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JOHN KING, USA

North Carolina Considers Same-Sex Marriage Amendment; Grading President Obama on Health Care; Interview with John McCain

Aired May 8, 2012 - 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: Good evening. I'm John King.

Tonight, voters in North Carolina decide whether to send an emphatic message against same-sex marriage. And in Indiana, a 36- year-old incumbent Republican senator faces a conservative and Tea Party revolt.

Also, we grade the president's health care record. Has he kept his big promises? And how will that issue impact the tight presidential race?

Plus, Joe Biden steps it in again. Tonight's "Truth" explores why the president's political team loves the vice president even though he often makes them cringe.

We begin tonight with primary elections that could send a loud national message. Yes, the race for the Republican presidential nomination is all but over, but we will get a taste tonight of whether the Tea Party will finally show some 2012 strength and a test of how important the culture wars will be in a year defined mostly today by economic challenges.

Our first stop tonight, Indiana, where 80-year-old Senator Richard Lugar, a leading Republican voice on foreign policy, is asking for one more term, but facing a Tea Party and conservative revolt for votes Lugar's critics say prove the senator has last touch with the folks back home.

Our senior congressional correspondent, Dana Bash, is at Lugar headquarters in Indianapolis.

Dana, you had a chance to talk to Senator Lugar, a man you know very well from Capitol Hill, a bit earlier today. Let's listen to some of the exchange.

(BEGIN VIDEO CLIP)

DANA BASH, CNN SENIOR CONGRESSIONAL CORRESPONDENT: You're 80 years old. You have had by all accounts a stellar career. Why did you decide to take on this fight within your own party, rather than just say it's been great, time to go?

SEN. RICHARD LUGAR (R), INDIANA: Well, first of all, because I believe that I have a unique opportunity to serve my country with regard to arms control, with regard to terrorists, with regard to all sorts of foreign policy questions that really have to be tackled by somebody. I believe I have a unique opportunity to serve Indiana agriculture and farmers generally.

(END VIDEO CLIP)

KING: It is striking, Dana. I understand his record, I understand the issues he loved, but in a year like this, to hear the first thing out of a man who is in risk of losing an election say foreign policy, wow. How does it look out there tonight?

BASH: That is what is making a lot of Republican strategists who want Richard Lugar to succeed scratch their head and cringe, frankly, because, yes, that is definitely his record.

It is the hallmark of his career, foreign policy, but it is frankly what has given him big trouble out here in Indiana, the fact that jobs is on everybody's mind, not nuclear weapons being in the hands of terrorists, so that is a big problem.

And the other thing that is really fascinating, John, is that Richard Lugar, unlike the Republican incumbents who lost to the Tea Party insurgents two years ago, he saw this coming. And he had a chance to tack right, as others like Orrin Hatch of Utah did. And he didn't want to do it. And I asked him about that, and he said, I took the votes that I wanted to take, those votes being for President Obama's two Supreme Court nominees, for the DREAM Act, and other things that have really hurt him on the ground here with Republican voters.

He seems very comfortable with those votes, even though at the end of the day it could mean that his fellow Republicans could oust him here.

KING: It's an interesting test. This vote will send a message to incumbents across the country, whether they're Democrats or Republicans. You have spent a lot of time talking to voters. A lot of them have voted for Richard Lugar time and time again. He was the mayor of Indianapolis before he was a senator. Let's listen to one of those voters.

(BEGIN VIDEO CLIP)

BASH: You were just talking to Senator Lugar.

DAVID KITELY, VOTER: Yes.

BASH: Did you vote for him?

KITELY: No, first time I didn't vote for him.

BASH: That was a long pause there.

KITELY: I hated to depart.

BASH: So why'd you do it? KITELY: I need someone that can go up to Congress, put the foot down and say, no more politics, we're going to do the right things. We can't let Obama dictate to us anymore what he's doing.

(END VIDEO CLIP)

KING: When you hear that voter say put their foot down, no more letting President Obama get his way, is this, will this be -- if Senator Lugar loses tonight, is it a Tea Party victory or a sense of the voters that he's just been there too long?

BASH: I think it's the latter, I really do, that it is a sense that he has been there too long.

There's no question that Tea Party activists and Tea Party groups have come in with a vengeance. They have spent their money, they have spent their time to help Lugar's opponent, Richard Mourdock, but this absolutely does seem to be a referendum on Senator Lugar, the fact that he's been there for a very long time.

And you could see in that voter's face, you could hear it in his voice that it pained him to vote against Senator Lugar. He's beloved in this state, even by people who are voting against him. And I heard that from voter after voter after voter, as you said, people who know him, have known him since he was mayor of Indianapolis. Their families have known him and voted for him.

But they just -- many of them think it's just not time for him anymore, it's time for somebody different, no matter how much Senator Lugar tries to use seniority as his -- to his benefit.

KING: Most of the polls have closed in Indiana. The polls that are still open will close soon. We will bring you results throughout the night here on CNN.

Our senior congressional correspondent, Dana Bash, is there. And again this will be a message to incumbents of both parties across the country.

Now, though, to North Carolina, where a statewide referendum on same-sex unions could give us a sense of conservative enthusiasm in a state President Obama carried in 2008 and hopes to keep blue in 2012. Voters are now deciding on a constitutional amendment that says -- quote -- "Marriage between one man and one woman is the only domestic legal union that shall be valid or recognized in this state."

Its passage would effectively ban same-sex civil unions and domestic partnerships, as well as marriage. And, remember, the Democratic Convention to nominate the president for a second term is in North Carolina this summer.

Let's go to CNN White House -- chief White House correspondent Jessica Yellin.

Jess, the president was supposed to be in North Carolina today. That's where his schedule last week said he would be. He often talks about showing leadership, showing boldness, showing political courage. Did he duck? Did he not want to step into the middle of this fight?

JESSICA YELLIN, CNN CHIEF WHITE HOUSE CORRESPONDENT: Well, today, he didn't talk about gay marriage. He was in New York. He talked about manufacturing.

I'm told by a top Democratic official that his senior advisers are now scrambling to try to figure out exactly what the president's position should be and how they should sort of clean this up. I should be more exact -- how they should sort of clean this up after Vice President Biden sort of went further on the issue than the president had, because gay rights groups have been very pleased with the president to date and where he has been on all these issues.

And now it's a very awkward position for the White House in an election year, as you know.

KING: And so how -- do they evolve again? They always say the president has evolved.

If you go back, George W. Bush and Dick Cheney had this same disagreement.

YELLIN: Right.

KING: From the get-go, Dick Cheney said it should be up to the states. If they want to do it, that's fine. George W. Bush said, no, you need a national constitutional amendment that bans same-sex marriage.

For a group of people, I'm talking about team Obama, that says Governor Romney can't get his act straight and keeps changing his positions, why can't they get this one right?

YELLIN: Well, because the president doesn't have a clear position.

I mean, as you said, President Bush said no. President Obama doesn't say no, he doesn't say yes. He stays murky, and it seems deliberately murky, so that he could have it both ways, where he seems to be indicating to the gay community that he's maybe with them and to others maybe against them, so it's unclear.

Now, next week, the president will be giving a commencement address at Barnard College, where one of the leaders of the gay marriage community will be getting an award. This issue will come up again because we will see them together on stage, presumably. And it will continue coming up until the White House clarifies the president's position.

They're going to have to say something at some point to clarify it. I'm sure they know that. So there will be a next step in this story at some point.

KING: There will be a next step. And when they make it, they will know the results of this important vote tonight in North Carolina, could come up at the convention down the road a bit as well, too.

YELLIN: That's true.

KING: Jessica Yellin, thanks so much.

We're learning a lot more tonight about a dangerous new bomb from al Qaeda, one that was meant to blow up a plane bound for right here in the United States.

CNN national security contributor Fran Townsend is in New York.

Fran, the FBI has the bomb now. What do we know about it, and what are they looking for?

FRANCES TOWNSEND, CNN NATIONAL SECURITY CONTRIBUTOR: Well, you know, it's interesting, John.

First, what they're looking for, one, is it PETN? That's the same high explosive, basically odorless, that can be put in a putty that was used both with in the underwear bomber, Abdulmutallab, and the cargo plot.

And so -- and all those bombs were made by al-Asiri. This is the Yemeni bombmaker who has been in the process over the few years of training others to make such bombs. So, they want to know, can they link this back to him? One of the ways you do that is, is it the same explosive, PETN?

Second, what is the detonation device? We have heard over and over, one, the detonation device of the underwear bomber is what failed to let this thing -- his thing explode, his bomb explode. Did they improve that? So there have been some different things done to this particular device, and they will really analyze the detonation piece to see whether or not they believe this would have been successful.

So those are the two keys here, and that's what they're looking for. John, sources have said to me, there's a real debate about whether or not they are going to release these photographs of the bomb. We understand that they have them. In addition to the device, they have taken photographs. They don't want it to leak.

And there have been so many leaks. We have heard such hue and cry out of Washington about the leaks. They're trying to figure out whether or not they can get the necessary information to screeners and law enforcement without releasing the actual photos.

KING: And they have this one device. The question is -- they're studying it now to see if al Qaeda in the Arabian Peninsula has made progress, if they have a new trigger, a detonator, as you just mentioned.

Do they think this is one device and they have it, or do they think maybe there are more out there they need to worry about?

TOWNSEND: No. You know, it's interesting, John, and I spoke to this law enforcement source, said to me, that's the problem. We don't know. We don't know if there were other individuals who volunteered to carry such bombs. We don't know if there are additional devices that were built, constructed in the same way.

It would be unlike al Qaeda to build just one, just based on my own experience. And so they're rightly concerned. If they don't have insight to that, now that there's so much information out there, they worry that they are going to lose their ability to sort of continue the investigation and learn more.

KING: National security contributor Fran Townsend -- Fran, thanks so much for that new information.

TOWNSEND: Thanks, John.

KING: And we will continue to follow the story as well.

In just a moment here, we grade President Obama on what may be the most controversial issue of his first term, health care.

And, later, one-time presidential candidate John McCain weighs in on the Romney campaign's latest self-inflicted controversy.

(COMMERCIAL BREAK)

KING: Tonight, as part of our continuing look at the major dividing lines in campaign 2012, we grade President Obama on an issue that is also a major challenge for Mitt Romney, health care.

Let's first look at the president's major health care promises. One was to deliver near universal access to health care. Another was to close an expensive prescription drug coverage gap Medicare recipients know as the doughnut hole. And another major promise from the president, he told most families, especially middle-class families , they'd see their health care costs go down.

(BEGIN VIDEO CLIP)

BARACK OBAMA, PRESIDENT OF THE UNITED STATES: And if you already have health insurance, we will lower your premiums by $2,500 per family per year.

(CHEERING AND APPLAUSE)

(END VIDEO CLIP)

KING: So has the president kept those promises?

Well, yes, is the answer to sign universal or near-universal coverage. You may not like the law, but, yes, the president has signed that into law. Yes would be the line here. Yes, eventually, is the answer when it comes to closing the Medicare doughnut hole. The health care law phases in those costly changes between now and 2020.

And on cutting premiums, if you scored it today, it would be a broken promise. Costs were up again in 2011, but we will score this one in progress. Why are we doing that? Because the true test will come after the health care law is fully implemented in 2014. By then or soon after, the president insists the controversy over his signature initiative will fade.

(BEGIN VIDEO CLIP)

OBAMA: But long after the debate fades away, and the prognostication fades away and the dust settles, what will remain standing is not the government-run system some feared or the status quo that serves the interests of the insurance industry, but a health care system that incorporates ideas from both parties, a system that works better for the American people.

(END VIDEO CLIP)

KING: Let's debate the health care politics of the here and now with Tevi Troy. He's a Romney health care adviser who served in the Department of Health and Human Services in the George W. Bush administration. And Melody Barnes, she was President Obama's domestic policy in the White House before, as I say, you escaped, right? Escaped.

(LAUGHTER)

KING: Let's start first with the premium cost, because, as I said, if you scored it today, you would have to say a broken promise. And the Kaiser Foundation, if you look at the numbers, health care costs, premium costs were up 9 percent for individuals, 3 percent for employees.

They say about 1.5 percent of that increase is tied to the health care law. Now, I was trying to be fair and say let's wait until the law is fully implemented. That would be the bigger test. But does it surprise you that, at the moment, was this supposed to happen, costs still going up?

MELODY BARNES, FORMER WHITE HOUSE DOMESTIC POLICY ADVISER: Well, I think it's important to put this in context.

If we look over the last few years, costs have been rising consistently. And, actually in the last year, 2010 to 2011, we have seen costs still high, but going down. What we expect, once health care is fully implemented, is for those costs to continue to go down and for families to save in the range that the president promised when he was on the campaign trail, about $2,200 for every family.

And that's because of all the things that we built into the Affordable Care Act when we put it together.

KING: You don't like it, but will that happen? Will premiums start to go down once the law is fully implemented?

TEVI TROY, HUDSON INSTITUTE: No, John, I don't think that is the case at all. The CBO has shown that the cost for a family is going to go up $2,000. So you are going to see that go up. And then the promise that Melody talked about was it going down $2,000, so you have got a $4,000 spread. It's actually going to be higher for people.

KING: Why is the CBO wrong?

BARNES: Well, because we have to look at all the pieces coming together.

The first thing that we did was to go after the consumer protections, to do things to make sure that children who had preexisting conditions could get covered. But what we have started to see now are the provisions that include things like rate review. So if an insurer is going to go up about 10 percent over its past year's premiums, we have to review that, and make sure that if there needs to be a rebate to consumers, that they're going to get it.

The same thing with administrative costs. We have to make sure that those costs are actually devoted to people getting better health care, not to the administration of a health care plan. We fully expect those costs to go down. And, as I said, and consistent with what the president said, that will be about $2,200 worth of savings for every family.

And we're already projecting for 2012 that costs are going to go down and in fact some lower than the rate of health care inflation.

KING: Another big promise from candidate Obama in 2008 was to deal with prescription drug costs. Now, some of this might have been dealt with in the Affordable Care Act, but in 2008, Senator Obama put it this way.

(BEGIN VIDEO CLIP)

OBAMA: Then we will tell the pharmaceutical companies, thanks, but no thanks for overpriced drugs, drugs that cost twice as much here as they do in Europe and Canada and Mexico.

(CHEERING AND APPLAUSE)

OBAMA: We will let Medicare negotiate for lower prices. We will stop drug companies from blocking generic drugs that are just as effective and far less expensive.

(END VIDEO CLIP)

KING: Senator McCain said he had the same position. It hasn't happened. Why?

TROY: Well, look, there's a lot of things that go into the cost of prescription drugs.

And I think the tax on prescription drugs that you see as a part of the Obama health care law is actually going to be paid by consumers themselves. So I'm not sure that this is going to work out the way he wants.

In terms of the prescription drugs for seniors, the real benefit to seniors came from Part D, which was a plan that passed under President Bush. That for the first time allowed seniors to get prescription drug coverage under Medicare.

KING: A lot of conservatives don't like that. They thought it was a huge new entitlement program.

TROY: True, some conservatives didn't like it, but it was passed with bipartisan majorities in Congress, which is something you can't really say about the Obama health care law, which was not passed with bipartisan majorities at all, in fact, very partisan, and as a result has become very unpopular.

BARNES: But one of the things that the president was able to do was the unfinished business of making sure that doughnut hole, that gap that causes seniors to have to pay more is starting to close.

In fact, what we have seen since the Affordable Care Act passed is that seniors are saving about $600 annually on their prescription drug costs. The president also referred to -- we heard it in that clip -- ensuring that there are more generics on the market. That was also included on the Affordable Care Act, so people with -- who are buying expensive -- relatively expensive drugs now because they have got M.S., because they have forms of cancer, because they have got forms of arthritis, are now going to see what we call generic biologics on the market.

That is also going to help them. So, consistently, we have seen more people with preventative care, this closing of the doughnut hole, more students that are able to stay on their parents' plans. All of these things are making sure that health care is more affordable and that more people have access to it.

TROY: Well, the generic biologics was only one piece of the very large 2,700-page bill that is unpopular, likely to be ruled unconstitutional by the Supreme Court, extremely expensive. They said about $1 trillion. It now appears to be more like $2 trillion.

And it doesn't reduce premiums, it doesn't give universal access. CBO says there will still be over 20 million people without coverage in 2019.

(CROSSTALK)

BARNES: Well, Tevi, I think you have gotten ahead of yourself on the Supreme Court.

(CROSSTALK)

TROY: ... very generous grading over there overall on your...

(CROSSTALK)

KING: You thought that was generous. OK. (LAUGHTER)

(CROSSTALK)

BARNES: Well, I think you have gotten ahead of yourself on the Supreme Court. We fully expect that this will be found constitutional.

But, beyond that, what people appreciate are the pieces that are already coming into play. And they will continue to see more of that. Like I said, if you're 26 or up to 26, you can stay on your parents' plan; 86 million Americans that now have preventative coverage, those are the kinds of things that they like. Those are the things that people are going to see more of.

KING: You can see that this is a feisty debate in here. We will continue it.

(LAUGHTER)

KING: Some of you at home are asking, why aren't we analyzing Governor Romney's record? Tonight was looking at President Obama's record. We will look at Governor Romney's record in the days ahead. Next week, I think, we get to Romney on health care. We are going to do this right now, all through the election.

Melody, appreciate you coming, and Tevi as well. We will continue the conversation.

And when we come back: If there's ever a collected sayings of Vice President Joe Biden, something today he said today is sure to be in the book. And guess what? It's also the "Truth." We will get to that in just a little bit.

But, next, we will remember an author who wrote a story you either heard as a child or perhaps you read it to your own children.

(COMMERCIAL BREAK)

KING: Welcome back.

(NEWS BREAK)

KING: Next, we will talk over the Romney campaign's latest miscues with someone, oh, who has been there, Senator John McCain.

Plus, a political deal that is so big, a national election just got called off.

(COMMERCIAL BREAK)

KING: This half hour, today's biggest political deal, so big the national election was just called off, but no, it didn't happen here in the United States.

Former presidential candidate John McCain has a few thoughts about the latest miscues by the Republican nominee this cycle.

And the "Truth" about why the White House loves the vice president, even when he says things that make them duck for cover.

Not exactly a picture perfect day for the Romney campaign. The Republican National Committee's Hispanic outreach director told reporters the presumptive Republican nominee was, quote, "still deciding" his immigration policy. That was quickly corrected, characterized as a slip of the tongue.

But it was the candidate himself who had a way with words on the auto bailout, telling this to an Ohio TV station.

(BEGIN VIDEO CLIP)

MITT ROMNEY (R), PRESIDENTIAL CANDIDATE: I pushed the idea of a managed bankruptcy, and finally when that was done, and help was given, the companies got back on their feet. So I'll take a lot of credit for the fact that this industry's come back.

(END VIDEO CLIP)

(BEGIN VIDEOTAPE)

KING: Let's visit with a man who knows all about the rough terrain of a presidential campaign, the 2008 Republican nominee, Senator John McCain.

Senator, forgive me, but to hear Mitt Romney taking credit for the resurgence of the auto industry, isn't that a bit of a parallel universe? He was firmly against the bailout.

SEN. JOHN MCCAIN (R), ARIZONA: Well, being against the bailout, what again was a deal they cut basically with the unions.

Mitt Romney and I don't understand why the auto industry -- and by the way, not Ford, who is doing very well -- but why GM and Chrysler didn't do the normal bankruptcy proceedings as thousands of small businesses all over America had to do, as they faced these rough times.

Instead, they got a special deal. They got taxpayers' money, billions and billions of which have not been paid back to the taxpayers. And they could have gone through the normal bankruptcy process. As I said, other companies and corporations did, remained viable and could be fine today.

KING: They say...

MCCAIN: Taxpayers wouldn't be on the hook.

KING: Companies say they would have run out of cash, that there was no private cash available, and they would have had to liquidate, meaning shut down and then maybe go through bankruptcy. Imagine all the turmoil that would have caused.

KING: Well, I wonder why Ford didn't have that do that, No. 1.

No. 2 is I don't accept that. That's the same thing that small businesses all over my state had to do.

What was the difference between the small business on Central Avenue in Phoenix and General Motors and Chrysler? They had -- they had Obama on their side to give the unions a special deal, and not have them go through the same painful process that thousands and thousands of small companies all over America had to go through, because they didn't have the clout with the Obama administration. That was fundamentally unfair.

KING: I spent a fair amount of time with you on the trail in 2008, and something that happened to Governor Romney yesterday reminded me of a few moments you had in that campaign. Listen here, Senator.

(BEGIN VIDEO CLIP)

UNIDENTIFIED FEMALE: We have a president right now that is operating outside the structure of our Constitution. I do agree he should be tried for treason, but I want to know what you are going to be able to do to help restore balance between the three branches of government.

(END VIDEO CLIP)

KING: Now, Governor Romney at the event, Senator, chose not to address the "I think he should be tried for treason" part.

You took a different approach when people would say things that I would say, outside of the mainstream, outside of the norm in 2008.

You can't -- the candidate isn't responsible for everybody who's in the room. I want to make that clear up front. But how does a presidential nominee have to handle those moments?

MCCAIN: Well, I think you have to be on your toes. And a lot of times I did let some things pass, just because you're thinking of an answer, you're thinking about who the next questioner is going to be, you're thinking about whether you answered the last question correctly.

There's nothing more taxing intellectually during a presidential campaign than a town-hall meeting, because every word you say is parsed and repeated.

Do you remember when I said -- oh, my God -- I said, "The fundamentals of our economy are strong"? You remember that? I was...

KING: Really well.

MCCAIN: Oh, my God.

But anyway, so you've got to really be on your toes. And sometimes you really aren't listening real carefully to the question, because you're thinking about what you just said or what you're going to say or whatever it is.

And Mitt Romney afterwards said, of course, not going to be -- no one believes that the president of the United States should be tried for treason. Of course he said that.

KING: It's tougher, though, in the age of instant blog postings.

MCCAIN: Oh, yes.

KING: The other side immediately says, "Aha."

KING: It is tough. It is very, very tough. And -- and listen, in the town-hall meeting, it is the most difficult challenge, because it is an unstructured format, as you know.

KING: Many people might not know that John McCain is not only a Republican and a United States senator, but he's a huge sports fan.

Charles Barkley was a forward for the Phoenix Suns the last time the Suns made it to the NBA championship. And yet, you're picking a fight with him right now.

During the broadcast Sunday night he saw Mitt Romney in the stands at the Boston Garden, and he said, "You're going down, Governor. You're going down."

And you tweeted this: "Dear Charles Barkley, don't take it personally. You seem like a nice guy, but you're clueless. Mitt Romney wins. Want to bet?"

What do you want to bet?

MCCAIN: Whatever he'd like to -- to bet. But the fact is that Romney was there enjoying the basketball game. Charles Barkley basically gave a political ad for President Obama, and saying -- by the way, he said, "You're a nice guy, I like you," but he said "you're going down, bro." I'm not sure that that's appropriate at a baseball game, to tell you the truth, when Mitt Romney was there, trying to enjoy a basketball game, on a rare moment of relaxation during the campaign.

I've always enjoyed Charles Barkley. He's one of the most entertaining and, by the way, most gifted and hard-working athletes we've ever had grace the Phoenix Suns. But the fact is, I don't believe he's right. And so I thought it might be appropriate. You know, that's what twittering and tweets are all about.

KING: I know Charles pretty well. Maybe I'll get you guys together for dinner. You can work out the details of that bet.

MCCAIN: It would be a pleasure.

KING: John McCain, Republican of Arizona, appreciate your time tonight, sir.

MCCAIN: Thanks for having me on. (END VIDEOTAPE)

KING: Just imagine if President Obama asked Mitt Romney to join his administration, and in exchange, they called off the November elections. Well, that's pretty much what's happening in Israel today.

There was a secret early morning meeting and then an announcement, the Israeli prime minister, Benjamin Netanyahu, calling off plans for early elections and instead he invited the opposition Kadima Party to form a new unity government.

Netanyahu and his new best friend say this move is crucial as Israel prepares to confront Iran over its nuclear program.

(BEGIN VIDEO CLIP)

BENJAMIN NETANYAHU, ISRAEL PRIME MINISTER (through translator): We would like to create a very broad, stable government, in fact the most stable ever.

SHAUL MOFAZ, KADIMA LEADER (through translator): This process of the broadest ever national unity government is an historic moment of national unity. This unity is important for the future of the state of Israel.

(END VIDEO CLIP)

KING: Nathan Gutman is the Washington bureau chief of the "Jewish Daily Forward." He joins me now.

How is this going to play out? This is astounding. It's the right analogy, right? It's like Obama and Romney say, let's call the whole thing off. Let's be buddies.

NATHAN GUTMAN, WASHINGTON BUREAU CHIEF, "JEWISH DAILY FORWARD": There are things you can do with a parliamentary system that you can't do with a presidential system.

Basically, what Netanyahu did was that he first called new elections. He wanted to dissolve the Knesset, the Israeli parliament, in order to hold the elections a year before they're terminal (ph), to strengthen his base.

But then the last moment as the Knesset was getting ready to vote on this, he sat in the back of the room, as I said, with Shaul Mofaz, the head of Kadima, and closed a deal. And now he has the biggest coalition ever in Israeli history. He has 94 members of Knesset out of 120. Basically, he's unchallenged.

One of his rivals even called it today the biggest coalition since Ceausescu in Romania.

KING: And you know Aaron David Miller, here in the United States. He was a negotiator for the Clinton administration in the Middle East peace talks, other administrations, as well. He wrote this today on CNN.com: "He's the king of Israel, and we may just have to get used to it." Is Benjamin Netanyahu the king of Israel?

GUTMAN: Well, definitely he's unchallenged right now. The election is only a year from now. He has the strongest coalition ever. It will be unimaginable to actually defeat Benjamin Netanyahu right now before the elections and probably even after, because Kadima, his main rival, has actually co-opted into his coalition right now. So it would be very difficult to see Netanyahu go away.

KING: Will it make it more likely, less likely or doesn't make a difference in terms of when we get into late May and June, if the prime minister, who has disagreements sometimes with the White House over this, does not believe the sanctions have enough teeth, does not believe Iran is giving up anything in the negotiations?

When he's facing that decision, "Do I have Israeli military strikes on Iran?" does this change that calculation?

GUTMAN: Not necessarily. Inside his own coalition he has himself and Defense Minister Ehud Barak support a hard line that believe that Israel might be -- might be forced to take action against Iran even without the United States.

But now he brought in Shaul Mofaz, who thinks as do some former military chiefs, that Israel should wait; Israel should let the U.S. take the lead on that. So he has does have some dispute within his government now, although it's easier to deal with that kind of dispute when they're in the government and not the opposition.

KING: In the new family, you might say.

GUTMAN: Definitely.

KING: It's a fascinating story. We'll stay in touch. Thanks so much for coming in. Appreciate it. It's amazing.

(BEGIN VIDEOTAPE)

KING: Now let's move to a fascinating story here in the United States. A top Democratic strategist -- you know him well if you watch CNN -- has a blunt message for his fellow Democrats.

In an opinion piece just published on CNN.com, our friend James Carville writes, if you want to win in November, Democrats, quote, "you need to WTFU." Now, you know what that means. We're a family- friendly network, but translate it, "wake the you-know-what up, there is an earthquake."

That Democratic strategist and our political contributor James Carville joins me now from New York to explain.

James, you're not known for pulling your punches.

JAMES CARVILLE, DEMOCRATIC STRATEGIST: Right.

KING: I think I detect what you detect. You're saying when you meet with the fundraising guys, when you meet with the activists, they say, "Oh, the polls are tight but don't worry, Obama's got it in the bag." You think not.

CARVILLE: No, I don't. Who -- who in this world would be an incumbent? Not just in the United States. An incumbent would feel any sense of confidence whatsoever?

And Republicans are raising hundreds of millions of dollars. The super PAC money is pouring in to them, and the Democrats are saying we're going to win this thing and it just doesn't make any sense.

But do I think in the end that we have a good chance to win? Yes, we do, but it's going to be a brutally tough election.

And right now the attitude among Democrats that I detect from across the board is not anywhere near close to what it has to be.

KING: So here is what you write in an effort, and you've done this in the past, when you think the system needs to be shaken a bit you're not afraid to shake it.

You write this: "You can shoot five bin Ladens. You can save 10,000 banks and 20 car companies. Even pass the most sweeping legislation in modern American history. If people don't think you're connected to their lives and are fighting for their interests, they will vote your tush out of office in a nanosecond."

You go on to say, "For historical reference, see Winston Churchill, election 1945 and President George H.W. Bush in 1992."

You're saying there, James, that you think a lot of voters -- and I know you study the polling data and I know you travel quite a bit -- do they not think the president is, quote, "connected to their lives and fighting for their interests"?

CARVILLE: Well, I think that voters see sometimes is, you know, the president ought to be very careful about talking about making progress, because while there's progress for some people, for a lot of people, they've been hurting for a long time.

And I just think we've got to take more of an insurgent kind of mentality here, that there are things that the president's trying to do. And he's fighting every day for the middle class.

And this kind of thing, if you remember, Democrats lost badly in '46. And Truman came back and ran against a Republican Congress and pulled a big upset and won the election in '48.

And I'm saying that we have too much, not just the president. I don't want to single the president -- single out the president here. But a lot of people have too much of an incumbent mentality in this party, this sort of attitude that we're going to win no matter what and, you know, they point to stuff like, well, the electoral map looks good for us, or, you know, Ohio looks good and that kind of stuff. And that's not how elections are won.

They're won by going out there and getting on the offensive and staying there. And the combination of that and plus the sense that Romney is just a really weak, bad opponent is causing, I think, unwarranted optimism among Democrats.

KING: That's why I wanted to read the sentence where you make the Churchill and George H.W. Bush comparison. Because I spent a lot of time with you back in 1992 when you were running against George H.W. Bush.

Do you see the complacency? The economic statistics were slowly getting better for George H.W. Bush. Do you see team Obama, they have the same complacency team Bush had for the greet?

And more important question, do you see the attitude in the Romney campaign that you guys had in the Clinton campaign of '92?

CARVILLE: I think -- honestly, I think the Romney campaign -- and I pointed it out. I think they're bad. And I mean like today with this auto bailout thing, I thought that was an "Onion" headline when I first saw that.

I mean, I don't know that the campaign comes up with this. I mean, some of the things that Romney's done are completely perplexing to anybody.

But having said that, you've got to figure at some point that he will get better or they will get better, not demonstrated by anything that happened today.

I think sometimes when you're an incumbent and you've been there, there's a tendency to defend everything that's happened. And I just think that -- and it's not just -- I don't want to single out the Obama campaign. All across, I think, among Democrats is just a little too much comfort here.

And what I'm trying to do is -- and you capitalized it just right -- is I'm trying to create some discomfort here to say, look, we're a long way from having this thing in the bag. In fact, being tied in the polls is kind of bad right now, that they have more money and momentum is going against incumbents everywhere in the world.

KING: Always provocative, James Carville.

You should go to CNN.com as soon as you can to read the entire piece. Mr. Carville shaking things up.

James, appreciate you coming to talk to us tonight.

CARVILLE: Thanks. You bet.

(END VIDEOTAPE)

KING: Want to bring you out some breaking news on the foiled terror plot against the U.S. airliner. CNN's Fran Townsend has confirmed that there was never a threat to the United States, because the United States controlled -- controlled the would-be bomber.

Let's bring in Fran, who's a member, of course, of the Department of Homeland Security and the CIA external advisory board. Fran, you're saying he was a double agent?

FRAN TOWNSEND, CNN NATIONAL SECURITY ANALYST: Basically. I mean, absolutely, John. What they said to me is, you know, you've heard this language that there was no threat to the United States. You now understand why.

The CIA, working with the Saudi intelligence service, controlled the source and therefore this device. And so the American officials were reasonably confident that this was somebody that they could exercise complete control over and so that there wasn't a threat to the U.S.

In addition, John, we've learned for the first time that it's the same informant who provided U.S. officials with the necessary information to enable the drone operation that killed al Quso, AQAP, al Qaeda in the Arabian Peninsula's external operations chief this weekend.

So this was clearly -- they had gotten this source infiltrated into the real center of the al Qaeda in the Arabian Peninsula organization so that he was privy to real sensitive and real-time information that they could take action on.

KING: Well, so let me ask you this question. This source, I assume, is this source now compromised? This source is out? Are there additional sources? Or with this intelligence coup, in this case, do we pay a price down the road in the sense that we've lost that asset?

TOWNSEND: Well, I think we have to assume that this -- this asset can no longer be of use inside that organization. Right? So we're going to have to work to confirm that, but I mean, in all my experience, John, you can't put him back in.

And you also have to assume the organization will be more sensitive now to those around them, those inside the organization, and it will be more difficult for American intelligence and foreign intelligence to get that sort of information.

So I mean, this is -- when you take that together with the fact that a law-enforcement source told me earlier today, we don't know if there are additional people who volunteered, as the informant did, to carry a device such as this, and we don't know if the bomb makers made more than a single device.

And so given that environment, you do worry. You can understand why they want to examine this bomb. They want to understand it so they can get the information necessary to screeners for what they're looking for.

KING: Fran Townsend with new information. This is a fascinating -- would be a fascinating spy novel. It is silver spar (ph) reality. We'll stay on top of it. Fran, thanks so much.

Coming up here, why Vice President Biden is a liability and an asset all at the same time in the race for the White House.

(COMMERCIAL BREAK)

KING: If you were with us just moments ago, you heard our CNN contributor, Democratic strategist James Carville, deliver a pretty blunt wakeup call to a Democratic Party he thinks is too complacent, heading into the final six months of the election campaign.

Let's talk it over. Our chief political analyst, Gloria Borger, is here. CNN contributor and Democratic strategist Maria Cardona, as well. And Republican strategist Alice Stewart.

Alice, this may be the only time you've agreed with James Carville. I want to read a little bit. He just posted this provocative piece on CNN.com. And he says, "My message is simple, WTFU." Family hour, I'm not going to say that. Then he goes on to say, "You can shoot five bin Ladens. You can save 10,000 banks, 20 car companies. Even pass the most sweeping legislation in modern American history. If people don't think that you're connected to their lives and you're fighting for their interests, they will vote your tush out of office in a nanosecond."

ALICE STEWART, REPUBLICAN STRATEGIST: He is completely right. People might like President Obama. He is a great speaker. But -- but the truth is his policies are not working. His liberal policies have failed to make things better for the American people.

And we have Mitt Romney who just came out of a very, very heated primary. He's in a statistical dead heat with President Obama in electability. President Obama is in some serious trouble. It's not about whether or not people like him. Obviously, people like him. But will people trust Governor Romney to handle the economy better than Obama? And that's the No. 1 issue, then he's in serious trouble.

KING: As you know, Maria, sometimes team Obama says Carville is kind of a cranky guy. Carville is trying to get some attention. Yet, he's done something a lot of Democrats haven't done, and the Obama team did win a presidential election. James has won two presidential elections. Is he right?

And he was very careful. He said it's not just the president's -- it's not the president's team. He means when you travel the country, the people have to help turn out the vote. The people who have to help gin up the organization, seem too complacent.

MARIA CARDONA, CNN POLITICAL ANALYST: So here's where I agree with James. He's right, obviously, in that you can only win an election, especially in this environment, if you act like the underdog. And frankly, the president said several months ago that he did feel like the underdog.

So my sense is in conversations that I've had -- I've had with the White House, they know how hard this is going to be. They are putting everything that they can into this.

But they also want to make sure that the record of President Obama since he took office is clear. And that's where you see him talking about what he has done to help the economy, what he has done for job creation.

I agree with James that there's got to be a balance. Because if people aren't feeling it, they're not going to buy it.

GLORIA BORGER, CNN POLITICAL ANALYST: Can I just say that the Republican super PACs are raising so much money that the Obama campaign has not yet been able to match, that Mitt Romney is going to be able to walk into Wall Street and raise an awful lot of money.

UNIDENTIFIED FEMALE: Absolutely.

BORGER: Now, President Obama has the benefits of incumbency. He goes over to Afghanistan, meets with the troops. You cannot duplicate those pictures. I'm not saying it was just a political trip, but those pictures are -- are worth an awful lot to you if you're a candidate.

KING: Rose Garden and Southeast Asia.

STEWART: I disagree with Maria on one thing. That the Obama administration does not want to set the record straight on his record as president, because he has a record of broken promises. That's what he has.

We've got dismal unemployment numbers. We have 23 million people out of work. You have the median household income has dropped $4,000. This is going to be a referendum on his record.

CARDONA: If you look at everything that they have put out, from the 17-minute documentary to the ads that have been put out, he is running on every single thing that he has done.

KING: I think they're trying to do run on the record to excite the base, and they're also -- they've also come out with negative ads attacking Governor Romney.

(CROSSTALK)

KING: Why is it -- we're going to have this conversation -- we're going to have this conversation until November. But to change this point about the complacency, I was in L.A. about two weeks ago, talking to a bunch of people. And I was laying out a scenario for a very, very close election. And there were a lot of Democrats there, looking at me like I was nuts.

I was in New York last week, and I laid out a scenario for a very, very competitive election. I said, "Look, the 2008 match does not exist anymore. He's an incumbent in tough economic times. It would be the same for a Republican. And it's going to be very difficult."

CARDONA: I do agree...

KING: Why do they look at you like you're nuts? CARDONA: Well, here is why. And I think James sort of touched upon this. Because a lot of Democrats -- and this is not the president's White House or his campaign. A lot of Democrats out there cede to James' point what a weak candidate Romney is and how out of touch he is that they can't even believe.

KING: Is that what they see? Or do they have -- or do they have, forgive me, pretty comfortable lives and they don't understand if you get off the coast and you get into the middle of America, a lot of people are hurting?

UNIDENTIFIED FEMALE: That's part of it, as well.

BORGER: Don't forget. We've also been through a very bruising primary process. They saw this Republican primary, which a lot of Democrats were sort of laughing at, saying, "Oh, look, they're making each other look terrible."

And they're -- and they can't take a step back and understand that Mitt Romney is, you know, going to be a formidable candidate. That it depends on how optimistic Americans feel about their future. And right now, if you look at the polls, John, you know Americans don't feel optimistic.

KING: Quick -- quick timeout on this -- quick time-out on this issue. We'll do this for the next 180 days. Let you listen here to Vice President Joe Biden speaking today. No truer words have ever been spoken.

(BEGIN VIDEO CLIP)

JOE BIDEN, VICE PRESIDENT OF THE UNITED STATES: No one has ever doubted that I mean what I say. The problem is sometimes I say all that I mean. And...

(END VIDEO CLIP)

BORGER: Only in Washington would saying what you mean be considered a problem. Right?

KING: He's just -- he's making fun of himself there. He -- he says this happens on live television sometimes. Your tongue gets out ahead of the brain. It happens, right?

STEWART: I'm ready for the campaign or the administration to start pulling him back a little bit and less public appearances, simply because it's one thing after another.

CARDONA: That won't happen. I mean, they know Joe Biden. I think they clearly think he's more -- much more...

KING: He's an asset in blue-collar areas. They think they get more than they give. Let's put it that way.

BORGER: They do.

KING: Alice, Maria, Gloria, appreciate it. We'll be right back.

(COMMERCIAL BREAK)

KING: A quick recap of tonight's breaking news story. CNN national security contributor Fran Townsend has confirmed the reason U.S. officials can say there was no threat, that they were never worried about the bomb plot suspect that is now taken into custody -- I'm sorry, the bomb that has now been taken into custody is that the operative was, quote, "controlled by the United States," meaning a double agent. Major intelligence coup there. We at CNN will stay on top of that story.

We'll see you back here tomorrow night, though. That's all for us tonight.

"ERIN BURNETT OUTFRONT" starts right now.