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"The Last Word": Interview with Jesse Jackson

Aired July 19, 2009 - 12:00   ET


KING: This is CNN's "State of the Union" report for Sunday, July 19.

There were some sobering moments this past week for Americans looking for signs of economic recovery and for progress on the pocketbook issues that squeezes family budgets, rising unemployment for one, including Michigan, now the first state in a generation to see its jobless rate climb past 15 percent.

And here in Washington, a setback in the president's push for sweeping health care reform. The Congressional Budget Office said the leading Democratic plans wouldn't reduce medical costs, but in fact raise them. President Obama says it's no time to slow down, but even now some Democrats are joining Republicans who say these proposals cost too much and that Congress needs to take more time to work this through.

With us now to take the pulse of the economy and the health care debate is the White House Budget Director, Peter Orszag. Welcome back.

ORSZAG: Good to be here.

KING: I want to start with this dramatic cover of Newsweek magazine, Senator Edward Kennedy, a leading voice on health care reform for decades, who is missing from the day-to-day debate here in Washington because of his own health issues.

He writes in Newsweek magazine a long essay about why health care reform matters to him, and on the big question troubling Washington right now, how do we pay for this.

Senator Kennedy, knowing his leadership does not think this is a good idea, writes this, "I'm open to many options, including a surtax on the wealthy, as long as it meets the principle laid down by President Obama, that there will be no tax increases on anyone making less than $250,000 a year. "

Now, that surtax is the centerpiece of the House proposal. Senators have wanted to do other things -- we'll move on to the specifics in a minute -- but with Senator Kennedy saying that, will the White House -- are you prepared to say that the surtax should be the leading proposal to pay for this?

ORSZAG: Well, first, it's not actually the centerpiece of the House bill. The House bill has more than $500 billion in savings from Medicare and Medicaid, which is the majority of the cost.

We've also said that the bill has to be deficit-neutral. The president yesterday said he will not sign a bill that is not deficit- neutral. To get there, some additional revenue in the short-term is necessary. The House has one approach. We put forward a different approach. The Senate is considering yet more options.

The key thing is we need to get there in a way that is deficit- neutral.

KING: But you say the president has a plan, the House has a plan, the Senate has a plan. There are many, as you know, saying it's time for the president to settle this squabbling within the Democratic Party. That he needs to step forward and lead. That the risk is, if he doesn't do it now, that this whole thing could go off the cliff.

ORSZAG: Well, look, this is the legislative process, and this is what normally happens.

I think we are making good progress. You had the Senate HELP Committee actually report out a bill next week. The Energy and Commerce Committee in the House will be marking up a bill, and the Senate Finance Committee is in intense discussions to move forward too. So there's been a lot of progress here.

KING: A lot or progress, but not a lot of consensus yet on how to pay for it, which is the big problem. I want you to listen to the Democratic chairman of the Senate Finance Committee. He wants to pay for a lot of this, yes, like the House bill, squeeze some savings out, but when you need the extra revenue, Senator Max Baucus, the chairman, would like to get that by taxing health care benefits that many Americans get from their employers. The president doesn't like that idea. Max Baucus says this.


BAUCUS: Basically, the president does not -- is not helping us. He does not want the exclusion. That's making it difficult.


KING: You disagree with him policy-wise, but to have a Democratic chairman say the president is not helping us. They're almost begging for more intervention from the president in the Senate.

ORSZAG: Well, there has been a lot of discussion with the Senate Finance Committee. That particular proposal is one that the president doesn't favor, but we've put on the table lots of other proposals, and we are working closely with the Senate Finance Committee to get to where we need to be. Remember, none of this is easy. There's a reason why this hasn't happened in 50 years, and we're making a lot of progress.

KING: The House bill, which has that surtax and the savings, the Congressional Budget Office, which you were once the leader of that office, says that it would not be deficit-neutral, as the president has insisted again in the past 24 hours. It says it would add $239, $240 billion to the deficit over 10 years.

ORSZAG: Only because it is keeping current Medicare reimbursement rates for doctors, which was always baked into the cake. Everyone anticipates that even absent health care reform, that would be taken care of. If you take that off the table, in terms of new policy, the House bill is deficit-neutral.

KING: You want to leave the legislative process to run its course. So let me ask you, take off your budget director hat and talk to me as someone who understands the economy, with your academic training. When it comes to the overall economy, what would hurt the economy less? The House proposal, the surtax on upper-income Americans, or taking away the exclusion and ending up taxing health care benefits? In terms of the impact on the rest of the economy, does it make a difference?

ORSZAG: Well, they would have different effects. I mean, to raise the same amount of revenue, the exclusion would be affecting more people. So again, this isn't a simple yes/no kind of answer.

KING: It's affecting more people, good or bad? Is it spreading more pain or is it causing more pain?

ORSZAG: Again, it depends what your objective is. So look, the key thing here is, we do need to make sure that this -- first, we need to get this done, because it hasn't been done in 50 years. The current system is unsustainable. We can't go on with not only such rapidly rising costs, but individuals facing constraints on preexisting conditions and difficulty obtaining insurance and what have you. We need to get it done. It needs to be deficit-neutral. And in the short run, some additional revenue is going to be required.

KING: Some additional revenue going to be required.

I want you to listen to the man who holds the job that you once held. Because he looked at the leading House plan and the HELP Committee plan that you mentioned that has passed in the Senate. And you have been adamant from day one, as the president has been, that the goal here is not just the moral imperative of helping the uninsured, but the policy imperative, the financial imperative of stopping a government health care cost that keeps going up like that and at least getting them here. Listen to Doug Elmendorf.


DOUG ELMENDORF, DIRECTOR, CBO: In the legislation that has been reported, we do not see the sort of fundamental changes that would be necessary to reduce the trajectory of federal health spending by a significant amount. And on the contrary, the legislation significantly expands the federal responsibility for health care costs.


KING: So this doesn't do what you need it to do, the proposals, as they now stand. You know him well. You had that job. You take issue with that, or is he right?

ORSZAG: Well, let's actually look at what the Congressional Budget Office put out on Friday night with regard to the House bill. And again, taking doctor payments off the table, that bill is deficit- neutral over 10 years. There are out-year deficits that we want to bring down even further.

I think the single most important thing that's missing from the legislation at this point is our proposal for an independent commission of doctors to help the policy-making process be more flexible, lead to higher quality and lower costs over time.

KING: Why is that (inaudible)

ORSZAG: That is a big game changer. Well, I think ultimately, it will be.

KING: Ultimately...

ORSZAG: We sent -- I sent up a letter on Friday to the leadership of both the House and Senate, laying out, including legislative text, the first time we've sent up specific legislative text, laying out a proposal to do that. We think it's really important.

KING: But the president, in his weekly addressed, talked about special interests. He said special interests are trying to knock this off the track. As you know, Republicans say, one of the reasons you're having a hard time paying for this is because you won't budge on taxing benefits and they say it's because another special interest, they would use that label, labor unions are putting so much pressure on the White House and leading Democrats.

ORSZAG: Well, I'm not sure that that's the president's concern. I think the president is concerned with proposals that would tax -- that would eliminate the exclusion has to do with what it would do to employer-sponsored insurance.

Remember, actually, this is a key thing no one has picked up on. The House bill actually expands employer-sponsored insurance coverage by a couple million people. Part of the reason for that is it doesn't affect the tax exclusion. So one needs to be very careful in that exclusion not to undermine the coverage that most people already have.

KING: Now, the president has been adamant, he wants this passed by the House, passed by the Senate, even if he disagrees with a little bit of this and a little bit of that, both pass them by August so that then you can all get together and try to strike the grand compromise. There are many in Congress, as you know, who say that's an arbitrary deadline. Among them is Mike Ross. He is one of the conservative Blue Dog Democrats who says he wants to get this done and he wants to get it done this year, but...


REP. MIKE ROSS (D), ARKANSAS: Whether we get it done in -- before August or after August, what's the hurry? We've been trying to do this since Teddy Roosevelt. What's important, I believe, is that we slow down, we get it right, and that we do it this year.


KING: The August deadline has been in almost everything the president has said about this. But when he had the hastily arranged event on Friday and then again in his weekly radio/YouTube address this weekend, he does not mention August. Is that deadline now off the table?

ORSZAG: No, it's still the goal. And we think...

KING: Still the goal or the still the president's insistence?

ORSZAG: We think we can make that. We're working towards that. And we have to remember, there are some who are advocating the delay simply because they don't have anything to put on the table.

The typical Washington bureaucratic game of, if you don't have a better alternative, just delay in the hope that that kills something, is partly what is playing out here. Not with regard to many members of Congress and senators who are actually actively participating in the debate, that's great.

But there are those who are advocating delay just as a desperation move to try to kill this.

KING: I assume you don't include Mike Ross and the Blue Dog Democrats in that group.

ORSZAG: No, he has been constructive -- he's in the constructive group.

KING: So there's a constructive group in the House that says, we would like a little more time to think this over. There is a group in the Senate, six senators sent the president a letter this week, Republicans and Democrats.

The Republicans, you would very much need to make this a bipartisan plan in the Senate. They say, Mr. President, we want to get there this year, we share your goals, but we need more time. Why not?

ORSZAG: Well, and the discussions are occurring. I mean, with regard to the Blue Dogs, there were discussions over the weekend, same thing with regard to the Senate Finance Committee. Those are happening -- continuing happening today and they will be ongoing. I think there's a lot of progress and discussions are quite active.

KING: Let me wrap this up by a couple of quick questions. The president said this was his deadline. Now you say it's his goal. That's a softening.

ORSZAG: Well, we want to get it done by August -- by the August recess, and we think we can. KING: And on the issue of presidential leadership, there are a lot of people who say, they understand the president's strategy at the beginning, but they say this has now frayed to the point where if he wants to guarantee this gets done this year, that he needs to get his hands dirty.

And if you talk to people on Capitol Hill, even close allies of this president, they're trying to question the reluctance. And many say that maybe he doesn't want his fingerprints on it now because of the experience of Bill Clinton.

It became "Clinton-care," because they put together such a detailed plan and sent it up to Congress, and when it failed, he suffered the big price for it. Is the president too timid to get involved here?

ORSZAG: No, I don't think so. And people are reacting too much to the ebb and flow of what's happening on a day-to-day basis. Again, this hasn't happened in 50 years for a reason. It's complicated. Legislative process is working.

I think people are sort of reaching judgment about who's going to win the marathon based on who's ahead at, like, mile 19, not a good way of judging things. We're making a lot of progress.

KING: All right. We'll continue our conversation. Much more to discuss with the budget director, Peter Orszag, including his take on whether the economy is beginning to bounce back or still heading deeper into recession. Stay with us.


KING: We're back with the White House budget director, Peter Orszag.

And, Peter, I want to start with one of my hometown newspapers. And significant as we discuss the economy, because this is my first- paying job, delivering The Boston Herald.

ORSZAG: My hometown too.

KING: If you look at The Boston Herald, "How Low Can We Go?" And that's a question Americans ask themselves every day, but particularly on Sunday morning as they sit around for breakfast and reflect, how low can we go? As we speak today, is the U.S. economy in the early days of a recovery? Are we moving this way, or are we still going into a deepening recession?

ORSZAG: I think that where we are is the sense of freefall that we had back in December -- remember, GDP was falling 6 percent on an annualized basis at the end of last year, beginning of this year, jobs were declining by 700,000 a month. That, we've stepped back from that precipice, but we're not yet in the growth zone. Most private sector forecasters are suggesting that won't happen until later this year. KING: Later this year. And because of that, there's an impact on what you do, essentially keeping the budget math of the United States government. I want to show some numbers on the screen for our viewers, because this is what you predicted in your budget, which is a few months back.

When you first came into office, you predicted the employment rate would average 8.1 percent this year. It is now 9.5 percent and going higher by almost all accounts. The stimulus plan would create 3.5 million jobs, create or save. That was what the president said when the stimulus plan or the recovery plan was sold a few months back. The economy since it passed has lost 2.65 million jobs. And as you noted, your budget predicted the GDP, the growth of the economy would be negative 1.2 percent, in the first quarter it fell more than 5 percent. At what point does that send Peter Orszag back to the table? Because those aren't just abstract numbers. That means you're paying out more in unemployment benefits from the government's standpoint, and you're taking in a lot less money in taxes. At what point, and we've had this conversation before, are you back at the table saying, something has got to give?

ORSZAG: Well, again, for this year, actually, that temporary increase in the budget deficit that comes from lower tax revenue and higher spending on unemployment benefits and food stamps and what have you is helping to cushion the blow on economic activity, along with the Recovery Act and other steps that we've taken.

And indeed, a big part of this stepping back from the freefall appears to be those automatic stabilizers that are built into the budget and the Recovery Act. Goldman Sachs says that the Recovery Act -- and Mark Zandi too, the Recovery Act is adding 3 percent on an annualized basis to GDP during the second quarter. That's a very big number. KING: I want to go back to the timeline of how this has played out. Because, as you know, even the vice president has said that, at the beginning, you underestimated the depths of the recession. And I want to go back. Days after taking office, the president said he needed stimulus money from the Congress, somewhere in the ballpark of $800 billion, and he needed it now.


OBAMA: We're moving quickly because we're told that, if we don't move quickly, that the economy is going to keep on getting worse, and we'll have another 2 million or 3 million or 4 million jobs lost this year.


KING: And it was just two months later after that spending passed, the president sounded pretty optimistic.


OBAMA: What you're starting to see is glimmers of hope across the economy.


KING: But this past week, a much more cautious message from the president, and when it comes to the stimulus spending, he sounded a tad self-defensive.


OBAMA: The Recovery Act was not designed to work in four months. It was designed to work over two years.


KING: You know the debate. Do we need more stimulus for the economy? And did you just underestimate the depth of the ditch? ORSZAG: Well, again, first, everyone -- almost everyone, not quite everyone, but almost everyone, in November or December, didn't realize how big the hole actually was, firstly.

Second thing, the Recovery Act was always intended to peak towards the end of this year and into early next year. So it is -- it is actually slightly ahead of -- despite all the media hoopla about the spendout from the Recovery Act, more than $220 billion has been obligated or gone out the door in form of tax relief, slightly higher than what was initially projected.

So we need to give this some time to work. It was always intended to peak later on this year, and it's on schedule for doing so.

KING: I'm going to ask you to walk over to the wall with me. Because I want to show what this means, in terms of a graph, and then ask you to help people at home trying to figure this out.

But if you look at the yellow line, this is where you thought the unemployment rate -- here's the year's playout. This is the unemployment rate, 3 percent up to 10 percent.

Here's how, if you look at Bureau of Labor and Statistics, this is how it would have picked out with the recovery plan. Then the idea was the administration said, if we pass the Recovery Plan, it would go down, something like this.

But this, in red -- and I'm going to stretch this out so we can see it better -- this is what has actually happened. The red line is what has actually happened.

So at what point, Peter Orszag, does this red line -- most people now expect it to go past 10 percent -- at what point does this come down? And would more money here have made it better?

ORSZAG: Well, first, I think a lot of the debate has been confused, because this is the impact of the Recovery Act. So, yes, the world has turned out somewhat worse than initially thought back in, you know, the end of last year, but the Recovery Act is still helping.

So, in other words, if you had your dotted blue line, it would look like this. Now I'm moving your screen.

KING: That's OK.

ORSZAG: Most private-sector forecasters are projecting that the economy will start to recover toward the end of this year. Unemployment will lag somewhat. Unemployment normally -- firms usually, even after the economy starts to pick up again -- they still remain reluctant to hire people for some period of time. So the unemployment rate is going to remain elevated, too elevated and there are too many people who are suffering, for some period of time. It's going to -- this was not a, sort of, overnight thing that happened, the problem that we face. And it's going to take some time to work our way out of it.

KING: So lastly, help the family out there watching that, maybe, had to put off a summer vacation or squeeze a summer vacation, what is it in the economy -- when all this data comes into you, what are you looking for? Is it still a credit crunch problem? Is it a consumer spending problem? What is it that you say, "When I see this, I will know that we're going up"?

ORSZAG: Well, there are some good signs. I think that sense of panic and fear in financial markets earlier in the year and into last year has dissipated in some degrees. But we'd start -- we're -- you know, we're focused on what's happening to job growth. We're focused on what's happening to consumption, the net exports, the key drivers of economic activity.

There's a lot of incoming data. During these kinds of periods, also, you're going to get mixed signals. For example, the unemployment rate remains high. The second quarter GDP numbers, even though they're likely to still show a decline, are likely to look a lot better than the first quarter, which is a sign of progress.

So mixed messages are part of what happens during these kinds of periods, where a sense of free fall's over, but we're not yet at point of sustained growth.

KING: Is there one thing that's, sort of, just holding the door shut?

ORSZAG: No, I think it's a variety of things. And again, this took a while to build up. It's going to take a while for us to get out of it.

KING: All right. The White House budget director, Peter Orszag. Peter, thank you very much.

And the questioning is over for Judge Sonia Sotomayor, and even critics say they expect easy confirmation for the nation's highest court. So how might her view of the law change your life?

We'll talk with the Senate Judiciary Committee's top Democrat and top Republican when "State of the Union" returns.

(COMMERCIAL BREAK) KING: A beautiful shot of the Capitol. Look at that blue sky on a Sunday morning here in Washington, D.C. While there isn't much doubt that Supreme Court nominee Sonia Sotomayor will be confirmed by the Senate, there has been plenty of debate over just what kind of justice she would be.

So what did we learn during last week's confirmation drama. Joining us now, the two top members of the Senate Judiciary Committee, the Democratic chairman, Patrick Leahy, is in his home state of Vermont, and the Republican -- ranking Republican, Jeff Sessions of Alabama, with me here in the Washington studio.

And Senator Sessions, let me start with you. Your leader in the United States Senate, Mitch McConnell, let it be known on Friday afternoon that he was going to vote against Sonia Sotomayor. And among his reasons he said this: "Judge Sotomayor's record of written statements suggest an alarming lack of respect for the notion of equal justice, and therefore, in my view, an insufficient willingness to abide by the judicial oath.

That is the leader of Republicans in the Senate, but as the ranking Republican on the committee, the man who is most enmeshed in the details, many of your colleagues will follow your lead perhaps even more than leader McConnell's lead. How is Jeff Sessions going to vote on Sonia Sotomayor?

SEN. JEFF SESSIONS (R-AL), RANKING MEMBER, JUDICIARY COMMITTEE: Well, I would first say that McConnell has followed this closely. He has made a number of speeches, he studied her record. He's a student of the law. He takes the judicial matters very seriously, and I think his opinion will have a lot of weight.

I have not announced what I am going to do yet.

KING: Here's your opportunity.

SESSIONS: Well, I think I'll pass again at this point.

We're looking at the record of the transcripts, the testimony, and the hearing. We have submitted some additional questions, and we'll be getting answers back from the nominee relatively soon, I think, on that. And so then we'll go through that process.

But I was troubled by a number of the things that the nominee has said, a number of the rulings that she has made, and I think it is a very serious and awesome responsibility to launch someone on a lifetime appointment with the power, in effect, to actually amend the Constitution, if they are not faithful to it when they render a ruling that alters its classical meaning.

KING: I want to get to the chairman in a minute, but it sounds to me like you're leaning no based on...


SESSIONS: Well, I have a lot of concerns. I've made a number of speeches and set those forth before the hearings. And so there has been no ambiguity about my concerns.

KING: And when will the vote be? Chairman Leahy wants to have it on Tuesday, but you have the right as Republicans to push that off under the rules of the committee and buy an extra week. Are you going to insist on that extra week?

SESSIONS: I think the July 28th date will be the date that we'll look to have that vote. Yes.

KING: So, Mr. Chairman, I want to bring you into the discussion. And as I do so, as Republicans like Senator Sessions and Senator McConnell air their concerns, we're also hearing a lot of -- I wouldn't call them jitters, but reservations from the left as well. Because as they listen to the hearings, they didn't hear what I would say is enough to reassure them.

I want you to listen to one exchange. This was Republican Senator Lindsey Graham asking -- excuse me, Judge Sotomayor a question. Let's listen.


SEN. LINDSEY GRAHAM (R-SC), JUDICIARY COMMITTEE: Do you believe the Constitution is a living, breathing, evolving document?

JUDGE SONIA SOTOMAYOR, SUPREME COURT NOMINEE: The Constitution is a document that is immutable to the sense that it has lasted 200 years. The Constitution has not changed except by amendment.

It is process -- an amendment process that is set forth in the document. It doesn't live other than to be timeless by the expressions of what it says.


KING: Many liberal groups or left-leaning groups said, you know what, she sounded an awful a lot like Roberts and Alito in the way she answered some of the questions, especially about precedent and following the Constitution. Are you satisfied that you are getting what you want, sir, someone who fits your views of a justice?

SEN. PATRICK LEAHY (D-VT), CHAIRMAN, JUDICIARY COMMITTEE: Her record is pretty clear. It's certainly easy enough for somebody to make up their mind how they'll vote or not based on these 17 hours of hearings, longer than most nominees ever have, 3,600 cases. Certainly she has had more experience on the trial bench and the court of appeals bench than any nominee to the U.S. Supreme Court in decades, and her experience as a prosecutor.

No, I find it pretty easy to make up my mind. I will vote for her. I don't expect her to sit there and say, look, I'm going to rule this way or that way, depending upon whether this group on the right or this group on the left want me to.

She said she's going to make up her mind, as she always has, based on the cases before her. That's what a judge is supposed to do. KING: The White House asked Democratic senators, please don't ask her about Roe v. Wade, please don't press on abortion or any specific cases, because if the Democrats start pressing, it opens the door for the Republicans to press.

But she did have from the newest member of the Senate, the newest member of your committee, Democrat Al Franken, he ignored the White House pressure, asked her some pretty specific questions about abortion rights, including this.


SEN. AL FRANKEN (D-MN), JUDICIARY COMMITTEE: Do you believe that this right to privacy includes the right to have an abortion?

JUDGE SONIA SOTOMAYOR, SUPREME COURT NOMINEE: The court has said in many cases, and as I think has been repeated in the court's jurisprudence in Casey, that there is a right to privacy that women have with respect to the termination of their pregnancies in certain situations.


KING: Senator Sessions, do you have any doubt if a Roe v. Wade- type case comes before the court that she is a vote for abortion rights?

SESSIONS: Well, it does seem that way. The organization she was involved with, the Puerto Rican Legal Defense Fund, had filed a number of very aggressive briefs in the case...

KING: Now, she says she was an advocate in those days and that was her job.

SESSIONS: Well, that's all right. But they -- I mean, she voluntarily joined and was on the board and her organization advocated that the federal Constitution required that it pay for abortions and the group also opposed any parental consent laws on abortions. So I would assume that that answer was where she will be.

KING: And...

LEAHY: You know... KING: Go ahead.

LEAHY: ... first off, let me clear up one thing. No one in the White House suggested to me what questions I should ask or I shouldn't ask. And had they done that, I would have just hung up the phone.

I made it very clear in talking to my fellow Democrats on there, you ask any questions you want. We're not there -- it's not the White House conducting this nomination hearing, it's the United States Senate. So nobody had any restrictions on what to ask.

But I would hope that people would not think we picked a Supreme Court justice on just one issue, the issue of abortion. I voted for Supreme Court justices who I'm sure totally disagree with the idea of having abortion legal, just as I voted for some who disagree with the idea of making all abortions illegal. That should not be the issue.

And the idea of trying to say, well, you know, she was on the Puerto Rican defense thing and so we have to ask some questions about that, I hope we don't go back to the day when we used to have African- Americans up for confirmation and say, yes, but you belong to the NAACP, so, you know, we're really suspicious of you.

Come on. Stop the racial politics. This is a person...

SESSIONS: Well, come on, Pat, you...

LEAHY: No, no, no, but...

SESSION: I want to disagree on that.

LEAHY: ... that's what it comes across. That's what it comes across. It comes across...


SESSIONS: Make them...

LEAHY: ... that if you belong to a group that tries to help Hispanics, help them in school, help them in other things, somehow you're suspicious. The same arguments were used against Thurgood Marshall and others. I think it's wrong.

The fact is, she has had more experience on the federal bench than any other nominee, and certainly, Jeff, since you and I have been...


SESSIONS: But, Pat, I want to correct something. No Republican leader said she was a bigot. You've overstated that. There's nothing wrong with us asking about her...

LEAHY: I was talking about Newt Gingrich.

SESSIONS: Her (INAUDIBLE) views about positions -- legal positions that she took as a member of any organization. That's a normal thing to do. And I don't think that was unfair. She said that she thought she was fairly treated. Other commentators, objective leaders, civil rights leaders have said that.

We gave our absolute best to make sure this was a fair hearing, but it had to be vigorous. We had to ask about things that people cared about, her speeches, her prior pleadings that she did and some of her decisions, which are troubling.

But, Pat, you gave us a fair hearing. I appreciate that. A lot of people felt we were pretty tight on time, but you -- when the hearing came up, we had an opportunity. And I appreciate that.

KING: Gentlemen, we're about to run out of time.

LEAHY: And I appreciate that, Jeff.

KING: Senator, let me...

LEAHY: I appreciate that, Jeff. The leader I was talking about...

KING: Hang on. Hang on one sec, Senator Leahy.

LEAHY: ... was Newt Gingrich.

KING: Senator Leahy, please.

LEAHY: The leader I was talking about, Newt Gingrich.

KING: He called her a racist, I believe, at the beginning. But let's -- he did not get a vote. And I think that both of you have received wide acclaim. This is more contentious than the hearing was, this few seconds right here.


KING: We're out of time and I want to ask you each to take about 30 seconds, please, because we're probably going to be back at this again in six months or a year. The president is likely to get at least one more pick.

What did you learn from this process? You know, there is frustration voiced by everybody that, of course, you can't ask about specific cases, but couldn't we learn more about these people? We're going to give a 30- or 40-year job on the Supreme Court. It's your last chance. What did we learn from this process that you think can make the next one better? Mr. Chairman, to you first.

LEAHY: Well, I think that -- and I will compliment Jeff and the others. We tried to make sure everybody had a chance to ask all of the questions they wanted. It is inherently frustrating, because you cannot ask how you're going to rule. That is a very difficult thing, but I think we got a pretty good idea of somebody who is a mainstream judge who has a great deal of experience.

KING: Are you happy with the way this went, the model for the future or build on it?

SESSIONS: I think we learned a lot on -- people did not press her to answer questions about future rulings. That would have been improper. I think that was good. I think we can always learn and do better. But my goal was to have the best hearing we've ever had. I don't know if we achieved that, but I think we came close. Most people were pretty complimentary. And your network, commentators were complimentary. So I hope that we achieve that and we can continue to talk openly about some of the most serious social and legal issues facing our country.

KING: We're out of time, but I'm going to try one more time. On the scale of 1 to 10, how likely is Sonia Sotomayor to get Jeff Session's vote? SESSIONS: Well, I'm not prepared to say at this time. And we'll consider it and announce it at an appropriate time.

KING: They pay me to try. Senator Sessions, thank you so much for coming. Mr. Chairman...

LEAHY: I would love to have Jeff's vote, I can assure you.

KING: Enjoy a beautiful day in Burlington, sir. We will see you again. Thank you both, gentleman.

(END VIDEOTAPE) KING: Twenty-five years ago, his historic run for the White House helped change American politics. Next, Reverend Jesse Jackson gets "The Last Word."



REV. JESSE JACKSON (D), PRESIDENTIAL CANDIDATE: The battleground and come the economic common ground and moral higher ground. America, our time has come. We come from disgrace to amazing grace. Our time has come.


KING: Twenty-one news makers, analysts and reporters are out of the Sunday morning talk shows, but only one gets "The Last Word." And that honor today goes to the man you just heard speaking at the Democratic National Convention 25 years ago. Former presidential candidate and the founder of the Rainbow Push Coalition, the Reverend Jesse Jackson. Reverent, it's great to see you this morning. Welcome to "State of the Union."

JACKSON: Good morning.

KING: I want to go back in time in a moment, but I want to fast forward a second because we read something in your home town newspaper, the "Chicago Sun-Times" on Friday, that I want to ask you about. We're six months into the Barack Obama presidency, a historic presidency, and Mary Mitchell wrote this in the "Chicago Sun-Times."

"When Bill Clinton was in the White House, Jackson practically had keys. But who from the grass roots of black America is speaking regularly to Obama about the issues that specifically relate to black people? Jackson is on the outside looking in. The Reverend Jeremiah Wright has been banished. Minister Louis Farrakhan won't get an audience. The Reverend Al Sharpton is operating on the fringes."

Reverend, is Barack Obama pushing out, excluding, keeping on the outside the previous generation of black African-American political leaders, including yourself?

JACKSON: No, he meets often with the Congressional Black Caucus. He meets with African-American mayors. I think that we want to engage more fully with him because there is a lot of unfinished business, and I think in time, his disposition is to address the issues that we feel most acutely about, more meaningfully.

KING: What about you?

JACKSON: Well, at some point in time, we will meet. I was very impressed with his speech in New York just this past week, and there are two dimensions. He acknowledged that there is the issue of structural inequality, and he had to overcome it with superior motivation. But his mission now is not just superior motivation, which is a big deal, but to address structural inequality and make it equality. And that involves a target stimulus investment. In these deep, dark areas where plants have closed and jobs have left and tax bases have gone down, certain class schools, first class jails, where jobs are leaving, that requires a real target stimulus urban project policy which has not yet happened, but that is his challenge.

KING: Well, let's discuss the challenge further, but as we do so, let's go back in time again to that speech back in 1984, because you laid out in that speech what you thought were the stakes, the benefits, the pluses of a Jesse Jackson candidacy for president. Let's listen.


JACKSON: When blacks vote in great numbers, progressive whites win. It's the only way progressive whites win. If blacks vote in great numbers, Hispanics win. If blacks, Hispanics and progressive whites win, women win. When women win, children win. When women and children win, we must all come up together. We must come up together.


KING: I ask you 25 years later, sir, how we doing?

JACKSON: Well, we've made an amazing progress. You saw it in Grant Park this past year with the election of President Barack Obama. You know, we must not forget, we've got the right to vote in 1965. It was not for blacks only. In Selma, white women couldn't serve on juries in Alabama. Farmers who couldn't pay poor taxes couldn't vote. By 1970, by extension, 18-year-olds got the right to vote. By extension in '74, we won a suit in Mississippi, where you could vote residency -- you could vote on the campus of your school. By '75, bilingual voting. So as we grew in the civil rights movement, it laid the predicate for tearing down walls, building bridges and in fact a new America.

KING: You make the point about the progress there. I'll move over to the map because there is some progress that you just noted, but there also what I would call, and I think you would agree, as unfinished business. And I want to go back to look at this is the African-American population in the United States. When you were running in 1984 the first time, 33.8 percent were below the poverty line. Now it's 24.5 percent. Some progress, but not enough. The unemployment rate among African-Americans, 1984, was 15.1 percent, pretty much close to that now, 14.7 percent.

KING: And single-parent families, the percentage of African- Americans in single-parent households, 53 percent in 1984; 56 percent now.

Reverend Jackson, what needs to be done to fix this gap?

And, specifically -- specifically, is there anything this president should be doing that you don't see him doing?

JACKSON: Well, just as there has been a stimulus target for the banks to let them recover, and they recovered to a certain extent that they are now making a profit again and sending money back to Washington, there must be targeted stimulus at the base, where you have this vast unemployment, where, as I said, when the plants close and jobs leave, the tax base erodes, which affects the schools.

In urban America, you have these vast pockets of poverty. And so if you're going to move from welfare to work, you need what? Child care; you need job training, a job and transportation. That requires rather targeted work, and I would think that remains part of the unfinished business, to in fact put the most unemployed, whether you're in Appalachia or urban America, back to work.

KING: More of our conversation with the Reverend Jesse Jackson after a quick break. "State of the Union" will be right back.


KING: We're back now. Our "Last Word" conversation with the Civil Rights leader Jesse Jackson.

Reverend, before the break, you were talking about the unfinished business and the more that needs to be done. Does that include, in your view, the need for more stimulus spending, particularly in America's cities?

Or is the White House right in saying, let's just wait a few months, maybe into next year, and see how the first stimulus plan works out?

JACKSON: It must be more targeted stimulus.

We've watered the roots -- I mean, the leaves; we've not watered the roots.

So, even as we water the bank roots -- they're too big to fail -- the hemorrhaging is outrunning the stimulus. We are -- 500,000-plus jobs a month are lost; 4.4 million homes in foreclosure, $100 million in student loan debt, 2.3 million Americans in prison -- a million are black -- and unemployment is at depression levels.

And so there must be some (inaudible) investment and enforcement of civil rights law at the bottom.

We need a stimulus package right now that's bottom-up. A bank, here, got $2 billion it did not want and did not -- it sent back to Washington. If that $2 billion was, say, spent among 10 banks in the inner city, they could be a force in helping to modify loans and reduce repossession and folks are restructuring. If that money was spent bottom-up and not just top-down, they could have more immediate benefits.

KING: Let's do a little compare and contrast, here. I want to go back again to your 1984 Democratic Convention speech. Here, one of the central messages of candidate Jesse Jackson.


JACKSON: I have a message for our youth. I challenge them to put hope in their brains and not dope in their veins.


I told them that, like Jesus, I too was born in the slum, but just because you're born in the slum does not mean the slum is borne in you.


And you can rise above it if your mind is made up.



KING: Let's fast-forward 25 years, now. That was the Reverend Jackson in 1984. Here is President Barack Obama this past week.


OBAMA: We've got to say to our children, yes, if you're African- American, the odds of growing up amid crime and gangs are high.

Yes, if you live in a poor neighborhood, you will face challenges that somebody in a wealthy suburb does not have to face. But that's not a reason to get bad grades.


That's not a reason to cut class. That's not a reason to give up on your education and drop out of school.

(APPLAUSE) No one has written your destiny for you. Your destiny is in your hands. You cannot forget that.



KING: The question, I guess, is this. Is imitation the best form of flattery, or is it that he says much the same thing proof -- proof that so much was left undone?

JACKSON: Well, you need a combination of superior effort and equal opportunity. On the football -- why do we do so well on football, basketball, baseball, golf, tennis, and track?

Whenever the playing field is even and the rules are public and the goals are clear and there's a fair referee, we do well.

In these inner cities, where we have the -- where guns and drugs are targeted -- the government must play a stronger role to stop the flow of guns. We must have revive the ban on assault weapons, for example.

We must have a real commitment, it seems to me, to have high motivation. He mentioned, I thought, very wisely, structural inequality. Well, let's make it less unequal and let's make it more equal.

And I think that's where investment comes in; enforcement of the civil rights law, as well as the motivation.

KING: Let me ask you...

JACKSON: I think the motivation speech is always appropriate, but you must -- you can't overcome these gaps without commitment to investment of an enforcement of law.

KING: Let me ask you, lastly, sir. CNN is going to launch round two of our groundbreaking "Black in America" series this week. And Soledad O'Brien and our documentary team have done a remarkable job on this.

I want to ask you a simple question. What is it like being black in America today, as compared to when the Reverend Jesse Jackson first ran for president in 1984?

JACKSON: We've faced a head wind in 1984 and, maybe, a tail wind in 2004. Because America is changing, as we're choosing these ball teams on uniform color, not on skin color. I mean, there's a sense of euphoria. There's a certain high. It's high noon in our politics, but, on the other hand, it's midnight in our economy.

We're still number one in infant mortality, number one in short life expectancy by seven years, number one in poverty and home foreclosures. Law suits have proven that blacks were targeted, steered and clustered; less access to capital, industry and technology.

And there is -- there is a structural gap that he addressed that must be meaningfully addressed by government policy as well as will we fight back and to be self-motivated.

KING: Reverend Jesse Jackson, we -- thanks for coming in and giving us the last word today. It's good to see you, sir.

JACKSON: Thank you.

KING: Take care, Reverend.

And ahead, we'll take you to Newark, New Jersey, and check in with a young mayor who, despite high unemployment and other steep challenges, says it's time to give his city a second look.


KING: In the week ahead, CNN will...

FAREED ZAKARIA, HOST, "FAREED ZAKARIA: GPS": This is GSP, the global public square. Welcome to all of you in the United States and around the world.

KING: ... African-American presidency, "Black in America" was also a topic of discussion as President Barack Obama addressed the nation's oldest civil rights organization, the NAACP.


BARACK OBAMA, PRESIDENT OF THE UNITED STATES: We know that even as our economic crisis batters Americans of all races, African- Americans are out of work more than just about anybody else. We know that even as spiraling health care costs crush families of all races, African-Americans are more likely to suffer from a host of diseases but less likely to own health insurance than just about anybody else.


KING: So to take a closer look for our "American Dispatch" series this week, we went nearby. The president was in New York. We went to Newark, New Jersey. And take a look at these numbers, 53.5 -- essentially 53.5 percent of the population is African-American in that city. The unemployment rate, 13.5 percent, and sadly going up. In a positive sign though, the population of the city, after declining since the '60s, is starting to come back, 281,000 people, that's up more than 3 percent since 2000.

Now this city has a 40-year-old African-American mayor. He was elected three years ago on a promise of hope and dramatic change. Sound familiar? President Obama offered Cory Booker a job in the White House, but the mayor says he has unfinished business.

(BEGIN VIDEOTAPE) KING: If we were on main street anywhere America, and I said, Newark, New Jersey, what would they say back?

MAYOR CORY BOOKER (D), NEWARK: People have this 1960s-'70s vision of Newark that's fixed in their minds. Well, if you walk around Newark today you're going to still see challenges. Look, we have -- there is definitely rising unemployment, we definitely have a rising foreclosure rate.

But we're doing things that are surprising a lot of folks. That we've led the nation now three years in a row for not just a small reduction in murders and shootings, 25 percent, 35, we're over 40 percent now and pushing those numbers down.

So I'm trying to get America, number one, to wake up to the truth of Newark.

KING: So why is crime down?

BOOKER: It's not one thing. If people think there is one answer to solve our problems, they're living in an incredibly simplistic world. The reality is, you have to do everything you can do change it.

So it's different policing tactics. It's clergy patrol. I have a senior citizen police academy now. It's getting technology up, like cameras.

KING: When you try to reform schools, where's the pushback?

BOOKER: People are often wedded to the way things are. We have got to deal with whatever interest group there is resisting change and get them as a partner in producing progress. And it's hard.

KING: Is that the diplomatic way of saying, grab the teacher's unions by the ear sometimes?

BOOKER: I think it's a diplomatic way of saying that we've created an environment where often people are more concerned about interest groups and not children. And you have to appeal to the better angels of any group.

KING: Have you seen stimulus money fast enough for your tastes or would you like to have it quicker?

BOOKER: There is not a government leader in America, I think, that wouldn't want more money to do more things right now. Because, you know, look, I wish we could be getting more shovels in the ground. A lot of the money was passed through the states, which is just very frustrating sometimes.

So it's not an easy, simplistic story. In some ways it has been a triumph already, and in some ways it has been very frustrating.

KING: You could give some advice to the people, as he hits around six months, his poll numbers have come from the stratosphere down back to planet Earth.

BOOKER: Right.

KING: What was it like for a young mayor who came into this city, and people said, well, the old administration was stale, many thought it was corrupt. How long did it take before it was, "give the new guy a chance" to "this is Cory Booker's problem"?

BOOKER: Well, I think that's the first piece of advice. And this -- I don't mean to give advice to the president, because he knows this, is you've got to not listen to that noise. But as, you know, Winston Churchill says, when you're going through hell, keep going, don't stop, don't look around, don't let anything slow you down.

KING: So what is the risk for a Cory Booker or a Barack Obama in being such an enthusiastic disciple of hope when there are problems and some of them are going to take quite a long time to solve and you might actually get it wrong a few times before you get it right? What's the risk in that? BOOKER: And I have made a lot of mistakes. Look, I believe we -- as a nation, we often damn ourselves with low expectations. And I had people say that about me and I heard people saying it about Barack Obama.

Why? Well, God forbid he raises people's expectations. Well, when we had great presidents stand up and say, we're going to the moon in a matter of years, that was raising expectations. Americans are at their best when they lift their vision to a higher plane.

So what's the risk of hoping too much? You know, what was the risk of a slave who never saw freedom but still hoped for one day being free? I would rather be a person that does everything I can to make change and not win than be a person that sits out the big fight and loses a part of myself.

Can't have great victories if you don't take on great battles.


KING: We thank the mayor for his hospitality at city hall there in Newark.

And we'll be here again next Sunday and every Sunday at 9:00 a.m. Eastern for the first and last word in Sunday talk. Until then, I'm John King in Washington. Have a great Sunday. Take care.

For our international viewers, "AFRICAN VOICES" is next. For everyone else, "FAREED ZAKARIA: GPS" starts right now.