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Interview With Iowa Senator Charles Grassley; Defense Rests in Jerry Sandusky Trial; Romney, President Have Mediocre Week; Panel Votes to Find Holder in Contempt

Aired June 20, 2012 - 18:00   ET


JOHN KING, CNN ANCHOR: Good evening. I'm John King.

Tonight: President Obama asserts executive privilege and a House committee votes to hold the attorney general in contempt. It's a constitutional showdown over what went wrong in the Fast and Furious gun program.

Also, the Federal Reserve offers a sobering economic outlook, slower growth and higher unemployment than predicted just a few months ago. It's a bitter pill for the unemployed and for the incumbent president.

And the defense rests. The Jerry Sandusky trial will go to the jury without testimony from the former coach facing 51 counts stemming from alleged child sex assaults.

We begin this evening with a dramatic constitutional and highly partisan showdown between the Obama White House and the Republican- controlled House of Representatives. This afternoon, The House Oversight Committee voted to hold the attorney general of the United States, Eric Holder, in contempt, accusing him, the nation's highest ranking law enforcement officer, of stonewalling an investigation into a botched gunrunning sting operation called Fast and Furious.

The committee vote came just hours after the Democratic administration significantly upped the ante. For months, this has been a stare-down between Congress and the Justice Department. But just this morning, President Obama invoked executive privilege, denying the committee the documents they had demanded for months from the attorney general. It would be an unprecedented step for an attorney general to be found in contempt by the entire House. That vote now set for next week, and the harsh statements from all sides tonight in Washington don't suggest at least at the moment any opening for compromise.

Here is the House Oversight Committee chairman, Darrell Issa.


REP. DARRELL ISSA (R), CALIFORNIA: There's still time for contempt of the House to be avoided if in fact the documents we have asked for are delivered by the time that the House is scheduled for a contempt vote.


KING: Democrats on the committee accuse Chairman Issa of not trying to be -- cooperating at all.

Kate Bolduan is here, our congressional correspondent.

Highly partisan, we have seen this going on for months. The meeting last night with the attorney general and comes out and said it is political games, the chairman says, no, it's not. So I guess no surprise how this one broke down.

KATE BOLDUAN, CNN CORRESPONDENT: No, no surprise at all -- 23- 17, that's the political breakdown, the partisan breakdown on the committee.

But what was a bit surprising I would say from what we heard today was in this marathon hearing where they were leading up to this contempt vote in the House Oversight Committee was just how caustic and how bitter the debate was amongst members even in these very partisan times on Capitol Hill.

The arguments did fall along similar lines, depending what party you are in. Republicans charge that the attorney general as well as the president now are stonewalling their very legitimate investigation into this botched Operation Fast and Furious, and everyone on both sides of the aisle acknowledged that this was a fatally flawed, a fundamentally flawed operation.

Democrats, though, they say that no matter how much information the Department of Justice would have handed over, the Republicans were bent, wanted to move forward with this contempt vote, they would never have been satisfied with any information that were provided to the committee, and that's really where things are left.

The House, this House committee has voted. Now it needs to move to the full House for a vote, and that we hear now from Republican leaders that will be happening next week, if something doesn't change in the meantime. We will wait and see.

I thought it was interesting just, and you will, too, John, even in the attorney general's statement he put out after the vote, he even himself talked how political it was, election-year tactic intended to distract attention, he said. The gloves are off here.

KING: Right. And if you read the tone of that, he is off for a trip to Europe, obviously has a staff to negotiate. But if you read the tone of that, and if you listen to the Republicans and the statement from the leadership saying this doesn't have to happen if you give us all of the documents, he is saying politics, they are saying all. Where do we go from here?

BOLDUAN: They're at a stalemate. I don't -- miracles can happen around real when they want make miracles happen. It just doesn't seem that there is the desire or air of compromise among us right now.

The options are, one scenario -- it becomes unclear after the House votes. They have the majority, it is likely to go through, and this contempt citation will go through. What happens after that is a little bit more unclear. One scenario is that this could be sent to U.S. attorney for the District of Columbia, but it's unlikely that the Department of Justice is going to enforce a contempt citation against one of their own, especially if it is in dispute.

The House could move on their own to take civil action, but it has to be said now with this executive privilege being asserted, it does inoculate the president and especially the attorney general from any further prosecution, if a judge upholds that an executive privilege is right in this case. So murky at best moving forward.

KING: A lot of legal ifs, ands, and buts. And then...


BOLDUAN: Yes, then the politics.

KING: Kate Bolduan will stay on top of this. Kate, thanks.

Let's get some perspective now from our senior political analyst and former presidential adviser David Gergen.

David, this is the attorney general of the United States. He is the nation's highest law enforcement officer. A House committee today says he is in contempt of Congress. Where do we go from here? How significant is this?

DAVID GERGEN, CNN SENIOR POLITICAL ANALYST: Well, it suddenly got a lot more significant, didn't it, John.?

We had sort of a low-level fight going on in Washington, almost below the radar screen for most Americans. But now both sides have escalated dramatically today. The president exercising executive privilege for the first time in his presidency, and the House committee voting contempt and sending it to the floor where it is likely to pass.

John, in the past when we have had these kind of dust-ups, they have ordinarily been resolved by political negotiations. And, for example, there are some documents here that clearly that the administration is sitting on, they don't want to share with the committee. The committee really wants to see them. I don't know if there's any smoking gun there or whatever, but there must be something there that's very sensitive from a White House perspective.

But ordinarily in this kind of thing, John, a negotiation would say why don't we have two or three selected people or four people that can go into a room, and look at the documents in that room, and they can make a judgment on what's there? But then there are going to be certain limitations on what they can say about it and that sort of thing. Something like that I think has to work out.

But in this environment, it is going to be hard to get there. And they really ought to do it before they have the contempt vote. And, John, I think for a lot of Americans who don't understand the complexities and really don't care about the complexities of this, I think it is one more illustration, as if we needed any more, that Washington is broken, and that has repercussions for economic confidence as we have learned when we went through the whole debacle over the debt ceiling.

KING: Over the debt ceiling.

This has happened in the past, the first time, David, that President Obama had an executive privilege clash with the Congress, first time. President George W. Bush six times, President Bill Clinton 14 times, George H.W. Bush once, President Reagan three times.

The question is -- you make the point -- is how do you go forward from here. One of the things that has Republicans angry is they say they have been asking for these documents and they have been in this showdown with the attorney general for well over a year, and just today they say for the very first time, the administration says this is covered by executive privilege. How much does that late invocation if you will complicate things?

GERGEN: A lot, because it leaves the implications with Republicans that the reason they don't want to show these documents to the House is that there's something there that involves the White House, possibly the president himself, that could be embarrassing or, you know, could raise questions about judgment and that sort of thing.

And up until this time, we thought this was internal, these documents were internal to the Justice Department. But when you invoke executive privilege, that really raises the ante, not only because it makes it a big, big issue, and it becomes a constitutional clash, but it also says there may be more in here than you even thought.

KING: And so if you read the tone of statements, and listen to tone of statements being made to the microphones, at the cameras, especially if you're the attorney general of the United States, you know him. He served in Clinton administration as well. He's been around politics a long time.

He had over the course of the past months sort of -- each statement sort of ratchets up the politics. After this vote tonight, in which a House committee and perhaps next week the full House would hold him in contempt, he says this is pure partisan politics, it's an election year stunt. Words like that coming from the attorney general of the United States tell you what?

GERGEN: He's stiffened his spine. He's been under pressure to resign from some quarters in the Republican Party. He ain't going anywhere.

He is a very smart fellow. They clearly blew this operation. They made two mistakes. They bungled the operation itself on the ground with the guns and then they -- and the Justice Department bungled its initial responses to Congress, and they had to retreat from a letter they sent out early in 2011. But having said all of that, you can respect Eric Holder for saying I'm not being railroaded on this, guys, you're not going to just come in here and run over me because you are just trying to do -- you're trying to squeeze out some things you want to embarrass us over. We have given you the basic facts, and we're not going to back down.

But from the public -- let's go back. This is again ultimately about does democracy work in Washington today? And if people conclude yet once again those guys really cannot run the country, it is very discouraging and it has ripple effects well beyond the Fast and Furious case.

It really has ripple effects about confidence in sort of government, confidence in the economy, and I can't -- this is getting rapidly built into something that neither you or I -- neither you nor I would have thought would have been likely say a week ago.

KING: My expectation was that they would broker a deal and cut a deal.


GERGEN: Exactly.

KING: But you mentioned they haven't cut a deal.

And for those of you out there who don't recall what Fast and Furious is, it was a gun -- it was supposed to be a gunrunning operation where the Justice Department set up what was supposed to be a sting operation to watch trafficking of guns across the U.S.-Mexican border to the Mexican drug cartels.

Instead, U.S. drugs from that program went to the cartels -- U.S. guns, excuse me, from that program went to the cartels, and one of them found at the murder scene of a U.S. Border Patrol agent. That's why the this investigation goes on.

And, David, I want to come back to this point. This is the first time this president had this confrontation with the Congress, but we have seen increasingly oversight from the House Republicans, a Democratic White House, divided government in Washington. There are a lot of people, if you look into commentary on Twitter and elsewhere on social media today saying, why is this even happening, when we should be focusing on the economy?

But you say the dots can be connected to the whole dysfunction of the town?

GERGEN: Absolutely.

This is -- people, reasonable people should have figured a way to have the information presented to the committee, but also isn't used to sort of create a political circus after people see what's there. We have seen such negotiations numerous times in the past. It can be worked out. But if you hate each other and you really want to sort of put the knife in as the election approaches, this is one way to do it, and it's one way to sort of get the country to say, you know, I don't like any of these guys.

KING: End it on that point. I think the country is already saying they don't like what's happening in this town, period. We will see how this one plays out. David Gergen, appreciate your insights tonight.

GERGEN: Thank you.

KING: Moving on now to an important and ominous report from the Federal Reserve about the economic outlook for the rest of the year. And remember this is election year.

The Central Bank says, yes, the economy is growing, but at an even more anemic pace than projected just two months ago. Stock prices were mixed at the announcement. They closed mixed at the announcement, which included word the Fed is extending one of its stimulus programs. But the Fed stopped short of taking more aggressive action, even after lowering expectations for economic growth for the rest of the year.


KING: Let's dig deeper with our chief business correspondent, Ali Velshi.

Ali, you heard what the Fed said today. Boy, they now see an even weaker economy than just two months ago. Look at the numbers. Now they say the economy will grow in 2012 between 1.9 to 2.4 percent. In April, they thought 2.9, up around 3 percent. The unemployment rate, they thought it was going to fall below 8 percent some time this year. Now they say no, it will stay at least 8 percent through end of the year. Why?

ALI VELSHI, CNN CHIEF BUSINESS CORRESPONDENT: There's a storm going on in Europe. The outer bands of that storm are hitting us here in the United States.

By the time it gets here, could be a little storm, could be a hurricane. And on top of that, China's economy is slowing down. So, this actually has very little to do with Washington, it has very little to do with what's going on in the United States. It is what we are feeling as a result of a global slowdown.

And at this point, the Fed has got very little ammunition left. It used some of what it had. I don't think it wanted to convey an entire sense of panic by throwing everything at the problem. So, it said we're going to make money cheaper for longer in the hopes that people will borrow that money and spend it, use it to expand their businesses, hire people, create demand, and Good seeing you. the economy.

KING: You say they don't have too many bullets left. The Fed chairman thinks he has some. Let's listen.

VELSHI: Right.

BEN BERNANKE, FEDERAL RESERVE CHAIRMAN: I wouldn't accept the proposition, though, that the Fed has no more ammunition. I do think our tools, while they're non-standard, still can create more accommodative financial conditions, can still provide support for the economy, can still help us return to a more normal economic situation.

KING: What does he mean by non-standard tools?

VELSHI: The non-standard tools are quantitative easing, which is printing more money, just putting more into the economy, making it that much more available, or doing what it is doing now, making the 10-year bond very, very inexpensive to borrow against, and that as a result influences mortgage rates and things like that.

But, again, John, do you ever remember mortgage rates being around 4 percent or lower for a 30-year fixed mortgage? Here is the problem. We have done so much already. We all harp on the stimulus bill, the $800 billion. The feds put in trillions of dollars into this economy.

So, with all that support, ultimately, this comes right back from my financial and economic court into your political court. It is about how people feel and whether they think things are getting better. And right now, Americans simply don't.

KING: When they hear that from the Fed chairman, they're unlikely to be at all more optimistic. Probably the other way.

VELSHI: Right.

KING: Our chief business correspondent, Ali Velshi, Ali, thanks.



KING: Let's get some important perspective from my colleague Fareed Zakaria, the host of course of "FAREED ZAKARIA GPS."

Fareed, if you listen to the president as the G-20 summit wrapped up, you could hear the frustration in his voice. He believes when it comes to the Eurozone and the European economy he says the leaders get it, but he knows it could take months if not more for Europe to get back on the path. Listen here as he tells the leaders it's not just your actions, there's more to it.


BARACK OBAMA, PRESIDENT OF THE UNITED STATES: Even if they can't achieve all of it in one fell swoop, I think if people have a sense of where they're going, that can provide confidence and break the fever.

(END VIDEO CLIP) KING: The president says confidence to break the fever, but you have heard these European leaders, a lot of them are in disagreement. Does this president, the most powerful job in the world, have any control over what happens in Europe?

FAREED ZAKARIA, CNN WORLD AFFAIRS ANALYST: No, it is actually a fascinating situation where Europe has become rich and powerful and unified enough that the United States has very little control.

This is one of the first major economic crises in which the United States is something of a bystander. But what Obama was signaling, which is I think a very important signal, is that there's a psychological dimension to this.

What Obama was trying to do was use the bully pulpit to try and get the Europeans to understand this and change the psychology, but as we started by saying, it is not clear that many Europeans are in the mood to listen to the president of the United States, any president of the United States.

KING: And if they don't listen, could European dysfunction cost Barack Obama his job say more than Mitt Romney?

ZAKARIA: Oh, absolutely.

I think that this is -- this has the potential to seriously wreck the American economy, particularly if you get one of these spirals of no confidence and panic, because in that situation, two things happen. First of all, the financial system could come unwound, and, remember, European banks and American banks are intertwined.

Of course, American banks have been preparing for this for a year, a year-and-a-half, so the damage will be limited, but it will be real. There will be damage. Secondly, Europe is our biggest market outside the United States. So we sell to Europe. Europe is the other rich pole of the world.

And a slowdown or a collapse in Europe will almost certainly send the United States into a double-dip recession. So, these are of course small probability events. But of all the things on the global landscape that Barack Obama is looking at, it is absolutely clear that Europe has the potential to sink the American economy and with it his prospects for reelection.

KING: Fareed Zakaria, as always, thank you.

ZAKARIA: Pleasure.

KING: Coming up, the defense team rests without a word from the former assistant football coach Jerry Sandusky. We will take you inside the courtroom to preview closing arguments.

But, first, what sent a JetBlue careening wildly through the air? What a passenger calls four hours of hell.



KING: Up next: a key Republican senator. A House committee votes to find the attorney general in contempt. This Republican senator says he wants to know the answer to this question. What did the president know?

Plus, closing arguments now slated for the Jerry Sandusky trial. The jury did not hear from the defendant.


KING: In this half-hour of "JOHN KING, USA," jurors will hear closing arguments in the Jerry Sandusky trial tomorrow. They will not hear though from the former assistant coach charged with 51 counts.

This senator says he is dumbfounded by President Obama's use of executive privilege. Chuck Grassley of Iowa is my guest.

And blunders from both the Obama and the Romney campaigns -- the "Truth" about which candidate is having the worst week.

Let's get back to our top story, the dramatic showdown between the Obama White House and the Republican House. The House Oversight Committee voting this afternoon to hold the nation's highest law enforcement officer, Eric Holder, the attorney general, in contempt.

President Obama earlier today invoking executive privilege, saying the administration did not have to turn to a House committee documents they have been demanding from the attorney general for months. But the president's action did not stop the vote.


UNIDENTIFIED FEMALE: Twenty-three ayes, 17 nos.

ISSA: The ayes have it, and a contempt report is ordered to -- ordered reported to the House.


KING: Let's go now to Capitol Hill.

Senator Chuck Grassley, Republican of Iowa, is the ranking member of the Senate Judiciary Committee, and they have also been closely tracking and investigated the Fast and Furious issue.

Senator, the attorney general tonight says this is unnecessary, unwarranted and he says of the House committee vote to hold him in contempt. "It is election-year tactic intended to distract attention and as a result has deflected critical resources from fulfilling my responsibilities, my top priority at the Department of Justice, protecting the American people."

Answer the attorney general.

SEN. CHARLES GRASSLEY (R), IOWA: If it was last February or March, when we started this, he might have credibility when he says that. But after 18 months of being stonewalled by the attorney general, I think that's intellectually dishonest.

KING: Your chairman, Pat Leahy, on the Senate side -- this vote was on the House side -- but Chairman Leahy says this tonight: "The Bush Justice Department was not nearly this forthcoming and never tried to reach a reasonable accommodation in response to our oversight efforts."

Chairman Leahy trying to make the case that Attorney General Holder is trying. Is he?

GRASSLEY: I can tell you this.

When the Democrats were investigating the U.S. attorneys that were accused of responding to political pressure, that I joined Senator Leahy in efforts to get transparency of all of the documents. I have not had that support of the Democrats in the Senate in my investigation.

KING: You mention the U.S. attorneys firing investigation. When the House committee looked into that, Darrell Issa said this when President Bush invoked executive privilege.

Darrell Issa, now the change, said -- quote -- They didn't need explaining to the public."

Is it possible now because of his past statements on executive privilege issues, the Democrats could say right now he is being partisan or he's being a hypocrite?

GRASSLEY: They can say that about anybody they want to say it about, but they can't say it about Chuck Grassley's investigations and oversight work for the past 25, 30 years.

KING: Well, let me read a bit of the statement you issued today when the administration did claim executive privilege.

You said this: "How can the president assert executive privilege if there was no White House involvement? How can the president exert executive privilege over documents he's supposedly never seen. Is something very big being hidden to go to this extreme?"

Senator, what do you think they're hiding?

GRASSLEY: Well, throughout 18 months of investigation, I never had any idea whatsoever that the president was involved, and I never accused the president of being involved.

I always wondered for the most extent how high up in the Justice Department it went, and I could only trace it up to the assistant attorney general. Beyond that, is the attorney general involved in approving this? But now it raises the question of whether -- what does the president know and when did he know it by the claim of executive privilege.

KING: Do you see this going -- do you see any path to a resolution, sir? Or do you think the House will vote on its contempt citation, and if it does, what happens on the Senate side?

GRASSLEY: Well, listen, a contempt citation does not come to the Senate, so it will go from the House of Representatives to the U.S. attorney, District of Columbia, with possible charges against the attorney general, and if those charges would stand, he could be subject to a misdemeanor with up to a jail term and/or some fine.

KING: I understand it doesn't go to the Senate, sir. My question was what happens to the Senate investigation?


KING: Did the investigation go forward or do you try? It's the Senate side, as you know. It's supposed to be the world's most deliberative body. It's -- will there be some effort, with Chairman Leahy and you as the ranking member, to try to find a circuit breaker here before the House takes such extraordinary step?

GRASSLEY: Well, Senator Leahy's never offered to have a hearing, and -- and you know, when there's a vacuum out there, that vacuum is filled by somebody. And I think I filled that vacuum over the last 18 months. And so far Senator Leahy said that he wouldn't have a hearing until the inspector general of the judiciary, or the Justice Department got done with their work.

Then he said he would have a hearing. But that's going to be too late. I think this -- this isn't just in the Senate a stall. This is a stall in the Justice Department, I think, to get by 'til the next election, because I think there's something embarrassing politically to this administration that they want to keep out of the public's minds, and that's why we've been stone walled.

KING: Senator Chuck Grassley, appreciate your time tonight, sir.

GRASSLEY: Yes. Thank you.

KING: From day one of Jerry Sandusky trial, there has been this question: would the defendant take the stand? Well, today we got the answer. It won't happen. The defense rested today.

CNN contributor Sara Ganim has been on this case since day one.

Sara, take us inside the decision. Jerry Sandusky's defense team deciding he would not go on the stand. Why?

Having audio problems there, obviously, with Sara Ganim. We'll try to get back to her if we can. But let's get some perspective on where this trial might be headed next with the former prosecutor, Wendy Murphy.

Wendy, Jerry Sandusky does not take the stand. You would -- you said you would advise when we talked last about this, you would have -- if you were his attorney, you would have kept him in the seat and not allow him to. How does it change the case going forward in the closing arguments, for example, tomorrow. Does the defense lawyer have to explain why the defendant didn't take the stand to the jury?

WENDY MURPHY, FORMER PROSECUTOR: You know, John, he doesn't have to, but he'll probably make some reference to it being his decision, because he doesn't want them to think badly of Jerry Sandusky. And he promised them in his opening that he would testify, or he at least implied strongly that that would happen. So I think he has to take responsibility for it, but he won't focus on it for long.

And the jury will be instructed not to consider that, and you know, hopefully, the jury will do the right thing. Constitutionally speaking, they're not allowed to take it into consideration.

As a theatrical matter, this man who so many witnesses for the defense testified under oath that he was the greatest since sliced bread, wonderful man, generous and loving to children, sat quietly and said nothing after eight victims took the stand and all of this evidence was presented against him? The jury can't help but think, "Hmm, if that were me, I'd testify if I were innocent."

KING: But help me break down the case. First from a prosecution standpoint, you go back through the testimony, it's a pretty quick case. You had the alleged victims testify, but moved through it pretty quickly. What in your mind stands out? Did the prosecution in your mind meet its test or did it leave an opening?

MURPHY: Well, I'll tell you, the burden of proof is tough. Beyond a reasonable doubt is the toughest burden of proof in law. And yet this case went in so quickly, in my opinion it was under- prosecuted. The only thing I can infer from that is that the prosecutor feels very, very confident.

For example, John, one of the things you would typically see in a case like this is an expert witness testifying about something like child abuse accommodation syndrome to help explain to the jury why sometimes kids stay friendly with their abusers for years after the fact, and why they don't tell for, you know, many, many years. Often jurors don't understand that, and they think that cuts against victims' credibility. The prosecution didn't offer up such a witness.

So you have to believe the prosecutor sees this case as so strong and that the victims themselves were so good on the stand that they didn't bother with anything beyond the basics, and that's why it went in so quickly.

You know, I don't want to overstate it, but I can imagine the prosecution's case tomorrow is also going to be very short, very tight.

And one of the arguments they're going to say, one of the arguments they're going to make and something they're going to focus on, is, look, the defense would have you believe that all eight of these victims would submit themselves to risk of felony perjury prosecution. And you saw them. You looked in their eyes. You saw them crying. You saw their demeanor on the stand. Was that the testimony of a liar, as the defense would have you believe? Or was that a truthful young man taking the stand?

And consider all of the corroboration in this case. You know, Mike McQueary, the janitor's testimony, the documentary evidence, the so-called love letters. Would you honestly discount to the point of reasonable doubt the strength of the prosecution's case? Because the defense, defense has no burden of proof, but they have done nothing, nothing to undermine the prosecution's case.

That's the kind of closing we're going to hear tomorrow, and I think it's going to be very short. Because they don't have to explain away much of what the defense put on in its case, because they didn't really make much of a dent.

KING: And do you agree with that, when the prosecution gets up there and says, you know, the defense proved nothing, that always is a challenge for a defense lawyer, prove at least at a minimum reasonable doubt if you can't attack the facts of the prosecution's case. Did they come close?

MURPHY: No. I mean, the odd thing in this case, John, is that some of the defense witnesses actually became good for the prosecution. Even Dottie Sandusky, as much as she tried to be supportive of her husband, ultimately testified as a witness for the prosecution during what was supposed to be a cross-examination and wasn't. She said, "I know of no motive to lie for these kids," and she confirmed that Jerry was often down in the basement, without her, all alone tucking the kids in.

You know, there was so much about the defense case that actually added to the prosecution's case, I don't know what to say, except that I think the defense is going to have a very difficult time.

I hope and expect that one of the things they're going to do is emphasize only those counts where there were real weaknesses, like where the investigators made suggestions about the kinds of testimonies they had already heard from other kids, and you know, the possibility of a money motive. One of the victims and a parent was reportedly saying things like "I can't wait to buy a new House after I cash in on my lawsuit."

You know, that kind of stuff resonates with juries. They don't, you know -- they don't want to over-believe just because they feel a lot of emotional reactions to this case. And so I do think he'll probably win some of the charges.

But again, 50 charges he's facing. Even if he wins ten, you know, instead of 500 years, it's 400 years. There's not -- there's not a lot of light at the end of the tunnel for Jerry Sandusky.

KING: Former prosecutor, Wendy Murphy. Appreciate your insights tonight.

Let's get back now outside the courtroom, Sara Ganim. She's back with us. Sara, sorry for the audio glitch here at the beginning. Take us inside the decision by the defense team. I assume Jerry Sandusky, given the fact he did so many media interviews, in his heart, he probably wanted to testify. Why didn't he?

SARA GANIM, CNN CONTRIBUTOR: John, the short answer is that we don't know why. The defense attorneys did not say, there's a gag order on the case.

But you know, they spent the whole week trying for small victories, really trying to chip away at the prosecution's case. And I think that they were able to explain, give alternate explanations for some of the strange behavior that Jerry Sandusky has been accused of.

And so the only thing that I could guess is that, you know, they didn't want to potentially mess that up by putting him on the stand. You know, he's spoken publicly several times, and every time he does, he's widely criticized for what he says. And putting him on the stand would give prosecutors an opportunity to really go after him.

Dottie Sandusky, his wife, testified on his behalf yesterday and pretty much explained -- you know, she was pretty forthright with her husband's innocence and tried to give, I think, what might have been his side of the story. You know, one, that he was very busy; two, that this was their lifestyle, that they brought kids into their home and mentored them. And she -- she went after the credibility of some of these accusers, as well.

So I think that maybe in some ways they believe that she gave his side of the story and really didn't endure much cross-examination and might have been satisfied with that.

KING: Sara Ganim outside the courtroom. She'll be there again tomorrow as the closing arguments take place in front of the jury. Sara, thanks very much for your help. We'll stay in touch.

Up next here, the truth on who's the worst week, and remember, it's only Wednesday. Mitt Romney or President Obama?


KING: Safe to say this will not be remembered as the Romney campaign's best week. He refuses to answer a pretty simple and straightforward question about immigration policy, to the point of ending a conference call today because reporters wouldn't follow the campaign script.


UNIDENTIFIED FEMALE (via phone): It sounds like we don't have any more questions on today's topic. We appreciate everyone having the opportunity to dial in today.

(END VIDEO CLIP) KING: End of discussion, and it is answering questions it promised it wouldn't. The candidate himself deciding to play the dangerous game of vice-presidential identity politics.


MITT ROMNEY (R), PRESIDENTIAL CANDIDATE: Marco Rubio is being thoroughly vetted as part of our process.


KING: Tactical missteps both of those things. But here is tonight's "Truth." The president -- yes, it's only Wednesday -- is having an even tougher week. He left the G-20 summit with no guarantee Europe will right its economic ship.

And he was home a few hours before the chairman of the Federal Reserve delivered this sober note. The Fed now projects 2.4 percent growth this year. That's down from 2.9 percent projected just back in April. And the Fed now believes unemployment will stay above 8 percent through the end of this election year.


BEN BERNANKE, CHAIRMAN, FEDERAL RESERVE: Strange and global financial markets, associated principally with the situation in Europe, continue to pose significant risks to recovery and to further improvement in labor market conditions.


KING: Safe to say, Ben Bernanke briefing, hardly the most exciting event in Washington today, but I would argue it was the most important.

Here to talk truth tonight, Republican Congressman Jason Chaffetz. He joins us from Capitol Hill. Here in the studio, CNN contributor Ryan Lizza of "The New Yorker." Democratic strategist Maria Cardona.

Congressman Chaffetz, I want to go to you first. When you hear Ben Bernanke say we thought 2.9 percent just two months ago. Now we saw 2.4 percent. We thought the unemployment rate was going to drop to maybe at least 7.8 percent, not great but it's an improvement. Now we think it's going to stay above 8, maybe at 8.2 percent through the end of the year.

Some Republicans say, "Yay. That helps us in the race against President Obama."

But is there any urgency at all to say let's go down to the White House and see if we can figure out something, something to help the unemployed Americans before the election?

REP. JASON CHAFFETZ (R), UTAH: I desperately wish we could. From the House Republican point of view, we passed nearly 30 bills that deal with jobs and the economy, and we have not gotten any action out of the Senate. And they won't even debate these bills, let alone vote on these bills.

We're getting no help from Pennsylvania -- 1600 Pennsylvania Avenue.

So economy is job one. Nobody wants to see people suffering. Remember -- remember, Congress represents people, as well, and constituents, as well. So we want them to be doing well, and this is the No. 1 issue. And it's where we're totally failing.

KING: So I'm not sure -- I'm going to stick with you for a second. I'm not sure the White House would offer this deal. But if the White House said we will give you a one-year extension of all the Bush tax cuts, but what we want in return is immediate construction spending before the summer passes. We want immediate money so we can tell mayors come fall, "You can hire more teachers when the school season resumes." Would you cut that deal?

CHAFFETZ: I don't know. We haven't had that offer. Remember, the federal government spends about $10 billion a day. Ten billion a day. So if that's not stimulative to the economy, we need to go reevaluate where that money is being spent, because one of the other problems is we don't have stability and predictability in the marketplace.

One of the reasons job creators are not hiring is because they don't know what's going to happen with taxes. They don't know what's going to happen with health care. They don't know what's going to happen with all these things. Hesitation causes capital to resist investment. And that's one of our fundamental problems.

KING: Maria Cardona, there have been a couple of what I will call Romney tactical missteps this week. They're relatively small, unless they blossom and grow. But when you hear from Ben Bernanke, and you hear those numbers, you just have to think, you know, this is -- this might not be about Mitt Romney. This could be Barack Obama versus the economy.

MARIA CARDONA, CNN POLITICAL CONTRIBUTOR: I actually think it has always been Barack Obama versus the economy. Whenever you've asked me and others have asked me, which Republican do we -- are we most afraid of to run against, it's never been that we're afraid to run against anybody, or that anybody, you know, would really make us not as confident. It's the economy. It has always been about the economy.

And so I think what Ben Bernanke said today, yes, of course it gives everybody pause, because no one wants to hear that kind of news. But I think it should also put fire under Congress, including our friend, Congressman Chaffetz here, that there is a bill there in Congress, waiting to be debated and waiting, hopefully, to be approved, that independent economists would say would create over a million jobs.

KING: But the president does have proposals that the House Republicans won't touch. And the Senate Democrats have proposals that the House Republicans won't touch. As the congressman just said, and he's right: I'm not passing judgment on the policy, but there are a whole bunch of House Republican bills that the Democrats won't touch.

The problem is that we break the dysfunction and the minds matter approach, or my-way-or-the-highway approach. There's zero indication. Right? That even -- even when you get the Fed chairman saying, "Get what? We were wrong. Just two months ago, it's even worse and the prospect of a European storm that could make it even worse than that.

RYAN LIZZA, CNN CONTRIBUTOR: I think absent things getting significantly worse, there's no way these two camps are going to agree on anything. Just the gulf between them on what to do on the economy is just too huge. That's why you have elections. Both the White House and the Republicans seem to be saying, "You know what? We're not going to solve this, and we'll let the voters decide in November."

And then immediately after the election in November, they're going to have to do something because we have this deadline looming.

KING: But if you're an unemployed American, it's too bad. In the meantime, you're on your own. And if you look at any historical data, again, forget the names of the candidates. Forget the parties, the president, the White House. Look at any historical data. On this day, you'd have to say he loses.

LIZZA: Yes. The polls don't quite show that, yes. But yes, look at historical data, and remember: it's not the absolute level of unemployment, it's the direction it's going, usually. It's how much money the people have in their pockets.

I think Obama is on a knife edge right now. He's on a knife edge. I think this summer will determine whether he -- which way he tips. It's the news coming out of Europe, what's going on with energy prices. That's going to -- we're going to know the story by the end of the summer, by Labor Day.

CARDONA: I don't think historical data is -- should be as important here. This president has clearly done things that have put history to rest. So I think...

KING: George H.W. Bush would argue things were actually getting better. That's why -- and data was actually starting to get significantly better, Ronald Reagan it was hugely better. But George H.W. Bush it was significantly better, and he still lost.

CARDONA: Right. But it's all about the choice. And George H.W. Bush was seen as being out of touch. And Clinton was very good at making that choice. President Obama is going to be very good at making sure that voters understand it.

LIZZA: Well, I think historically, Obama wants a choice. Romney wants it to be a referendum. Historically, incumbents, it's a referendum.

KING: Especially when you have bad economics. Congressman, stand by. We'll get right back to the conversation, including one of the most interesting things you were at today, Ryan, as well. The most bizarre case the Homeland Security Department ever handled. Latest detainee, a 70-million-year-old dinosaur skeleton.

And just how many calories are you wolfing down with that slice of pizza? Well, the big change, shockingly. What they don't want you to find out.


KING: In Washington today, a House committee on Capitol Hill voting to hold the nation's highest ranking law enforcement officer, the attorney general of the United States, in contempt of Congress. That committee vote now goes to the full House. There could be a vote next week. Listen here. Here's Republican Congressman Jason Chaffetz explaining, in his view, the stakes.


CHAFFETZ: I hope we have the guts and the perseverance to get to the bottom of this. We have two -- nearly 2,000 weapons purposely -- purposely -- given to drug cartels. We have hundreds of dead people in Mexico.


KING: Chaffetz is with us, of course. And still Ryan Lizza, Maria Cardona, as well. Congressman, this is a very important, significant vote. The attorney general also says it's an election- year partisan stunt. Do you think a compromise on these documents can be reach before the big House vote is scheduled next week?

CHAFFETZ: Well, the Department of Justice really should have disposed of this a long time ago. One of the main cruxes of what we're after is what led to the death of Brian Terry. Brian Terry, a Border Patrol agent, was killed in December of 2010.

We've issued a number of requests for documents including a subpoena in October of last year. You can't just ignore subpoenas in this country. We want to find the dominants. We want to find out who is responsible and do as President Obama promised in his March 2011 interview. That is hold the people accountable and get to the bottom of this to make sure it never, ever happens again.

KING: Maria, the congressman mentions, these requests go back to early last year. It was just today the White House says, "Oh, there's executive privilege. You can't have these documents." To a lot of people, that's a little fishy.

CARDONA: Well, look, people should also understand that they have actually been cooperating quite a lot with all of the investigators. They've given over almost 8,000 pages of documents, even deliberative documents, which as you know, John, is normally covered in an executive privilege.

But because they want to be really forthcoming and they want to negotiate in good faith -- and by the way, they would still be open to a negotiation before this does go to a vote, because that would be very extreme.

But here's my question, and maybe the congressman can answer this for me. If we really wanted to get to the bottom of this, why hasn't Chairman Issa brought in the head of the ATF and the agents who were actually involved in this operation who actually know what happened? They've actually refused to have any hearings on this and bring them up for any sort of public comment. That makes no sense to me.

CHAFFETZ: Well, the reality is July 4 of last year in a bipartisan way staff did, over the course of two days, interview the acting ATF director, who was appointed by President Obama and interviewed about this.

We also have the ATF agents -- the reason we know about this is because the whistle-blowers at the ATF sent the committee documents saying, "This is outrageous."

We let 2,000 weapons -- think about it. We gave 2,000 weapons to the drug cartels. That's why we got into this mess. It was fundamentally flawed. Even the attorney general recognizes it was fundamentally flawed.

And on February 4th of 2011, the Department of Justice sent Congress a letter, a letter that ten months later, they had to pull back because it was full of lies. It was not truthful.

CARDONA: They retracted that and acknowledged that.

KING: They retracted that, but it raises a lot of suspicions. They have thousands of people, the Justice Department, to send up a letter that was so wrong, raises a lot of questions.

Ryan, I'm going to ask the Congressman and Maria to stand down for a second here. You hear it here. You hear the partisan divide. This is a legitimate inquiry, without a doubt. Again, the Democrats say the chairman's gone over the line. We'll see how that one plays out. Can they fix this or are we going to have that this will be unprecedented? The attorney general held in contempt?

LIZZA: Well, not to take away the -- some of the drama of today's vote, but you know, there was a congressional report out recently that listed since 1980 the number of administration officials who lost a contempt vote in a committee. And it's a pretty long list: Karl Rove, Harriet Myers, some Bush administration people, Janet Reno in the Clinton days.

Usually, what's happened in these situations, is they can't agree on which documents to hand over. Congress -- the committee votes to hold them in contempt. And they come back to the negotiating table and at some point, I think Holder and the Republicans on this committee will reach some deal and there will be some documents -- that's historically how it's happened.

CARDONA: And hopefully, that's what will... KING: Let's hope that's what happens or for the good of the government or the good of the Washington dysfunction anyway, to keep this, if it goes to the courts. We'll be talking to the lawyers for months and months and months.

Congressman, Ryan, Maria, thanks. We'll track this one. I promise you. It's going to go forward into next week.

Kate Bolduan is back now, though, with the latest news you need to know right now.

Hey, there.


Hello again, everyone.

Egypt's ousted leader is off life support, and his health has improved. That is according to an attorney for Hosni Mubarak. It comes just a day after a state TV reported Mubarak was clinically dead. He is now in a Cairo hospital after reportedly suffering a stroke in prison. Mubarak was forced out of power last year, you will remember, during the Arab Spring revolt.

And now to the south of France and the city of Toulouse, where police now have a gunman in custody after a tense standoff. The gunman claimed he was with al Qaeda and took four people hostage at a bank. During hours of negotiations, two hostages were released.

Then police stepped in, wounding the suspect and freeing the remaining hostages. The bank, strangely enough, is located in the same neighborhood where a deadly 32-hour standoff unfolded just in March.

And the Department of Homeland Security seizes guns, cash, weapons and now, weirdly enough, you can add dinosaur bones to that list.

A judge gave the OK to seize a 70 million-year-old tyrannosaurus skeleton. Homeland Security says it was exported to Florida illegally in 2010. Now it will send the skeleton back where it came from, Mongolia.

KING: All righty.

BOLDUAN: Pretty interesting.

KING: It's even older than I am.

BOLDUAN: I wasn't going to go there.

KING: Yes, yes. I went there before you could.

Kate -- Kate, you like pizza?

BOLDUAN: Obviously. KING: All right. Tonight's "Moment You May Have Missed." Pizza Hug, Domino's, Papa John's, Little Caesar's and Godfather's, all on Capitol Hill today. No, not for a pizza party. They're fighting to keep calorie counts off their in-store menus.

In case you're wondering -- ready, deep breath -- here's a look at how many calories you rack up with just one slice. But the chains say they're not trying to hide nutrition information. As Domino's points out, 34 million ways to customize your order. They say that would make in-store nutrition signs, well, way too crowded.


LYNN LIDDLE, DOMINO'S PIZZA: Most of our customers in pizza stores order online or over the phone. They don't look at a menu board and make their decision that way. So we're not only doing it in a way that's expensive for the small businessperson. We're doing in it a way that would be too confusing.


KING: Now, Congress required this menu labeling as part of the health-care reform law. While that law may not have bipartisan support, pizza -- maybe we need Mayor Bloomberg to broker this one.

BOLDUAN: You stole my line. That's exactly what I was going to say. I don't know. You know, I'm one of those people that they can throw all the calorie counts at me. I'm still going to eat the pizza.

KING: Yes. I was looking at a menu the other night, and boy, boy oh, boy, oh boy. It made me feel guilty.

BOLDUAN: Just kind of close your eyes and do the best you can.

KING: See you back here tomorrow night, everybody.

"ERIN BURNETT OUTFRONT" starts right now.