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CNN LARRY KING LIVE

The Ronald Reagan I Knew

Aired January 30, 2008 - 23:00   ET

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


LARRY KING, HOST: We examine the 40th president's persona and policies and their meaning in this year's election. "The Ronald Reagan I Knew" is next on a special edition of "Larry King Live."
I'm Larry King. We're at the Ronald Reagan presidential library in Simi Valley, California. Thanks for joining us.

Just what kind of person was our 40th president? What kind of politician? Will his legacy help determine who wins the White House this year?

In the next hour, we'll get insights from Mr. Reagan's family, from friends, colleagues and critics, from people who saw him change America and the world. We'll also hear from the man himself.

Ronald Reagan died on June 5th, 2004. He had retreated from public life about a decade before that, and yet nearly 20 years after he left the White House, Ronald Reagan is a factor in another presidential campaign, for both parties.

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MITT ROMNEY, (R) PRESIDENTIAL CANDIDATE: I take my inspiration from the inspiration of Ronald Reagan. Ronald Reagan who lifted up our eyes and said we're going to be a strong and prosperous and mighty people. He said we're a good people and a great nation. We're going to be a shining city on a hill.

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JOHN MCCAIN, (R) PRESIDENTIAL CANDIDATE: As president of the United States, I'd take an old veto pin that Ronald Reagan gave me and I'd veto every single pork barrel bill that comes across my desk. I'd make the authors famous and we've got to stop it and stop it now.

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MIKE HUCKABEE, (R) PRESIDENTIAL CANDIDATE: Ronald Reagan to me was the voice of clarity, clarity in his conservatism and his convictions.

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MARIO CUOMO, FORMER GOVERNOR, NEW YORK: Why are they bringing him back now? Because he's best they have, you know. That doesn't mean his policies were good. Fortunately for them most people don't know the Reagan record. They really don't. They know Reagan, but they don't know the record.

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JAMES BAKER, FORMER CHIEF OF STAFF: He is the republican president that all of our presidential candidates today would like to emulate. And I think that's understandable because he was a very successful two-term president.

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SAM DONALDSON, ABC NEWS: To look for Ronald Reagan today is the wrong proposition. You don't see the Democrats looking for Franklin Roosevelt.

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BARACK OBAMA, (D) PRESIDENTIAL CANDIDATE: I do think that, for example, the 1980 election was different. I mean, I think Ronald Reagan changed the trajectory of America in a way that, you know, Richard Nixon did not, and in a way that Bill Clinton did not. He put us on a fundamentally different path because the country was ready for it.

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RON REAGAN, RONALD REAGAN'S SON: As far as transformational leader goes, yes, I agree with him. He paid the price for that, of course, because naturally his Democratic opponents will see an opening there and try to stick it to him.

(END VIDEO CLIP)

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JOHN EDWARDS, (D) FORMER PRESIDENTIAL CANDIDATE: Senator Obama was talking about change agents in the past and he used Ronald Reagan as an example.

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OBAMA: Now let's talk about Ronald Reagan. What you just repeated here today is patent -- wait, Hillary, you just spoke for two minutes.

HILLARY CLINTON, (D) PRESIDENTIAL CANDIDATE: Barack, I did not say anything about Ronald Reagan.

OBAMA: You just spoke for two minutes.

CLINTON: You said two things. You talked about admiring Ronald Reagan and you talked about the ideas of the Republicans. I didn't talk about Ronald Reagan.

OBAMA Hillary, we just have the tape. You just said that I complimented the Republican ideas. That is not true.

(END VIDEO CLIP)

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RUDY GIULIANI, (R) FORMER PRESIDENTIAL CANDIDATE: You even hear him now entering into the Democratic debates with Senator Obama and Senator Clinton and President Clinton. The reality is even to this day we're reacting to Ronald Reagan's policies.

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OBAMA: What I said was is that Ronald Reagan was a transformative political figure because he was able to get Democrats to vote against their economic interests to form a majority to push through their agenda, an agenda that I objected to.

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CUOMO: Obama is right to regard Reagan as inspiring and a man good with poetry and one to model yourself after if you want to speak poetry. But if all you're promising is the kind of record that Reagan created, then you ought not to win.

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OBAMA: What I said was that Ronald Reagan back in 1980 was able to tap into the discontent of the American people, and he was able to get Democrats to vote Republican. They were called Reagan Democrats. You remember that?

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RONALD REAGAN, FORMER PRESIDENT OF THE UNITED STATES: I want to carry our message to every American regardless of party affiliation who is a member of this community of shared values. (END VIDEO CLIP)

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HUCKABEE: And I think, you know, sometimes we forget that while people hold Reagan up as this icon of the party and conservatism, he was an anti-establishment Republican maverick that the insiders in Washington absolutely didn't want to be president.

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KING: Does any of this attention, the name Reagan being prominent again, surprise you?

NANCY REAGAN, RONALD REAGAN'S WIFE: Well, I really didn't expect it, you know. I suppose it does in that sense. I didn't think -- now we're going into a campaign and by, gosh, they are going to talk about Ronny.

KING: He's back.

N. REAGAN: He's back.

KING: Do you think -- he would probably like that though, wouldn't he, do you think?

N. REAGAN: He would probably get a kick out of it. I think if he were sitting and listening to this now, he'd just smile.

(END VIDEO TAPE)

(BEGIN VIDEO CLIP)

R. REAGAN: I suppose you could make the case that a number of the candidates are somewhat like him politically. I mean, they want to cut taxes. They want a strong military and that sort of thing. But you have to remember that that's -- that's a 30-year-old play book they are working off of.

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GIULIANI: Probably when I was working for Ronald Reagan.

MCCAIN: I was a foot soldier in the Reagan revolution.

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R. REAGAN: I just don't see it working for them. The other problem they have is that none of these people are Ronald Reagan.

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BAKER: One of the secrets of his political success in my opinion is that everybody underestimated him. They thought he was just an actor who didn't really, you know, that he just read his lines. And that's not at all the way he was.

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ROMNEY: What makes us such a great nation is the American people. I take my inspiration from Ronald Reagan and George Herbert Walker Bush.

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MCCAIN: When I left the navy and entered public life, I enlisted as a foot soldier in the political revolution he began, and I am as proud today to be a Republican conservative as I was then.

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HUCKABEE: Ronald Reagan raised taxes when he was governor of California. He raised tax when he was president. A lot of these guys out there are criticizing me and love to talk about Ronald Reagan. And I wonder if they love Ronald Reagan for what he did both when he was governor and a president.

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KING: That republicans want to hitch their White House hopes to Ronald Reagan is no big surprise, but when he's the flashpoint for a fight among Democrats, that says something.

More perspective when "the Ronald Reagan I knew" continues.

(COMMERCIAL BREAK)

KING: Welcome back. I'm here at the Oval Office at the Reagan library.

We'll never know how Ronald Reagan would have reacted to Hillary Clinton and Barack Obama slugging it out over his legacy, but years before either one of them decided to run, we asked him if a woman or an African-American would be elected president in his lifetime.

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R. REAGAN: I don't know whether it will be in my lifetime or not, I would hope so, but I think that both things can happen. You only have to look at the progress that has been made already.

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H. CLINTON: You talked about Ronald Reagan being a transformative political leader. I did not mention his name.

OBAMA: Your husband did.

H. CLINTON: Well, I'm here. He's not.

OBAMA: Well, I can't tell who I'm running against sometimes.

H. CLINTON: Well --

(END VIDEO TAPE)

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R. REAGAN: He probably wouldn't approve of either Hillary Clinton or Barack Obama's policies, but he would be proud of America I think that a woman or a black person of either gender could end up in that position. He would think quite rightly I think that that says something good about this country.

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R. REAGAN: I will not make age an issue of this campaign. I am not going to exploit for political purposes my opponent's youth and inexperience.

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KING: How do you think he'd run now?

MICHAEL REAGAN, RONALD REAGAN'S SON: You know, as much as they talk about my father, it may be tough for him to get the nomination now because the party as you said there are so many fractures within the party.

KING: It is split.

M. REAGAN: And they so knit pick what you did as governor and knit pick this that they would try to find the Achilles' heel in Ronald Reagan.

(END VIDEO TAPE)

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HUCKABEE: He was a person who had things about which he really believed, and they weren't positions they took because they were politically correct or even popular. He took them because he really believed them.

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OBAMA: We as Democrats right now should tap into the discontent of Republicans. I want some Obama Republicans.

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ARNOLD SCHWARZENEGGER, GOVERNOR OF CALIFORNIA: People mention his name because they hope that this will add some value to them, but in fact they are not really believing exactly all the things that Ronald Reagan believed. And he was wonderful, a wonderful leader because he represented all people.

He was not a right wing nut like some of those guys out there today in the presidential debate and mentioned Ronald Reagan's name. Ronald Reagan was in the center.

(END VIDEO CLIP)

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DONALDSON: Well, there were two Reagans, the man of his policies, controversial then, controversial now and the personality, and that man was the one that I think captivated the country.

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GIULIANI: I think you have to do across-the-board spending cuts the way Ronald Reagan did, 5 percent, 10 percent per civilian agency.

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ROMNEY: This is a patriotic and great land, and Ronald Reagan reminded us of that.

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HUCKABEE: Mitt has changed his position. He's been all over the board. When he was against the Bush tax cuts I was for them. When he was against Ronald Reagan's legacy and said he wasn't a part of that Bush/Reagan thing I was a part of that Bush/Reagan thing.

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ROMNEY: Ronald Reagan would never have said let's give tuition breaks to illegals like Mike Huckabee did. Ronald Reagan would never have stood by and pushed for a budget that more than doubled during his term as president.

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SCHWARZENEGGER: But I think that in a lot of cases maybe these candidates admire him. But if you admire him, then you should be clear of what you really admire because you can't be -- it's not a grocery store where you can go and say the reason I admire Ronald Reagan is because he looked handsome. That's why I mentioned his name. No, Ronald Reagan was Ronald Reagan, and there's a whole package deal.

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CUOMO: He won big, and he won big twice. He was a winner. That's what parties want. That's what politicians want. They want a winner, no matter how you won.

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R. REAGAN: I mean, you've got Mike Huckabee who can speak to evangelicals and you got Mitt Romney who speaks to Wall Street and you got John McCain and maybe Rudy Giuliani that speak to the military folks. But they're all -- it's all animized. And my father by virtue of his charisma and his political talent and the fact he could win an election brought all these people together.

(END VIDEO CLIP)

(BEGIN VIDEO TAPE)

KING: Why do you think he's being talked about so much on the campaign on both sides?

M. REAGAN: He was such a leader. He not only led the country, but he also led the world, led the world towards freedom. And I think that's why people are talking about him. You have the Republicans who want to be like him and you have the Democrats saying, "You know something, he did a good job."

(END VIDEO TAPE)

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R. REAGAN: I told every cabinet member and every staff member that I appointed that I wanted to hear from them without any shading on all of the issues that we faced and the decisions that had to be made, I wanted their thinking on it. But I said there's one thing I don't want. I don't want to hear anyone tell me what the political ramifications are of some decision that has to be made. We will discuss it only is it good or bad for the people?

(END VIDEO CLIP)

KING: Ahead, pocketbook politics are key to the current presidential campaign. Would Reaganomics work now, and did it work back in the 1980s? "The Ronald Reagan I knew" continues after this.

(COMMERCIAL BREAK)

KING: These are scary financial times for many Americans. Things were tough in the early '80s, too. The president pushed Reaganomics, reducing government aid, social services and taxes.

The country moved from recession to recovery to economic expansion, but did boom times mean a better life for everybody? Now decades later does the idea of trickled-down economics hold water?

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R. REAGAN: The economic recovery package that I've outlined to you over the past few weeks is I deeply believe is the only answer we have left. Reducing the growth of spending, cutting marginal tax rates, providing relief from overregulation and following an uninflationary and predictable monetary policy are interwoven measures which will ensure that we have addressed each of the severe dislocations which threaten our economic future.

(END VIDEO CLIP)

(BEGIN VIDEO TAPE)

KING: What was Reaganomics, in a nutshell?

M. REAGAN: I lived it.

KING: If that's possible.

M. REAGAN: I lived it; trickle-down economics, do it on your own. That was really it. Learn to do it on your own. Learn to be your own master of your financial abilities or lack thereof.

(END VIDEO TAPE)

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R. REAGAN: These policies will make our economy stronger, and the stronger economy will balance the budget which we're committed to do by 1984.

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BAKER: But one thing Ronald Reagan showed us, showed the nation I think is that you'll never be able to reduce a fiscal imbalance simply by raising taxes because if you raise taxes in congress, they are going to spend money on something else.

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GEORGE H. BUSH, FORMER PRESIDENT OF THE UNITED STATES: People forget the highest rate, maybe not when he became president but it was up around 90 percent, and Reagan articulated, president Reagan articulated the need to get taxes down even though, Larry, he had to compromise a time or two. The Reagan revolution, you might say, in terms of hammering home the need for lower taxes.

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CUOMO: Whatever you can say about Reagan, and you can say he was charming and you can say he was a very strong speaker and you can say he was inspirational. You cannot say that he gave you a good economy.

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ROMNEY: He came in as a president at a time when America was suffering from what Jimmy Carter called a malaise. And he told us that we're a good nation, a great nation, a shining city on a hill.

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MCCAIN: When I first came to Washington as part of the Reagan revolution, we said we have to cut taxes, but we also had to restrain spending.

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ROMNEY: The first lesson of Reagan 101 was lowering taxes, helps get you out of a recession, helps build the economy.

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DONALDSON: And, of course, the theory is correct. If you lower taxes, you broaden the base, you get more revenue from a broadened base. But at some point if you lower them too much you don't get enough revenue, and the fact is in the Reagan administration and in the Bush administration we have never gotten enough revenue in order to meet the demands of the spending side so it didn't work.

It just didn't work, and to say, well, it could have worked if we cut spending. Don't come to me and say it could have worked, it didn't work, excuse me.

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R. REAGAN: If you really look at the economic record, things didn't start looking up until the mid-'90s really. I mean, we bounced back from a recession in the mid-'80s, but I don't think that was because, you know, taxes were cut for rich people.

We tried that before, and we demonstrated I think conclusively supply side economics does not work.

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BAKER: Economically his tax and spending reductions in the first term were quite significant. In the second term he was -- he accomplished tax reform, fundamental tax reform the only time in 100 years it's been accomplished.

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MARGARET THATCHER, FORMER BRITISH PRIME MINISTER: Once in Paris he was asked about what he thought about the economy and how it should come right. And he had just sat and gave a 15-minute belief in free enterprise and why it worked and low taxation and how marvelous the people were that could create the jobs. And after that person later on was in the chair and he even said, well, you just have to know that President Reagan really believes every word and it's very compelling.

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BAKER: I suppose the most major accomplishment was that he set our economy on a course of growth which was sustained over the course of the following 20-plus years. Only one or two occasions did we dip into a little slow periods. We had really uninterrupted, sustained non-inflationary growth for a long time.

(END VIDEO CLIP)

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CUOMO: Let's use his own test. He started by saying morning in America. This is the beginning of a whole new era of prosperity, and he failed to deliver. The price we paid in New York for his big tax cuts to the rich and his big military expenditures was less for education, less for the welfare problems, and I resented that on behalf of my people in New York, and so I gave that speech in 1984.

(END VIDEO CLIP)

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CUOMO: And the president is right. In many ways we are a shining city on a hill, but the hard truth is that not everyone is sharing in this city's splendor and glory.

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What hurts me is that I could give that speech today, and it would be almost as true today.

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KING: When we return, how would cold warrior Ronald Reagan deal with today's international hot spots? Insights ahead on this special edition of Larry King Live.

(COMMERCIAL BREAK)

KING: We're back at the Ronald Reagan library. The world is a dangerous place today; security is a big issue. There was plenty of international danger in the '80s, too. The Cold War continued, and the Soviet Union remained America's global rival. But Ronald Reagan came to the presidency convinced that Communism would wind up on the ash heap of history.

Not many shared his view. Even fewer would have dreamed that he'd find common ground with the leader of the evil empire.

(BEGIN VIDEO CLIP)

KING: The liking of Gorbachev, was that a real sense of affection? Did you like like him?

R. REAGAN: Yes. I have to tell you, as you know, he was the fourth. There were three leaders before him of the Soviet Union, and I didn't have much to do with them. They kept dying on me, and -- but he was totally different than any Russian leader that I had met before. And I have to say I think that there was a kind of a chemistry there that set up.

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If you seek liberalization, come here to this gate. Mr. Gorbachev, open this gate. Mr. Gorbachev, tear down this wall.

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(BEGIN VIDEO CLIP) HUCKABEE: When he said, "Mr. Gorbachev, tear down this wall." You know, the foreign policy experts just hooted at that. Thought that was the most ridiculous thing and embarrassment to have the president go out and say something like that. Who is laughing now?

(END VIDEO CLIP)

BUSH: The way in which he did it, you knew where he stood, it was very powerful, very strong, but it wasn't mean-spirited, and it wasn't trying to, you know, to stick a finger in the other leader's eyes, even though he said, "Mr. Gorbachev take down the wall." I think if you asked Mr. Gorbachev about that, he would rationalize and say, wait a minute, you can understand back then.

N. REAGAN: I mean, from the moment they first sat down with each other, they -- there was a connection. You could see it. You could feel it. He came for Ronnie's service.

KING: I know.

N. REAGAN: In Washington, and he -- he came to Blair House to see me, and he stood there at the door, and I looked up, and there he was with his arms outstretched, and I went over and he hugged me, and we just stood there.

QUESTION: Are you going to meet again, sir?

N. REAGAN: Yes.

RON REAGAN: Finally along comes Gorbachev who is a new kind of Soviet leader, who understands that his system is in a state of collapse and that he's got to do something new and different, and he found somebody on the other side in my father who wasn't a monster himself who really did want to work with the Soviet Union.

We've got to stop aiming these weapons at one another, and he was very sincere about that, and Gorbachev likewise and when they finally got together in Geneva and sat down in front that fireplace together, they realized, hey, we're just, you know, we're two human beings and we kind of want the same thing here.

N. REAGAN: It was a very cold day, and everybody thought that Ronnie had said to him why don't you and I go down to the boathouse and sit and talk, and everybody thought oh, no, no, no. Don't do that.

Well, of course, the few people said I think we should go down there and break it up, and I think it was George Schultz who said if you do that, you don't deserve to have the job that you have.

MIKHAIL GORBACHEV, FORMER SOVIET LEADER (through translator): If we had not established human rapport then we wouldn't have been able, I think, to develop real cooperation, real work together. It was hard.

RONALD REAGAN: To ignore the facts of history and the aggressive impulses ever an evil empire, to simply call the arms race a giant misunderstanding and thereby remove yourself from the struggle between right and wrong and good and evil.

BAKER: He said the Soviet Union is an evil empire. They will do anything. They will cheat, lie and steal to accomplish their ends, and all the experts around the world went tut, tut, look at that crazy cowboy who doesn't know anything about diplomacy and this, this shoot from the hip actor and so forth. Well, the president was right.

KING: Despite calling the Soviet Union an evil empire, he got away with that, didn't he?

M. REAGAN: He got away with it because it was an evil empire. He wasn't calling the people evil but everybody knew the empire was evil, and somebody had to say it.

ROMNEY: I love what he said about his strategy to win the cold war, did you ever hear that? He said it's very simple. We win, they lose.

CUOMO: You have to give Reagan credit for escalating the end of the Cold War by being tough and putting a lot of money into munitions, et cetera, et cetera, and so that probably is what most people will give him credit for.

DONALDSON: There were two dangerous points of the Cold War, the most dangerous, the Cuban missile crisis was one, but in the first Reagan administration there was another. The Soviet leaders then seeing that they might not be able to compete against this arms buildup considered a first strike, a very dangerous period, but he saw it through.

RON REAGAN: I suspect that my father, having faced an enemy that really did pose an existential threat to the country, the Soviet Union with over 20,000, you know, missiles and nuclear missiles aimed at us is a considerably more dangerous threat than somebody who is hiding in a cave in Pakistan, not that those people aren't a threat, but they are not an existential threat to the country, and I think he would have understood that, and I think he would have treated them as outlaws, as criminals which they are.

BAKER: Well, I think he would deal with them the way he dealt with the Cold War. I think the parallel to the cold war is a very good one. We turned everything, all of our strength toward winning that war. It was a total war, and I think the same thing is true today with respect to the war on terror.

RONALD REAGAN: We don't mistrust each other because we're armed. We're armed because we mistrust each other.

KING: Ahead on "The Ronald Reagan I Knew" an extraordinary answer to a simple question about a shocking episode in the life of America's 40th president. Stay with us.

(COMMERCIAL BREAK) KING: When it comes to the 2008 campaign, candidates aren't just touting Ronald Reagan's policies. Some are trying to capture his personality, too. What kind of man was he? Well, much has been written about his elusiveness, his inaccessible nature. Whether anybody really knew him is open to debate, but some felt that 1981's assassination attempt offered a glimpse into Reagan's core qualities, and many were impressed by what they saw.

I learned a lot about the former president when I asked him simply what's it like to be shot?

RONALD REAGAN: What it was like was I didn't know I was shot. I heard a noise, and we came out of the hotel and headed for the limousine, and I heard some noise, and I thought it was firecrackers.

And the next thing I knew one of the Secret Service agents behind me just seized me here by the waist and plunged me head first into the limo. I landed on the seat, and the seat divider was down and then dived in on top of me which is part of their procedure to make sure that I'm covered. Well, as it turned out later, the shot that got me caromed off the side of the limousine and hit me while I was diving into the car and it hit me back here under the arm and then it hit a rib, and that's what caused an extreme pain, and then it tumbled and turned instead of edge-wise and went tumbling down to within an inch of my heart.

UNKNOWN: Get down, get down.

RONALD REAGAN: But when I got to the emergency entrance, I got out of car and walked in, and the nurse met me and I told her I was having a little trouble breathing, and what I thought it was, and the next thing I knew then when my knees began to turn to rubber and I wound up on a gurney.

KING: Was there a period of time that you thought you'd lose him?

N. REAGAN: Oh, yes, oh, yes.

KING: It was a lot more serious than we thought it was, right?

N. REAGAN: Oh, much, oh, much.

KING: He was, how close would you say? How close, touch and go?

N. REAGAN: Yes, oh, yes. They couldn't find the bullet. When they did find it, it was a quarter of an inch from his heart.

RONALD REAGAN: A lot of those people there at the hospital thought it could very likely be the end. They said that I was very near going into a state of shock, and I had also lost more than half the blood in my body.

G. H. W. BUSH: I didn't think about the loneliest burden in the world, the job of the presidency falling on my shoulders. We didn't know enough about what was happening. I thought that a friend had been shot.

DONALDSON: Well, I was standing five feet away from John Hinckley when he shot Ronald Reagan and three other people, and that day and the subsequent days in a strange macabre way helped make the Reagan presidency, because of the way he reacted, honey, I forgot to duck. And to the doctors, I hope all of you are Republicans today endeared him to people. They said, well, what courage, what ability to overcome this. This was a true American hero.

BAKER: And he came at a time where we needed all of that in this country.

CUOMO: He was charming. He was sweet. He was not controversial. He was heroic. I mean, he's shot and he waves out window at everybody. I mean, he was a marvelous human being and an excellent role model for the rest of us who are in politics.

RONALD REAGAN: It does require, however, our best effort and our willingness to believe in ourselves and to ...

RON REAGAN: His character, you always had the sense with my father that when push came to shove, you could trust him to do the decent thing. You know, he would never be small. He would never be a bully, petty or anything like that. He would always be a big man.

RONALD REAGAN: You were young the day you took these cliffs. Some of you were hardly more than boys with the deepest joys of life before you.

BAKER: He was a man totally without guile. With Ronald Reagan what you saw is what they got.

RONALD REAGAN: As they prepared for their journey and waved good-bye and slipped to surly bonds of Earth.

SCHWARZENEGGER: He was very inspirational. He was always very optimistic, positive, upbeat. He was warm, and at the same time very tough and very affectionate. He didn't talk down to people. He talked to people.

KING: What made him so special?

DAVIS: I've never met anybody before or since who was so comfortable in their own skin. I mean, he had a serenity about him.

RON REAGAN: I think even my mother would admit that there was a -- that there was a final percentage point that even she found very difficult to get to. He had a kind of core that was very guarded.

KING: What did you learn from him?

M. REAGAN: I learned that nice guys can finish first, because he was always the consummate nice guy.

KING: Still to come, Iran-Contra and other controversies. Mistakes were made then. What does that mean now? More of "The Ronald Reagan I Knew" after this.

(COMMERCIAL BREAK)

KING: The next president will have to deal with Iran. Things may not get as dramatic as the hostage release on Reagan's first day in office, but Iran will be on the agenda, and what happened in the past can't be ignored. The Iran-Contra scandal, arms for hostages, pointed questions about what the president knew and when he knew it.

RONALD REAGAN: Eighteen months ago, as I said last Thursday, this administration began a secret initiative to the Islamic Republic of Iran.

I considered the risks of failure and the rewards of success, and I decided to proceed and the responsibility for the decision of the operation is mine and mine alone.

BAKER: Iran-Contra would have to be -- would have to be the -- when the historians write the books, they will probably pinpoint that as the biggest mistake of his presidency.

UNIDENTIFIED MALE: Do you swear to tell the truth, the whole truth and nothing but the truth?

KING: Was Iran-Contra the toughest time?

G.H.W. BUSH: I think it probably was, Larry. I mean, I think it -- I think it -- I don't ever remember it being totally down, but you could just tell it was a burden on him.

KING: And he denied there was a deal and later had to admit that there was a deal, and the deal involved Iran and selling them weapons and getting cash for the Contras.

RON REAGAN: Well, my father trusted people a lot. He trusted the people that he worked for a great deal. He assumed that they would be as honorable as he was, and that's not always the case, of course, so I think he dropped the ball around Iran-Contra.

You know, he let people run amuck, assumed they were doing the right thing, and they weren't.

RONALD REAGAN: I understand this decision is deeply controversial, and some profoundly disagree with what was done.

M. REAGAN: See, I'm one of those people who said he should never have apologized for Iran-Contra because it was ultimately genius what he did. But there are people working in Washington, DC. And you had the National Security Administration trying to do the best they could and they came up a plan and, unfortunately, they didn't run it by the president of the United States and we had Iran-Contra.

DONALDSON: I think to this day we still argue whether Ronald Reagan knew about the diversion of funds from the sale of arms to Iran to the Contras which was clearly illegal or not and I think it hurt him very much to understand that there was a pack after him, partisan though he might have thought it was, that believed he had broken the law and that he lied about it, and I think that was the lowest point of his presidency.

RONALD REAGAN: Sam?

DONALDSON: Mr. President, the polls show that a lot of American people just simply don't believe you.

RONALD REGAN: In every press conference there was an adversarial relationship. They weren't there to get just some news. They were there to trap me into some kind of boner.

No, and I'm not taking any more questions.

DONALDSON: Mr. President, Walter Mondale says you're not telling the truth.

BAKER: The press disagreed vigorously with many of his policy prescriptions. In fact, I would say with most of them, but they couldn't dislike him as a person, and he had an uncanny ability to disarm them with humor.

DONALDSON: Early on in his presidency I got up at a news conference, we were still in a recession and pulled myself up to my full pomposity when he called on me and I said Mr. President tonight you blamed this continuing recession on mistakes of the past and the Congress. Doesn't any of the blame belong to you?

Yes, he said, for many years I was a Democrat. Well, what do you do? You all have to laugh.

QUESTION: Don't you know what you did?

RONALD REAGAN: I know what I did, and I have told all of you repeatedly what I did.

DONALDSON: But I think in some sense it was a case of two hams recognizing each other and playing off each other. I was the straight man, and he got to always supply the punch line.

RONALD REAGAN: You forgive me if I say Hell no.

DONALDSON: Without a script he was at sea with the facts quite often. He depended on one-liners or his catechisms about lower taxes, but he was not quick and facile in answering questions.

QUESTION: What's the difference, sir?

RONALD REAGAN: Well, the difference is that we ...

I think their job is to be totally responsible, and I'm afraid that sometimes they let -- they have goals of their own, and they aren't as responsible as they should be.

KING: When we return, the legacy of Ronald Reagan and what it means for the 2008 election. (COMMERCIAL BREAK)

KING: A few weeks ago Mitt Romney said, "As I get older Ronald Reagan seems to get smarter." A lot of people have upgraded their assessments of the former president. One possible reason, Ronald Reagan never wavered in his vision of America and its place in the word and that ultimately may be the key to understanding his legacy and his impact on this election.

RONALD REAGAN: I've spoken of a shining city all my political life but I don't know if I ever communicated what I saw when I said it but in my mind it was a tall, proud city built on rocks stronger than oceans, wind swept and God blessed and teeming with people of all kinds living in harmony and peace.

RON REAGAN: My father was in love with America. He loved the idea of America.

Hi loved what he perceived as the reality of America. He saw it full of possibility. He thought it was a special country and a special people with a special role in the world.

CUOMO: You can learn a lot from the Reagan presidency. You can learn the political power of charm and poetry.

KING: What did he like best about being president?

N. REAGAN: He liked best being finally in a position to do things that he had cared about for a long, long time but had never been in a position to do them.

THATCHER: He had the same beliefs as I did. He had something else. He had the most marvelous voice and communication talents and then he could get everything across, not only what he wanted to do but the reason why. And also he had something else in common, he never deflected from his purpose.

GORBACHEV (through translator): We were able to get along and we were able to speak candidly to each other. My opinion of his human qualities is also very high. He was a great president. He was a wonderful man. He was an extraordinary person.

KING: Was President Reagan always to your knowledge optimistic?

PRES. GERALD FORD, FORMER PRESIDENT: That was a very outstanding characteristic of President Reagan. He always believed that things were going to be better, and he worked hard to make them better.

BAKER: A beautiful person and a really wonderful person to work for. I mean, I feel so fortunate to have had the opportunity to work for him as closely and for as long as I did.

DONALDSON: But on balance history will say he was well above the line as a president and did good things more than bad things for the country.

CUOMO: Yeah. As long as people don't go deep into the record, they are going to love him forever.

RON REAGAN: This was a major presidency. Again, all, you know, policy disagreements aside, he made a difference.

KING: How much do you miss him?

M. REAGAN: Oh, I miss him desperately. I go out to the library all the time and kind of visit with him over his gravesite. I miss him, miss him a lot.

N. REAGAN: There are people who told me that it gets much easier. Well, maybe for them but not for me. I miss him more now than I ever did.

RONALD REAGAN: My friends, we did it. We weren't just marking time. We made a difference. We made the city stronger. We made the city freer, and we left her in good hands. All in all not bad, not bad at all. And so good-bye, God bless you and God bless the United States of America.

KING: I interviewed Ronald Reagan twice for my show and had lunch with him a couple of times, too. Did I know him? Yeah, to a point. He was a good guest, a terrific storyteller. I enjoyed talking with him. Being an actor gave Reagan an edge on the political stage. He knew how to make an entrance and an exit. He knew how to hit his mark and say his lines. He seemed like a regular guy in a lot of ways. Now whether deep down he thought he was, I can't say. But many Americans looked to him and believed he is one of us. This has been "The Ronald Reagan I Knew."

I'm Larry King at the Ronald Reagan Presidential Library. Thanks for watching.

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