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JOHN KING, USA

Christmas Showdown Over Nuclear Arms Treaty; Legislation to Provide Health Care for 9/11 Responders in Limbo; Interview With Sen. Gillibrand

Aired December 20, 2010 - 19:00   ET

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


JOHN KING, CNN ANCHOR: Thanks, Candy.

Good evening everyone.

Are Senate Republicans jeopardizing national security just to flex their political muscle or because they are still mad Congress voted to repeal the ban on gays serving openly in the military? That's what Obama White House and its allies believe tonight as the Senate stages a Christmas week showdown over a nuclear arms treaty. The Republicans say the president negotiated a deal which gives Russia giant advantages.

(BEGIN VIDEO CLIP)

SEN. RICHARD SHELBY, (R) ALABAMA: I will not support subordinating U.S. national security to an untrustworthy partner and neither should the United States Senate.

(END VIDEO CLIP)

KING: Also in Senate limbo, legislation to provide care to 9/11 first responders who were exposed toxins, but have exhausted their normal health benefits. New York Democratic senators say they can not under why the Republican leadership doesn't want to pass this plan this year.

(BEGIN VIDEO CLIP)

SEN. KIRSTEN GILLIBRAND, (D) NEW YORK: This is not an entitlement. It's is not an un-ended promise, it is about 100,000 people that are eligible. We know every single person who is eligible, we know who worked on the pile, who was there. This is the health care for them and the costs that they need if they die.

(END VIDEO CLIP)

KING: When you stack up the approval ratings of our six most recent presidents, at the two year mark, President Obama ranks fifth. We'll tell you why being at the bottom might mean being in good company. What a clue? Think 49 out of 50.

Let's begin though with the collision of politics and national security, as the Senate careens towards Christmas not with holiday cheer but with partisan sniping. One big subtext, a debate over whether a rather productive lame-duck congressional session is helping President Obama stage a year-end rally. New CNN polling is among the items to debate tonight with CNN contributors Paul Begala, Alex Castellanos and John Avlon.

But first let's ask Senior Congressional Correspondent Dana Bash if the Republican objections to the START Treaty with Russia are on policy or political grounds?

Dana.

DANA BASH, CNN SR. CONGRESSIONAL CORRESPONDENT: The answer to that is both. Many Republicans have substantive issues with the START Treaty. If you look live, right now, as we speak, on the Senate floor the Senate is voting tonight on GOP amendments, attempts to change it. For example, some argue it doesn't go far enough to putting verification systems in place so that Russia will live up to its commitments in this treaty to reduce its arsenal of nuclear warheads and launchers.

But there's no question in talking to several Republican senators in the hallways today opposition is also highly political. And about the atmosphere in these closing days of Congress where, John, patience is running out and tempers are flaring, several Republicans are openly angry at Democrats for using these last days before the Democrats lose the House and lose seats in the Senate to cram a lot of what's left on their agenda. Republicans also are especially angry that Democrats passed the "don't ask, don't tell" repeal this weekend. Some are making it pretty clear that that is coloring their view of this unrelated START Treaty.

KING: Well, to try to get the votes they need, two-thirds of the Senate, one strategy the strategy today was to have this classified session, a closed session, where they could talk about the treaty in ways the public is no supposed to hear. Coming out of that session, John Kerry, the chairman of the Senate Foreign Relations Committee, said he thought it was helpful in building support. Let's listen.

(BEGIN VIDEO CLIP)

SEN. JOHN KERRY, (D) CHAIRMAN, FOREIGN RELATIONS CMTE.: It was helpful. I think it was instructive to everybody and hopefully provided some facts and some insights that people needed that may be able to help them on the treaty.

(END VIDEO CLIP)

KING: After that session his new Republican colleague from Massachusetts, Dana, Scott Brown, said he would vote for START. Did they make enough progress among Republicans?

BASH: It's pretty fluid now. Democrats I talked to, many of them say that they agree with Senator Kerry they will be OK. The president and Secretary of State Hillary Clinton worked the phones all day today calling senators, but there are a lot of undecided Republicans and the president is now up against the GOP leadership in the Senate and including Jon Kyl of Arizona. I'm told by GOP sources he is actually aggressively lobbying his colleagues to vote no.

KING: Dana Bash for us tracking the Senate debate. As you note, live Senate floor right there. We'll watch it. Now, let's talk over the politics of this and whether these objections are on policy or political grounds? John Avlon, Paul Begala, Alex Castellanos.

To the Republican in the room first. This treaty has been around for months. You hear we need more time, we need more time, we need more time. Is that not a fraud?

ALEX CASTELLANOS, REPUBLICAN STRATEGIST: I don't know that it is a fraud. I think Republicans have real substantive objections to this. To understand it they are calling it the "Trust Putin and Let the Soviets Catch Up Treaty". Because this basically lets the Soviets modernize their nuclear weapons while ours, very rusty, we-President Obama has already taken that off the table. Said he won't, President Obama has already taken up the peace shield, defending ourselves from nuclear weapons off the table.

So the Russians get to modernize their cruise missiles on ships and on submarines, don't count. Some people, yes, think that a balanced world where the Soviets do catch up is better.

KING: They are the Russians now.

CASTELLANOS: The Russians.

(LAUGHTER)

With Putin back you never know.

PAUL BEGALA, DEMOCRATIC STRATEGIST: I hate to like say history, but it's been 20 years since they stopped being the Soviet Union. They are the Russians now. That's a misstatement of some pretty important things in the treaty.

President Obama has committed-responding to Senate Republicans criticisms, much of which is founded in substance. I don't want to- maybe it is just Christmas-I don't want to just say they are only playing politics. He's respond by saying we'll beef up modernization of our nuclear forces. He hasn't said we won't. He said we will. And he has put a huge pile of money on the table.

John Kerry-this may prove to be John Kerry's finest hour. The chairman of the Senate Foreign Relations Committee, when given every opportunity to take a partisan shot at the Republicans, some of which are playing politics and some of whom have not, he has always refused. And in today's session, I'm told, he did an extraordinarily good job of laying out the national security case, leaving politics aside. I think this thing will get done and I think John Kerry-in addition to the president and secretary of State.

CASTELLANOS: It's not much of a political issue when it doesn't have that much political fire power. Right now, security is not on the agenda. It's all the economy and jobs. So when you see a Republican standing up against this, with little political gain, it's because they think it's right. Not because they are playing politics.

(CROSS TALK)

KING: John Avlon, is that safe territory for them to stand up, or this is tone setting not just for the end of this year, but to carry over to the new?

JOHN AVLON, SR. POLITICAL CONTRIBUTOR, DAILYBEAST.COM: No, that's right. The story of this lame duck, the lame duck has shown it can fly. And it has shown us that divided government looking forward doesn't need to be gridlock.

But this issue is important. And to what Alex was just saying, the flipside is also true. There's no political gain in this and yet the president and administration have front loaded it because they think it's important. That's why every living Republican secretary of State has support it. Clearly they are not naive or playing politics. Most leaders of the military have supported it. By my count I think we are at least four Republican senators. This thing has a broad base of support because people don't and they should not play partisan politics with nuclear arms treaties. This is the right thing to do, it would be a good way to go out in the lame duck. This should move forward.

CASTELLANOS: Well, Putin is supporting it because he thinks it's in his interest, too. That makes me-if we had looked in his eyes, too.

KING: For anybody at home saying, what's in this treaty? Let me just break it down. Maybe you don't follow nuclear arms agreements. Or 20 years after the decline, but if you look here, red are your known nuclear powers, orange are nuclear nations, as well, yellow are suspected nuclear nations. Let's take a quick look at this START Treaty.

These are what these countries have around the world. You see the United States and Russia are the big nuclear powers around the world. Now, let's take a look what this treaty would do. This is the old START Treaty. We started out up here. We got down to 6,000. This is where the two countries are today, the United States has a little lower number than Russia. The goal of this treaty is to get down to 1550 on each country side. And as Paul said, the president I think has put up about $4 billion for the modernization.

There's one of the concerns that Senator Corker, of Tennessee, is writing a nonbinding, essentially they want to put record that the Senate is worried about missile defense, they are worried about some language in the preamble, because they have heard some things said by Russian officials they don't like. So they are essentially saying, well, here's what we don't like. And we will work it all out. Will this be done?

CASTELLANOS: It is moving in that direction. They are probably going to get enough Republicans to get this over the top, like they have gotten a few other issues, "don't ask, don't tell", in the past week. But, again, these are substantive objections. The Russians do mod-their assembly is saying we see this treaty a little differently than you do. These things don't apply to cruise missiles on subs, on ships, and rail. which is where the Soviet arsenal is growing-Russian.

KING: If they violate the treaty, I assume we could come back.

All right. So let's put this in the year-end political context. I want to show, right here. We did some new polling. CNN/Opinion Research Corporation polling and it shows the president's approval rating at 48 percent. That's not great. But it is up a little bit from where he was a couple of months ago, as we get to the end of the year.

But let's break it down among groups on the political spectrum. Among liberals 72 percent approve, 27 percent disapprove. The president's number among liberals are down a little bit from last month. You can say, tax deal, they don't like right there, maybe. We'll watch if they go up. Moderates 60 percent approve, 36 percent disapprove. Conservatives 22 percent approve, 72 percent disapprove. That number has been pretty constant for a very long time.

John Avlon, is the president at least trying and do you see some evidence that he's recapturing a bit of the middle?

AVLON: This poll provides that evidence. He's up at least 5 points among self-identified centrists, which gets to the plateau, actually to the percentage of centrists that voted for him in 2008. It shows that his leadership on tax cuts trying to form that compromise, even though folks on the far left and far right didn't support him, he has increased his support with the center. And that is essential going into this next election year.

KING: Yes, among independents it's still 41 percent approve, 54 percent disapprove, Paul. So, he's getting moderate Democrats, but the people who just helped the Republicans get from 40 to 63 seats in the House, the independent voters, they are not so sure still.

BEGALA: That's right. I think the president won't get them back just by cutting deals with the Republicans. So, the Democrats cutting are compromising. He has to move the needle on jobs. That's what I've been saying for two years, since the day the man took office. We have not moved the needle on jobs, sufficiently. He has to do that.

By the administration's calculations the deal he just cut will create 2.2 million jobs, OK? By the Congressional Budget Office calculation $858 billion, by my seventh grader's Charlie's calculations, that's $390,000 per job. You can pass something pretty easily through Congress if you cut taxes and raise spending. I mean, a monkey could do that. George W. Bush even could do that. But Barack Obama? He needs to do better.

(LAUGHTER)

(CROSS TALK)

KING: Go ahead, John.

AVLON: Barack Obama will actually have to lead in cutting the deficit and the debt to win those independents back.

BEGALA: He has to generate jobs.

KING: Next year is going to be the tough choices. You're being very, very polite there, it kind of scares me a little bit. You are just standing there?

(LAUGHTER)

CASTELLANOS: Interestingly enough the other bad numbers in these polls are for Republicans. When you look at the rest of that survey, what the survey says is that we trust Republicans, the country trusts Republicans to stop Barack Obama, to hit the brake pedal. Take away his car keys periodically, when he is spending too much. But they don't trust Republicans to lead.

KING: We'll look more closely at those when we come back. These guys are going to stay with us, but when we come back we'll have New York Senator Kristen Gillibrand, the Democrat of New York, who says she cannot understand, cannot understand, why the Republican leadership won't approve legislation to take care of 9/11 first responders.

(COMMERCIAL BREAK)

KING: One of the final question marks for this year-end session of Congress is whether a multi-billion dollar plan to help 9/11 responders will pass. Hoping to break the stalemate the measure's two main sponsors in the Senate have made some changes. The 10-year price tag now $6.2 billion, down from $7.4 billion, in the earlier version. And it has now paid for differently with a mix of excise and visa fees the sponsors believe are less controversial than the earlier plan to close to some corporate tax loopholes. But will it pass before the Senate goes home for the holidays?

Democratic Senator Kirsten Gillibrand, of New York, joins us from Capitol Hill.

Senator, you have made these changes. You think it is more palatable, you think it should answer at least some of the Republican criticism. The question is, with the clock ticking, can you get this done before Senate goes home?

KIRSTEN GILLIBRAND, (D) NEW YORK: I think we can. We obviously need people of goodwill to come together to vote for this bill and do it in a timely way. But I think it can be done. Because, John, just remember, this bill is about the first responders. This bill is about the people who literally ran up the Towers when people were rushing down. It's about the men and the women who worked at that pile, first looking for survivors, then looking for remains and doing the cleanup. They answered the call to duty when we asked them to come. So now literally some of these men and women are dying. We need to stand by them and give them the health care they need to literally survive.

KING: Help people understand the specifics of this and then the substance. Then we'll talk about the politics, in the sense, many would think-and if they are not paying very close attention, they might think, of course, we want to give them health care, of course, we want to help them, but weren't they policemen and firemen? Didn't they have a generous benefits package? Why is this necessary?

GILLIBRAND: Well, they do have benefit plans and their benefit plans, their health care pays out first. Their workmen's comp is second. Any relief they get from any settlement, court settlement, comes in third. And then this fund is here because for a lot of these men and women they are at their lifetime maximums for health care. And some of these families are literally being forced into bankruptcy because they can't afford all the health care costs.

So this bill would cover those first responders who have coverage and are now over the limit. It covers first responders who were perhaps retired, and were volunteering. It covers the construction workers, and all the people that were on the pile, and the volunteers. It also helps some of the families who live just at ground zero, because some of the kids, in particularly the children, they are particularly vulnerable to the toxins that were released. And a lot of them are now are suffering from asthma and other grave health effects.

So what this does is makes sure they all have access to the health care they need. This is a capped fund, John. This is not an entitlement. It's not an un-ended promise. It is about 100,000 people that are eligible. We know every single person who is eligible. We know who worked on the pile, who was there. This is the health care for them and the costs that they need if they die.

KING: And so why, then, I want to you listen to Senator Jon Kyl. He is the number two in the Republicans leadership. Why do Republicans have so many questions? Let's listen to Senator Kyl.

(BEGIN VIDEO CLIP)

SEN. JON KYL, (R) ARIZONA: First question is, is it amendable, or is it a take it or leave it proposition. The bill has not been through committee. There are problems with it. And I think the first thing Republicans will ask is, do we have a chance to fix any problems that may exist with it? It's a lot of money and so my early response is that I'm skeptical about that bill.

(END VIDEO CLIP)

KING: Would they have a chance.

GILLIBRAND: Well, we have been working on this bill for years now and this particular bill has been through 22 hearings, one in the Senate, 21 in the House. It's been through every committee of jurisdiction on the House side. And what we are looking at right now is a House bill that was amended by Republicans. All the Republican ideas that needed to go in that bill got in that bill. What we're looking at is a bill that's very bipartisan.

When I put this bill in last year I've been working over the last year to get the support on the Senate side. And we had a hearing in the Health Committee that was open for people to try to work on the bill, to change the bill, to make any additions. There were no request for changes.

KING: So, then why would Senator Kyl say, I'm still skeptical. It is that just pure politics? Does he have legitimate questions?

GILLIBRAND: I don't know if he has legitimate questions because we have been engaging Republicans now for several months. His concerns have never come up. He hasn't articulated anything he wants changed in the bill.

But what we can know about this bill is it has been through all these committees. It has had the time and effort where amendments went into it. Because this is a House bill that has been worked on, literally, for years. And on the Senate side, Secretary Clinton worked with Senator Enzi for years on these issues. And they really had a chance to talk through what they want to see in a bill. When I talk to Senator Enzi he really wants accountability. What this bill does is takes the past programs, we had about six programs in place, that were put together very hastily after 9/11, that we are literally going to remove and replace it with one program that is 100 percent transparent and 100 percent accountable.

So it addresses some of the underlying issues that I have heard from colleagues in the past. I think it's a strong bill. And at the end of the day, John, this is about our first responders. It's about the people who literally answered the call to duty. And they came and they helped and did what was asked. And the least we can do right now is to give them the health care they need.

KING: Let me ask you a couple of other questions. Some of them related, in an indirect way to 9/11. As you know for months there's been this controversy about this mosque and cultural center that the supporters wan to build right near ground zero. There have been reports in the last 72 hours or so that the King of Saudi Arabia has some compromise plan. That he would buy a different building, a bit further away, and we haven't been able to get any official confirmation that such a plan actually exists. Have you heard anything about this?

GILLIBRAND: I've not heard about it. But I know that our governor, Governor Paterson, was been working on alternative solutions. And that this may be something that has come of those efforts.

KING: One much your colleagues in the New York delegation, Republican Pete King, on the House side, will be the chairman of the Homeland Security Committee when the new Congress comes back in January. He says he wants to have hearings on radicalization of the American-Muslim community. Is that necessary in your view?

GILLIBRAND: Well, he's the chairman of the Homeland Security Committee and he'll move forward on his agenda about what he wants to learn about. Let me say a word about Congressman King. I can tell you he's been the best supporter, the greatest advocate on this issue and he has helped me immeasurably in the Senate. He has not only called my Senate Republican colleagues, he's called Mitch McConnell, he has called the leadership. And he's really beseeching them to come together and leave partisan politics aside to support this 9/11 bill. I can really show extraordinary gratitude for his courage and his advocacy.

At the end of the day, Peter King and I agree on one thing. We want to protect this country. We want to protect New York. And he has shown how much he cares about this country and New York, in all of his efforts.

KING: Do you think that's a necessary review or could inflame tension?

GILLIBRAND: Well, I need to speak to Peter about it. I want to hear what he is hoping achieve, through his hearings. What kind of testimony he hopes to have. I do know that Peter King is very focused on not only keeping New York safe, but really fighting terrorism across the board.

KING: Help me under a little bit of the post-election tug-of-war and discussion within the Democratic Party. As you know there are many liberals who think the president just sold them out by cutting this tax compromise. They think he should have fought for a better deal. They think he should have never extended the tax cuts for the wealthy. They think the estate tax plan component of this plan is a give away to the rich. How feisty and how bitter-I guess-is the debate especially among liberals, about the president right now?

GILLIBRAND: Well, one thing is clear. The president cares deeply about this economy. He's so committed to making sure we grow this economy. We focus on middle class tax cuts, tax cuts for small businesses, because small businesses create two-thirds of all new jobs. That's the is going to be the secret to actually unleashing America's potential and making sure this economy can grow again.

That being said, I voted against the compromise because I believed that there was too much money being spent, too much wasteful spending in areas that don't create jobs. I was most worried about tax breaks for a million plus. That was about $60 billion. I was also concerned about changing the cutoff for the estate tax from $3.5 million per individual to $5 million per individual. That cost about $70 billion. And so that $130 billion to me is money that's being invested in the wrong way. It is not being invested in job creation. It is not being invested in economic growth. That's why I chose not support package. But I know the president is dedicated to fixing this economy. That was the deal that he reached.

KING: Senator Kirsten Gillibrand, Democrat of New York, I appreciate your time today.

GILLIBRAND: Thank you.

KING: Thank you.

When we come back, the politics of the 9/11 responders bill. And later now that Congress has voted to repeal the military's "don't ask, don't tell policy" how long should it be before gays are allowed to serve openly?

(COMMERCIAL BREAK)

KING: Can Republicans sustain opposition to that 9/11 first responders bill? And is the president having a little bit of a year- end come back? Let's get back to our conversation with John Avlon, Paul Begala, and Alex Castellanos.

John, to you first, in New York, on this question of this 9/11 bill: Can the Republicans hold this and make it kick over to next year? And as I ask the question what struck me in the last 24 to 48 hours, or so, is watching one of the most influential voices in this country, when it comes to swaying the Republicans and that would be the FOX News Channel. They have gone show after show saying why won't you pass this?

AVLON: Yes, and they should pass this. My former boss, Rudy Giuliani strongly supports the passage of this bill. Mayor Mike Bloomberg, of New York, strongly supports the passage of this bill. I think since its input from Republicans in the House, particularly Congressman Pete King, this is a better bill. Simply, it's the right thing to do. You should not play partisan politics with 9/11. We need to be bigger than that. We need to be smarter than that. This should go forward.

KING: Will it go forward?

CASTELLANOS: Absolutely. Republicans are looking like Mr. Potter, here, the cranky banker in the "It's not such a wonderful life" movie on this. They are defending indefensible ground. It's like -- they are telling cancer patients they can't get what the medicine they need until they fill out more forms. So, Republicans have been snookered on these kind of deals before though. That's why they are so reluctant.

Remember, that your talented, President Clinton, promised all kinds of help to policemen and firefighters, and it ended up going to Democratic unions. Republicans have tried to look at every detail in this bill to make sure it actually would go help those that are in need. And I think it's gotten better, but we're just a few moments away from this becoming law.

BEGALA: I'd say before we give too much credit to the FOX News Channel, the guy in the media who was ahead of even the Democrats was Jon Stewart. He's going to throw his shoe at the set if he's watching, because he hates my guts. But he has been a hero on this for those 9/11 responders. It took a comedy show to take the political class in Washington and focus their attention on this. He should get a lot of credit. I think they will prevail. I'm glad to see Senator Gillibrand out there. I'm thrilled that Congressman King, a Republican, is taking a point as well. But it is indefensible what Senator Kyl was saying on our air, earlier. It is just indefensible.

KING: Let's look at-we thought this-we weren't sure after the election how productive the, quote/unquote, lame-duck session of Congress would be. We'll had to do the tax deal. They wanted to do a lot more. They have done "don't ask, don't tell", the DREAM ACT failed. We'll see what happens to 9/11 bill, the START Treaty, too, we'll see that. Some other things have been done.

Here's what you look at. You raised this point a little bit earlier. The president's standing in the polls has improved a little bit. He was in a rut heading in to election. Here right now, will Obama's policies move the country in the right direction? 55 percent say yes; 42 percent say no. That's a majority. That's not so bad. Here's the key question. The Republicans just won this huge election. They are going to take over the House in January; 63 seats they picked up. Will Republican policies move the country in the right direction? 44 percent of Americans say yes. 51 percent say no.

Buyer's remorse already, Alex?

CASTELLANOS: No, not buyers remorse. We didn't compete for leadership. We just competed to keep the country safe from Democratic spending and expansion of government. So, again, we're very happy to just kind of tapping the brakes now and then, but not leading. That means the next year, 2011, both parties will be searching for the political G-spot. By G, of course, I mean growth.

(LAUGHTER)

Who has the agenda-

(LAUGHTER)

UNIDENTIFIED MALE: That's what I thought you meant.

CASTELLANOS: Yes, absolutely. Who has the agenda to actually take the country to future and create jobs? Can you tell me what the Republican, or Democratic, agenda strategy for growth is? Neither side has made a compelling case.

KING: Can either side, John Avlon, make a compelling case for growth when the argument is we can't touch taxes now-unless the president forces them into a tax reform debate. But he has agreed to keep the Bush tax cuts in place for two more years. And what Republicans are going to say, especially on the House side, now we're looking for cuts, we are looking for spending cuts.

AVLON: Yes, and I think that is where a lot of the debate will be. It will be interesting to see if there is a tax reform debate. That could be pretty profitable. But clearly on the tax cut side that's been a key to the stimulus growth. There will be some serious spending debates that may go under entitlement reform. That's necessary to bring down long term deficit and the debt.

But I think those poll numbers show you something profound about this election and about the electorate, which is that we like divided government. We like the checks and balances of divided government and President Obama does very well with the check and balance of Republican Congress in place. It's actually going to increase confidence in him and his leadership over the long run. It's a win- win, because everybody has to be responsible here. You can't just demagogue stuff and walk away.

KING: Have you seen, Paul, any evidence, everybody in town is buzzing will he be Bill Clinton and move to the middle, and sometimes anger the left, sometimes anger the right. Or some people said, no, please, please, be Harry Truman and raise holy hell, and fight the Republicans everyday. You were right there at Bill Clinton's side, do you see any signs yet that tell you, with certainty, which way he's going?

BEGALA: What he needs to be is FDR. He needs be about growth. The word Alex uses a hilarious metaphor for it, but yes. We want to feel good. We want to feel good with jobs. That's the point. This is why so many Democrats are so skeptical about this deal, so few jobs.

(CROSS TALK)

KING: Well, how can he do a big growth plan when it has such tough tight fiscal situation.

BEGALA: This is the problem. When you just spent more money this week than the bank bailout, more money this week than the Obama stimulus package, not a lot of bullets left in the gun. This is long term, I think, the big fear that all Americans should have. We may not have enough tools. We'll are going to have to need another jobs bill, and I don't know if we have the political will for it.

KING: I want you guys to look at this. Normally, especially in politics, it's like a sport, you want to win. You don't want to be fifth out of sixth. Look at this list. This is presidents at the two year mark. Our last six president, George. W. Bush, George H.W. Bush, Bill Clinton, Jimmy Carter, Barack Obama, Ronald Reagan. Barack Obama is near the bottom there. 48 percent two years into his term. The only guy who did worse, Ronald Reagan, at 41 percent. So, you say, oh, god, that is horrible news for Barack Obama. Except, the guy with the 41 went on to win 49 out of 50 states. So you look at these numbers, they are interesting but don't tell you much about 2012, do they?

CASTELLANOS: Not that much. But you can't fall off the floor. That's good news for Barack Obama. He's about as low as he needs to get on this thing.

Reagan had an advantage. He didn't have to change his narrative. He came in as the America can do anything you want. He stuck with that all through his term. Barack Obama has gone left. He has to pivot back towards the middle. He has demonstrated he is more than capable and willing to do that in the past week. I think we'll see a whole lot more of that.

KING: It raises other issues.

BEGALA: Ronald Reagan agreed the largest tax increase in American history. That changed his narrative mightily. He was remarkably flexible and he would not recognize the Republicans today setting their feet in stone against every single idea just because a Democrat proposed it. Reagan was much more flexible than these guys.

But, again, it's not a left-right thing. It's an up-down thing. Americans are mad at the elites, and that includes corporate elites and Wall Street, and of course it includes government elites like the president as well.

But I think if he can, you know, start to channel some of our righteous indignation towards the Wall Street bandits that ripped this country off and are taking billions of dollars in bonuses this holiday season --

CASTELLANOS: Especially the ones running the Obama administration.

KING: John Paul, Alex, thanks for coming in. We'll continue the conversation.

When we come back, we'll explore a pressing question. The president on Wednesday morning will sign the repeal of don't-ask, don't-tell. What we don't know yet is how long the Pentagon will take to say it's OK to serve openly. We'll debate that, just ahead.

And also we'll take a closer look at this tax cut debate. Now what? Will it cause growth? Will it help the president politically? Will it run up the deficit? We have a great debate segment on that.

And beat on the street tonight, he says he wants to ask some questions of me. I call it "Stump the Anchor."

(COMMERCIAL BREAK)

KING: The White House tonight says the signing ceremony for the legislation repealing the "don't ask, don't tell" policy prohibiting gays from serving opening in the military will be this Wednesday, but it could be months before the historic change takes effect. Defense Secretary Robert Gates say he will, quote, "approach this process deliberately."

So how long should it take? Alex Nicholson served in the army intelligence against until he was discharged in 2002 under the "don't ask, don't tell" rule. And Peter Sprigg is the senior fellow for policy studies at the Conservative Family Research Council which opposed the repeal.

Alex, as you talk about how long do you think the Pentagon deserves to implement the transition, also factor in these numbers. The Pentagon did this big survey. It's the reason they swayed some votes in the end. Overall, 30 percent of people in the military said there would be a negative or very negative reaction. You ask combat unit, 48 percent said it would be negative or very negative, 58 percent of marine combat units negative or very negative.

Should there be some distinction when you repeal the policy and gays can serve openly? Should it be different or does it have to be across the board the same?

ALEX NICHOLSON, FORMER ARMY INTELLIGENCE COLLECTOR: I think that's a really good question. The Pentagon has been studying this issue for more than 50 years and this latest iteration they had over nine months to do a very thorough and comprehensive report on how to go about implementing the repeal of "don't-ask, don't-tell." They may take a couple of months. We don't know.

KING: How long do you think is the bottom line for you? If it's three months it's OK, but six months do you start to question?

NICHOLSON: I think about the first quarter of 2011 is about as long as I think they reasonably need. They have already done studies on this thing for 50 years. They had nine months to prepare. We already have gays serving openly right now, defying the law. About three months is all they really need, realistically.

KING: And Peter, Tony Perkins, who runs your organization, issued a statement tonight, and I want to ask you about it. We have disagreements in this town, and some are legitimate policy conversations, some of them are more political arguments.

But Tony Perkins makes this statement. "The Senate repealed "don't-ask, don't-tell" because it endears them to the greatest sources of campaign dollars in America, the homosexual lobby. As that lobby stands triumphantly on the rubble of "don't ask don't tell," they will tell you that they can already see marriage in the distance."

PETER SPRIGG, OPPOSES REPEAL OF "DON'T ASK, DON'T TELL": I think that that's a part of the reason why Nancy Pelosi and Harry Reid made this a top priority during the lame duck session. It's astonishing to me that with so many other things they had to deal with, with funding the government, with preventing a massive tax increase on January 1st, dealing with a major arms limitation treaty, that they would even give any attention in a lame duck session.

KING: They managed to do all that and still address this issue.

SPRIGG: They have. It's sort of shameless to push through a large liberal agenda before they lose the reins of power.

KING: Do you honestly see the same sex marriage debate now coming next, or I could cynically ask, is your organization raising the prospect of that so it can raise money?

SPRIGG: I've seen quotations already in the media and have been asked about it by other reporters about the homosexual movement seeing marriage as the next frontier and this as giving momentum to the legalization of same sex marriage.

I think the same sex marriage issue is very different from this issue. This was an issue in which you had homosexuals as individuals being excluded from participating in the military for, we believe, valid reasons. But nevertheless it was directed at individuals. The marriage issue is about granting special benefits, special affirmation to same sex couples, to homosexual relationships. I think that's a very different kind of issue.

KING: Alex, are there any factors from your servers, if the Pentagon does this, I may not like it but I understand. If there's any kind of segregation or opt-out, or does it have to be for it to work universally across the board, like when racial integration happened in the army?

NICHOLSON: I think the best thing the Pentagon could do is to do it across the board and do it swiftly and quickly. I think the senior military leadership, the commandant of the Marine Corps said if you're going to do it, do it quickly and swiftly. They certainly would be shooting themselves in the foot the more they drag it out.

KING: And again back to Tony Perkins statement. He goes on the list "12 percent of the military surveyed threatened to leave the service." Then he lists all the Republicans that voted for this.

Then he says at the end, "Are they prepared to accept to accept the responsibility for losing those 264,600 soldiers," meaning if they leave the military. He goes on the say this, "and others who may be injured or killed because of their votes?" Injured or killed because gays will be allowed to serve openly in the military? It's controversial. It will be tough for some people. All social change is. You thinks it's wrong, he think it's right. But injured or killed?

SPRIGG: That was an issue not raised first by us, but raised by General Amos, the commandant of the Marine Corps who just last week said that he believed that with this distraction it could result in increased casualties.

A specific example of that was raised in Congressional testimony earlier in the year by General John Sheehan, who testified to a specific incident when he was in Vietnam when some soldiers on the frontline, there was one who attempted to molest the other.

KING: That was 40 some years ago. I hope people understood -- I don't mean to take side in debates. I hope people understand this --

SPRIGG: This is sexual assault.

KING: You think it's possible anybody would be injured or killed because of this?

NICHOLSON: I really don't think so. I think that's proven by the fact that you already have gay women and men serving openly in the military today. You have many, many hundreds defying the law, commanders looking the other way, peers accepting them, and you've not had any discharges for 40, 45, 50 days. Nobody injured or killed. It was ridiculous.

KING: It's a controversial debate as the implementation plan goes forward. Thank you both for coming in tonight. But next, the night's top stories, including a rare public appearance by the Reverend Billy Graham who came to see a couple of people you'll recognize.

And later, a calculator that tells you whether the tax deal helps or hurts the president's reelection prospects.

(COMMERCIAL BREAK)

KING: Welcome back. Let's check in with Joe Johns with be the latest news you need to know right now.

JOE JOHNS, CNN ANCHOR: John, New Mexico's Governor Bill Richardson and CNN's Wolf Blitzer will soon be out of North Korea. They are leaving as tensions seem to be cooling now that North Koreans decided not to respond a South Korean military exercise and offer to let U.N. inspectors see its new uranium enrichment facility.

Keep your eyes on a big vote tomorrow by the Federal Communications Commission, it's decision on rules for what's called net neutrality could affect what Internet providers will let you see and how much you have to pay.

And finally, check this out, 92-year-old reverend Billy Graham made a rare public appearance today at a book signing by former president George W. Bush and his wife Laura. Grahams really keeping a high-profile. Just last week Franklin Graham going down to Haiti with Sarah Palin.

KING: It's great to see Billy Graham.

JOHNS: Absolutely.

KING: God bless him. Joe, thanks for coming in.

When we come back, will tax cuts help or hurt the president? Stay with us.

(COMMERCIAL BREAK)

KING: Now what? That's the question both economists and political strategists are asking now that the president has signed the big tax compromise. There's a big debate about both whether it will help the economy and whether it will help the president's reelection prospects.

Let's talk it over with Robert Kuttner, the cofounder and co- editor of the liberal "American Prospect" and Grover Norquist, president of the conservative Americans for Tax Reform. Bob Kuttner, you don't like this deal. I want to read something you wrote about it. You say this, "This tax deal rebranded as a stimulus program is paltry and ineffective as an economic tonic.

What anyone hardly seems to have grasped is that the deal basically continues the status quo with almost no stimulus. If the tax rates on the books in 2010 did not produce recovery why should we expect the very same will change the economy in 2011?"

So you think the president sold out for nothing?

ROBERT KUTTNER, CO-EDITOR, "THE AMERICAN PROSPECT": Leave out the politics for a minute. Let's just talk about the economics. You're taking the tax rates that were in effect in 2010, which was a terrible year economically. and saying we'll continue them in 2011, 2012. That's not a stimulus.

You're taking the unemployment compensation system that was in effect last year and the Republicans are going to say, well, we'll compromise we'll continue them next year. Same status quo -- no stimulus.

You're taking a slight cut in the payroll tax which substitutes for a different tax. The only stimulus in the bill is about $50 billion or $60 billion worth of business tax cuts in a $15 trillion economy, so I don't think it works as economics.

KING: Are you as down beat about the economic prospects or do you subscribe there's not complete certainty because it's only a two year extension, but there's a bit more certainty, therefore there will be more investment?

GROVER NORQUIST, AMERICANS FOR TAX REFORM: Go back two years, investors were looking at a significant increase in the capital gains tax, the dividend tax, top rate marginal tax rate, now, in January, if it wasn't continued. So one of the reasons why the economy has been slower than it should have been was this threatened tax increase.

The problem for Obama is he didn't want to make it permanent. He only wanted to extend it for two years. Some won't get all the economic benefits of permanently reducing the capital gains tax, permanently reducing marginal tax rates.

He gave us the lower rates so when we replace him as president we'll have lower rates to start from. But he didn't do it in a way that's going to help him with the economy.

KING: And you make the point when you replace him as president. There are a lot of people on your side who think this tax deal helps the president. I want to show some statistics and go to an economist at Yale University who does these things by the numbers.

Let me first set up the economy. Here's where we are -- 9.8 percent unemployment. Here is where the election is in 2012. Of course the president of the United States is hoping this number goes down somewhere like that. A lot of people think it's going to essentially do something like that over the next couple years. That's the big political economic question over the next two years.

Let's turn that one off and look at GDP. Take the unemployment away and look at GDP. This is where we are. We started to come out of the recession here, got up here and it's relatively anemic growth down in here since. Again, the question is what happens between now and the election? If the president can get above this line above three percent most people think he'll be in pretty good shape.

Why? Let's look at this model. This is again from Ray Fare at Yale University. Essentially, how many good quarters do you have? What is the rate of growth? Right now if we stay somewhere like this bouncing along at an anemic rate of growth, then you don't have very many strong quarters. And you calculate what happens to the president? 51 percent, which means there is a margin of error, a very competitive presidential election in a two way race somewhere around 50/50.

If you had a double dip recession, which some warn might happen, the White House used that argument, then you're in negative territory for growth. You don't have that many strong quarters and then you calculate that one out. and the president falls below 50 percent then you would look for the Republicans.

Here's what a lot of people think when they look at this. Charles Krauthammer, for example, Grover, he thinks this will gin up growth a little bit. If the president gets above three percent growth heading into 2012 you've had more strong quarters, and if you calculate that you see a president up above 55 percent.

Now, this model has worked. It's based on economic numbers and not so much political factors but it has worked pretty well over the last 30 years or so. Do you worry that the best you can get right now, that you help a Democratic president?

NORQUIST: The goal of reducing tax rates and reining in spending is not to win the next election but to have a better economy and create more jobs for the American people. I tend to think given that Obama was taking us off a cliff on spending, a Republican house and more Republican Senate are going to pull him back, that the American people will realize that's why the economy will be getting stronger, not because of what Obama is doing.

KING: But that is the question. What did we learn about Obama here? Did we learn anything lasting here? I know you're worried to a degree. I want to read you a little bit from the "Wall Street Journal" editorial over the weekend. "A Democratic Congress extended the Bush era tax rates, Republican senators disavowed earmarks to kill a spending as usual bill, and a federal court declared Obama care to be unconstitutional.

The arc of these events reveals a break from the helter-skelter government expansion of the past four years." Do you see that, a dramatic shift in our politics?

KUTTNER: Well, I see spending cuts because what the Republicans have done with this tax deal is they've teed up the next round of spending cuts.

Where Grover and I disagree is I think if you cut spending in the teeth of a recession you're only going to slow down growth. So I think Professor Fare has a very good model, but the problem with the model is when you have very high unemployment, even if you have a couple of quarters of good growth, in places like Michigan, Ohio, Pennsylvania, Wisconsin, Minnesota that Obama has to win, even if the national rate comes down a little bit, if unemployment is high in those states, those are the states where the Democrats got wiped out this summer.

KING: What should he have done?

KUTTNER: He should have held out for a better deal. He should have done jobs, jobs, jobs, rebuild the middle class in this country, make things in America again. And he should have been more of a fighter, and then even if the Republicans blocked it they would have taken the blame for blocking it.

NORQUIST: Look, Obama is a left of center democrat. He spends money when he has the opportunity. The modern Republican Party under Bush spent less than Obama but more than it should have.

And with the Tea Party movement coming in over the last two years they infused a back bone in the Republican Party which is continued after the election. It wasn't just something that was helpful in 2010.

And what we're seeing is the Republicans swearing off earmarks, defeating the $1 trillion spending spree that the Democrats wanted as their Parthian shot out of town.

KING: You'll still have a Democratic president and a narrowly Democratic senate. Can you get real deficit reduction if that's your goal now that you've extended these tax cuts, less money coming in to Washington, can you get real deficit reduction if that's your goal, and maybe it's not, without at least saying as long as you have a Democratic president and a Democratic Senate maybe you have to agree to some revenue increase as part of the equation.

NORQUIST: No, the Republicans will not agree to a tax increase. What they will do is take the domestic discretionary spending and some of the military discretionary spending that's been jumped up under Obama. We need to take that back down to 2007-2008 levels. And that can be done without a super majority in the House or the Senate, just with the U.S. House of Representatives saying no to higher tax increases.

KING: And if that's the choice what should the Democratic president do?

KUTTNER: Well, he should resist it and he should make clear what he's for the way Truman did in 1948 when the Republicans blocked his whole program. Truman made clear what he was for and the Democrats not only reelected Truman but they picked up 75 seats in the House in the election of '48.

Where I think Grover is sort of arguing against himself is this. This program will slow down economic growth by cutting the deficit in the teeth of a recession, and that will defeat Obama. So if he succeeds he may win politically by sacrificing the economy.

KING: Grover Norquist, Robert Kuttner, we appreciate your time. This is teeing up what will be the pivotal economical and spending debates of the next two years. Thanks.

Up next, our reporter Pete Dominick, well, he wants to play "Stump the Anchor."

(COMMERCIAL BREAK)

KING: Let's go straight to Offbeat Pete Dominick, who came to work today with some questions. Pete?

PETE DOMINICK, CNN CORRESPONDENT: That's right, John King. I had a couple of other questions, but now what's tearing up the Internets, the blogs, is the governor of Mississippi in an interview with the "Weekly Standard" apparently praised the pro-segregationist Citizens Councils of the '60s. Is Governor Haley Barbour, does this, John King, does this hurt his elections prospects? You talked to him about running in 2012. Is this going to hurt him? What do you think?

KING: I've known Governor Barbour a long time and I don't believe him to be a racist. He's a good man. But we're going to try to get him right here to answer those questions, Pete. So I'll let him speak for himself and we can book him right here. You've got one more?

DOMINICK: Yes. Ed Henry, cushiest assignment, being in Hawaii without the president? You worked in this job.

KING: Being the senior White House correspondent has its advantages, my friends. Ed is playing the senior card right now and he should enjoy it. Pete, we'll see you tomorrow.

We'll see you tomorrow, too. "PARKER SPITZER" starts right now.