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JOHN KING, USA

Obama's Gift to Romney; No Triple Crown Winner

Aired June 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: President Obama hands Mitt Romney a gift, saying the private sector economy is doing fine. Republicans say it's proof the president is out of touch. And the White House goes into full damage control mode.

A family of six from Kansas dies in a small plane crash that has investigators puzzled, parts of the wreckage miles apart, one of the bodies found a half mile away.

And I'll Have Another is scratched from the Belmont Stakes, stunning the horse world and ending an improbable quest for the Triple Crown.

We start this evening with what you might call President Obama stepping into it today. It happened during an appearance at the White House Briefing Room. While trying to prod Congress into acting on his economic agenda, the present, not once, but twice, referred to the private sector in glowing terms.

(BEGIN VIDEO CLIP)

BARACK OBAMA, PRESIDENT OF THE UNITED STATES: Overall, the private sector has been doing a good job creating jobs. The private sector is doing fine.

(END VIDEO CLIP)

KING: It was a gift. And Republicans, including the president's opponent this November, wasted no time in pouncing.

(BEGIN VIDEO CLIP)

MITT ROMNEY (R), PRESIDENTIAL CANDIDATE: He said, the private sector is doing fine. He said the private sector is doing fine. Is he really that out of touch?

REP. ERIC CANTOR (R-VA), HOUSE MAJORITY LEADER: We just listened to the president say that the private sector is doing fine, and my question would be to the president, are you kidding?

(END VIDEO CLIP)

KING: A few hours later, in the Oval Office, with the president of the Philippines sitting right there silently at his side, Mr. Obama repeatedly tried to clean up a mess of his own making.

(BEGIN VIDEO CLIP)

OBAMA: Listen, it is absolutely clear that the economy is not doing fine. The economy is not doing fine. There are too many people out of work. So let me be as clear as I can be. The economy needs to be strengthened.

(END VIDEO CLIP)

KING: CNN's chief White House correspondent, Jessica Yellin, joins us now.

And, Jess, we just saw take two there. But this morning, in the Briefing Room, off-script, off-message. Why?

JESSICA YELLIN, CNN CHIEF WHITE HOUSE CORRESPONDENT: Well, John, the president is trying to make -- tried to make the case that the part of the economy that's struggling the most is the part where government intervention could make the most difference and that's with government jobs.

They have been consistently making the case that the private sector continues to add jobs as it did last month, but those numbers are dragged down by the fact that teachers, cops, firefighters are losing jobs, and if Congress would only do something to get those people back to work, the overall jobs picture would look better.

That was the case he was trying to make, but he didn't say that so artfully. He said the private sector, as you heard, is doing just fine. And the last thing a politician wants to be doing in tough economic times is seeming like he is out of touch and not feeling real people's pain, John.

KING: And this comes, Jess, at the end of what I think it is fair to say not the president and his political team's best week?

YELLIN: That is an understatement. Let's tick through some of the problems, not just disappointing job numbers, but then Democrats lost the Wisconsin recall, which was so closely watched, Bill Clinton going off-message with the White House.

Then I am checking -- Romney outraised the president for the first time in fund-raising totals, a leak investigate on Capitol Hill that has got the White House in the crossfire, and now the president off-message. He was trying to get on his aggressive footing and reclaim the message here. But I do not think that this Q&A in the press briefing room managed to do that for him, John.

KING: Even presidents sometimes need a weekend to sort of collect their thoughts. And we will see what happens come Monday.

YELLIN: Yes.

KING: Jessica Yellin, our chief White House correspondent, Jess, thanks. So, let's take a deeper look at the real condition of the private sector.

Chrystia Freeland is an editor for Thomson Reuters Digital.

Chrystia, good to be here -- good to have you here.

I want to put some job numbers up on the screen. This is the past year, private sector job growth over the past year, and if you go month by month, you see there are a few pretty good months there, but most of those are just about breaking even. You're in the 100,000 new jobs created. As you know better than me, you need about 150,000 a month to break even. Some of those months are pretty anemic.

How could the president say things are fine?

CHRYSTIA FREELAND, GLOBAL EDITOR AT LARGE, REUTERS: Well, I think Jessica explained the thinking absolutely correctly.

The point of view that the White House is trying to put across, which I think most economists would agree with, is that what has been happening on the jobs front is job creation by the private sector not as strong as anyone would like, but the private sector absolutely adding on jobs, while the public sector actually has been laying people off.

And it's that laying people off by the public sector which feels very perverse to this White House in the teeth of a recession, of a weak economy. I think the point the president was trying to make is, isn't it crazy for us, the government, to be laying people off at this time, when we actually need more jobs and need more employment in the economy?

But, obviously, the way he put it has come across very, very badly.

KING: That's an understatement there. I think very, very badly is the way he put it.

So the president is trying to say to Congress pass essentially what used to be called -- they don't like the word anymore -- more stimulus spending. Give the states some money. Let them rehire some teachers, rehire some firefighters. Spend some money on construction. That's another thing the president said to help.

But he also looked overseas, Chrystia, talking about how not all of our troubles here in the United States are of our own making. Listen to the president talking about the euro crisis.

(BEGIN VIDEO CLIP)

OBAMA: The decisions required are tough, but Europe has the capacity to make them.

And they have America's support. Their success is good for us, and the sooner that they act, and the more decisive and concrete their actions, the sooner people and markets will regain some confidence and the cheaper the costs of cleanup will be down the road.

(END VIDEO CLIP)

KING: A little kick and a prod from the president of the United States there. You know what happens in the political debates back here. Republicans say he wants to blame everybody but himself. How much of a drag is Europe?

FREELAND: Europe I think is a considerable drag right now, but if I were the president, I would be incredibly worried about it.

I think that there is a considerable chance that this election will be determined not in Washington and not in Ohio or in Iowa or in Wisconsin, but in Athens, Madrid, Frankfurt and Berlin. If things go wrong in Europe this summer, which they could, they could go wrong at the end of this month, then I think you could see the world economy go into a tailspin, which makes this spring look like a cakewalk.

And I think the White House is very worried about that.

KING: And when the president makes his push to Congress to try to get some help here at home with the job numbers, do you see any way that would happen, to get the teacher money, get the firefighter money, to get some construction spending, unless he cuts a bigger deal with Republicans and extends tax cuts?

FREELAND: Look, my take on this is that this was very politically motivated.

When the weak jobs numbers came out, the president had to come up with a story. And the story that he is putting forward, which is not untrue, but which they haven't been emphasizing, is rather than saying the economy is in great shape, he wants to say, the economy would be in great shape if only I were able to do what I want to do, which is this jobs act.

So, he is trying to put the blame on Congress. I think that this is much more shadow play, this is much about the politicking and much less about anyone really thinking something is going to happen.

KING: Excellent point at the end there, especially, what, 151 days to the election. Unlikely he is going to get that money.

Chrystia Freeland, nice to see you. Thanks for your help tonight.

And the president's stumble at that news conference about the economy also obscured another very important point he wanted to make today. The president emphatically says his White House is not leaking national security secrets.

Our congressional correspondent, Kate Bolduan, is here. She's been talking to lawmakers who are trying to figure out then who is doing the leaking.

Where is this one going? KATE BOLDUAN, CNN CORRESPONDENT: Yes, that seems to be the million dollar question, if you will, in Washington right now.

On this point, the president seemed to almost get angry when this really came up, John, strong pushback from President Obama on the brewing controversy over who is behind a string of intelligence leaks in recent weeks.

Senator John McCain, he has been and is calling the leaks politically motivated so -- to make President Obama look good in an election year, he says. Well, President Obama fired back at those accusations today.

(BEGIN VIDEO CLIP)

OBAMA: The notion that my White House would purposely release classified national security information is offensive. It's wrong. And, you know, people I think need to have a better sense of how I approach this office and how the people around me here approach this office.

(END VIDEO CLIP)

BOLDUAN: Senator McCain, though, is not satisfied by the president's remarks.

He released a statement late today accusing the president now of trying to distance himself and his administration from the leaks, saying in part when -- in the statement, I will read you the quote -- "What the president did not unequivocally say today is that none of the classified or highly sensitive information recently leaked to the media came from the White House. I continue to call," McCain says, "on the president to immediately appoint a special counsel to fully investigate and where necessary prosecute these gravely serious breaches of our national secure."

I think the only thing that both sides are kind of agreeing on at this point is that whoever is the source of the leak should be held accountable. The president is saying, he has zero tolerance for the leaks, for these leaks, but this is far from over, obviously.

KING: But then McCain also said, if you read those stories, it says, administration officials, advisers to the president.

So, when he says, let's have a special counsel, is that going anywhere?

BOLDUAN: The reason they want a special counsel is because they want it to be independent of any kind of government influence, because they don't know where the leak could have come from. It is not likely to go anywhere any time soon.

While McCain and other Republicans are pushing to bring in this outside counsel, similarly high-profile key Democrats and Republicans, at least for now, indicate that they are satisfied that the FBI is investigating. I emphasize at least for now. This seems to change every day, though.

KING: At least for now. We will watch this one as it goes.

BOLDUAN: Yes.

KING: Kate Bolduan, thanks so much.

Up next: today's crushing news in the sports world -- the horse that could have been the first Triple Crown winner in 34 years pulled from the Belmont Stakes.

And, later, an air crash mystery so unusual, federal investigators say they have never seen anything like it before.

(COMMERCIAL BREAK)

KING: A sad and stunning race for the world of horse racing. I'll Have Another won't be on the track for tomorrow's Belmont Stakes. He has been scratched the day before his attempt to become the first horse to win the Triple Crown in 34 years.

His trainer says I'll Have Another's career is over, all because of a tendon injury.

(BEGIN VIDEO CLIP)

DOUG O'NEILL, TRAINER, I'LL HAVE ANOTHER: Cooling out, you could tell that swelling was back. And at that point, I didn't feel very good. He has done so much, that it was unanimous between the Reddam and my brother and I and everyone at the barn to retire him.

(END VIDEO CLIP)

KING: I'll Have Another becomes the 12th horse since 1978 to win the first two races of the Triple Crown, but not the Belmont.

Gene Menez, who is associate sports editor for "Sports Illustrated," was at Belmont today for the announcement and joins me now.

Gene, first, what more about this injury? Is it a persistent injury, something that came out of the blue?

GENE MENEZ, "SPORTS ILLUSTRATED": This is an exercised-induced injury that came over time.

They first noticed something yesterday afternoon, a little inflammation. They went out today. And he trained on the track today. They thought he looked fine. But as soon as they took the wraps off this morning, they saw a little more inflammation. They brought in the doctor in. And that's when they discovered the beginning of tendinitis.

KING: Let's listen to the owner, Paul Reddam. You could hear his disappointment clearly. But he thinks he's making the right call here. (BEGIN VIDEO CLIP)

J. PAUL REDDAM, OWNER, I'LL HAVE ANOTHER: We tried to be quiet, but I really thought he was going to run off tomorrow and really show something. So, we were all a bit shocked. But we have to do what's best for the horse. And if he can't compete at the top level, he has done enough.

(END VIDEO CLIP)

KING: Help put this into context, Gene, for someone who may not follow the sport of horse racing so much. This is like LeBron suddenly disappearing from the NBA playoffs.

Help me out.

MENEZ: Gene, yes, this is really disappointing in the sport of horse racing. We haven't had a Triple Crown winner since 1978; 11 horses have tried, 11 horses have failed. And now we have our 12th.

And it's the fact that we have come so close to having a 12th Triple Crown winner. Real Quiet lost by a nose in 1998. Others have come close. And it's the fact that we have some so close that makes this so elusive.

KING: And Wayne Lukas was talking about this. He is obvious another -- a huge trainer, big name in the business. He said: "I feel terrible for Doug," meaning his colleague, the other trainer. "To come this close and having arguably the best horse, everything being equal, you have to give him the nod as being the best horse. He has done everybody he was supposed to do. He had four big ones," meaning wins in a row. "The fifth one is tough. That's what I have always said. It is not a Triple Crown. It is a five or six race series."

So, we all focus of course on the three. But what does he mean by that, essentially, that this horse has just been running and is tired and got hurt, right?

MENEZ: Yes. To win the Triple Crown, you not only just have to win the three races, but of course you have to get to the Kentucky Derby, the Preakness and the Belmont.

And that begins as a 2-year-old. I'll Have Another started last summer. He ran twice, got hurt with sore shins, and then he came back earlier this winter and ran well in his first race. Some horses have three or four preps going into the Kentucky Derby. And I'll Have Another had two. So this was the end of a long and strenuous road for him.

KING: And when you have the prospect of a Triple Crown winner, how much does it mean financially and psychologically for the industry that now that is gone?

MENEZ: Well, to say that I'll Have Another would have saved horse racing is probably a bit ambitious, but he could have at least injected a little bit of excitement into this sport that really badly needs it.

KING: Gene Menez of "Sports Illustrated," appreciate your time on this. It's a very sad story.

MENEZ: Thanks, John.

KING: Thank you.

It's been a rough week at the White House, but tonight's "Truth" is the president can't blame his latest problem on Bill Clinton.

But, next, everything in Texas isn't only bigger. They are about to be faster. The speed limit is going up.

(COMMERCIAL BREAK)

KING: Welcome back.

(NEWS BREAK)

KING: The United Nations and the Arab League's point man on Syria admits his peace plan isn't working. Next, we will look at whether there is any other way to avoid a full-scale civil war.

Plus, investigators try to understand a private plane's terrifying final minutes. Apparently, it broke apart some three miles up in the air.

(COMMERCIAL BREAK)

KING: This half-hour: More blood spills in Syria as Hillary Clinton meets with Kofi Annan about his failing peace plan. Tonight, we ask the question, can diplomacy save Syria?

A family of six dies when a small plane starts breaking apart midair -- why investigators say they have never seen a crash like this.

And "The private sector is doing fine" -- the "Truth" about why those six words could haunt President Obama.

No break in the violence in Syria today, with government forces pounding a rebel stronghold in the city of Homs. You can see there smoke erupting from this neighborhood near a mosque.

With Syria approaching the brink of all-out civil war, United Nations special envoy Kofi Annan was in Washington today to meet with the secretary of state, Hillary Clinton. Annan admitted his peace plan isn't working.

(BEGIN VIDEO CLIP)

KOFI ANNAN, FORMER U.N. SECRETARY-GENERAL: Some say the plan may be dead. Is the problem the plan or the problem is implementation? If it's implementation, how do get (INAUDIBLE) what other options do we have? (END VIDEO CLIP)

KING: In welcoming Mr. Annan, Secretary Clinton avoided any specifics.

(BEGIN VIDEO CLIP)

HILLARY RODHAM CLINTON, U.S. SECRETARY OF STATE: It is an honor to welcome here to the State Department the special envoy, former secretary-general, friend and colleague, Kofi Annan. And I am looking forward to the discussions that we will have together.

(END VIDEO CLIP)

KING: Let's explore whether diplomacy is the answer or whether that time has passed.

Fouad Ajami is a senior fellow at the Hoover Institution at Stanford University and author of "The Syrian Rebellion."

Fouad, it's interesting. It has been 107 days now. Kofi Annan admits it's not working, but he's not willing to say it is finished, that his effort simply has failed. Should he?

FOUAD AJAMI, PROFESSOR OF MIDDLE EASTERN STUDIES, JOHNS HOPKINS SCHOOL OF ADVANCED INTERNATIONAL STUDIES: Well, John, you are exactly right.

Moral integrity would require Kofi Annan to say that the plan isn't working, that he can't really do anything, that the killing goes on. Since the Annan diplomacy was put in place in April, well over 2,000 people have been killed. A couple of massacres have taken place during this time.

There is nothing there. And for Bashar al-Assad, his attitude towards Kofi Annan is the same as the famous question that Stalin once asked about the Vatican, about the pope. And how many military divisions does the pope have? Kofi Annan has no military divisions. And Bashar Assad knows that. He treats this diplomacy with contempt.

KING: And so let's listen to a bit more from the former secretary-general.

He is a distinguished career diplomat.

AJAMI: Yes.

KING: But listen again. After 107 days, this is what he says.

I'm sorry. He says, "Pressure, substantial pressure is what this crisis demands. We will soon reach a day when it will be impossible to keep this crisis from spiraling out of control." That's in "The Washington Post," Kofi Anna. Forgive me.

And forgive me on this point, Fouad. Pressure, substantial pressure is what this crisis demands. Isn't that what he's supposed to be doing?

AJAMI: That's exactly right. He speaks about the crisis spiraling out of control. It has already spilled into Lebanon. It has the potential of spilling -- of spilling into Jordan, of spilling into Iraq. This has become a regional crisis, John, because it has become a sectarian war.

And one thing that's interesting about these two recent massacres in Houla and Qubair (ph) was something very new, which is the killing was not done by military forces. The killing was done by Alawi villagers who converge on these Sunni towns and killed these poor people.

Children have been killed point blank. Women have been killed point blank. And something else has happened, which is unbelievable. Some of the victims are being taken, hauled off, their corpses hauled off to the Alawi villages as trophies. We are in the middle of a Sunni-Alawi war. It was inevitable we would be there if the powers did not intervene.

KING: And yet, there's no indication any power will intervene. You have China assuming the presidency of the Security Council. It's not interested in tougher sanctions or certainly not in authorizing the use of military force.

So president Putin and his team have said they're not selling them arms when the evidence is to the contrary. And when they -- there has been a proposal from the Russians to maybe bring Iran into the conversation. The united states objects, saying you can't bring Iran into the conversation. They're part of the problem. Where does this go, if anywhere?

AJAMI: Well, John, it goes to these -- it goes to these wretched towns. It goes to these suffering people. It goes to the people who have been massacred, and it goes to the regime which feels it can still ride out the storm. And it believes that no one will come to the rescue.

I think that this is the more -- this has become a big moral and strategic scandal. And I think when you hear the Obama administration, when -- I think it was the senator, McCain, who at one point said, the Obama administration is running out of adjectives. We keep saying, this is vicious, this is unacceptable. This is immoral. And the killing goes on.

KING: Fouad Ajami, appreciate your insights tonight, and we end on that sad point. The killing does go on. Thank you, my friend.

AJAMI: Thank you.

KING: Returning now back home to a plane crash so unusual, one federal official says he's never seen anything like it. A family of six died when investigators say their plane started falling apart at 21,000 feet. The cabin ripped, big chunks of the plane just gone. The one teenager might have been pulled through a hole mid-air.

Here's CNN's David Mattingly.

(begin videotape)

DAVID MATTINGLY, CNN CORRESPONDENT (voice-over): Investigators are at a loss to find any immediate explanation for the crash of this small private plane that killed a Kansas family of six.

TIM MONVILLE, NTSB INVESTIGATOR: The pilot of another aircraft heard the pilot of this aircraft announce a mayday. He gave his call sign, but he was not specific about the nature of the emergency.

MATTINGLY: But no one can say what happened next. Ronald Bramlage, a businessman and philanthropist, was the pilot. His wife, Rebecca, and their four children, ages ranging from 15 to 8, all left the Bahamas Thursday morning en route back home to Junction City, Kansas. The Bramlages were at over 20,000 feet before crashing in a nature preserve 50 miles northwest of Orlando.

HUEY, WITNESS: It sounded like a sonic boom, like, you know, when the space shuttle flies over, and then that's all you heard.

MATTINGLY: Most unusual: the plane seemed to break apart in midair.

MONVILLE: I'll tell you, we're missing, structurally, parts of the aircraft. We're missing about -- we haven't calculated exactly but about six feet of the right wing.

MATTINGLY: pieces of the plane were found two miles from the main crash site. The body of 13-year-old Boston Bramlage, thrown from the plane before it crashed, was a half mile away.

Experts say the most common factor in cases like this is weather. There were showers in the area but nothing severe. Air traffic control warned Bramlage of what was ahead.

UNIDENTIFIED MALE: (UNINTELLIGIBLE)

MATTINGLY: While everyone waits for answers, in Kansas, many mourn the loss of a well-known and admired family.

(END VIDEOTAPE)

MATTINGLY: and, as these investigations go, John, it could be months, the NTSB says, before they have anything definitive regarding answers.

KING: David, it's a huge mystery. This plane, described as a 2006 Pilatus PC-1247, what do we know about the aircraft safety records?

MATTINGLY: Well, looking at the records that NTSB has, since 2001, there have been 15 incidents recorded with this plane and resulting in 14 fatalities.

Now, it sounds like a lot, but I've spoken to experts who follow these things all the time and have former ties to the NTSB. They say, you can't make any blanket judgments just looking at those statistics. This aircraft is very popular. It is -- a lot of them are in the air today. And it is known as something that's very popular with small businesses, because it's relatively cheaper than other aircraft, because it has only one engine.

But at this point, they say you can't make a judgment based on those statistics right there on that one piece of paper.

KING: David Mattingly, tracking this sad mystery for us. David, thank you.

America, as you all know, famous for being a nation of immigrants. But how to handle illegal immigration is a divisive issue this election year. Fareed Zakaria sat down with the New York City mayor, Michael Bloomberg, who talks about it in terms of the bottom dollar.

(BEGIN VIDEO CLIP)

FAREED ZAKARIA, CNN ANCHOR: You look at the danger of the current approach we have to immigration as quite substantial economically.

MICHAEL BLOOMBERG, MAYOR OF NEW YORK CITY: It is the biggest economic issue facing this country.

ZAKARIA: Just look at the nation's Fortune 500 companies. More than 200 of them were founded by immigrants or the children of immigrants, including Google, Yahoo! and Intel.

(END VIDEO CLIP)

KING: Be sure to watch Fareed's special, "The GPS Road Map to Making Immigration Work." That's Sunday night, 8 Eastern, only here on CNN.

Coming up, Christmas comes early for Mitt Romney and the Republicans. We'll have the "Truth" about a five-word gift President Obama handed them today.

(COMMERCIAL BREAK)

KING: It's been an interesting week here in Washington. And guess what? Team Obama, they can't blame Bill Clinton for this one.

(BEGIN VIDEO CLIP)

BARACK OBAMA, PRESIDENT OF THE UNITED STATES: The private sector is doing fine.

(END VIDEO CLIP)

KING: At his White House news conference today, not only did the president not realize his mistake, he doubled down.

(BEGIN VIDEO CLIP)

OBAMA: Overall, the private sector has been doing a good job creating -- creating jobs. We've seen record profits in the corporate sector.

(END VIDEO CLIP)

KING: Now, just imagine if Mitt Romney had said something like, "See, things are fine. Look, corporate profits, they're breaking records. Team Obama would have pounced, like they did when Mitt Romney said this.

(BEGIN VIDEO CLIP)

MITT ROMNEY (R), PRESIDENTIAL CANDIDATE: Corporations are people, my friend.

(END VIDEO CLIP)

KING: And like they did four years ago when John McCain said this.

(BEGIN VIDEO CLIP)

SEN. JOHN MCCAIN (R-AZ), FORMER PRESIDENTIAL CANDIDATE: Our economy, I think, still the fundamentals of our economy are strong.

(END VIDEO CLIP)

KING: Well, today was payback time for the Republicans. Point?

(BEGIN VIDEO CLIP)

OBAMA: The private sector is doing fine.

(END VIDEO CLIP)

KING: Counter point.

(BEGIN VIDEO CLIP)

ROMNEY: I think he's defining what it means to be detached and out of touch with the American people.

(END VIDEO CLIP)

KING: "Truth" is, no other way to look at it. The president handed Romney and his fellow Republicans a gift. This is the weakest recovery since the Great Depression and job growth, especially the past few months, has been pretty weak.

(BEGIN VIDEO CLIP)

REP. ERIC CANTOR (R-VA), MAJORITY LEADER: And my question would be to the president, are you kidding? Did he see the job numbers that came out last week? The private sector is not doing fine. (END VIDEO CLIP)

KING: But one consistent trademark of Team Obama is that when they make a mess, they move pretty quickly to clean it up. So just four hours after saying the private sector is doing fine, the president, himself, tried to undo the damage.

(BEGIN VIDEO CLIP)

OBAMA: The economy is not doing fine. There are too many people out of work. The housing market is still weak and too many homes under water.

(END VIDEO CLIP)

KING: Now, for me, this part of the cleanup was priceless and vintage Obama.

(BEGIN VIDEO CLIP)

OBAMA: And the question then is, what are we going to do about it? And, you know, one of the things that people get so frustrated about is that, instead of actually talking about what would help, we get wrapped up in these political games.

(END VIDEO CLIP)

KING: Wrapped up in these political games. Well, politics, Mr. President, is a two-way street. If this was game -- fair game four years ago...

(BEGIN VIDEO CLIP)

OBAMA: The fundamentals of the economy are still strong. Senator McCain, what economy are you talking about?

(END VIDEO CLIP)

KING: ... and if this was fair game just two weeks ago...

(BEGIN VIDEO CLIP)

OBAMA: The last time he visited these very same fairgrounds, he famously declared that corporations are people. Human beings, my friends, that's what he said. That's what he called them.

(END VIDEO CLIP)

OBAMA: ... well, then, this is more than fair game today.

(BEGIN VIDEO CLIP)

ROMNEY: He said the private sector is doing fine. He said the private sector is doing fine. Is he really that out of touch?

(END VIDEO CLIP) KING: Here tonight to further this debate and talk truth, the "New Yorker's" Washington correspondent, new CNN contributor Ryan Lizza; Democratic strategist Penny Lee; and Republican strategist and former Santorum campaign spokeswoman, Alice Stuart. Sorry. So...

PENNY LEE, DEMOCRATIC STRATEGIST: Get it out of the way (ph).

KING: Yes. It's been a long week for the Democrats, hasn't it?

LEE: It's Friday.

KING: T-ball, if you were advising Mitt Romney, that's exactly what you would say: "He doesn't get it. He's detached." And as you know, this president has said the same thing about both of his opponents in presidential races. How could he say something like that?

LEE: You know, we are now in a world that we used to try to win the news cycle, it's a 24-hour cycle. Now, it's the Twitter hour that we're trying to win.

And the president misspoke, and he came back later on to say what -- put it in the right context, which is compared to the public sector, the private sector is doing better. Is it enough? No. And he has been consistent on that from day one, that we need to get this economy moving forward.

Four point two million jobs have been created. There's been 27 months of straight private-sector growth. So he is right in that sense, that it is moving in the right direction. Is it fine? No. He's not pleased, and no one is pleased right now.

ALICE STUART, REPUBLICAN STRATEGIST: Well, the fact is that he said it. And he -- as you said, he doubled down on it, because he believes it. And Governor Romney was right. This is just a clear indication that the president is completely out of touch with how his policies have failed to make things better for the American people.

He seems to think that it's perfectly fine for 23 million Americans to be out of work. It's not good. Things are not fine when we have...

(CROSSTALK)

STUART: ... when we have housing foreclosures through the roof. Business start-ups are at an all-time low. This is all because of his policies that have made a hostile environment for business owners in this country and created tremendous uncertainty.

KING: It's a foolish thing to say because of all the things we've mentioned here. Even if you give a paragraph. And Bill Clinton went through this this weekend. You read the whole paragraph, you might get the context and the nuance. You can't say the private sector economy, the economy is doing fine right now.

But he was trying to make the point that, you know, well, at least the private sector is hiring and government is throwing people off the payrolls. But there's got to be a better way to do it, right?

RYAN LIZZA, CNN CONTRIBUTOR: There's got to be a better way to do it. I agree with the way you set up the segment. On the politics, you live by the gaffe, you die by the gaffe. Right? Every time Romney says something stupid, or something that they can take out of context and hammer with, the Obama campaign plugs our mailboxes. They hammer for as long as they can and still hammering him for some of those comments from the primaries.

So if that's how you're going to run your campaign, when you mess up like this, you're going to get hammered.

You know, you're right: the key word was "fine." Because he's trying to talk about this distinction between private-sector job growth and public-sector job growth. One was positive. One was negative. But he should not have said one was fine.

KING: And so trying to -- trying to change the subject with -- to drive the blog debate and the Twitter debate because it was not going their way. The Democrats, and smartly so, have pointed out something that Governor Romney said in his response to the president.

(BEGIN VIDEO CLIP)

ROMNEY: He says, we need more firemen, more policemen, more teachers. Did he not get the message of Wisconsin? The American people did. It's time for us to cut back on government and help the American people.

(END VIDEO CLIP)

KING: I think there's no question the message of Wisconsin is they want tough decisions made by government. But was it smart there for him to put policemen, firefighters and teachers in there? He could have said, "Did he not get the message? The American people want us to balance the books" or "They want us to spend less money." Teachers, firemen and policemen are pretty popular.

STUART: Well, they are. And those are easy examples to pull out there to tug at people's heart strings. You don't want to mess with teachers. Everyone loves teachers. But the fact is that we don't need to create more government jobs; we need to create more private- sector jobs.

And another thing that he did that was inappropriate, was to blame things on local government and governors across the country. And Governor Christie came out and spoke out very strongly against that. Don't blame -- don't pass the buck down the line. Don't blame it on Europe. The problems in Europe are not the problems with -- the problems that we have going on with the economy now. And certainly, it's not Republicans in Congress. He tries to pass the buck, blame the problem in Europe and the Republicans in Congress when he has no one to blame but himself on why we have this economic mess.

KING: We focus on these as gaffes, and I think they are gaffes or words you'd like to have back. But it's actually a pretty good contrast about the philosophical differences between these guys. Right?

LEE: Absolutely. What you saw today was the austerity measures that Mitt Romney continues to put forth. And that is that there is absolutely no -- absolutely no government that is good government. And in fact, having the protection of teachers, having firefighters, having cops, and a lot of the public-sector growth that we have seen in a little bit has been in defense, in homeland security and other matters.

So you know, he can talk all he wants about balancing the budget, but when you do it on the backs of everyday workers, that is going to be a philosophical debate going forward. Do we want to expand those jobs that are in the middle sector, or do we want to just continue just to reward the 1 percent?

LIZZA: I am surprised at Romney's comments. Romney is offered this lay-up of the president saying the economy is fine. And for some reason, he stepped into this trap on the police and the firemen. It seems like it's not getting as much attention.

KING: Right. When they put it on the tee, hit the ball and stop.

Quick time out. Everybody stay put. "ERIN BURNETT OUTFRONT" coming up at the top of the hour.

Erin, you were actually at the racetrack when we learned "I'll Have Another" is not going to run?

ERIN BURNETT, CNN ANCHOR: Yes, I was out there and I was going to interview, actually, the only living trainer of a triple crown winner. Had trained Seattle Flu and went out there. And all of a sudden, it was a rumor: you've got to go to this press conference. And just a couple moments later, I learned from someone there that, indeed, "I'll Had Another" had scratched and was going to be pulled out.

It's going to be a pretty dramatic influence on the race tomorrow, John. They were going to have 100,000 people. Now, they're only going to have 50. But I spent some time with "I'll Have Another," the horse today and with his owner to find out exactly what happened and why might be wrong in the world of horse racing. Why it's been since 1978 since we had a triple crown winner.

So that interview coming up top of the hour.

KING: Looking forward to it. It's a fascinating story. And I don't know what -- it's not lucky time. Don't know quite what the word is there, but you were there when it happened.

BURNETT: Yes, yes. I don't know what it is either. It happens sometimes.

KING: We'll see that in just a few minutes.

BURNETT: All right. KING: Thanks, Erin.

And still ahead here, grab your diploma and run for cover. See what happens as this massive storm cloud rolls in.

And, yes, yes, I have -- this is painful for me. That's an Obama 44 jersey, courtesy of the New York Giants. Super Bowl champs weren't the only White House VIPs today. See who he met with first.

(COMMERCIAL BREAK)

KING: This just in at CNN. The attorney general, Eric Holder, has just announced two U.S. attorneys will lead a criminal investigation of the recent leaks of national security secrets. U.S. attorneys from Washington, D.C., and Maryland will head up the investigation. A statement from the Justice Department says the unauthorized disclosure of classified information will not be tolerated. That breaking development.

Let's go back to our conversation with Ryan Lizza, Penny Lee and Alice Stuart.

Alice, some Republicans, John McCain leading them, saying let's have a special council. Do you think this will be enough to at least let them see where this one goes?

STUART: Well, we have to start somewhere. I think it's important. I think it is -- it's good that it's, you know, a Republican and a Democrat making up this panel. It's important.

These leaks are absolutely unnecessary. It's a threat to -- for all of us to have this classified information out there, and if it was being done to -- to boost the president's position and his stature on foreign policy, that's wrong, too. But we need to get to the bottom of it, and we have to start somewhere. And this is a good start.

KING: The attorney general gets beat up by Republicans on some other issues, but this -- will this quiet the critics for now?

LEE: I hope so. I mean, I think it really -- he acted very swiftly and do it in a bipartisan panel that will have the independence to be able to go in and actually determine what the cause was because it is serious.

LIZZA: I disagree on this as a journalist. I think anytime the government is investigating what we do is not the best thing, and this administration has been terrible, from my perspective, on trying to ferret out leaks and go after leakers.

And look, from what I know, and I know a little bit of back story to this. David Sanger went out and reported the heck out of this story, and it was through a lot of hard work and discipline that he got it and only then brought it up to -- you know, to senior officials. It's not like anyone handed him that stuff on a silver platter.

KING: David Sanger of the "New York Times." Wrote a new book on this.

Let's go back to politics. Who's your favorite vice-presidential candidate for Governor Romney? Who do you think?

STUART: I think -- I would say Governor Huckabee would be a good one.

KING: CPAC straw -- CPAC straw poll today. I like the Huckabee, but don't count out Mike Huckabee in this one. Marco Rubio 30 percent, Chris Christie 14 percent, Paul Ryan 9 percent, Rand Paul 8 percent, Bobby Jindal 7 percent. Rick Santorum only got 5 percent.

LIZZA: I want Alice to make a Sophie's choice here. Huckabee or Santorum?

STUART: Huckabee, Santorum and Bachmann. Not in -- not in that record, but that would be my panel of start the vetting right there and then work your way down.

KING: Would you -- I know you're a Democrat, but come on. Who's the best candidate for him to pick?

LEE: Sarah Palin? Can I?

KING: That's not right.

LEE: I mean, at the end of the day, it's going to be about Romney. We always do these parlor games on VPs, and it's -- it's, at the end of the day, the candidate.

KING: Right. So Ryan, quickly, Rand Paul. Rand Paul, the freshman senator. I don't think Romney is ready to do that. But would he take it? Listen here.

(BEGIN VIDEO CLIP)

SEN. RAND PAUL (R), KENTUCKY: I'd say what I said before. I think it would be an honor, and I think anybody who says they wouldn't be honored by it isn't being honest.

(END VIDEO CLIP)

KING: An honest man on that point. Everyone else is "Oh, not me; don't want it. No, no."

LIZZA: He clearly knows he's not going to be picked, because he's being completely honest about it. I think Rand Paul is probably not the direction Romney wants to go with this pick.

STUART: And I think certainly everyone says they don't -- you know, wouldn't take it, don't want it, aren't vying for it. But rarely, if ever...

LEE: They would all say yes.

STUART: Absolutely. LIZZA: When they said they weren't going to take it, yes.

KING: That one's easy to make go away.

Bobby Jindal, Mike Huckabee, Jeb Bush. Jeb Bush seems pretty adamant he's not going there.

STUART: Kelly Ayotte would be...

KING: Not happening.

LIZZA: The Obama strategy is to talk about going back to the Bush years. You don't want a guy with Bush on the ticket.

KING: There you go. Ryan, Penny, Alice, have a great weekend. You're all candidates on Romney's list. I'm sure of it.

Mary Snow is going to join us with the latest news you need to know right now -- Mary.

MARY SNOW, CNN CORRESPONDENT: Hi there, John.

Well, the top American commander in Afghanistan is apologizing for an air strike that killed 18 civilians including women and children. Coalition commander General John Allen flew to the scene today to personally offer his condolences after the Wednesday strike, which was part of a mission targeting a Taliban leader. Afghan President Hamid Karzai has condemned the strike.

Opening statements in Jerry Sandusky's sex abuse trial will start Monday after the judge denied a last-ditch effort to get the case dismissed. Penn State's former assistant football coach is facing 52 counts of sexual misconduct for allegedly abusing 10 boys. And Sandusky's lawyers tried to say that some charges were too vague, but that didn't fly with the judge.

It's not exactly the welcome addition to graduation photos, but check out this enormous storm cloud that rolled in just after graduating seniors collected their diplomas in Galloway, New Jersey. There was hail, thunder and lightning. Grads got soaked in their caps and gowns, but meteorologists say this wasn't actually a tornado. It was a super cell thunderstorm.

And it could be the end of the blind spot. A newly patented side-view mirror claims to eliminate that area just out of sight behind you. It was invented by a math professor who compares it to a disco ball, even though it doesn't look like one. The surface is made of smaller mirrors which end up reflecting a wider version of what's going on behind your car.

One hitch, though, John. U.S. regulations don't allow curved mirrors, so they only let flat mirrors being on the driver's side.

KING: Ah, well, hmm. Disco ball? Disco ball? All right. Fine. All right. You're going to love this, Mary. I made fun of you earlier in the show. This is painful for me. Tonight's "Moments You Missed" and I wish never happened.

You might call it the moment Tom Brady missed. He didn't get an invite. President Obama welcoming -- yes, they won, the Super Bowl champion New York Giants to the White House today. Ugh, ugh, ugh, I'm a Patriots fan.

And the president promised the champs -- praised the champs both for their football skills and their charitable work. He even snuck in a few jokes about congressional gridlock.

(BEGIN VIDEO CLIP)

OBAMA: The night before the Super Bowl, they watched a highlight reel set to Justin Tuck's good luck song "In the Air Tonight." I don't know about, you know, a little Phil Collins before -- before a big game. I may try that, you know, before a big meeting with Congress.

(END VIDEO CLIP)

KING: Congratulations, New Yorkers. That's the way it goes. My guys lost. See you next year.

SNOW: Say that again?

KING: Congratulations. They won the game fair and square; they kicked their butts. So they get their White House visit. It's a great treat.

Have a great weekend, Mary.

That's all for us tonight. You have a safe and great weekend yourself. We'll see you back here on Monday.

"ERIN BURNETT OUTFRONT" starts right now.