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CNN LARRY KING LIVE

Obama's Transition to Power/More Dish on Sarah Palin

Aired November 6, 2008 - 21:00   ET

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


JOHN KING, GUEST HOST: Tonight, President-Elect Obama names a chief of staff -- Rahm Emanuel -- and it's making some people mad.
Why is the pick producing so much heat?

And what about Caroline Kennedy, Colin Powell, the Clintons?

Will they be part of Team Obama?

Plus, T. Boone Pickens is here. Could he be America's new energy czar?

The Texas oil tycoon wants to change what powers America.

And Sarah Palin -- stunning revelations. Yes, new ones. Were she and John McCain on speaking terms at the end?

Find out right now on LARRY KING LIVE.

I'm John King in Washington tonight.

Thanks for spending some time with us.

Larry is off.

President-Elect Obama picks a chief of staff. We'll talk about that and his continuing transition to power.

More dish on Sarah Palin. Yes, more disk on Sarah Palin.

And, also, T. Boone Pickens, as you heard in the open, joins us to discuss his ideas for getting America off its energy dependence and whether he thinks President Obama will help him on that mission.

Let's get straight to our first panel.

Paul Begala joins me here in Washington. You know Paul, CNN political contributor, Democratic strategist who served with President Clinton back in the day, we would say, right, Paulie?

David Gergen is with us from Boston tonight, CNN senior political analyst. He served as White House adviser to Presidents Nixon, Ford, Reagan and Clinton -- not as yet to President-Elect Obama -- at least not as we know.

And Candy Crowley, our senior political correspondent, is out in Chicago. She, of course, logged all the miles and hours with the Obama campaign and she is now held hostage by the Obama transition in Chicago.

(LAUGHTER)

KING: Candy, let's get straight to the day's news. Rahm Emanuel -- a familiar figure to those of us in Washington, perhaps not so familiar to many Americans around the country -- will be this new president's chief of staff in 70 some days. Tell us about Rahm Emanuel and what it signals for President-Elect Obama.

CANDY CROWLEY, CNN SENIOR POLITICAL CORRESPONDENT: Well, what's really interesting here, I mean, Rahm Emanuel is famous for his hard- charging partisan sort of hyper partisanship.

He is a tough guy. Paul probably has a lot more stories about Rahm Emanuel than I do, simply because he was with the Clintons at the beginning. He served in that White House.

But what's really interesting here, in some ways, Rahm is temperamentally the polar opposite of Barack Obama -- that cool, deliberative president-elect. And here's why I'm told that people in the Obama campaign Rahm Emanuel is the perfect pick. They say listen, this is a guy, if you take the old-fashioned way of looking at what a White House chief of staff does -- not the Bush administration, which kind of changed that job.

But this is the gatekeeper. This is the guy responsible for, A, keeping people -- only shuffling in people who need to see Obama; B, making sure his agenda is put forward; C, keeping White House people in their lanes so that there's not all of this bickering and -- which there will be -- but not everybody -- but he can still sort of try to do that; and, as well, coral all those Democrats up on Capitol Hill so they are singing off the same page as the White House, so they can move forward and get something done.

And what do you need for that?

You need a hard-charging, tough as nail guys. And that's why they think Rahm is perfect for this job.

BLITZER: Paul Begala, if you tell us the stories you're not supposed to tell us, I'll give you the rest of the hour.

(LAUGHTER)

PAUL BEGALA, CNN CONTRIBUTOR: Yes, I could fill it.

KING: You know, Candy makes the point about Rahm -- and he is very partisan. I covered the Clinton White House in those days and he has an interesting vocabulary sometimes, if he's mad at you.

Republicans are saying why would you do this, if you're Mr. Bipartisan, you picked this partisan bulldog Democrat.

BEGALA: Right.

KING: He was involved in the balanced budget negotiations. He was involved in welfare reform.

BEGALA: Right.

KING: I guess my question is outward a partisan, but is his word good?

I assume that is what matters most when we get to the business of government.

BEGALA: Right. Absolutely. And I think -- I think that the folks who worked with him in both parties on the Hill would tell you that. He gives you his word, he keeps his word. If he's going to nail you, he's going to nail you. And he'll tell you straight to the face. He'll stab you in the stomach, not in the back.

But you're right, the things he worked on in the White House were the classic Clinton centrist agenda. You mentioned the balanced budget, welfare reform, crime, NAFTA, which was mostly Republicans who voted for it. Rahm was the quarterback on that.

So I would not describe him as a hyper partisan at all. He's a very loyal Democrat, but he understands, you know, there's a time to run campaigns and to run them to win, but then there's a time to govern. And you have to reach out across the aisle.

I think -- obviously, I think it's a terrific choice. I probably don't have a better friend in the world. We've talked about five or six times a say, seven days a week, for, I don't know, 15 years now. So -- gosh, more than that. So I...

KING: So you can leak to us all the time.

BEGALA: No, no, no. He doesn't -- he's not going to -- he's not going to be revealing anything to me, believe me.

(LAUGHTER)

BEGALA: But I think what it says about the president-elect is a lot of what the Biden pick said, which is, yes, he wants somebody who knows his way around, but somebody who's still -- while he's in Washington, he's still rooted in Chicago -- the same way Biden is rooted in Delaware. And, third, someone who will challenge him.

You know, when Tony Blair was the new British prime minister -- he had just come into office -- he came to visit at the White House and we were going to have a big press event. And he and Bill Clinton were friends and they were really joshing it up and they were -- and Rahm was worried they were going to be a little too loose. And he walked up to the British prime minister, put his little nubby finger in that man's face and said, "Don't screw this up." And used a much saltier word than that to the British prime minister. And Blair sure looked at -- and then Clinton laughed. And that's Rahm. He'll keep you in order.

KING: So, David, what does it tell you?

You've worked in many White Houses and you know what the job of the chief of staff.

What does the -- what is the job, in your mind, and what does this tell you about President-Elect Obama?

DAVID GERGEN, CNN SENIOR POLITICAL ANALYST, FORMER PRESIDENTIAL ADVISER: Well, let's go back to Paul's word. I had the experience of working with Rahm for about a year-and-a-half. And I think Paul described him well.

The chief of staff at the White House is the quarterback for the team on the field. And he has -- I think Rahm will need a chief operating officer to, you know, make things run on time and all the rest of it. But he has to look out for the president's larger interests. He has to scope out what the president's policy goals are, understand that and also then try to translate the policies into political action and keep the whole administration running.

He is the president's ambassador, if you will, not only within the White House, but often to the cabinet.

And I think, in this case, he brings a toughness we've all talked about, we all know about, that suggests that with Barack Obama, we're going to have a velvet glove, but there is going to be a lot of steel in it -- a steel fist in it, you know, on a regular basis.

And Barack Obama will often operate as sort of a transcendent, healing kind of figure. But everyone who works for the White House, especially on Capitol Hill, will know, you know, there is a club in the closet. And Rahm knows how to take it out.

So I think it's an extremely interesting choice. I think -- there's a couple of other things that I think are interesting about this. His close relationship with David Axelrod.

KING: Right.

GERGEN: Who was the chief strategist for the campaign and who's coming into the White House as a senior adviser. And it's almost like a Karl Rove kind of position.

They're such good friends that when, as you know, at a Jewish wedding, a long tradition is to have a ketubah, where the bride and the groom each sign and then two of their closest friends sign as witnesses. David Axelrod signed the ketubah at Rahm Emanuel's wedding. That shows how -- I think demonstrates their closeness.

The other thing I would add -- and Paul could comment on this. Rahm Emanuel's dream has been to be speaker of the House. Everyone has known that.

KING: Right.

GERGEN: And he was making lots of progress on that. In fact, in many ways, he was a chief architect of the big, big Democratic victories in 2006 at the House level. Nancy Pelosi was going to serve out, but after she left, there was a good chance Rahm would do that. He had to make a decision about whether he was going to pursue that or come in and work for Barack Obama. And, in many ways, he's made a sacrifice. He's given up his personal dream.

KING: We'll talk a bit about that when we come back.

We've got to work in a quick break here.

We'll talk a bit about that, Rahm Emanuel, more on the transition and more on the name game of picking an Obama administration.

Stay with us.

You're watching LARRY KING LIVE.

(COMMERCIAL BREAK)

KING: Candy and David Gergen will be back with us in just a minute.

But first, a little name game with our friend Paul Begala here.

Barack Obama has to fill an administration now. He has a chief of staff. The cabinet is the next big job.

Paul, let's go through some of the names.

Colin Powell, a Republican, served in the Reagan administration, served in the Bush administration, endorsed Barack Obama. That probably didn't hurt his chances. You hear about him as a possible education secretary.

Good?

BEGALA: Right. Yes. It would be wonderful. He's also run America's Promise, which is a non-profit that cares about kids at risk. He knows a lot about this. And he's an inspirational leader.

KING: John Kerry, four years ago was the Democratic nominee for president, has been floated as a possible secretary of State.

Does that makes sense, a senator in that job?

BEGALA: Well, a senior member of the Senate Foreign Relations Committee, on which sat Senator Barack Obama. They bonded there. Kerry went way out there in support of Senator Obama in the campaign and so maybe he's owed a little something. But he knows more about foreign policy than about anybody in the Democratic Party.

KING: He may be owed a little something because he gave Barack Obama a speech at a convention four years ago that sort of worked out.

BEGALA: That's a pretty good point. Yes. He gave him the speech that gave him his national stage.

KING: Robert Kennedy, Jr. -- one of the New York tabloids had the headline today "Obamalot," thinking that they're going to bring the Kennedys back in.

Robert Kennedy, Jr. , where might he fit in?

BEGALA: EPA, Environmental Protection Administration. He is the toughest, smartest, I think most charismatic, environmental crusader in this country, well, with all respect to Al Gore, who has a lot of charisma, too. Bobby Kennedy would be an extraordinary pick because he's an experienced, proven litigator fighting polluters.

KING: He's kept a lower profile than many of his sisters, brothers, cousins.

BEGALA: He has. And he supported Hillary Clinton in the primaries. Some of his cousins supported Barack Obama. But that would also reach out to the Clinton wing of the Democratic Party, as well.

But he's not just a Clinton guy, he's a Kennedy and a powerhouse, at that.

KING: Another Kennedy -- and you hear this -- is the potential United Nations ambassador, Caroline Kennedy.

BEGALA: Yes. She's a remarkable person -- not as given to the public limelight as maybe some other members of her family, and yet acted with such poise in the campaign. Another place you might see her -- and I -- this is not inside gossip, but my own view -- the Court of St. James, our embassy in London, where her grandfather, Joseph P. Kennedy, was once ambassador. So she could serve America in a lot of different roles.

KING: I'm not getting that gig.

BEGALA: You're not getting it.

(LAUGHTER)

KING: Oh, well.

BEGALA: You can go to Ireland.

KING: No. Some other (INAUDIBLE).

(LAUGHTER)

KING: Let's deal with the hard one, Bill and Hillary Clinton.

Do they have an official role in any Obama administration?

BEGALA: No. And I don't think they're interested in one at all. I mean, you know, Hillary has the best job she could hope for except the presidency, which is senator from New York. She's going to be central to implementing the agenda that Senator Obama campaigned on -- President-Elect Obama now. And Bill Clinton the same thing. He has a foundation that he runs. He has always been -- he has always said yes to the current president, George W. Bush, when asked to do anything. I'm sure he would do anything Senator Obama asks, but nothing formal. KING: Last but not least, a guy named John McCain. He's the senior senator from Arizona. Some have kicked him around. If you want to reach out, Barack Obama, you want to prove you're serious about doing business with Republicans, put your opponent as defense secretary.

BEGALA: That secretary is tough, though, because look, let's face it, it wasn't a very well-managed campaign. And that's the one executive experience that he's had lately and it didn't go very well for him.

He could speak for America. He could be an ambassador in places. He's a heroic America -- American. But it's pretty tough to see him at the Pentagon.

KING: You were pretty good at the lightning round.

Paul Begala on the name game with us.

We'll be back in just a minute.

More from David Gergen and Candy Crowley on President-Elect Obama's big decision and his first news conference since the election, coming up tomorrow.

Stay with us.

(COMMERCIAL BREAK)

KING: We're back with Candy Crowley in Chicago.

David Gergen is in Boston.

Paul Begala with me here in Washington -- Candy, we're going to hear from the president-elect tomorrow. We always want to hear from the winner after an election. But this is an incredibly difficult and delicate time for him.

We have a president. His name is George W. Bush. But we also have a country in the middle of a financial meltdown. Still another tough day on Wall Street.

How does he handle this challenge?

CROWLEY: Well, what's really interesting is they're so aware of that. I talked to sources inside the Obama campaign today who said listen, we have one president at a time and we want to honor that. So they're -- they really know that they can't walk across a line -- whatever line there is that they see.

However, in addition to his news conference, Obama is having a meeting with his economic advisers that the cameras will be allowed to come in and spray, as we call it -- take pictures -- at the top of it. And there's a very clear message here -- the economy, the economy, the economy. Here's my first meeting. Here's what I'm doing. I wouldn't be totally surprised if we got a Treasury secretary or some top economic adviser tomorrow. I -- you know, I say that just because I know that it's very important for the president-elect and his team to put forward a -- OK, here are the guys that I'm going to surround myself with. I told you I was going to help fix the economy and here are those signals.

So I wouldn't be surprised if we got that. But nonetheless, that picture tells you a lot.

The press conference, as you know, is up to reporters and asking questions. But I can tell you that Obama is very aware that there's a line there that he doesn't want to cross, looking as though he's already the president, and, at the same time, reassuring people that the incoming guy still remembers how he got there.

KING: And David, how do you handle that challenge?

He just won this overwhelming victory, brings all these new voters into the process, has this excitement in the African-American community in higher turnout.

Does the balloon almost deflate now, because they have to wait 70 days before they get their new president?

GERGEN: Not at all. And, if anything, I think the anticipation is going to grow, because we're going to have this very, very lame duck President Bush in office. And the likelihood is the economy is going to get worse in the next two or three months, not better, and that there's going to be this longing for a new team on the field.

You know, I think that -- we saw this kind of anticipation grow up long before any of us were alive in the closing months of the Hoover administration, as people waited for Franklin Roosevelt. And the anticipation rose during that time.

What has been interesting -- and a couple of things about this. On one -- on Obama's immediate plans for the economy, it appears that Nancy Pelosi now, on the stimulus package, wants to divide it up and to put -- have a downpayment in this new -- in the rump session of Congress, so when they come back here in November. And to have a like $60 billion or $100 billion downpayment on the stimulus, but not work out a full stimulus package. Wait for the president -- President Obama to come in in January to pass a major one.

President-Elect Obama has made it clear he's not going to go to this meeting of industrialized nations or the G20 nation -- summit meeting that Bush has called. He may have a representative there. He may meet with some people.

He's also, I think, turning down this invitation from Secretary Paulson to send some people and put them in the Treasury Department. One person very close to Obama told me today that he saw that as a trap, that Paulson was trying to invite them in and they didn't want to do that. I -- my sense and what I'm being told is there may -- he is not yet ready to be -- name a Treasury secretary. Maybe he will tomorrow, but he may need a little more time to figure out exactly who that's going to be. He has three potential ones in that room tomorrow.

KING: So, Paul, as you watch this play out, it's not often you come on national television and say a kind word about George W. Bush.

BEGALA: Right.

KING: So I'm going to give you a chance.

(LAUGHTER)

KING: In his words and his deeds so far, is this president, in your mind, handling the transition right, both in his tone and his actions?

BEGALA: I think so. Yes. I don't know that I would have scheduled this G20 economic summit with all the global leaders here, because it puts a lot of pressure on the president-elect.

Now, he scheduled that before he knew who was going to win the election...

KING: Right.

BEGALA: So I don't -- I don't think it's...

KING: And he's got to do his job.

BEGALA: He's got to do his job. He's got to bring them together. So, yes, I think he is. And I've talked to people involved in the transition. And they say that the current Bush administration is doing a very good job of being helpful and offering help.

But, I think David is right. The Obama, once again, impresses me with how -- not campaigning anymore, the Obama transition -- with how nimble they are. In the campaign, you have to pounce on every comment, on every news development and be ready to give a speech, make an ad, attack.

Now, they've dialed back. They're not commenting and they're not going to be attacking George W. Bush again, right?

KING: Right.

BEGALA: No more attacks, no more -- no more running commentary on the state of the nation, right?

Very disciplined and very reticent. Senator Obama has read Jon Alter's book. Jonathan Alter of "Newsweek" wrote a wonderful book called "The Defining Moment" about that transition that David referred to, from Hoover to FDR. And he himself, Senator Obama, has been quoting from that book -- and at least the title. He says this is another defining moment. And so I think it's important that he's been a student of history in this.

KING: All right. Paul Begala, Candy Crowley and David Gergen, thank you.

We're going to take a quick break.

When we come back, the McCain-Palin tension. Sarah Palin is back in Alaska, but not out of the headlines.

Stay with us.

(COMMERCIAL BREAK)

KING: Welcome back to our discussion.

And remember, if you want to join online, go to CNN.com/larryking and participate on the blog. We'll talk back to a bit about that a little later. Give us some advice. We'll be happy to take it here.

We want to move our conversation on now to the tensions between John McCain and his running mate, Sarah Palin.

Joining me here in Washington, Evan Thomas, the "Newsweek" editor-at-large. A fabulous issue of "Newsweek" about the election just over. You want to pick it up if you don't have it already.

Andy Holmes, CNN contributor and conservative strategist. I won't call you a Republican strategist, because you'll tell me you're an Independent. Thank you for being here.

Michelle Laxalt is a Republican consultant somewhat critical of Sarah Palin during the campaign.

And Dana Bash, our Congressional correspondent, who spent all the months and hours on the McCain campaign.

Let me start with you, Dana, because you've been reporting on this. Even more today about Sarah Palin standing behind John McCain in Phoenix and she didn't want to be silenced.

DANA BASH, CNN CONGRESSIONAL CORRESPONDENT: She actually had two speeches prepared -- one if they won and one if they lost. And this is something that she had worked on with her speechwriter pretty intensively. And she came certainly prepared and expecting to speak. She apparently had just a short intro prepared, saying nice things about John McCain and nice things about Barack Obama.

But when she got there, she was told that that was not going to happen, she was not going to speak. There were various reasons that was given for that, but I think primarily it's this lingering tension that is bubbling big time now over the surface.

KING: So, Evan, in the "Newsweek" issue, you guys go into the $150,000 shopping spree and so much more. Why?

Why, after a campaign, are they so eager -- they were on the same team just a few days ago, weren't they?

EVAN THOMAS, EDITOR-AT-LARGE, "NEWSWEEK": They're just mad.

(LAUGHTER)

THOMAS: That stuff we got at the very end, election night.

KING: Right. Right.

THOMAS: They were just fed up with her and they unloaded on her. And, you know, they say that she -- you know, she did this whole thing of, oh, I gave a third of it back and I'm back to the consignment shop. Then after she gave that speech, she was still having stuff delivered to her and paying for it by having low level aides put it on their credit card and that she -- and they gave us a really nasty quote about her being the Wasilla hillbillies looting Neiman and Marcus coast to coast. I mean it was really a rough -- a rough line.

KING: Amy, you've lived through the world of Congressional offices and campaigns. Obviously, at the end, most of the McCain campaign -- and there's a side that is loyal to her -- but most of them seem to be trying to make sure she does not have a future.

AMY HOLMES, CNN POLITICAL CONTRIBUTOR: Well, you know, I think it is as vicious and unfortunate as it is inevitable. And I remember back in 2004, all of the recriminations, the backsliding and the stabbing with the Kerry team. If you remember, that Teresa Heinz was unmanageable and she would blow off events that she was supposed to go to, the kids were brats, they wouldn't go down into the Grand Canyon.

So I think this is what you have with...

(LAUGHTER)

HOLMES: Yes, you remember all that.

MICHELE LAXALT, REPUBLICAN ANALYST/CONSULTANT: Leave the kids alone.

HOLMES: ...what you have with...

LAXALT: Leave the kids alone.

HOLMES: Well, "Newsweek" didn't. They reported it.

KING: (INAUDIBLE).

HOLMES: They knew...

KING: It's all your fault.

(LAUGHTER) (CROSSTALK)

LAXALT: They had a slip.

HOLMES: Sure. But I think political scientists, of course, will be looking at The Palin Effect for many months to come.

KING: Right.

HOLMES: I think it's important to remember that John McCain did better than Bob Dole and George I, facing a much more steep, difficult climb to get to the -- to get to the White House. He did well.

KING: So why not agree to disagree, Michele, and part ways and then leave her future up to her?

Why decide to do this dump?

LAXALT: I think they should go ahead and let her -- leave her to her own devices. I think that she has been more than willing to talk to everybody and anybody since she landed there in Alaska. I saw none of her comments, including a definition of what her "rogueness" was all about. And she said my rogueness that they were rumoring about was all about my trying to sneak away and get on the phone and call you reporters, guys, so that we could talk.

KING: Right.

LAXALT: So I think that she'll take care of herself.

KING: We like that kind of rogue, when they get on the phone and talk to us.

LAXALT: Exactly.

KING: Don't go rogue and leave us.

Stay with us.

We're going to work in a quick break.

We'll be right back.

(COMMERCIAL BREAK)

KING: Remember, you can join our conversation at cnn.com/larryking. Jump on the blog.

And David Theall is with us now to tell us what you're interested in tonight -- hi, David.

DAVID THEALL, LARRY KING LIVE PRODUCER: John, how are you doing tonight?

Whether you support her or don't support her, whether people like her or don't like her, one thing is for sure -- mention Governor Sarah Palin and you'll get people talking. And that's what they were doing today on Larry's blog.

Our question of the day was, "Is Sarah Palin being unfairly blamed for the problems of John McCain's failed presidential campaign?"

Here's some of the comments that we have heard.

Estelle says: "The blame is not unfair. She, Palin, is totally unfit for the job and it was an insult to women to expect them to believe that she was qualified."

Chris, on the other hand, says: "It's hard to blame Palin because she was doing better than was Senator McCain. In fact, she was more interesting to watch."

Chris also had this to say: "John McCain failed Sarah Palin. For this reason," says he, "bringing someone with such enormous potential for the future into the 2008 campaign and damaging her image."

George says: "It's also unfair to blame Sarah Palin, disagree with her or not, she energized the base, where John McCain couldn't." He says he's an Obama supporter and he does not think that the blame lies with Governor Palin.

And Charles says: "John McCain lost this one fair and square. That's how we do it in the US of A."

And, John, he also had this to say, which we found very interesting: "Sarah Palin and President-Elect Obama are both to be commended on who and what they are."

We will continue this conversation throughout the evening on CNN.com/larryking. Look for the live blogs. Look at -- come on in.

This conversation, by the way, is happening under our question of the day.

KING: David, thank you very much. Keep talking on that blog, everybody. Let's come back to that point. Are the aides trashing Sarah Palin? They are. They're saying she was a rogue; she was a diva, the shopping spree stuff. But they're also saying she was not prepared to be vice president, therefore president. Are they as mad at their candidate, John McCain, for picking her, as they are at her.

BASH: That's an excellent question. Not just the candidate, but obviously the candidate was guided by some senior aides, who thought that it was a really good idea to pick Sarah Palin. It's a question that is hard to get answered. I know that's probably a big surprise. I think probably the most telling moment was on election day, when Steve Schmidt, who was one of McCain's top advisers, who was highly involved in picking Palin, was asked twice by reporters on McCain's plane, do you think it was a good idea to pick Palin, and he wouldn't answer the question. He just said, we'll look at that later.

KING: Well, we're looking at it. Evan, as the Republican party looks forward, if you look at voter ID in the exit polls, the Republican party is getting smaller. That's one of the reasons Barack Obama is the next president of the United States. Is she someone who has a niche within that 32, 33 percent or does she have a lot of rehabilitation to do? She's got a lot of time, but a lot of work too.

THOMAS: She definitely has this core, angry populous vote. One thing the Republicans still have is this anger at the elites, the anger at the coasts. But they're not going to get to 51 percent with that. It's a strong core, but it's not a formula for ever becoming a majority party.

KING: Is it easier to point a finger at her than to say, this party has really big problems?

HOLMES: Certainly. It's much easier to scapegoat Sarah Palin than to look into the soul of the Republican party and figure out what we need to do. But John, do we really believe that people voted for Barack Obama because Sarah Palin went shopping? At the end of the day, when you are looking at why did John McCain win -- sorry, lose, and why did Barack Obama win, I think to point at Sarah Palin is to diminish Barack Obama.

Here's what I know from the campaign. Sarah Palin was polarizing. In the suburbs around Philadelphia, women in particular reacted very strongly to her. But was John McCain going to win Pennsylvania any way? George Bush lost Pennsylvania both in 2004 and 2000. So I think we need to look at the bigger picture here.

KING: Michelle, if the bigger picture is the Republican needs to get back to addition, not subtraction, and find ways to be more appealing in those suburbs, how does it do that without alienating the base, which says, if you're moderate on the social issues, if you start talking nice to moderate, pro-choice women in the suburbs, you're going to anger your right flank, which you need.

LAXALT: Well, you put your finger on what I believe the problem is with the Republican party. And that is that the Republican party, who got our butts kicked on Tuesday, absolutely no doubt about it -- it was a blowout. This was not a close race. It was a referendum on what the Republican party has become. And the Republican party has moved away from the larger tent.

The Republican party has moved away from the party of fiscal responsibility, national defense, and keeping the government off our backs. And it has moved toward a party, unfortunately, in my view, who says, we don't want the government in our wallet, but we would like to be the government that tells you how to live your personal life and to make judgments upon you and perhaps have the government in your bedroom.

I think the Republican party needs to return to basics. Leave the social morality and those pretensions and judgments up to people themselves, or we will continually diminish into a party that used to be.

HOLMES: And there's a lot that I agree with there, but when you look at the marriage ballot initiatives, that's going to really complicate the picture, in terms of how conservatives talk about it.

KING: Anti-gay marriage ballot initiatives passing in several states.

We need to leave it here, unfortunately, for time. But listening up in Anchorage, Alaska has been a close friend a former aid of Alaska Governor Sarah Palin. On the other side of the break, we'll get her perspective. Stay with us.

(COMMERCIAL BREAK)

KING: In Anchorage, Alaska, now joining us, Meg Stapleton. She was the spokeswoman for the McCain/Palin campaign, and also served as an aide to the governor of Alaska. Meg, the governor is back in Alaska. You're back in Alaska. She must listen to all of this and be quite furious.

MEG STAPLETON, FMR. MCCAIN/PALIN SPOKESWOMAN: I would say that she's quite disheartened, John, if anything. She certainly enjoyed being John McCain's running mate. They had an incredible relationship. You saw them out on the trail more than any other presidential or vice presidential combination in history. They really worked well together, and she felt honored to be next to his side and truly believed and continues to believe he's a great American hero.

To see some of this, to her, is not reflective of the great time they had together and the great ticket they felt they were to bring to the White House.

KING: Some of this includes McCain aides anonymously saying that she didn't know Africa was a continent, not a country. True?

STAPLETON: That is very upsetting. And I think that's probably the most upsetting to those of us around her, those of us who know her experience, those of us who know that she's bringing a natural gas pipeline to this state. She certainly does know that Africa is a continent. Those who are creating these anonymous allegations perhaps walked in and out of meetings, perhaps are taking things out of context, perhaps are spinning things and/or completely making things up at this point.

But, John, if you speak to those around her, her foreign policy advisers and those who worked and prepped her, they felt and continue to say that her questions were serious, that her questions were well- thought out, very detailed, and went far beyond what continent exists or who is within NAFTA. That is just absolutely so far out of the realm, it almost doesn't deserve responding to, except that it has taken on and gone to such a degree that we find ourselves out here saying that, of course she knows that Africa is a continent. And it's absolutely a false allegation that exists out there.

KING: Her optimism can be contagious. Dana Bash interviewed her in Phoenix before she left. She sounded very upbeat. If you're where you are, you can get a Palin 2012 t-shirt on sale. I'm counting on you to send me one for my collection. What does she do next? I know she is back to work on being the governor. Obviously, a lot of friends are going to say, hey, you need to form a national political action committee. You're going to have to travel when you can, get away from being governor, if you want to at least keep open the possibility of running four years down the road. How does she handle that, Meg?

STAPLETON: John, right now, she is entirely focused on the state of Alaska. She is so excited to be back home again and be with Alaskans, and really focus on this state. I think she learned a lot on the campaign trail. She is fresh with new ideas, as well as making sure to implement her old ideas. Getting that gas line is one of the number one priorities for her. That remains to be true, again, not only for Alaskans, but for energy independence in the United States. She looks forward to working with President Elect Obama on that.

Within Alaska, we need a bullet line for gas for Alaska's homes and businesses. And we've got a budget that continues to need tightening. We have oil prices falling, and she's aware of all of these things and aware of the demands. Alaskans are hurting too in this economy. She still has a lot of work to do and she is embracing the challenges as Alaska's governor. She is thrilled to be back here. She loves the state of Alaska, loves to be home again.

She is not focused on 2012. She's focused right now -- as she said, I think, 2012, if there's any focus, it's on Trig entering Kindergarten. She's truly focused on this state and making sure that Alaskans are taken good care of.

KING: Meg Stapleton, we need to leave it there tonight. If she does lift her eyes past kindergarten, and maybe focus, we hope you stay friends with us and come back and say hello as we move on. Meg, thanks very much.

STAPLETON: Thanks, John.

KING: We're going to take a quick break. When we come back, the leader of the Democratic Party, Democratic National Committee Howard Dean tells us what is next for the Democrat and whether he has a role in the new administration. Stay with us.

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KING: We're back now with LARRY KING LIVE. Remember, CNN.com/LarryKing, get on our blog. Joining us now, the chairman of the Democratic National Committee, and one happy man, Governor Howard Dean, the former governor of Vermont. Pretty good year, governor. What did you do wrong?

HOWARD DEAN, CHAIRMAN, DEMOCRATIC LEADERSHIP COUNCIL: What did we do wrong? No, we had a great candidate who managed to appeal to a broad cross section of Americans. There's a lot of good news here, but the best for me is that young Americans, under 30, for the first time out-voted over 65s, and they voted 63 percent Democratic, which is really extraordinary.

KING: That is extraordinary, and it gives you a great opportunity, if you can keep them, going into the future. Let's talk about President Elect Obama's first pick, Rahm Emanuel, a man you know from his days in the Clinton White House. You know him from his days in the Congress. I believe he was one of those guys, when he was head of the Congressional committee, who was critical of your 50-state strategy. What does Rahm Emanuel bring to the White House?

DEAN: Smartness, toughness, and, most importantly, smart knowledge of both the Legislative branch and the bureaucracy. I have long thought that whoever we elected to the presidency, even before I knew it was Senator Obama, needed somebody from inside Washington to be the chief of staff. It's a frequent problem that we have when we set up White Houses; you come from a campaign, in the Democratic side, and you get a group of loyalists in who may not know the city.

The political culture in Washington is different than in any place else in America. And I think Rahm brings us, A, somebody who can get stuff done, but mostly a really thorough knowledge of the other groups of folks in Washington that you've got to know something about in order to get your agenda through.

KING: You're the chairman. You're a former governor. You're also a doctor. Is there a role in an Obama administration, perhaps at the Department of Health and Human Services, for Dr. Howard Dean?

DEAN: I would say that would be entirely up to President Obama. There's a constituency of one for these jobs. He'll make his decision when he gets around to it. Whenever that is, that it is.

KING: No contact with him yet?

DEAN: I'm not going to say anything about anything to do with transition. Generally, those who talk don't know, and those who know don't talk. And I don't know what he's going to do, but I ain't talking.

KING: We're short on time. I want to come back to where we began, those young voters. Ronald Reagan got young voters in the 1980. The Republicans had a coalition that kept the White House in their hands for almost all of a quarter century. What does President Obama need to do early on to keep those young people loyal?

DEAN: The biggest thing he needs to do is what he said he was going to do last Tuesday night, which is bring Americans together. The core message of the under 35 generation, which now essentially has their first president, is please stop fighting about the things that you've been fighting about and can't agree on for 30 years, and get something done about the things that you do agree on. Climate change is a big one. The economy is an obvious one.

But the main message is bring people together. Bring Americans together again. End the 30 years of divisive, hate-based politics and treat us all the same. I think President Obama wants to be the president of all Americans, not just the half that agreed with him on Tuesday night.

KING: Wish we had more time. Governor, Mr. Chairman, we'll have you back another time. Especially, if you're going to be Mr. Secretary. Give us a buzz. Howard Dean, thanks for joining us.

DEAN: You'll be the first to know, John.

KING: I appreciate that. Governor, take care.

When we come back, one of those issues Governor Dean was just talking about, that Congress is fighting about, all the politicians are fighting about it, energy. T. Boone Pickens in the chair right here on LARRY KING LIVE to share his plan and his thoughts on President-Elect Obama. Stay with us.

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KING: If you did follow the presidential campaign and all those ads, about the only guy competing with them on television is right here with me now. T. Boone Pickens is the founder and chairman of BP Capital Management, a legendary Texas oil man. You can find this in your bookstores right now, "The First Billion Is The Hardest," T. Boone Pickens.

If you remember those ads on TV, they were urging Americans to get off its addiction to foreign oil. T. Boone Pickens, thanks for being with us. Let's start with your thoughts -- you met the man -- President Elect Obama, your thoughts on him in the contest of do you think he will do what you think is necessary when it comes to energy independence.

T. BOONE PICKENS, BP CAPITAL MANAGEMENT: You know, I had an hour-plus visit with him on energy. Very good meeting. And I think he understands what has to be done. What we have to do is to get off of foreign oil, not totally. That's going to be extremely hard to do. But I think you can reduce it very comfortably 30 percent within ten years.

Now, remember, John, we've gone 40 years with no energy plan. Zero energy plan.

KING: In the context of this, and I don't think anybody disputes the crisis and the need to act urgently. But now versus before this financial meltdown, in terms of government resources to do what you think needs to be done, does that hurt your effort and hurt the cause that the government essentially has a lot less money and a lot less optimism that more money will be coming in in the middle of all of this?

PICKENS: Well, with the price coming down -- when I opened on July 8th, the price of gasoline was 4.11. That's when I launched. And now we're half that. Does it hurt? You know, really, the cheaper the gas price goes, the better it helps the country. No question. But we're importing exactly the same amount of oil today as we did back on July 8th.

So the security issue is still -- has not changed a bit. The economic issue has. It's cheaper now to import. But we cannot continue to do this. KING: Gas is cheaper, but the government doesn't have much more money. When they do talk about spending more money, now they're talking about spending it on economic stimulus. Is that short-sided in your view? Should we get to the bigger long-term issues like energy infrastructure?

PICKENS: You've got to fix the energy issue, because just look at the 40 years that have passed. No energy plan, zero. If we go forward for ten years with no energy plan, we got the picture in the last year. Go back five years and the OPEC nation's revenues were 250 billion. This year, 2008, will be 1.250 trillion.

Now go forward ten years and say we have no energy plan; we will be importing at that point 75 percent of our oil, which is a huge security problem for America. And we will be paying 300 dollars a barrel for the oil.

KING: You say President-Elect Obama gets the urgency. Does he get the details? This is a very complicated issue. Do you think he has a grasp of it? Or people close and around him that do?

PICKENS: Well, it's not that complicated. Because we only have one resource in America that can reduce, actually reduce foreign oil. Now, what is it? Natural gas. There are only three fuels that will move an 18-wheeler: diesel, gasoline, and natural gas. We don't have diesel and gasoline, but we do have natural gas.

Now, what a lot of people want to do is get to the battery as quick as they can or the fuel cell. Battery won't move an 18-wheeler. So I want to see all of the trucks, all new trucks, not retro-fit trucks, but all new trucks go to natural gas.

KING: You talk about the energy part of the debate. If you pick up a newspaper in recent days, Vice President Gore has this big newspaper campaign. He's going to start a new effort on the climate change. He's talking more about the climate change. You're talking about the dependence. Are there places where you guys are at odds? Or is this something where you are in sync? He talks about climate change, and he believes a green economic revolution, creating all of these new jobs. Are you at odds with that at all, or is this actually a marriage?

PICKENS: If you do the wind corridor, that I'm for, which is from Texas to Canada, that, the first year, will create 168,000 jobs. In ten years, it'll be three and a half million jobs. So Al and I see a lot of things on the same level. He wants to cut out the Carbon footprint. I say the natural gas will take you to -- it's the bridge to what Al wants to do.

So when Al and I have lunch and talk, we agree on a lot of things.

KING: More of our discussion in just a minute. T. Boone Pickens with us, discussing the energy issue. And we're also going to talk a bit about the economy when we come back. Stay with LARRY KING LIVE.

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KING: Back on LARRY KING LIVE here with T. Boone Pickens. I asked you before the break about your impressions of President-Elect Obama whom you've met. You've also spent some time with Rahm Emanuel at town hall. I think it was back in October. You know him well. He's about to be the White House chief of staff. Man you trust to handle the issues you care most about?

PICKENS: Well, I knew Rahm back in the Clinton administration years, so we go back a long way. A very smart guy and he understands. He introduced me at the town hall in Chicago. And then we had a two- hour lunch afterwards. But we had talked about this subject quite a bit before. So he understands the energy issue and that's good.

KING: Let me ask you to lift your eyes up a bit from the specifics of the energy issue to where we are as a country. You've been involved in the economy for a long time. Some good times and some bad times.

PICKENS: Eighty years long.

KING: Most Americans are having some pretty bad times right now. When you look out at this financial mess -- the market I think has lost 10 percent in the last two days -- where are we? And where are we going?

PICKENS: I don't know where bottom is. You know, you're feeling for it. But I don't know where it is, for sure. Sure, I've been through several, '70s, '80s, '90s, all of them had recessions. I wonder how long this is going -- this is much different. This is all being engineered by Bernanke and Paulson. And I'm ready to go with them. The guys know a hell of a lot more about it than I do.

But I don't know, but we will come out of it.

KING: What's your advice to a new president at a time like this? You mentioned you have confidence enough, it sounds like, in Paulson and Bernanke. What does a new president do at a time when you ran on a pretty ambitious agenda? You're from left of center party that has some ideas that involve spending money, and yet you have an economy that's in a rut, if not the tank.

PICKENS: I don't know. I'd like to have had the job that President Obama has now. Not at my age, but at a time --

KING: You want to help? You think you can have a role in an Obama administration officially?

PICKENS: You know, sure, I mean I would do anything for this country. But enough said on that point. He is really coming into a very, very tough situation. It's not easy.

KING: What is the one thing you would do if you were him?

PICKENS: If I were him? KING: Yes, to inspire confidence. Two thirds of the economy is just getting people out to spend, but you can't spend if you don't know if your job is going to be there.

PICKENS: I like the green economy. I think you can turn the country -- Ted Turner said that two or three years ago. He said, when we have the green economy, we will have the best economy we ever had in America. I think there are parts of that that are right. I think you can adjust it. But we've got a lot to look forward to.

KING: Optimistic voice from T. Boone Pickens. The book is "The First Billion's The Hardest." It is for me so far.

PICKENS: Well, I was 70 before I made it, John. So I plowed for a long time.

KING: All right, that's all the time we have tonight on LARRY KING LIVE. Tune in tomorrow night. Larry will be back in the chair here. At the top of the hour "ANDERSON COOPER 360." Anderson's standing by in New York. Anderson, take it away.