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ANDERSON COOPER 360 DEGREES

Interview With President Barack Obama; Could Michael Phelps Face Drug Charges?

Aired February 3, 2009 - 22:00   ET

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


ANDERSON COOPER, CNN ANCHOR: Tonight: President Obama, two weeks into his term, his economic rescue bill under fire, the economy bleeding more jobs, two appointees today stepping down for tax troubles, including Tom Daschle, his choice to reform health care -- all of it, and more, part of our conversation late this afternoon in the Oval Office.

You will hear the entire interview tonight, what keeps the president up at night, the latest on the stimulus, even the search for a dog, and whether or not the president still smokes.

But we begin with something you almost never hear from a president, any president: an admission that he screwed up.

(BEGIN VIDEOTAPE)

COOPER: Thanks very much for seeing us.

Explain what happened today, Tom Daschle. You've let one of the most important domestic issues, which is health care, get caught up in what looks to many Americans like politics as usual.

BARACK OBAMA, PRESIDENT OF THE UNITED STATES: Well, I think what happened was, was that Tom made an assessment that, having made a mistake on his taxes, that he took responsibility for, and indicated was a mistake, made the assessment that he was going to be too much of a distraction in trying to lead what is going to be a very heavy lift, trying to deliver health care.

And...

COOPER: Do you feel you messed up in letting it get this far?

B. OBAMA: Yes. I think I made a mistake. And I told Tom that. I take responsibility for the appointees and...

COOPER: What was your mistake? Letting it get this far? You should have pulled it earlier?

B. OBAMA: Well, I think my mistake is not in selecting Tom originally, because I think nobody was better equipped to deal both with the substance and policy of health care -- he understands it as well as anybody -- but also the politics, which is going to be required to actually get it done.

But I think that, look, ultimately, I campaigned on changing Washington and bottom-up politics. And I don't want to send a message to the American people that there are two sets of standards, one for powerful people, and one for ordinary folks who are working every day and paying their taxes.

COOPER: Do you feel you have lost some of that moral high ground which you set for yourself on day one with the ethics reform?

B. OBAMA: Well, I -- you know, I think this was a mistake. I think I screwed up. And, you know, I take responsibility for it. And we're going to make sure we fix it, so it doesn't happen again.

COOPER: Let's talk about the economy, the stimulus. Every day, you get an economic briefing, along with an intelligence briefing. Which, to you, is -- is more sobering, the economic news you get or the national intelligence?

B. OBAMA: Well, look, the national security briefing is always sobering, because my most important job is obviously keeping the American people safe. And we have to remain vigilant. The threats are still out there.

But I will tell you, in terms of what is alarming right now, is how fast the economy has been deteriorating. I think, even two or three months ago, you -- most economists would not have predicted us being in as bad of a situation as we are in right now. And...

COOPER: It keeps a lot of Americans right now up at night.

B. OBAMA: Absolutely.

COOPER: Does it keep you up at night?

B. OBAMA: It keeps me up at night, and it gets me up...

COOPER: Literally?

B. OBAMA: Literally, because -- because we have got a range of different problems, and there is no silver bullet. We're just going to have to work our way through the problem.

So, number one, we have got to have a recovery package that puts people back to work and ensures that states that are dealing with rising unemployment can deal with unemployment insurance, can provide health care for people who have lost their jobs. So, that's one set of problems.

Then, you have got a banking system that has undergone close to a meltdown. And we have got to figure out, how do we intelligently get credit flowing again, so that small businesses and large businesses can hire people and keep their doors open and sell their products?

And, you know, part of the problem, unfortunately, is, is that the first round of TARP, I think, drew a lot of scorn. You know, we learned -- you know, we have now learned that, you know, people are still getting huge bonuses, despite the fact that they're getting taxpayer money, which I think infuriates the public. So, we also have to set in place some rules of the road. And, tomorrow, I'm going to be talking about executive compensation and changes we're going to be making there.

Even after we get that done, we still have to get a financial regulatory system in place that assures this crisis never happens again. And we have got to do this in the context of a world economy that is declining, because, in some ways, the Europeans are actually doing at least as badly as we are.

You have even seen China, which has been growing in leaps and bounds over the last two decades, starting to decline. So, trying to do all those things on parallel tracks, at a time when people are scared -- and legitimately so -- I think, is going to be a -- a big challenge.

I think we're up to the challenge. But it's going to take some time. And I think the American people recognize that.

(END VIDEOTAPE)

COOPER: A new "USA Today"/Gallup poll gives President Obama a 64 percent approval rating, still high, but down considerably from the 84 percent he enjoyed on talking office.

We will, of course, have a lot more of our conversation throughout the hour. You may have seen some excerpts earlier on CNN. This is the first time you can see the complete interview.

Coming up shortly: the president on holding banks accountable, on how they spend your bailout dollars and how he plans to limit those billions being spent on bonuses. Look for a big announcement on that tomorrow.

First, let's talk strategy with senior political analyst David Gergen, along with political contributor Ed Rollins, and political analyst Roland Martin.

David, were you surprised to hear the president say, "I screwed up"? Rarely do you ever hear a president admit to making a mistake.

DAVID GERGEN, CNN SENIOR POLITICAL ANALYST: It's very rare, Anderson.

I do -- the -- the most memorable moment was John Kennedy with the Bay of Pigs back in his first 100 days. And he took responsibility. And he said afterward, you know, that defeat is always an orphan and victory has many fathers.

But it -- I -- this was obviously always nowhere as big a defeat for him. I think it was a hard blow, not a staggering blow. In the near term, it comes at a very, very awkward moment, when all this is going on.

But the long-term damage is really what you raised. And that is, Tom Daschle was seen as an essential player for getting health care reform done this year and next. And his loss is a very tough and perhaps even a staggering blow to prospects for health care reform.

COOPER: Ed Rollins, from a Republican standpoint, how big a distraction has Tom Daschle been, do you think, for this president? I mean, should -- should he have withdrawn his name earlier?

ED ROLLINS, CNN SENIOR POLITICAL CONTRIBUTOR: He should never have put his name up. Once it became very clear that he had serious tax problems -- Daschle has been around the game a long time -- I have a lot of respect for him -- he should have taken himself out.

Equally as important, somewhere along the vetting process here, there should have been a reality check who basically said, this is not -- I used to do this with clients and I used to do this in the White House. When someone would come in, I would basically say, tell me all your sins. Pretend I'm your priest. I will tell you whether they're venial or mortal.

This was a mortal sin. And the reality is, he should never have been put up. It has distracted this president. It makes this administration that has very strict ethics look like it's kind of not for real.

COOPER: And, Roland, for an administration which talked so much and continues to talk about transparency, being the most transparent administration, I mean, with Tim Geithner, they knew about his problems before the public did, certainly with -- with Daschle as well.

What do you make -- have they lost some of their credibility?

ROLAND MARTIN, CNN CONTRIBUTOR: I think that is one of the critical issues in terms of when you set high expectations.

You know, one of the issues that you even asked in terms of have you lost the moral high ground, if you will, and this is what happens when you have this particular stance. Look, as Ed said, you have got to have the folks who are vetting very clear as to what is going on here.

And, look, we all know -- I don't care who you are -- the first thing you ask about is taxes. It's the most basic thing. Look, we have got Al Capone on taxes. So, I don't understand how Daschle somehow thought he could somehow -- he could get away with it.

He knew back in June, and you don't pay it off until you get nominated, the public somehow thinks that, well, you had no intentions of paying it off until you were nominated. This makes sense whatsoever. And, again, I think there's failure on both parts. And I'm glad the president at least owned up to it and didn't dance around it by saying, I screwed up.

COOPER: David, on the stimulus, what I don't understand is why the president allowed so many of these programs, which the Republicans have just been picking apart, and even some Democrats say justifiably so, into that House bill.

GERGEN: Anderson, I think, in retrospect, the White House probably realizes it -- it let the House go too far.

But, at the time they were going through this, you know, this was the first time heard gone through anything like this. They really wanted they had to have a great deal of momentum, have the House Democrats enthusiastic about the bill.

There was all this pent-up demand from the past, the pass, to put all sorts of things in there. But also felt that they're -- they're -- they could clean it up in the Senate, and then in the conference committee, when the two sides get together from the House and the Senate.

What I don't think they anticipated was how effective the Republicans and the critics would be in picking it apart, so that at the -- that you have had this Gallup poll you just cited about his popularity. You see two-thirds of the people still support President Obama and want a stimulus package passed, but only about 40 percent want this stimulus package that has come out of the House passed. So, there's a big gap between -- you know, and that's -- that's what -- the political big gap he's got to close, I think, over the next couple of weeks.

MARTIN: Anderson, they have failed to explain how this benefits the average Americans.

I have been e-mailing folks in the White House, saying, you know, what kind of outreach program do you have? They said, well, we're going to be kicking this thing off this week. It's too late. Your opposition has already defined what the plan is. That's where they failed there.

You are in a process where, of course, Republicans are going to pick here and here. We're not -- in terms of the total number, we're not talking about a lot of money. But if I'm able to show even a small amount is waste, I can get you on that.

And, so, how did they miss that? I don't know. This was a natural thing to see what your opposition was going to do. And they failed to communicate with the American people properly on the overall aspect of this bill.

COOPER: I want to hear from Ed on this, but I want to take a short break first.

We're going to have more from our panel throughout this hour as we play this interview.

Let us know what you think about President Obama today. How did he do? Join the live chat happening now at AC360.com. Also check out Erica Hill's live Webcasts during the breaks.

So, we will have more of the president's interview next.

(BEGIN VIDEO CLIP)

B. OBAMA: The only measure of my success as president when people look back five years from now or nine years from now is going to be, did I get this economy fixed?

(END VIDEO CLIP)

COOPER: More specifics from Mr. Obama on that. And we will try to pin him down on when the new dog is coming and whether he's still smoking cigarettes.

Also tonight, Michael Phelps, he wishes he was only caught smoking a cigarette. First, there was the bong hit, and now the possibility of criminal charges? We're going to have the latest on that.

And, later, the Obama school day, dropping in on a Washington second-grade class, and a new development on those Sasha and Malia dolls we have been telling you about. The Obamas wanted them off the market. Did they get their wish today?

That and more -- when 360 continues.

(COMMERCIAL BREAK)

COOPER: We are back, after spending the afternoon right there inside the White House, actually, in the Oval Office, one-on-one with President Obama.

You can read my blog about what it's like interviewing the president at AC360.com, a kind of behind-the-scenes look -- his stimulus plan today taking new hits from Senate Republicans, who seem to be going after one piece at a time, trying to paint it as the sum of the parts they find easiest to ridicule. They're also using public outrage over the bail bailout against it, the first chunk already spent, the second now President Obama's responsibility, including how to stop executives from taking federal bailouts, then paying themselves those big bonuses.

Here's part two of my interview.

(BEGIN VIDEO CLIP)

COOPER: On executive compensation, Paul Krugman suggested in "The Time" on Sunday that your tough talk may be just for show. What can you really do?

B. OBAMA: Well, I think -- you know, we will talk about it tomorrow, but we're going to be laying down some very clear conditions in terms of where...

COOPER: Do you support Claire McCaskill's idea of capping...

B. OBAMA: Well, I -- I -- again, I don't want to completely preempt my announcement tomorrow.

COOPER: You could here.

(LAUGHTER) B. OBAMA: But the -- but I think there are ways -- there are mechanisms in place to make sure that institutions that are taking taxpayer money are not using that money for excessive executive compensation.

And I think that, when you see the announcement that we make, people will say, this is a reasonable approach. It's not a government takeover. Private enterprise will still be taking place. But people will be accountable and responsible. And that's what we have to restore in the financial system generally.

COOPER: On the stimulus plan for you, what is non-negotiable with -- with Republicans?

B. OBAMA: The unemployment insurance, health care for people who have lost their jobs, you know, providing some relief to the states on those fronts, and providing families relief, that's very important.

Infrastructure investments that lay the groundwork for long-term economic growth, I think, is critical. You know, so, for example, when we say we're going to weatherize two million homes, that's not just make-work. First of all, you can employ people weatherizing those homes. We are also then saving families, individual families, on their energy bills. But the third thing is, it's making this country less dependent on foreign oil.

So, the same is true for health I.T. The same is true when it comes to education. We want to train thousands of teachers in math and science, and invest in science and technology research. All those things will make us more competitive over the long term.

What I do think is negotiable is some programs that I think are good, good policy, but may not really stimulate the economy right now.

(CROSSTALK)

COOPER: But how did they even get into the -- the bill in the first place?

B. OBAMA: Well, Anderson...

COOPER: I mean, why did they get this far?

B. OBAMA: ... you know, there are 535 members of Congress who have their own opinions about...

(LAUGHTER)

COOPER: Do you think some of the House Democrats went too far?

B. OBAMA: You know, I think that, if you look at -- first of all, I think, to -- in fairness to the House Democrats -- and this hasn't been talked about enough -- if you tally up all the programs that have been criticized on A.C. 360 or anywhere else, that amounts to less than 1 percent of the total package. So, they actually were remarkably disciplined, considering the size of this package. We have -- they left out, at my request, all earmarks, so there aren't private pet projects. And by the way, many of the critics of the current package can't say that about any of the budgets they passed over the previous six or eight years.

COOPER: But this is what American people are hearing about, whether rightly or wrongly. And, I mean, did the -- did the Republicans beat you on selling this, on selling the message? Did you lose the message?

(CROSSTALK)

B. OBAMA: Well, no, no, I don't think we've lost the message. That's why I'm here with you. Everybody is going to be watching me talk to you today.

But I think that the American people understand something has to be done. They want to make sure that we're serious about it and that we're not using this to promote politics as usual. And that's what I'm insisting on.

You asked earlier, do I lose sleep? Look, the only measure of my success as president, when people look back five years from now, or nine years from now, is going to be, did I get this economy fixed?

I have no interest in promoting a package that doesn't work, because I'm not going to be judged on whether or not I got a pet project here or there. I'm going to be judged on, have we pulled ourselves out of recession?

I think that the members of Congress understand that as well. I don't question the sincerity of some Republican critics, who may think that they can do better on this. And I'm happy to negotiate with them. If they have got better ideas, I'm happy to do it.

What I won't do is, in some cases, some of the criticism has suggested that the better approach would be to do exactly what we did over the last eight years that got us into this problem in the first place.

There is going to be some differences ideologically or in terms of, you know, recipes for how to fix the economy. And, you know, those differences, we can live with.

(CROSSTALK)

B. OBAMA: But I think -- I -- I still think we can arrive at a package that works for the American people.

COOPER: You say five years or nine years. Which one are you hoping for right now?

(LAUGHTER)

COOPER: Based on what you've seen so far? B. OBAMA: You know, listen, you want to be president when times are tough, because, you know, I -- I didn't do all of this just to occupy this fancy office. I did -- I came here to change things.

(END VIDEOTAPE)

COOPER: Well, back with our panel next, David Gergen, Ed Rollins, and Roland Martin.

Then, more from President Obama -- has he smoked a cigarette since becoming president? What about the puppy for Malia and Sasha? We will get all the behind-the-scenes from the president.

Also tonight, just when you thought the Michael Phelps bong-hit story would disappear, now threats of charges against the Olympian. Is this a publicity stunt by local law enforcement, or is this a real threat of prosecution?

We will be right back.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

MICHELLE OBAMA, WIFE OF SENATOR BARACK OBAMA: There's a bowling alley and a movie theater. And there's a florist shop and a place where they make candy and chocolate.

(LAUGHTER)

M. OBAMA: And I have to keep my kids from going down there.

(LAUGHTER)

M. OBAMA: But it is one of the most important houses in the country. So, we feel like we have a real big responsibility

B. OBAMA: Not to break anything.

M. OBAMA: Not to break anything.

(LAUGHTER)

(END VIDEO CLIP)

COOPER: The first couple visiting a second -- a local second- grade class this morning on their -- we will have more on their visit in just a moment. They were describing what the White House is like to those kids.

In a moment, the president on why he doesn't like the term war on terror, and a progress report on his private battle with cigarettes.

Right now, digging deeper on what you have heard so far tonight in the interview with our panel, David Gergen, Ed Rollins, and Roland Martin. You know, David, the timing of this interview, the Tom Daschle news notwithstanding, was clearly aimed at building support for the president's stimulus plan. Do you think he was successful? I mean, they scheduled these interviews yesterday, before the Tom Daschle news became, you know, breaking news.

GERGEN: Well, I think that -- that the interview proved two things.

First of all, the Tom Daschle withdrawal this morning must have been a complete surprise to them. They never would have scheduled this interview if they had known this was coming, yes, because they didn't want the -- they wanted to talk about the stimulus package.

Secondly, I think it does underscore the fact they realize they have slipped, in terms of helping the public understand and support this package, the -- the particulars of this package.

So, they have gone on the offensive. Did it work? Well, I think they were facing second-down-and-15 situation, and they probably picked up maybe five or six yards today.

COOPER: Ed, the president pointed out that the portions of the stimulus, which have been criticized a lot by Republicans, amount to less than 1 percent of the total stimulus package. Does he have a point, or...

ROLLINS: Well, first, he has to be very careful about his numbers. He's throwing a lot of numbers out. It's like the jobs. First, he was going to create three million -- three million new jobs. Then it was four million jobs. Today, he said, we're going to save or create three million new jobs.

Tonight, he says 1 percent. I can add up 1 percent right here, and I can get to 10 percent, and I can get to a lot more than that. You know, the bottom line is that the public is not foolish. And they want this president to succeed. And they want a stimulus bill that's going to create jobs and move the economy forward.

We still have -- we don't even have this year's budget passed. They're fooling around with an -- (INAUDIBLE) of this bill. There's a lot of money going to be spent here. We're already spending a trillion dollars more than we're taking in, in an ordinary year.

So, I think he has to be very careful in his numbers, or he will get caught very quickly in -- in mistakes.

(CROSSTALK)

COOPER: Yes, Roland, go ahead.

(CROSSTALK)

MARTIN: The answer to your question is no.

I mean, I'm sorry. The problem is here. All of these interviews, tomorrow's front page, the conversation on talk radio, on morning shows tomorrow will be about Tom Daschle, not the stimulus package.

But, also, when you asked about the question about this whole issue of when the president talked about weatherization, he talked about not being dependent upon oil in terms of creating jobs, look, this is how you answer that question.

The weatherization money we're spending will save the people out there who are spending high amounts of money when it comes to their energy. This is about selling people on how this will stimulate the economy, save them money, allow them to spend more.

You have to drive that home. When the message gets convoluted, and all kind of different messages, people then get confused. Republicans have been very smart. You focus on pork, pork, pork. Everybody gets that. His message has to be jobs, jobs, jobs, money, money, money.

COOPER: David, it's interesting, though.

And I come back to the same question about House Republicans. But, I mean, the Democratic Party doesn't seem to be doing him any favors on this by -- by loading up this thing with -- with these projects they have been champing at the bit to get for an awfully long time now.

I mean, is he weak to Democrats? I mean, he talks about being bipartisan and being tough, but doesn't he have to be tough to both Republicans and Democrats equally?

GERGEN: I feel very strongly that way, that, if he's going to make this bipartisan, he's going to have to say no to some of these marginal Democratic programs.

And Ed Rollins is right. They add up to more than 1 percent of the spending. Yes, we get caught in the little things like sod on the mall and that sort of little stuff. But the bigger -- Republicans are not just going after that. They have got bigger, more fundamental problems with the bill.

It's not 1 percent of the -- of the bill. And he has to say no to some House Democrats, and indeed maybe people in the Senate, if he wants to now forge a true bipartisan compromise.

I do not think that -- I don't go as far as Roland does. I think he's -- and I appreciate where Roland is coming from.

But I think they have done a better job than that, Roland. I think they have got the public mostly still with them, but they have been slipping, and they need to -- and they needed to go back on offense. I think this was the beginning of going on offense. I think it will be more sustained, I would assume, over the next two weeks.

COOPER: Ed, you have worked in White Houses, as well as David has. What happens behind closed doors when -- when, you know, they have those cocktail parties and they invite the opposition in, and they invite the Democrats in? I mean, how tough does he actually get?

ROLLINS: Well, he doesn't get tough in those -- in social settings.

Where he gets tough is on the one-on-ones. Where he needs to get tough is with the leadership. He basically has to have his own party say, listen, we have a tremendous opportunity and tremendous obligation to move this thing forward. But, if we basically want to do all the stuff we haven't been able to do for the last several years, because Bush or others wouldn't let us, now is not the time to do it. Now let's just create a stimulus bill, a real stimulus bill, that creates jobs and makes this economy move. Let us get judged on that. There's plenty of time to add other stuff later.

COOPER: Roland, what -- what do you think happens tomorrow? I mean, he has said he's going to make an announcement about executive compensation. That clearly seems to be an issue that he can get Republicans and Democrats united on.

MARTIN: Yes, but it is one, again, that we have -- we heard that last week, when he went after them. And, so, if it's a corrective move, that's great.

I think what this White House has to do, they have to be reaching out to people who are radio talk hosts, columnists, bloggers, and others, and begin to drive the message home, how this bill is going to help the average American. Get away from the Daschles, get away from all the people on Wall Street, and say, this is how we're going to affect people in Pennsylvania, Ohio, Michigan, in Texas, Georgia, Tennessee.

Get them with school construction, what this means to you in your community. When people hear that, they say, hey, that's affecting me. When it's all this stuff about banks and other folks, they say, that's not me.

Go to the bread and butter, the people who put you in office.

COOPER: We're going to have more from our panel coming up.

And, just ahead, the rest of my interview with President Obama. We talked about the threat of terrorism and why Mr. Obama does not much like the phrase war on terror, and also about a tough personal challenge he's been trying to overcome.

(BEGIN VIDEO CLIP)

COOPER: Have you had a cigarette since you've been to the White House?

(END VIDEO CLIP)

COOPER: We will tell you what the president said. Is President Obama winning his battle to quit smoking? His answer and much more coming up. Also ahead, before our interview, the president and first lady dropped in on a public charter school in Washington, visited with some second-graders.

We will have that and new developments in the battle over the Sasha and Malia dolls. The White House has criticized the toys, as we have reported on this program, for trying to cash in on their first daughters -- the latest just ahead.

(COMMERCIAL BREAK)

COOPER: Before I sat down with President Obama in the Oval Office today, a new audio recording from Ayman al-Zawahiri, al Qaeda's No. 2, surfaced on the Internet.

Now, on the tape, he criticized Mr. Obama for not mentioning Gaza in his inauguration speech, and he also urged Muslims to target U.S. interests and to continue fighting in Gaza, where a two-week truce remains fragile, to say the least.

Keeping Americans safe from terrorism is obviously another huge challenge facing President Obama. The threats remain. But the language President Obama is using to discuss them is by design different.

(BEGIN VIDEOTAPE)

COOPER: I've noticed you don't use the term "war on terror." I think I read an article that you've only used it once since inauguration. Is that conscious? Is there something about that term you find objectionable or not useful?

B. OBAMA: Well, you know, I think it is very important for us to recognize that we have a battle or a war against some terrorist organizations. But that those organizations aren't representative of a broader Arab community, Muslim community. .I think we have to -- you know, words matter in this situation because one of the ways we're going to win this struggle is through the battle of hearts and minds.

COOPER: So that's not a term you're going to be using much in the future?

B. OBAMA: You know, what I want to do is make sure that I'm constantly talking about al Qaeda and other affiliated organizations because we, I believe, can win over moderate Muslims to recognize that that kind of destruction and nihilism ultimately leads to a dead end, and that we should be working together to make sure that everybody has got a better life.

COOPER: Final questions, just a quick lightning round, just a couple of fun questions. What's the latest on the dog search?

B. OBAMA: We are going to get it in the spring. I think the theory was that the girls might be less inclined to do the walking when it was cold outside.

COOPER: Portuguese Water Dog? You don't know yet?

B. OBAMA: You know, we're still experimenting.

COOPER: Coolest thing about your new car?

B. OBAMA: You know, I thought it was the phones until I realized that I didn't know which button to press. That was a little embarrassing.

COOPER: Have you had a cigarette since you've been to the White House?

B. OBAMA: No, I haven't had one on these grounds. And I -- you know, sometimes it's hard, but, you know, I'm sticking to -- sticking to it.

COOPER: You said, on these grounds. I'll let you pass on that.

And final question, you've read a lot about Abraham Lincoln. What is the greatest thing that you've learned from your studies of Lincoln that you're bringing to the office right now?

B. OBAMA: You know, when I think about Abraham Lincoln, what I'm struck by is the fact that he constantly learned on the job. He got better. You know, he wasn't defensive. He wasn't arrogant about his tasks. He was very systematic in saying, "I'm going to master the job, and I understand it's going to take some time."

But in his case, obviously, the Civil War was the central issue, and he spent a lot of time learning about military matters, even though that wasn't his area of experience.

Right now I'm learning an awful lot about the economy. I'm not a trained economist, but I'm spending a lot of time thinking about that so that I can make the very best decisions possible for the American people.

COOPER: Mr. President, thank you very much.

B. OBAMA: Thank you. Appreciate it.

(END VIDEOTAPE)

COOPER: I just want to take a moment to point out, an interview like this requires a lot of research and a lot of planning. I just want to thank all those people at CNN who made it possible. I reached out to a lot of on-air correspondents, and producers, and analysts for their suggestions.

And I want to thank them for that, in particular researcher -- producer Eva Nordstrom, who did an amazing amount of research on background information. And that interview would not be possible without her. So appreciate that.

Fifteen days into his presidency, the marathon has just begun for Mr. Obama. The course ahead could not be steeper. He looks calm, as you saw. He sounds confident. But from the sound of it, he might be sneaking a smoke now and then. But apparently, not in the White House, at least.

Let's talk strategy with our panel: David Gergen, Ed Rollins and Roland Martin.

David, it's interesting. For a president who earlier today lost two nominees to tax problems, is having ongoing problems getting bipartisan support for his stimulus, he seemed remarkably calm and cool. You served four presidents. Have you ever seen one who came across so unflappable?

DAVID GERGEN, CNN POLITICAL ANALYST: Reagan came very close. I must tell you that there's a word somebody used with me yesterday. Preternatural. He's preternaturally calm. And I think that's one of the most reassuring aspects about him, what I think helps to calm the country in these very troubled times.

And he also chooses words, Anderson, in a very thoughtful way. The war on terrorism conversation. He's moving away from the war on terrorism in much the same way Tony Blair and the British have done. They have not been comfortable with the sort of militaristic approach to terrorism, that they've wanted to go more toward diplomacy and thought that phrase didn't walk.

I think that whole approach, the deliberative approach, I thought he helped himself tonight with this interview. Because the calmness and because he speaks like an adult. Because he uses language in a -- an interesting and thoughtful way. And I think it gives you reassurance that, whatever the state of play in Washington, Daschle or stimulus or whatever it is, that the man in the middle, the man in the center, is well-anchored.

COOPER: Ed, how do you think Republicans are going to react to the war on terror part in particular? Do you think he's going to get criticized for sort of rejecting that term?

ED ROLLINS, CNN CONTRIBUTOR: Well, I think he'll get criticized, but I don't think he's wrong. I think to a certain extent, the judgment you have to make is, A, how does he get us out of Iraq? And what does he do in Afghanistan? And equally as important, does he continue to hunt down al Qaeda?

And I think that every indication is that he's going to. The measurement there, as President Bush said over and over again, the measurement is are we going to be attacked again? The likelihood in four years or eight years is that we're going to again. And has he done everything to make sure that doesn't happen again, I think, is a key test.

The Republicans can cry out all that they want. But the reality is that he's still spending money, still devoting resources and making the right decisions, then the criticism will fall on deaf ears.

COOPER: Roland, I asked him about the dog and whether he's been smoking. Obviously, if he's caught on camera smoking, it will be a big deal. What do you think if he's caught smoking while he's walking the new dog? Do you think people will give him a pass?

ROLAND MARTIN, CNN POLITICAL ANALYST: Well, look, if he has another appointee who drops out over taxes, I think he probably will take a smoke on the White House lawn. So that wouldn't be a smart move. But then again, he has got a bunch of folks working for him. Make them walk the dog.

COOPER: Do you think the president does well by being so accessible? There are some -- I think Peggy Noonan wrote an article the other day sort of almost criticizing him for being too accessible, too out there. Do you think that's a mistake, Roland?

MARTIN: No, I don't think so. I mean, the only problem I have with people today who somehow cannot call him President Obama, they keep calling him Barack Obama. It's amazing that happens. I think because he is so familiar to people.

In order for him to maintain that sense with the common man, I think when he is constantly communicating with the American people, is a good thing. It's like disagree with this go behind and hide behind the wall sort of thing and come out every now and then. No. It will -- these are difficult times. People want to see the calmness and the coolness of the president. It's a good thing.

COOPER: Ed, do you agree with that?

ROLLINS: If he keeps communicating with the public over and over again and telling them what he's doing, why he's doing it, tonight saying, "I take the blame," that will go a long ways. The only mistake on the smoking will be if he's smoking with Mark [SIC] Phelps on the lawn of the White House, walking the dog. He'll be in big trouble.

COOPER: David, very quickly. I know you want to get in.

GERGEN: Yes. He should -- I don't think he should speak every day. What they need is he needs to carry the ball along, but they need other players who can also carry the ball...

MARTIN: Yes, indeed.

GERGEN: ... carry the message. They have not put enough people out.

COOPER: All right. Really fascinating discussion. David Gergen, Ed Rollins, Roland Martin, thank you.

A quick reminder. Don't miss Ed Rollins' blog post, "Daschle Did the Right Thing." You can read it, AC360.com. I also wrote a blog about what it's like to interview the president. So take a look at that, both of those blogs.

You can watch the entire interview, of course, at the top of the hour. We'll replay it.

Coming up next, though, Michael Phelps admitted to smoking pot. We all know that. But now local law enforcement may not let him get away with just "sorry." Is this a publicity stunt, or might they really charge him? The latest ahead.

And taking a time-out from the White House, the president and first lady went back to school and are more than happy to have cameras record it all.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

B. OBAMA: I've really always thought that it would be neat to be able to help people who are -- maybe they're poor or they don't have good schools or they don't have good housing. So I worked in neighborhoods to try to make life better for people.

And then eventually, I decided -- after I got my law degree, I became a lawyer. And I decided that maybe I would run for office. So first, I ran locally in Illinois, where we're from in Chicago. And then eventually, I ran for the United States Senate. So I was working on Capitol Hill. And then finally, I decided I would run for president.

MICHELLE OBAMA, FIRST LADY: But the first thing he did was work hard in school, and he listened to his parents and his teachers.

B. OBAMA: Yes.

M. OBAMA: Most of the time.

(END VIDEO CLIP)

COOPER: Most of the time. President Obama sharing some personal details with second graders at a charter school in Washington today. He and the first lady visited the school before Mr. Obama and I sat down at the Oval Office.

The president and Mrs. Obama saying it was a welcome break. We'll have the "Raw Politics" ahead.

But first, Erica Hill joins us with a "360 News and Business Bulletin" -- Erica.

ERICA HILL, CNN ANCHOR: Anderson, worse than expected news from automakers, sales plunging last month to their worst levels in nearly 27 years. Chrysler reporting a 55 percent decline, while General Motors saw a 49 percent drop. Ford sales slid 39 percent. Toyota, Honda, and Nissan also saw some steep declines.

Olympic gold medalist Michael Phelps could face criminal charges as part of the fallout from that photo which shows him smoking from what appears to be a marijuana pipe. The incident allegedly happened during a party at the University of South Carolina.

Well, the Richland County Sheriff's Office there is investigating and says it will file charges if warranted. That sheriff is known for his tough stance on drugs. Phelps has apologized publicly.

Scientists say they have discovered ten previously unknown species of amphibians in the mountains of Colombia, including nine frogs and one salamander. With many amphibians facing extinction, conservationists really welcoming the news.

And speaking of extinction, say goodbye to Marvelous Malia and Sweet Sasha. Toy company Ty retiring those two controversial dolls, the same ones slammed by the White House as an attempt to cash in on the first daughters.

Shortly after the announcement, a set of the 12-inch dolls reached $152 on eBay. The original retail price: $9.99.

The highest bid that I saw just -- I checked just before this -- was, with 12 bids, a little over $100. One set.

COOPER: This ones may be gone. I don't think it's the last time we're going to be covering some toy company...

HILL: No, probably not.

COOPER: ... or marketer to make money off the Obamas.

All right. Time now for our "Beat 360" winners, our daily challenge to viewers to come up with a caption better than the one that we can come up with for a photo that we put on our blog every day.

So here's the picture: President Obama and the first lady Michelle Obama, visiting with the second graders at the Washington school.

The staff writer tonight is Kay. Her caption: "OK, so the next part of 'Single Ladies' is put your hands up like this."

(SOUND EFFECT: "Oooh!")

COOPER: Our viewer winner...

HILL: You can't get enough of that, ever.

COOPER: I know, we can't.

Our viewer winner is Kristien from Asport (ph), Belgium. Her caption: "It took some time to sink in, but Michelle Obama finally realizes that she's the new first lady."

(SOUND EFFECT: CHEERING)

COOPER: Kristien, congratulations. An international T-shirt, our "Beat 360" T-shirt is heading to you overseas.

Ahead on the program, Mr. and Mrs. Obama go to the school and talk about life in the White House.

(BEGIN VIDEO CLIP)

B. OBAMA: Can you guess why it's called the Oval Office?

UNIDENTIFIED FEMALE: It's shaped like an oval.

B. OBAMA: It's shaped like an oval. That is exactly right.

(END VIDEO CLIP)

COOPER: It sure is. A fun visit for the students, while the Obamas try to send a message on their commitment to education. No surprise, the cameras were following.

And at the top of the hour, the Oval Office interview: my conversation with President Obama. The candid, surprising comments he made about his cabinet picks and his plan to fix the economy.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

B. OBAMA: Hello, everybody.

UNIDENTIFIED MALE: Hello, Mr. President.

UNIDENTIFIED MALE: Hello, Mr. President.

UNIDENTIFIED MALE: Hello, Mr. President.

B. OBAMA: I -- thank you for having us here. Does everybody know who this is?

UNIDENTIFIED MALE: Yes!

UNIDENTIFIED MALE: Yes!

UNIDENTIFIED MALE: Yes!

B. OBAMA: Who is that?

UNIDENTIFIED MALE: Michelle.

UNIDENTIFIED MALE: The first lady.

B. OBAMA: Yes, she is.

(END VIDEO CLIP)

COOPER: Funny moment, one to remember, no doubt, for kids at a public charter school in Washington today. For the students and the teachers, it was the surprise of a lifetime. Not every day that the president and first lady pop in to say hi.

Mr. and Mrs. Obama were accompanied, of course, by cameras. This was a photo opportunity. But both have made education one of their top priorities. Now, that's the promise, but will it be delivered? Once again, here's Erica Hill with "Raw Politics."

(BEGIN VIDEOTAPE)

HILL (voice-over): Back to school for the Obamas Tuesday morning and a welcome break.

B. OBAMA: We were just tired of being in the White House.

M. OBAMA: Yes! We got out. They let us out.

HILL: Of course, they didn't escape to just any school.

B. OBAMA: The outstanding work that's being done here by the entire staff and the parents who are so active and involved is an -- is an example of how all our schools should be.

HILL: Washington's Capital City Charter School, founded in 2000, is one of the Department of Education's demonstration sites for school reform. The student body is diverse. Parent involvement is high: more than 75 percent regularly volunteer here. And the kids are high achievers.

But even the smartest second graders probably don't care much for policy pitches.

B. OBAMA: The Recovery and Reinvestment Act that we've put forward will provide billions of dollars to build schools and help with school construction.

HILL: Between today's school visit and Mrs. Obama's stop at the Department of Education yesterday...

M. OBAMA: I am a product of your work.

HILL: ... the message from the president is clear. I care about education. The stimulus plan has more than $100 billion earmarked for grades K through 12, money welcomed by many educators. But not everyone is convinced those dollars would bring change.

BRUCE FULLER, UNIVERSITY OF CALIFORNIA BERKELEY: I think a number of policy analysts are scratching their heads as they see the stimulus bill debate unfold. This president campaigned on trying to improve No Child Left Behind. He campaigned on trying to fund innovations that work.

Yet if you look at the fine print, in all this new spending for education, there are a lot of old dusty ideas.

HILL: And when it comes to major reform, like overhauling the widely criticized No Child Left Behind Act, the challenges could be substantial.

JEFFREY HENIG, TEACHER'S COLLEGE, COLUMBIA UNIVERSITY: Because of the pressure of other events, and the economy tanking, that's not going to be the first order of priority. Getting something through is going to be tricky enough without, I think, trying to break radical ground.

HILL: A tough road ahead for education on Capital Hill. But when it comes to the second grade vote...

UNIDENTIFIED MALE: Do you have a favorite superhero?

B. OBAMA: I do. That's -- you know, Spiderman and Batman were my two favorite superheroes.

HILL: ... the president is clearly making progress.

Erica Hill, CNN, New York.

UNIDENTIFIED MALE: Cheese!

UNIDENTIFIED MALE: Cheese!

UNIDENTIFIED MALE: Cheese!

(END VIDEOTAPE)

COOPER: Well, coming up, some of the other stories of interest today. Have you heard the actor Christian Bale's verbal thrashing that was caught on tape? It is our "Shot" tonight. Find out who got him so upset and why.

And at the top of the hour, serious stuff from the Oval Office: my one-on-one interview with President Obama, admitting mistakes, telling me he screwed up. How he plans to fix the economy, coming up.

(COMMERCIAL BREAK)

COOPER: All right. Erica, time for "The Shot." Actor Christian Bale, a great actor, no doubt, who's always intense in movies, is apparently intense in real life, as well.

Now, we know this, because an audio tape in which he had a tantrum, or meltdown, has been released. It was reported last July, apparently on the set of his upcoming movie, "Terminator: Salvation," which I must say, looks pretty cool. He's not too happy with a member of his production clue.

Listen to this. We had to bleep a lot of it.

(BEGIN VIDEO CLIP)

CHRISTIAN BALE, ACTOR: I want you off the set, you (EXPLETIVE DELETED).

UNIDENTIFIED MALE: I'm sorry.

BALE: No, don't just be sorry. Think for one (EXPLETIVE DELETED) second. What the (EXPLETIVE DELETED) are you doing? Are you professional or not?

UNIDENTIFIED MALE: Yes, I am. BALE: Do I (EXPLETIVE DELETED) walk around and -- no, shut the (EXPLETIVE DELETED) up, Bruce. Do you want -- no. No. Don't shut me up. Am I going to walk around and rip your (EXPLETIVE DELETED) lights down in the middle of a scene? Then why the (EXPLETIVE DELETED) are you walking right through, "Ah, da-dah, da-dah," like this in the background?

(END VIDEO CLIP)

COOPER: Scary to listen to. I've got -- I've got to warn you, though. If you think that's bad, you should hear Erica Hill talking to Jack Gray (ph). It is...

HILL: Listen, you know what, though, seriously? I am so sick. It's time somebody put that kid in his place. And the way he goes into your office and rifles through your stuff all the time. Yes, you didn't know about that. Did you?

COOPER: What? Hmm.

HILL: Now you have a different feeling, don't you?

COOPER: There's actually now a dance music mix of Christian Bale's tirade. We'd have to bleep every word of it, so we actually can't -- can't play it for you. But you can check it out online in places.

COOPER: But really, could he dance to "Single Ladies" is the question?

COOPER: I don't think he wants to, certainly not in that moment. No.

All right, Erica. Thanks a lot.

Coming up at the top of the hour, President Obama, the 360 interview in its entirety.

(BEGIN VIDEO CLIP)

B. OBAMA: Anderson, good to see you. How you been?

(END VIDEO CLIP)

(COMMERCIAL BREAK)

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