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CNN Larry King Live

Interview with Bill Clinton

Aired February 17, 2009 - 21:00   ET

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

LARRY KING, HOST: Tonight, Bill Clinton -- does he believe the mega billion stimulus plan the president just signed will save jobs and protect people's hard-earned cash?

What if it doesn't work?

And how about Hillary?

Has her globetrotting role as secretary of State changed his international agenda?

And the big question -- does Bill Clinton have Obama's super exclusive, super secure BlackBerry e-mail address?

The 42nd president of the United States up close for the hour, next on LARRY KING LIVE.

Good evening and welcome to a very special edition of LARRY KING LIVE.

Our guest is the 42nd president of the United States, Bill Clinton.

And we're at the William Jefferson Clinton Center -- the Clinton Library -- in Little Rock, Arkansas, on the banks of the Arkansas River.

And we open with the obvious question, the stimulus bill passed today. The president signed it in Denver.

Is it going to work?

BILL CLINTON, FORMER PRESIDENT OF THE UNITED STATES: I think it will do what it's designed to do. And I think it's important that the American people understand what it's designed to do.

It's supposed to do three things.

Number one, put money in people's pockets who are in trouble now -- extended unemployment benefits, the modest tax cuts, increase in food stamps. That will help grocery stores and other businesses and keep Americans who are good, honest, hardworking people afloat.

The second thing it's supposed to do is give a chunk of money to state and local governments, primarily for education and health. That is designed to make sure that they don't have to either have big tax increases or lay a million people off. Either one, in this economy, would be bad.

The third thing it will do is to create jobs through existing road and bridge contracts, through rail improvements, through modernization and especially through clean energy and energy efficiency.

So I think that given how fast it had to be done and the compromises that had to be made, it's quite a good bill. And I think it will -- will do what it's designed to do.

But it's important that the American people understand that this is sort of our bridge over troubled water. The economy cannot come back until the fundamental problem is addressed, which is declining asset values, starting with the homes, which have compromised the banks and their ability to lend.

So in the next couple of weeks, the Treasury secretary will announce -- or the president will announce plans to try to save more people who are in their homes and can't pay their current mortgages by redoing the mortgages. They will announce plans, I think, to take some of these so-called toxic assets that are underwater off the bank books temporarily, hold them in a government entity and then put them back onto the market when the economy picks up.

And then I think they'll offer some more liquidity -- some more cash to banks. But this time, unlike last year, I think in order to get that money, they'll will have to promise to lend it.

KING: Do you have confidence in all those areas?

CLINTON: I do. I think that this is the right strategy for this time. But it's really important that the American people understand, number one, the stimulus isn't just a jobs bill. It's also stopping lay-offs or tax increases putting cash into the hands of people who need it.

Number two, that it's a bridge over troubled waters and that the economy can't come back until we get a floor on the deflation in asset values and make the banks healthy again, because it's a private economy.

So they've got a plan to deal with all of this and I think it will work. I think if I were there, I'd be doing something similar. I think that they're good people, they're smart people and they -- they know what they're doing.

KING: John McCain and others on the other side of the ledger are saying that he didn't come forward enough to the Republicans, he didn't make them part of this Easter basket.

CLINTON: Well, I disagree with that. I think the -- the only way he could have gotten a lot of them to vote for him would be to accept their economic theory. Their economic theory is why we're in this mess in the first place.

KING: Lower taxes. CLINTON: Yes. They wanted lower taxes, particularly on upper income people. We did that for eight years. We doubled the debt of the country. We wound up, in eight years, with about two million jobs, all of whom were government -- which were government jobs -- no private sector jobs. The whole thing was an abject failure, just as it was in the 12 years before when we tried it.

So I think that the moderate Republican who voted with the president, senator -- the senators from Maine, Senator Collins and Senator Snowe and Senator Specter from Pennsylvania, have a much more sophisticated view of the economy. And it may be that there's a political strategy involved here. It may be that if they do what they did to me in '93 and say just say no and this is the end of the world and they think there will be some gains.

The evidence is they may get a short-term gain in the next Congressional election or not. But over the long run, you don't gain by not contributing to the solution.

KING: Do you resent it when the Bush people say that this problem started with you, it started in your administration?

CLINTON: Well, they don't have much evidence for that. I always answer, does anyone seriously believe if the team I had in place had been in place for the last eight years that this would have happened?

And the answer to that is no. We had a much more vigorous regulatory environment with the Securities and Exchange Commission. We were watching these derivatives. I do think we should have done more on derivatives.

But the suggestion they have that because we required banks, for the first time, to live up to the requirements of the Community Reinvestment Law, which says you're supposed to loan money back to the people who deposit money in your bank, contributed to this, I just think is factually wrong.

If you look all over America, the community banks -- the ones that reinvested in their communities -- were not the people that caused this problem. They did well.

KING: Is it wise for Obama and his people to keep saying how bad it is?

His press secretary the other day said it hasn't hit rock bottom yet. It's going to get worse.

Is that a good idea?

CLINTON: Well, I think it's always good to be -- to shoot straight with the American people. And here's why they're saying that.

In the last five months, some $30 trillion in asset wealth has disappeared worldwide -- declining stock values, declining values of oil and gas and gold and all kinds of minerals and metals and other assets. That is more than twice America's annual income and more than half the world's annual income. So there's going to be an echo effect. And there is no economic model from which the Obama people or anyone else can tell you exactly when the bottom will be reached.

The only counsel I would have on the other side is that we should always remember this -- and the president, I think, reflects this. People have been betting America since -- against America since we started. George Washington's got a bunch of freezing soldiers, they don't even have shoes in the winter. Everybody that's bet against America has lost money.

We're going to come back from this. So I would like him to say we haven't hit bottom yet, but we're going to come out of this.

KING: We'll be right back with the former president, Bill Clinton.

We'll talk about BlackBerries and other things.

CLINTON: Yes.

KING: Don't go away.

(COMMERCIAL BREAK)

KING: We're back at the Clinton Library.

I almost said the White House. I've been with him there many times, too.

And before we move on to other things, should taxpayers be bailing out the automakers?

Just today, Chrysler asked for another $5 billion. That's on top of $4 billion that it got in December.

Do we owe this to them?

CLINTON: We don't owe it to them. We should only do it if it's in our interests. I believe it's in our interests...

KING: It is.

CLINTON: ...if they have presented a plan that will reform the way they do business -- that will cut a lot of their overhead costs, their legacy costs and reflect the new world they're going to be living in, which will be far more competitive, more dominated by energy-efficient cars and, ironically, maybe more competitors. Because you have a lot of these individual American entrepreneurs now that are producing electric cars who believe they can get into the market.

Now, if you look at what Chrysler and General Motors -- their investors and bond holders and the labor unions have agreed to, they've been working on quite a number of shared sacrifices to undertake a restructuring. And I strongly believe that America needs to produce cars and that we don't want to have what would happen if General Motors and Chrysler and then Ford went down. We'd would lose two million jobs, with all the suppliers and the dealers and everybody that depends on them.

So if they have presented a good plan for restructuring that will give them a chance to succeed over the long run on their own merits, just by selling cars and without any subsidy from the taxpayers, then I think that to go one more time to help them is a good thing to do.

KING: We keep hearing about -- we're going to touch other bases here. Obama's BlackBerry -- he's got a special BlackBerry now that doesn't have to be recorded into the White House.

Do you have the number?

CLINTON: No. No. But I know that...

KING: Would you like the number?

KING: I know that in the world that exists today, if you're hyper busy, you need them. Hillary lives on hers. And...

KING: Do you have one?

CLINTON: No, I don't, because...

KING: Yes.

CLINTON: I -- you know, when I want to e-mail somebody, we e-mail somebody. But I don't -- I like being able to concentrate on what I'm doing one thing at a time, you know. And I think if I had one, I'm so hyper and always trying to do three things at once, I'd be worse than he is or worse than she is. So I don't have one.

KING: Apparently, he's pretty bad, Obama, huh?

CLINTON: But it's bad or good. But there's no question that it facilitates more instantaneous communication with a larger number of people at a lower cost. There's no question that it's -- it's a marvelous, marvelous advance. And for people who are really busy, it's good.

I also think the fact that he got one that is secure and sort of off-the-books is good because every president needs some way of communicating with people who know you personally and are outside the loop, who can say what my friends from Arkansas said when I -- back in the stone age, when I became president and the average cell phone weighed five pounds and there were only 50 sites on the Internet.

I got a separate zip code and gave it to 50 people from Arkansas. And they would -- so they knew their letters would always get to me. And they'd say, you look like an idiot doing this, that or the other thing -- you know, people that grew up with you and care about you, that don't have to pretend because you're president, are very important. So I'm glad he's got some way of letting the people he cares about communicate directly with him. And I also think it speeds up -- and therefore his communication makes him more efficient.

KING: So Hillary has got her BlackBerry out there in the Far East.

But you won't communicate to her on your -- on any BlackBerry, you'll call her?

CLINTON: Yes, I call her. I talked to her yesterday morning. And it's tough now. See, this is the perfect time for BlackBerries, because she's in Japan, 14 hours ahead of me, East Coast time. So she was 17 hours ahead of me when I was back on the West Coast a couple of days ago.

KING: All right, how is -- it's kind of strange. I mean you're a president. Your wife is a senator. Now she's a secretary of State.

What's Chelsea going to be?

I mean what -- where does it -- isn't it, for want of a better term than weird, isn't it kind of unusual?

CLINTON: Sure it is. But she's an unusual woman and a gifted one. And I'm very, very proud of her. And our daughter is, too. And I just want her to do whatever she finds rewarding and what makes her happy. But Chelsea has gone back -- she's in graduate school at Columbia now in public health. And she's always...

KING: Is she interested in government?

CLINTON: Yes, she's interested in government. She loved the private sector. She wanted to see how it worked. She did very well at McKenzie and when she worked at Avenue Capital, that she still does a little work with.

She's -- she's had a good life. But I think she really, really cares about health care. She cares about public health. She thinks that America has still got a ways to go to develop an affordable, high quality health care system. And I think she wants to be a part of it.

KING: More about the secretary of State, right after this.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

HILLARY RODHAM CLINTON, SECRETARY OF STATE: I am so grateful to him for a lifetime of all kinds of experiences...

(LAUGHTER)

H. CLINTON: ...which have given me a...

(APPLAUSE) H. CLINTON: ...which have given me an extraordinary richness that I am absolutely beholden to and grateful for.

(END VIDEO CLIP)

KING: We're back with President Clinton.

Everyone talks about Hillary and says what makes a good secretary of State?

CLINTON: I think first you have to have the confidence of a president and a good, open, honest and consistent way of communicating. They have that. They have a good relationship.

Then I think the secretary of State needs to be a man or a woman who knows a lot about the world, has a view of where we are now and where we ought to be going and is comfortable implementing the strategy to get us there and using other strong people to help.

I mean one of the issues for Hillary when she took office was, was it a good or bad thing for her to pick and for the president to approve envoys to the Middle East and to Pakistan and Afghanistan right away -- and to Iran and perhaps to some other places?

And conventional wisdom says no, you ought to try to keep all the big stuff to yourself. She said no, because we have to do too many things at once and my job is to make sure we're moving on all tracks.

So I think you have to understand the world, where we are, where we want to go and then be able to implement a strategy to get there.

KING: There are some who say, Mr. President, that Afghanistan could be Barack Obama's Vietnam.

Do you buy that?

CLINTON: Well, in theory, it could happen. But I don't think so. And I think what they mean is that Afghanistan has often been a sinkhole for other country's aspirations, that it is big, tough terrain, rugged people and impossible to control the borders.

As you see from the area of Pakistan where the Al Qaeda leaders and a lot of their Taliban supporters have hung out, hidden and from which they have launched attacks and incursions into Afghanistan. That's never ever even been a part of the central government's control in Pakistan.

But if President Obama were to do what the British tried to do in the 19th century and literally control the country, or what the Russians did into the 1980s, trying to, you know, have a puppet government and then send the whole Russian Army in there to fight, it could become Vietnam.

But I don't expect that to happen. He's got perhaps our smartest general, General Petraeus, and our most successful diplomat in the modern era, Dick Holbrooke, working together to craft a military/diplomatic strategy, strongly supported by Hillary and Secretary Gates.

They know what the risks are. But they believe the risks of noninvolvement, losing the Afghan democracy, having the Taliban come back in and institute the most repressive government in modern history against women and little girls, giving free reign to the Afghan -- Al Qaeda, all over Afghanistan -- those risks are far greater.

So I think that they'll be smart. I think they learned some lessons in Iraq. And I believe they've got a reasonable chance to succeed and no alternative but to try.

KING: We'll be right back.

Don't go away.

(COMMERCIAL BREAK)

KING: We'll be discussing his global initiative shortly.

Our guest is former President Clinton.

We're at his library in Little Rock.

What about the cabinet stumbles. We had Bill Richardson, Judd Gregg -- two former, would be, may be secretaries of Commerce -- backed out. Tom Daschle withdrew.

Embarrassing, right?

CLINTON: Yes, it is. But I've been very pleased that there hasn't been the constant harping on it in the press that you had, for example, when I was president. And I just had -- I had one -- all my cabinet members were confirmed the day I was inaugurated except for one.

But look at what the president is up against here. He picked an excellent national security team and an excellent economic team and moved quickly to deal with the big, tough economic and national security questions. And he's doing very well with them.

I think that in the context in which we are living, with all of these pressures on the economy and on the national security front, it isn't surprising that there would have been some glitches by the people sort of filling the other positions, if you will. And I expect he'll appoint good people, they'll be confirmed and we'll be fine.

And I think that he knows that he's got to major in the majors, even if he messes up or there's a problem in some other area. And I think, on balance, he's done very well.

KING: Are you surprised at Senator Gregg?

What do you make of that?

CLINTON: I have no idea. I suspect Hillary knows Senator Gregg better than I do. But we both like him. We think he's a man of integrity. And I understand why President Obama likes him.

But I think -- I think you have to assume Judd Gregg told the truth, that finally he decided that his philosophical differences might have been too great. After all, he once voted, when I was president, to get rid of the Department of Commerce.

I think Bill Richardson could have done quite a good job there. And I think that what we need to look for in a Commerce secretary, without regard to party, is someone who understands the policies, but is also a good promoter for America -- a good salesperson.

KING: Sarah Palin, net plus, net gain?

CLINTON: I think she was a net plus before the failure of Lehman Brothers and the collapse of the stock market, because she gave him credibility on the Republican right. And you had all of a sudden -- I remember -- everybody has forgotten this. But before Sarah Palin was named, Senator McCain had two offices in Ohio and I think Senator O -- then Senator Obama had 14.

Overnight, you had an operation. Through no fault of her own, she became a negative on September 15th, because nobody on their team had any economic experience and the burden against the Republicans was overwhelming.

However, I think after September 15th, it wouldn't have mattered who his vice presidential candidate was. I think the election ended when the Bush administration decided not to try to help Lehman Brothers and accelerated what was then a deep housing crisis into a generalized collapse of the stock market. After that, I think the election was over and we were all just working hard as we could to do as well as we could.

KING: What do you make of President Obama?

I mean, for a while I know that you were down and dirty tough when Hillary was running. And that was a pretty rough campaign, a very close campaign.

What do you make of him now?

CLINTON: Well, I always had a great respect for his abilities. And I -- those have been confirmed by the way he's conducted himself in the transition and in these early weeks. I think he is very smart. And I think he wants right things for America. And I think he's made good people decisions and good policy decisions.

The other thing is that he's got the right sort of mind for this time. And let me explain what I mean by that. Most people, including a lot of really, really smart people, learn things serially -- that is, they learn one thing and master that. Then they go to the next and they go to the next.

We need a president, when a lot of things are happening at once, with a mind like Roosevelt had and, to some extent, the way I thought about my job when I became president. When you've got a whole lot of things happening at once, you had to be able to first understand things you have not experienced and secondly, learn by listening and then put them into a pattern and figure out what to do.

He's got that kind of mind. So he's, I think, both temperamentally and intellectually suited for the challenges he faces. And, on balance, I think he's done a fine job so far and I think he's going to be successful.

KING: Can he try to live like a normal person -- going home to Chicago, kids go to school, he helps take them to school, plays basketball, goes out to public restaurants?

Can you keep that up?

CLINTON: I think so.

KING: Yes?

CLINTON: Yes. I did quite a bit of it and I wish I had done even more. And I think that -- look, for example, when I want to play golf, some times I'd play five holes before I hit a decent shot because I couldn't stop thinking about what I was doing. You need -- the president needs a release, number one.

Number two, the president needs friends and family.

And number three, the president needs to know he's doing right by his daughters.

In their hearts of hearts, most fathers believe that raising their kids is their most important job, even presidents. And so we should be happy when he takes his children to school, because it then will free him up emotionally to be even more involved in the decisions of the presidency.

If you know you've taken care of your kids, then you feel that your job can get your full attention.

KING: Because they're more important than the country -- I mean, when you get down to it.

CLINTON: Well, I don't know if he can say they're more important than the country, because there are so many of us. But I think most -- I once had -- you know, I think the only dispute I ever had with my daughter -- only one the whole time she was in high school. She was a magnificent child, I thought.

But once we had a little argument. And I looked at her and I finally said, in exasperation, you have to understand I think the presidency is my second most important job. And pretty soon you'll be out of here making your own decisions. So just trust me, if I'm wrong, at least my heart's in the right place.

And so it makes me happy every time I see him taking his kids to school.

KING: We'll be right back with Bill Clinton.

We're going to talk about the global initiative, too.

Don't go away.

(COMMERCIAL BREAK)

KING: We're back with President Clinton. We're going to talk in just a moment about the Global Initiative. And incredible, all the balls in the air that he has going.

But one question though. What would you recommend or say or advise George W. Bush about being a former president? There aren't many of you.

CLINTON: Well, first I would advise him to make his own decisions with Laura about how they want to spend both the next five years and then the rest of his life. You have to assume he'll live 20 to 25 more years, and he seems to be in very good health. And I think he should just look at this as a whole new phase of his life.

Yes, he'll build a presidential library. And yes, he'll continue to appear at Republican events. But basically once you leave the White House, it's never the same again. You're not really in politics anymore.

So he should decide what he wants to do and then go about doing it. And I think he'll find that because he was president, from time to time, he'll be asked to do things by subsequent presidents, or ask his opinion. But as long as you've got something to look forward to every day, you're gaining on it. And I think that's what you want to do.

You never want to spend a day wishing you could still do something you can't do anymore. If I were in his position -- and I have been there -- I think the most important thing is just to think about that.

I know he's already begun work on a book. Then he's going to give some talks. And I think he'll take a few months to really decide that. And I would advise him to do that as well.

KING: You just explained to me, and I wish you could quickly do the same, the things you're involved with. You know, people know about charities and that you handle people who made donations. But where is the global initiative fit in all of this?

CLINTON: Well, my foundation work is basically divided into three baskets, if you will. There is this library, which I'm very proud of, which is an educational institution, and the first federally-managed building to win the top environmental award from the U.S. Green Building Council. And there is my School of Public Service, which is the only school in America that offers a Masters Degree in public service. So whether you go into government or private sector in public service, the non-governmental group. You just met my students. About half of them come from around the world. They're great kids.

KING: What a group.

CLINTON: And they do projects, as well as academic work, all over America and on all six continents.

Then the second thing I have is my foundation, and that's headquartered in Harlem. They run our massive AIDS program, which provides medicine to about 1.5 million people; our malaria program; the small business mentoring program in New York and elsewhere; our national effort against childhood obesity; and our effort to help cities all over the world combat climate change. We're supporting millions of square feet of retrofit and closing down landfills, and doing all that.

Then the third thing is what most people know about, the Global Initiative, which meets twice a year, once at the opening of the U.N. We bring in business people and political leaders and philanthropic leaders.

KING: And media.

CLINTON: And media, hundreds of media. And leaders of local community organizations in America and from all over the world, and get people to make commitments to actually do something about these problems. And then once a year we have one on a university campus.

We just finished at the University of Texas, where we brought in 1,000 students from 50 states and 60 foreign countries, and they made the same kind of commitments. The universities as a whole did; student organizations did. And they do -- the young people, sometimes they do some of the most amazing things.

So that's what we do. We do those three things.

KING: And when we come back, I'll ask what specifically the Global Initiative does.

Don't go away.

(COMMERCIAL BREAK)

KING: What's the purpose, Mr. President, of the Global Initiative, specifically? What's it supposed -- you just had it in Texas.

CLINTON: Yes. The purpose of the Global Initiative is to focus on the question that most people don't think about in politics. Most of the time I was in politics, the two questions people asked me, "What are you going to do?" and "How much are you going to spend on it?" The stimulus debate, right? You're going to cut taxes or spend money. How much?

The purpose of the Global Initiative is to focus on the how. How are you going to turn your good intentions into positive changes, whether it's alleviating poverty, combating global warming, improving health or education, promoting human rights or peace? How are you going to do it?

And we ask everybody who comes to these meetings, the college students at the university events, and everybody from around the world at the other events, to make a specific commitment. We don't have a minimum dollar amount, although we've had 46 billion dollars worth of commitments in four years, affecting 200 million people in 150 countries.

That's been very moving, but the most important thing is how. We have people sit around tables like you and I are now, where you'd have a head of state, a head of a big company, and someone from India or an African country wanting a little community organization, figuring out what would work best, and then people make commitments to do things.

KING: Now, how is this economic crisis going to affect that and your other various things?

CLINTON: Well, so far, it has not had an adverse effect on the Global Initiative. It has had a very adverse effect on my health and economic development programs, and my climate change programs. Because after my library was built, where Americans were very generous to me at all levels, since then most of the contributions I get are 100 dollars or less, or a half a million or more. Millions and millions and millions of dollars disappeared from that upper category through no fault of their own.

So I had saved some money for a little endowment, and I spent about half of it last year to keep all of our clinics open, and to keep most of our global warming work going, because I didn't want any children to die because of the economic downturn.

But this year, I have got to go out and probably get another 200,000 or 300,000 people to give me 100 dollars or less, and then get more people to give money at the 500 to 1,000, 1,500 dollar category. And if I don't do it, I won't be able to continue my operations.

KING: Do you think any giving might be hard?

CLINTON: Well, no, ironically, here is what I think is going to happen. I think that most Americans know they're still better off than most people who ever lived. And a lot of people around the world feel that way.

So they will continue to give some money, even if less. What I think is that almost every charitable endeavor will have to do what I'm doing, they'll have to restructure to be more like the recent presidential campaign. You know, in American modern history, the most Internet- intensive, small donor-dominated campaigns ever run, in order, were: first, President Obama's; second, Hillary's; third, Senator McCain.

In other words, the world is taking us all in this direction. So I feel the same way about my foundation that I do about America. If I'm doing something people believe in, I should be able to get people to give modest money to it so I can continue to do it and keep all of these kids -- it will have two-thirds of all the children in the world -- poor children who are on AIDS medicine are getting it out of our foundation.

And so I should be able to do that. And if I can't, I won't be competitive. But I think it's important that when this is over, my foundation will have a broader base of donors and a smaller average amount.

And when this is over, America will be better off because people will still make money investing money, but they'll have to invest it in the production of goods and services that we need for the 21st Century.

So it will be more broadly shared prosperity.

KING: I must say, at the Global Initiative you sure get a disparate group.

CLINTON: It's great, isn't it?

KING: Rupert Murdoch.

CLINTON: Barbara Streisand. And again, we bring people in from poor countries from all over the world, even if we have to pay their way, to make sure they're at the table and they're all talking about what works.

I'm only concerned now -- it's nice if we raise a lot of money, but the amount of money we raise every year is by and large a function of how many energy projects we do, because they cost more.

The main thing is, how do you turn your good intentions into positive changes? I'm in the "how business" for the rest of my life. And I'm going to leave the politicians to determine the "what" and "how much."

KING: You'll never leave politics.

(LAUGHTER)

KING: We'll be back, don't go away.

(COMMERCIAL BREAK)

KING: We're back with Bill Clinton.

What's the impact, do you think, of having a wife as secretary of state on the Global Initiative, if any?

CLINTON: So far I would say it hasn't been negative. I think the agreements I made with President Obama's transition team were altogether proper. I mean, they don't want me personally raising a lot of money from foreign governments, because there would always be a question there, even if it had nothing to do with trying to influence any decision, somebody could always I did.

So the deal I made was that any government that was giving me money to do my AIDS work, for example, a lot of the medicine -- most of the medicine itself is bought through government contributions. They can continue to do that.

The private money I raised creates the health clinics.

KING: That's OK.

CLINTON: Yes. That's fine. But if a new government wants to say-- sees this show and says, gosh, I don't want Bill Clinton to close down his AIDS money, and let's say the government of Belgium called me tomorrow and said, our foreign assistance program might be interested in giving you money, then I have promised to refer that to the State Department ethics people, and if necessary also to the White House.

I would have done that if Hillary weren't secretary of state.

KING: But she runs the State Department.

CLINTON: Yes, but, see, those people are full-time professionals. That is, she didn't hire or fire them.

KING: The ethics people.

CLINTON: And -- yes. And if -- but they also can be referred to the White House. And in -- but in addition to that, if someone from overseas, an individual wants to give me money, and I think there's any question about the provenance of the money, I would refer that to the State Department and White House too.

I did that when President Bush was in office. That is, I think when you've been a former president, you have a responsibility at least to try not to cause any problems, either for your enterprise or for the government.

So I don't I have any problem at all with the agreements we've made. And they've had no negative bearing on us. In fact, all of the discussion about the foundation in Hillary's hearing process was good for us because now millions of Americans know what we do who didn't know before.

And so, you know, I think that over the next three or four months, we may get more people sending us 25 or 50 bucks than otherwise would have not.

KING: Going to talk about the youth in a minute. Don't go away.

(COMMERCIAL BREAK)

KING: By the way, more information just on your Web site. Go to ClintonFoundation.org. You'll get all you need. ClintonFoundation.org. You mentioned how you fight AIDS a lot. In that connection, should Obama sign the stem cell research funds, federally for embryonic stem cell research?

CLINTON: I feel very strongly he should.

KING: He said, though, he wants Congress to do it, not him.

CLINTON: Well, he may or may not need federal action there, but the Congress will pass a good bill on this. Congress passed a good bill under President Bush.

KING: But if you pass it, he signs it now, maybe somebody will live who wouldn't live, three months from now.

CLINTON: I'm assuming that he knows that this is a high priority for the speaker and Senator Reid and he expects legislation coming.

But let me say, I feel very strongly about this. I think that I worked hard on the sequencing of the human genome. We finished it when I was president. Now there are all these practical applications being spun out of it. We've identified the genes that were high predictors of breast cancer. We're getting close on Parkinson's. We're even making headway on Alzheimer's. But this stem cell research, if the stem cells are frozen embryonic stem cells, if they are never going to be used to be fertilized, to bring a life into being, then I think making them available for medical research is the pro-life position and I honestly don't understand -- I would understand it if we were going and raiding stem cell banks, where these stem cells were going to be used to actually fertilize eggs and have babies.

But it's not going to happen. I think it's very wrong to just throw these things in the trash can.

KING: You opened the second Clinton Global Initiative University conference this past weekend and also a thousand students attended. How do you see the younger generation responding the global challenges, especially in these economic times?

CLINTON: Well, I think there is a -- there is a very large number of them who are doing astonishing things. Like there were kids at the University of Texas, just for example -- I'll give you just two or three examples. One young woman decided that she's going to go around and collect all the kitchen grease from all the dining halls and then nearby eateries and then use it to make bio-diesels, to run cars and lawn mowers and generators.

Another one, they organized the deaf schools in Texas to do videotapes -- live video conferencing back and forth with a deaf school in Mali in West Africa, to teach the kids through sign language, who don't speak and don't hear. about basic public health to try to stem the rise of AIDS and other health problems.

Those are just two examples. I could give you just the amazing idea these kids came up with. One guy is going to develop a peanut butter based nutritional supplement for children in Nepal, like the ones we give to kids to Africa. without which they cannot take their AIDS medicine.

So that's amazing. Here is the problem: some percentage of young people may be totally discouraged by this economy and totally worried by it. And therefore think, well, there's no point in me doing this now. We've got to redefine citizenship in the 20th century so that everybody, everybody thinks they should give something, some time, some money, some skill. Because there is never going to be a time when the private economy and the government, no matter how good the government is, whether it's your government or my government or whoever, will be able to solve all these problems.

And these non-governmental groups like my foundation are exceedingly creative and they can do more with less money. So I think you're going to see more and more partnerships between government, the private sector and non-governmental groups, foundations, like the Gates Foundation and very, very small ones as well.

KING: Remaining moments with Bill Clinton right after this.

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KING: We're back with our remaining moments with President Clinton. Before we ask about Peter Max, this wonderful exhibit, do you see any, any chance of the Mideast having peace?

CLINTON: I do.

KING: You do?

CLINTON: Yes.

KING: George Mitchell have a lot to do with it?

CLINTON: Well, he can. He's going to have to fill in the blanks, you know, with people. But look, however the Israeli government is constituted --

KING: We don't know yet.

CLINTON: No. And however divided the Palestinians are, there are two things that give us hope. One, the underlying realities haven't changed. Palestinians are having more babies than the Israelis. The Israelis have to decide whether they want to share the future in a positive way with a constructive Palestinian state, so that they have a Jewish democracy, which is what Israel was set up to be. And if they don't, then they'll have to disenfranchise the Palestinians living outside of old Israel, pre-'67 Israel, and they won't be a democracy anymore. Or they will let everybody vote and they won't be a Jewish state anymore. That hasn't changed. The other thing that has happened that's really better now is the external environment is so much better. The king of Saudi Arabia and I think more than 20 other Muslim countries in the whole Arab Middle East, with the exception of Syria, has been out there strongly supporting a peace process and basically saying, if you will give the Palestinians a state in the West Bank and Gaza, with appropriate compromises -- essentially, what I proposed in 2000 that Israel accepted then -- we will strongly support it. We will urge the Palestinians to sign it. We will help them succeed economically. We will relocate them.

Now, therefore, I think there's hope, and I don't see what the alternative is.

KING: There are a lot of exhibits that pass through this wonderful library. Throughout the year, motorcycles and artifacts from old western movies. And now they have our good friend, my friend from long time ago, the brilliant artist, Peter Max. And he's got an exhibit here on this floor and on the main floor. What do you make of this?

CLINTON: Oh, I love it. You know, Peter and I and Hillary have been friends a long time. We met him early on in my -- in beginning in national politics, and he was always incredibly kind and generous. Upstairs in my apartment that I occupy when I'm here, I've got his portrait of Harry Truman, who I admire, my neighbor to the north up here in Missouri.

And I've got the portrait he did of me at home in New York. So I think he's just great. He's a very gifted man. And as you pointed out when we were talking during the break, his facility with colors is truly amazing.

KING: And I wanted that the one of the portraits is with me. Down on the main -- I'm on the main floor.

CLINTON: I'm going to look at your main floor portrait as soon as we finish.

KING: In our remaining moments here, what it's like to be a former? You're a former.

CLINTON: Well, the great thing is, you can -- at least before Hillary became secretary of state, the great thing was I could say whatever was on my mind.

(LAUGHTER)

CLINTON: And the bad thing is, nobody has to care what you say anymore. No, really, let me be serious. It's been in some ways the most rewarding period of my life, because if you use the knowledge, the experience, the contacts you had when you were president, to continue to serve at home and around the world -- you don't have the power that you had when you were president, but neither do you have the array of responsibilities, nor are you chained to the day's news. So you can concentrate on a few things. As I just said, we haven't talked about all of the things I do. But if I decide, for example, I want to help the Rwandan coffee farmers make more money, I can go figure out how to do that. So you can focus on things.

If President Bush asked his father and me to go help in the tsunami, we can do that. So -- and Katrina, we can do that. So in some ways, this has been so rewarding, because I don't have to fight any political battles, and I can concentrate on things I care about.

KING: For all the years we've known each other, it never gets dull.

CLINTON: Thank you.

KING: Thank you.

CLINTON: I'm glad to see you.

KING: Former President Bill Clinton.

Anderson Cooper and "AC 360" is next.