president tapped into last year. It's supposed to only be there for sort of national security reasons, but, nonetheless, presidents are known to tap into it for high gas price reasons. How much would that help if he would let loose some of that oil?

HOFMEISTER: Very little, because you can't take the reserve down far enough without jeopardizing national security. And just a million or 2 million here or there, it's not going to make a big difference.

People should not underestimate that right behind China is India. India is going for 4 million barrels a day to 7 million barrels a day demand. That's 10 million barrels a day, and the world seems stuck at about 88 million barrels, when we need to be getting to 96 or 98 million barrels. That's the big problem. It's a game of math.

And even if we're using less and paying more or headed for gas lines, that's not good for the economy. I worry about the future of the economy under this high price scenario.

CROWLEY: Right, because high gas prices always undermine the economy.

HOFMEISTER: Exactly.

(CROSSTALK)

CROWLEY: Thank you so much, John Hofmeister --

HOFMEISTER: Thank you.

CROWLEY: -- we always appreciate your time.

After the break, roll out the red carpet because we're bringing you the winners of D.C.'s Oscars. But first, this honorable mention for best cameo in a political speech. He is not running for office. We don't even know his name, but you can call him the sleeper candidate.

(COMMERCIAL BREAK)

CROWLEY: With a nod to tonight's Academy Awards, we pulled political gold from the past year for this week's campaign trail. The envelope please.

(BEGIN VIDEO CLIP)

CROWLEY (voice-over): Most aggressive campaign for the cool vote: Jon Huntsman.

FORMER GOVERNOR JON HUNTSMAN: Governor Romney, who called it a fraud in his book "No Apology," I don't know if that was written by Kurt Cobain or not.

I want to be the president who embarks on a Grateful Dead-like concert tour around this country.

CROWLEY (voice-over): Best impression of a stand-up comedian? Mitt Romney.

FORMER GOV. MITT ROMNEY, R-MASS., PRESIDENTIAL CANDIDATE: The gap between his promises and his performance is the largest I have seen, well, since the Kardashian wedding and the promise, "until death do we part."

My son had a motorcycle, which I would ride on occasion, rarely.

UNIDENTIFIED MALE: Can you get on one?

ROMNEY: No.

UNIDENTIFIED MALE: With the helmet maybe, Dukakis style?

CROWLEY (voice-over): For best choreography, hands down, Michele Bachmann, here busting a move with Iowa supporters. It's been rumored she was joining "Dancing with the Stars," but, darn it, she denies it.

Most ironic campaign moment: Newt Gingrich.

UNIDENTIFIED MALE: Please define yourself using one word and one word only.

FORMER REP. NEWT GINGRICH, R-GA., PRESIDENTIAL CANDIDATE: Cheerful.

(LAUGHTER) CROWLEY (voice-over): Best debate exchange: Ron Paul and Rick Santorum.

REP. RON PAUL, R-TEXAS, PRESIDENTIAL CANDIDATE: He is a fake.

(LAUGHTER)

SANTORUM: I'm real, Ron. I'm real.

PAUL: Congratulations.

SANTORUM: I'm real. Thank you.

CROWLEY (voice-over): Maybe that explains why Ron Paul was the recipient of one of the most passive-aggressive handshakes of the campaign.

Most over used campaign catch phrase, say it with me --

HERMAN CAIN, FORMER REPUBLICAN PRESIDENTIAL CANDIDATE: 9-9-9. 9-9-9.

STEPHEN COLBERT, HOST, "THE COLBERT REPORT": The plan so fine they named it 9-9-9.

HUNTSMAN: I thought it was the price of a pizza when I first heard it.

(LAUGHTER)

CROWLEY (voice-over): Best single moment to bring down a campaign belonged to Rick Perry.

GOV. RICK PERRY, R-TEXAS, PRESIDENTIAL CANDIDATE: I would do away with education, the -- commerce, and let's see, I can't -- the third one I can't. Sorry. Oops.

CROWLEY (voice-over): Best unintentionally funny campaign ad, Herman Cain and his chief of staff.

(MUSIC PLAYING, KRISTA BRANCH, "I AM AMERICA")

CROWLEY (voice-over): And best parody of an unintentionally funny campaign ad goes to Cain's number one fan, Stephen Colbert.

(MUSIC PLAYING)

(END VIDEO CLIP)

CROWLEY: Congratulations to all our winners. Thank you for watching STATE OF THE UNION. I'm Candy Crowley in Washington. You can find today's interviews as well as analysis, web exclusives, and much more at our website, cnn.com/sotu. Up next for our viewers here in the United States, "FAREED ZAKARIA GPS."