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STATE OF THE UNION WITH JOHN KING

Interview With Senator McCain; Interview With Senators Stabenow, Casey

Aired October 11, 2009 - 09:00   ET

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


JOHN KING, CNN ANCHOR: I'm John King and this is "State of the Union."

Debating the way forward in Afghanistan. President Obama's former rival and pointed critic gives a blunt assessment.

(BEGIN VIDEO CLIP)

KING: Do you think the United States can win in Afghanistan with fewer than 40,000 more troops?

MCCAIN: I do not.

(END VIDEO CLIP)

KING: One-on-one with the ranking Republican on the Armed Services Committee, Arizona Senator John McCain. We will discuss the policy and political flashpoints on Afghanistan, health care and the economy with two influential Democrats -- Michigan's Debbie Stabenow and Pennsylvania's Bob Casey.

Then in our "American Dispatch," a ride across Kentucky and the rolling hills of horse country to a struggling town in coal country. Very different places, both feeling the pain of recession.

This is the "State of the Union" report for Sunday, October 11th.

Senator McCain, thanks for joining us. I want to start with the big news that came at the end of the week. The president of the United States, who a year ago this weekend was your campaign rival, heading into the final month of the campaign, is the Nobel Peace laureate for 2009. Deserved?

MCCAIN: Oh, I'm sure that the president is very honored to receive this award, and Nobel Committee -- I can't divine all their intentions -- but I think part of their decision-making was expectations, and I'm sure the president understands that he now has even more to live up to.

But as Americans, we're proud when our president receives an award of that prestigious category. KING: Did it surprise you, a little more than eight months into office, at a time when, yes, he has set some lofty goals around the world, but he has not won more NATO troops for Afghanistan; he has not convinced the Israelis to do what he says is necessary to sit down with the Palestinians. Were you surprised?

MCCAIN: I think all of us were surprised at the decision, but I think Americans are always pleased when their president is recognized by something on this order.

KING: The great irony of the moment may be, he voices his humility and his gratitude for winning the Nobel Peace Prize, and then he spends much of his day in the situation room, in a war council meeting, debating the fundamental question of Afghanistan and whether to send more troops.

I want to walk through the threat with you. I know you have had questions about both the policy and the process. Let's start with the policy. If you listen to the president back in August in a speech to the VFW, he was quite forceful, describing the U.S. military in Afghanistan this way.

(BEGIN VIDEO CLIP)

PRESIDENT BARACK OBAMA: This is a war of necessity. Those who attacked America on 9/11 are plotting to do so again. If left unchecked, the Taliban insurgency will mean an even larger safe haven from which Al Qaida would plot to kill more Americans.

(END VIDEO CLIP)

KING: And yet one week ago...

MCCAIN: Totally agree.

KING: You totally agree with that, and yet one week ago on this program, General Jim Jones, his national security adviser, offered what sounded like a much more optimistic assessment of the security situation.

(BEGIN VIDEO CLIP)

GENERAL JIM JONES (USMC, RET.), NATIONAL SECURITY ADVISER: The Al Qaida presence is very diminished. The maximum estimate is less than 100 operating in the country. No bases, no ability to launch attacks on either us or our allies.

I don't foresee the return of the Taliban, and I want to be very clear that Afghanistan is not in danger, imminent danger of falling.

(END VIDEO CLIP)

KING: Those statements less than two months apart sound very, very different. Does the administration have a mixed message, or perhaps an internal debate about the scope of the threat? MCCAIN: I think we are all very aware, because of the way this town leaks, we kind of follow one day after another the discussions or debate that's going on within the White House. How true those reports are, I don't know, but they're generally accurate, as we find out.

But, look, I agree with the president in that speech, and I also agree with what he said in March, where he said we have a strategy. And so I have urged the president to act with deliberate speed, because Admiral Mullen and General McChrystal and General Petraeus have said the situation is deteriorating.

Just over the last several days, as you know, week or so, we lost 10 more brave young Americans. And the longer we delay the decision, the longer it will be before we provide them with what the needed resources are.

And I'm not trying to rush the president. I think the president has to be deliberate, because this is the most difficult decision that any president makes, to send young Americans into harm's way. But we do have the strategy. We do have the leaders. And we have a successful strategy that worked in Iraq, that can be adjusted to the situation in Afghanistan. And I hope the president will heed the advice of his advisers.

On the specific issue that General Jones raised, I think some people are beginning to differentiate between the Taliban and Al Qaida in the respect that one poses a threat and the other won't, et cetera. One, they will become inextricably tied. Two, the Taliban are the most cruel and oppressive and repressive people. I mean, the abuses that they have inflicted on women, as well as all people, are something that we would -- should find very distasteful, to see them in power anywhere.

KING: And yet, as you say that, there are those in the White House who say, look, we may find them repugnant, but they are a political force in Afghanistan. And as we move forward, perhaps we have to find a way to bring some of them into the process. Recognizing that, again, we don't like it, but they have political presence and political support in Afghanistan. Should part of the policy be trying to find a way to integrate some of the Taliban?

MCCAIN: Part of the strategy will clearly be that. I mean, there are people who work for the Taliban for money, for because they think the Taliban is gaining, which they are, for a variety of reasons. But there's still a hard core of Taliban that are dedicated to the prospect of taking control again in both Afghanistan and Pakistan. I mean, they move freely across the borders, as we know. And there's a lot of things we talk about, but I'm pleased at the progress that the Pakistani military is making. And the Pakistani foreign minister just this week said, we Pakistani military go in, we clear and we hold and we secure, and you Americans are using the wrong strategy. I'll tell you, I didn't think I'd hear that for some time ago.

KING: You said the president -- you hope the president takes the advice of his advisers. But there's a mix in that advice. Admiral Mullen, General McChrystal, General Petraeus have said we need more troops, and General McChrystal wants as many as 40,000, maybe even a little bit in excess of that. But if you listen to General Jones, who says fewer than 100 Al Qaida right now inside Afghanistan. If you accept that view, could you not say, then, maybe the right approach is, as Vice President Biden advocates, a smaller footprint, go to special forces, use the drones, use intelligence and put fewer Americans at risk?

MCCAIN: Well, I think that would be the counterterrorism strategy, which we attempted in Iraq under Rumsfeld and General Casey. It didn't succeed. The strategy that was developed by General Petraeus, in particular, but also with General McChrystal as his strong right arm, did succeed there.

But should we risk -- should we risk going against the advice and counsel of our best and strongest advisers? Those we've given the responsibility? As you know, General McChrystal's predecessor was fired by the president because of the confidence that he had in him.

So the question is, is do we take a risk and go to a strategy basically that failed before versus one that succeeded? And again, this is very tough decision. But I do, again, argue, for some deliberate speed, because our allies in the region are beginning to get the impression that perhaps we are wavering, especially in light of the fact that in March, the president announced that we did have a strategy. So are we developing a new strategy, or is it just trying to adjust for some changed circumstances?

KING: I want to get to some of the politics of this debate in a minute, but another policy question first, because many see a parallel to Iraq, in the sense that it has been eight years in Afghanistan now, it has been billions of dollars. We have shed American blood there, and yet a European commission report out just this past week says for all the efforts to train the Afghan national army, there's a 24 percent rate of attrition. And others have said, not only do they leave, but they take their weapons with them, and some of them still get paid.

What has gone wrong and what is the United States doing wrong when it comes to the fundamental challenge of getting the Afghans ready to do this themselves?

MCCAIN: First of all, rightly or wrongly, we were focused on Iraq. I happen to believe we had to win there. Whether we should have gone in or not and weapons of mass destruction -- you've covered on other days.

But I think the important point here is that, again, if the military of a country does not think they're going to succeed, you have all kinds of problems. Look at the total collapse of the Iraqi army at one point after we had built them up.

The Afghan soldiers are very good. They're the most highly respected in their country. There's just not enough of them. We're going to have to train a whole lot more. And it doesn't mean just training. The thing that works with these militaries is operating side by side with American troops. That's what really gives them the kind of, not only training, but the kind of morale and esprit that goes to -- is an essential ingredient in militaries that succeed.

MCCAIN: So we've got to expand the military, and could I mention -- you mentioned the Karzai government, the corruption has got to stop. If there is a finding and it's that the election was corrupted to the point where a runoff would have been called for, have a runoff, have it quickly, as soon as possible.

But corruption in the government is a huge problem and we have to have -- that's part of this equation. And we have to have the Karzai government show us that it is going to truly reform.

By the way, small item, I'd say his brother should leave the country.

KING: Brother should leave the country. Much more to discuss with Senator John McCain when we come back, the politics of the Afghanistan debate, whether he believes negotiations with Iran will get rid of its nuclear program, and the health care debate here at home.

Stay with us.

(COMMERCIAL BREAK)

KING: We're back with Senator John McCain of Arizona.

Let's talk about the process and the debate about more troops in Afghanistan, because in the past week, we have seen General Jones, right here on this program saying that...

MCCAIN: I saw it.

KING: Saying that Stanley McChrystal, the commanding general in Afghanistan, the president welcomes his advice, but General Jones made clear he thinks it should have been delivered a different way.

(BEGIN VIDEO CLIP)

GEN. JIM JONES (RET.), NATIONAL SECURITY ADVISER: Ideally, it's better for military advice to come up through the chain of command.

(END VIDEO CLIP)

KING: And so then the question in town was whether that was supported elsewhere in the administration, and the defense secretary, a Bush holdover, Robert Gates, says essentially that he agrees with General Jones. (BEGIN VIDEO CLIP)

ROBERT GATES, DEFENSE SECRETARY: I think the important thing is for the president to hear the advice of his commanders and to have the advantage of hearing that advice in private.

(END VIDEO CLIP)

KING: Do you believe they're trying to muzzle General McChrystal?

MCCAIN: I don't think they're trying to muzzle General McChrystal. I have the highest regard for General Jones and Secretary Gates.

The fact is, General McChrystal was told we had a strategy last March. General McChrystal had to receive clearance to give the speech that he gave in London, and he was asked a direct question, whether the counterterrorism strategy, as I mentioned, the same one that failed in Iraq, would work.

And he said, no. I wouldn't expect him to say anything else. But, look, this whole thing of leaks and leaks of the assessment and all of this is kind of the ugly side of the way we do business here in Washington. And I do believe that General McChrystal should and will -- I mean, he certainly understands that the chain of command has to be observed.

But also, at the same time, since he has a responsibility, I think he should be consulted very heavily and frequently.

KING: Well, do you think the United States can win in Afghanistan with fewer than 40,000 more troops?

MCCAIN: I do not. And I think the great danger now is not an American pullout. I think the great danger now is a half measure, sort of a -- you know, try to please all ends of the political spectrum.

And again, I have great sympathy for the president, making the toughest decisions that presidents have to make. But I think he needs to use deliberate speed and I think he needs to adopt a strategy which he has basically articulated last March and before.

KING: And if he adopt what you consider to be a half measure and says 10,000 more troops or 20,000 more troops, can General McChrystal stay on as the commander in that capacity, or do you believe that that would be a rebuke to his leadership?

MCCAIN: I really don't know, because I would have to see exactly what the plan was and General -- one thing about our military leaders, they have a spirit that's indomitable, but I think to disregard the requirements that has been laid out and agreed to by General Petraeus and Admiral Mullen, I think would be an error of historic proportions.

John, we are at a seminal time in history right now. There's -- we've got the Iranian problems, we've got the rising power in China and Asia. We've got this war now. We have to wrap it up in Iraq. These are very difficult and challenging times for America and our future.

And during the Bush administration, when there was resistance to the surge, you used the Senate floor and you used hearings to pressure the administration to listen to General Petraeus. You're trying to do the same thing now, trying to pressure, or at least convince President Obama, to listen to General McChrystal and General Petraeus, above all others.

To the degree that you went to the Senate floor and you said, you worry that Rahm Emanuel, the White House chief of staff, and even your own friend General Jones were now listening to the left wing, the anti-war wing of the Democratic Party. I put your criticism to General Jones last week and he took exception.

(BEGIN VIDEO CLIP)

JONES: I don't play politics and I certainly don't play it with national security and neither does anyone else I know. The lives of our young men and women are on the line. This is -- the strategy does not belong to my political party and I can assure you that the president of the United States is not playing to any political base. And I take exception to that remark.

(END VIDEO CLIP)

KING: Do you accept that, or do you think that Rahm Emanuel and General Jones -- who once served under you, when you were the Navy liaison on Capitol Hill, do you think that they are catering to the left?

MCCAIN: No. I have the highest respect and regard for General Jones, and of course great respect for the president's main adviser, Rahm Emanuel.

The point I was trying to make and the point I will continue to make is that General Jones was not correct about Iraq. He called for a strategy that I think would have failed. And I would like for him...

KING: Now do you think he's wrong again?

MCCAIN: I think -- I don't know, exactly, because I don't know exactly what his position is. I think he's working a process that I think is too slow. But I think he's working a process. I have the highest respect for him, but I really believe that to not give the resources which are -- a sufficient number of troops is a main component, to our leaders in the field, given in light of the experiences we've had, would be a fundamental error that would lead to consequences for a long, long time.

KING: Let's move quickly through some other issues. MCCAIN: Sure.

KING: Iran has agreed to let international inspectors into the newly disclosed enrichment facility later this month. Do you believe that that is a sign of progress that convinces you it is possible to keep Iran away from having a nuclear bomb, the capacity to deliver a nuclear bomb, or do you believe that genie is out of the bottle?

MCCAIN: I'm not sure I worry a lot about the conflicting statements. Sometimes we kind of like to home in on those that give us the most optimism. There was a statement just on Friday by one of the Revolutionary Guards individuals, it was very belligerent.

MCCAIN: I also worry about a kind of a rope-a-dope strategy from the Iranians that the North Koreans has been playing us with for many, many years. I think we need to have hard deadlines. So we'll see. "Trust but verify," our -- Ronald Reagan used to say, but we can't let this progress just drag out. Because there's no doubt in my mind that the Iranians continue on this path to development of nuclear weapons.

KING: The president has said he's considering new initiatives to help job creation. They passed one stimulus plan, and most Republicans, including John McCain, have been pretty critical of the $787 billion stimulus passed early in the year.

Should the president do more now, through government spending, through tax incentives, or should he wait because, as you have said so many times, we have so much red ink, we can't afford much more?

MCCAIN: I would certainly look at any proposal that helps small business in America.

I would look at proposals that help create jobs. This unemployment, in my state, is -- is devastating -- devastating around America.

What we've done, unfortunately, is we bailed out Wall Street. Now they're making billions; they're making the deals; they're giving the bonuses. And because they were too big to fail, we pumped, I don't know -- we still haven't had a full accounting -- into those major financial corporations and told the financial institutions -- we told them they were too big to fail.

We told the guy on Central Avenue that just shut down his storefront that he's too small to save. There's something terribly wrong with that picture, and we were off on the wrong foot by bailing out these financial institutions instead of addressing the housing crisis. And I'll tell you, Americans have figured it out and they're very, very unhappy.

KING: The Senate finance committee is about to act on a health care bill. It looks like a close vote, but it appears it will get to the floor of the United States Senate.

Two Republicans you have served under as the Republican leader in the Senate have said, you know what, they think their party doesn't have this just right.

Here's what Bill Frist said, who was just before Mitch McConnell, the Senate Republican leader. He said, "I would end up voting for it. As leader, I would take heat for it. That's what leadership is all about."

And the longtime Republican leader, and a man who, like you, was a Republican nominee for president at one point, Bob Dole, said, "I want this to pass. I don't want the Republicans putting up a 'No' sign and saying, we're not open for business."

If the bill reaches the Senate floor, will John McCain support it?

MCCAIN: Well, obviously, I have to see what it is. I would remind you that Bill Frist, kind of, so we say, abridged his remarks, revised his remarks about it. And I love Bob Dole. I just have a disagreement, and had a disagreement with him back in 1994 on the other health care initiative.

We Republicans need to come up with our agenda and we need to do it so that there is a viable alternative to this.

And it has to do with things that are not associated with government control of health care in America. And there are many, many things we can do: medical malpractice reform, go across state lines to get insurance policies of your choice, refundable tax credits. There's a long list of things that we can and should propose as we enter this debate.

KING: Let me close on this note. Again, a year ago, we were in the final stretches of a campaign. And a term you heard in the final weeks, not so flattering, was "going rogue," and it's about to be a book cover.

(LAUGHTER)

And that is the title of your running mate, Governor Palin's new book. And it is already a bestseller. It's not on the book stands yet.

(CROSSTALK)

KING: A lot of people who worked for you in the campaign have told me and others that they expect to be treated harshly here because there was some disagreements. Among them is Steve Schmidt, who was the top strategist. And I talked to him last week, and I said, what about Sarah Palin as a potential presidential candidate down the road?

Steve Schmidt had this to say.

(BEGIN VIDEO CLIP)

STEVE SCHMIDT, REPUBLICAN STRATEGIST: I think that she has talents, but, you know, my honest view is that she would not be a winning candidate for the Republican Party in 2012. And in fact, were she to be the nominee, we could have a catastrophic election result.

(END VIDEO CLIP) KING: A catastrophic election result with Sarah Palin leading the Republican ticket?

MCCAIN: I have a degree of clairvoyance, but in 2009, to predict what would happen in the 2012 election is -- I'm not capable of. Look...

KING: Why the bad blood?

MCCAIN: Look, whenever there's a political campaign, and I've been involved in them for many, many years, there's always tensions within it. You know, how -- with a high-pressure situation, there's always tensions that develop within campaigns. And there were clearly tensions between Steve Schmidt and people in the Palin camp.

There are fundamental facts, though, that cannot be denied. When we selected, or asked Sarah Palin to be my running mate, it energized our party. We were ahead in the polls until the stock market crashed. And she still is a formidable force in the Republican Party. And I have great affection for her.

Well, Sarah and I -- did we always agree on everything in the past; will we in the future? No, but, look, let's let 1,000 flowers bloom. Let's come up with a winning combination the next time.

(LAUGHTER)

And let's -- let's all go through the process rather than condemning anybody's chances. And I'm happy to say, we have some great people out there and Sarah is one of them.

KING: Senator John McCain, we appreciate your time.

MCCAIN: Thanks, John, for having me on.

KING: Thank you.

Coming up, two key senators give us the Democratic perspective on the challenge in Afghanistan and a closer look at President Obama's big promises in a major weekend speech to a gay rights organization.

Plus, a look at the top stories breaking this Sunday. "State of the Union" will be right back.

(COMMERCIAL BREAK)

KING: I'm John King and this is "State of the Union." Here are stories breaking this Sunday morning.

The head of the U.N. mission in Afghanistan says there was widespread fraud in Afghanistan's presidential election, but he isn't giving any specifics, saying that would be speculative and could affect the ongoing recount. Preliminary results show President Hamid Karzai well ahead.

President Obama's reaching out to the gay community as thousands of gay rights activists prepare to march here in Washington today. Speaking to the nation's largest gay rights organization last night, the president reaffirmed a campaign promise to overturn the ban on gays serving openly in the military.

However, he gave no timetable for repealing "Don't ask, don't tell." The president also called on Congress to repeal the Defense of Marriage Act.

(BEGIN VIDEO CLIP)

OBAMA: My commitment to you is unwavering, even as we wrestle with these enormous problems.

(APPLAUSE)

And while progress may be taking longer than you'd like, as a result of all that we face, and that's the truth, do not doubt the direction we are heading and the destination we will reach.

(APPLAUSE)

(END VIDEO CLIP)

KING: Those are your top stories here on "State of the Union."

And up next, we'll ask two leading Senate Democrats if they support the president's promises to the gay community and what they see as the best way forward in Afghanistan. "State of the Union" will be right back.

(COMMERCIAL BREAK)

KING: And with us now are two Democratic senators who play key roles in foreign and domestic policy debates. With me here in Washington, Senator Debbie Stabenow of Michigan. And back in his home state of Pennsylvania is Senator Bob Casey.

Welcome both of you back to "State of the Union."

I want to start with the president's speech last night and this headline in one of the papers in Senator Casey's home state. The Reading Eagle says "Obama Vows to End Gay Ban in Military."

He also pushed for Congress to repeal the Defense of Marriage Act, which was passed back in 1996. And Senators, as you know, and lets inform our viewers, it says this. "The word 'marriage' means only a legal union between one man and one woman as husband and wife."

Senator Casey, you have voiced support for the Defense of Marriage Act, for marriage to be defined as between one man and one woman. Would you vote to repeal it?

CASEY: John, I think the -- the key thing that we heard from the president last night was, in a very focused way, that some of the policies that have governed with regard -- governed our policy in the military on "Don't ask, don't tell" aren't working right now. And I think that's critically important.

He also mentioned that the hate crimes legislation, at long last, is moving forward. I was a cosponsor of that. Whether or not we should...

KING: On the Defense -- on the Defense of Marriage Act, would Senator Bob Casey, Democrat of Pennsylvania, vote to repeal it? CASEY: John, I've said in the past I don't think that's the way to go. But I do believe that some people in this country who have argued from a different point of view have tried to use tactics like a constitutional amendment, which I think is a way to divide people and to demonize people.

We can move forward on a lot of measures, but I'm not sure there's the support yet for that. But I do believe we've made progress on hate crimes and significant progress if we implement a change on "Don't ask, don't tell." KING: Senator Stabenow, would you vote to repeal the Defense of Marriage Act?

STABENOW: Well, first, I think we need to start with making sure that there is domestic partners' benefits for everyone involved in relationships.

The hate crimes bill, as Senator Casey just said, is about ready to go to the president's desk.

And I also think we shouldn't be losing the great talent of anyone in the military, whether it's because of skin color or because they're a man or a woman or sexual orientation. So I think the president's putting the priorities in the right place.

KING: But why is this so hard?

If I asked you, would you vote for a public option in health care, you would say yes. If I asked you if you would vote to help out the auto workers in your state, you would say yes. I asked you if you would vote to repeal the Defense of Marriage act, and you didn't answer the question. Why is it so hard?

STABENOW: Well, the challenge for me is that we have had on the ballot, and there has been passage, in Michigan, of a law prohibiting gay marriage. So I think, for a number of us, that becomes a challenge in terms of what has happened in terms of voting in our states.

Now, I am a cosponsor of the hate crimes bill and support eliminating the policies that discriminate among talented people in our military. I support making sure that there are legal protections for everyone. But I think the patchwork of state policies now make it difficult, and we all have to take another look.

KING: And in the politics of this, heading into a campaign cycle in which the Republicans are already saying, "The Democrats run everything in Washington and they're spending all our money, they want to raise your taxes, they're the tax-and-spend liberals," do either of you think it's a good idea to deal with these issues now and add the culture wars -- to you, Senator Casey, first -- into this mix, going into the midterm elections?

CASEY: Well, John, obviously, it's a crowded docket, so to speak, for the Congress and for the president. We have to complete our work on health care. There's also a real concern about moving forward on climate change legislation, to keep that moving down the track. We have a grave challenge in Afghanistan and Pakistan, the threat from Iran. So there's a lot.

But I don't think it ever hurts to try to move other agendas forward. I'm glad that we made progress on hate crimes. That wasn't the case just a couple of years ago.

And so, finally, we're addressing a lot of the unfinished business as it relates to Americans who happen to be gay or lesbian or bisexual or transgender.

At long last, we're saying that it's not just a question of being tolerant; it's a question of acceptance and treating people the way that most of us would expect that the world around us would treat us.

I think we're making progress, but it's difficult to say, in the sequencing of legislation, what can happen when. But I know the president's committed, and I think a number of people in Congress are committed to moving that agenda forward.

KING: The votes are there, Senator Stabenow, for the hate crimes legislation, but would you prefer, both for policy and political reasons, "Don't ask, don't tell" and Defense of Marriage Act -- should those issues wait at least until next year and maybe until after the elections?

STABENOW: Well, there's no question we have a lot on our plate. But it's always important to be focused on human rights, whether it's here at home or abroad.

But it all comes back to jobs, John, from my perspective. I mean, we're talking about whether or not people are going to be able to keep the jobs they have; we're going to benefit from their talents. I bring it back to jobs. I bring it back to health care.

We're losing jobs as a result of our health care costs, which is why I'm very pleased that we're poised to make a huge change that's going to lower costs for families and businesses and tackle health care costs long-term.

So this is unfortunately a time when, for eight years, we've seen so little happen. If anything, we've gone in the wrong direction. Now we're turning it around, a lot on the plate. But it all connects. And there's no question about it, though; we are laser-focused on jobs and everything related to it.

KING: We'll get to jobs and health care in a minute. But I want to talk first about Afghanistan. Because you both just listened to Senator McCain.

As we talk about his proposals, I want to go through a little bit of a timeline to underscore the administration's position and what some might say -- might say is a bit of a shift.

Back in March, the president announced his new strategy. He put a new commander in place, and he spoke in very -- spoke in very strong terms about what he called a clear threat.

(BEGIN VIDEO CLIP)

OBAMA: I want the American people to understand that we have a clear and focused goal, to disrupt, dismantle, and defeat Al Qaida in Pakistan and Afghanistan and to prevent their return to either country in the future.

(END VIDEO CLIP) KING: Five months later, more very strong language from the president, making clear that Afghanistan was not like Iraq, which he called a war of choice.

(BEGIN VIDEO CLIP)

OBAMA: This is a war of necessity. Those who attacked America on 9/11 are plotting to do so again. If left unchecked, the Taliban insurgency will mean an even larger safe haven from which al Qaeda would plot to kill more Americans.

(END VIDEO CLIP)

KING: Yet, last week on this program, the president's national security adviser gave an assessment of the threat in Afghanistan that sounded much more measure and less alarming than the president's take.

(BEGIN VIDEO CLIP)

JONES: The Al Qaida presence is very diminished. The maximum estimate is less than 100 operating in the country. No bases, no ability to launch attacks on either us or our allies. I don't foresee the return of the Taliban and I want to be very clear that Afghanistan is not in danger, imminent danger of falling.

(END VIDEO CLIP)

KING: Senator Casey, you were just there a couple of months ago, if you believed General Jones, you could come to the conclusion that Vice President Biden and those who are arguing for a stable troop level and more of use the drones, use the intelligence, that they're correct.

Senator McCain says that is naive and wrong and you need at least 40,000 more troops. Who's right?

CASEY: Well, John, one thing the president is doing right now, and even John McCain, in your interview, talked about deliberation and deliberate speed, I think it's very important that the president spend the kind of time that he is now, not only reviewing what General McChrystal has recommended, but talking and consulting with a lot of people, military and non-military alike.

Right now what we have before us is not just a question of a troop increase or not and what the level should be, but a lot of other questions that are non-military.

The key thing here is we have to get the strategy right before we talk about resources. The president, and even General McChrystal in his report, talks at length about changing of strategy. There may be differences about how to do that, but I think it's very important that we get the strategy right.

And Congress has a role to play here. We can't just point the finger at the administration and say, you have to get it right. We have to get it right in Congress as well. I don't think there's as much disagreement as some people want to make it.

You heard from Senator McCain about the progress we've made in Pakistan or the Pakistani army has made great progress. The key thing here, though, in two places, is that you have to have assurances, over time, that al Qaeda cannot have a presence in Afghanistan that destabilizes that country.

And the same, whether it's al Qaeda or related groups along that border can threaten Islamabad in Pakistan. We've got to make sure that that threat is dealt with.

KING: Some common ground, as Senator Casey said, but Senator McCain also said that he believes we cannot win with at least 40,000 more troops. And for the president to say no General McChrystal would be a mistake, in Senator McCain's view, of historic proportion.

Is he right?

STABENOW: Well, John, from my perspective, what we are doing right now is assessing what is happening today in terms of strategy. Al Qaeda is a global threat. General Jones and his comments, talking about what's happening, not just in Afghanistan, but Pakistan and other places around the world, what the president is doing right now -- and I think it's a breath of fresh air, is assessing what is happening today, based on the fact that seven weeks ago, there was an election where there were tremendous allegations of fraud.

Part of counterinsurgency involves a stable partner. And they're now assessing what's happening with al Qaeda and Pakistan, we see what's happening even today in Pakistan. And what the strategy should be given the facts today.

And frankly, the right strategy needs to be put together so it is a strategy that works for the people we are putting in harm's way. It needs to be deserving of the sacrifice that they're making.

KING: We're short on time. Let's move quickly through a couple of health care questions. The Congressional Budget Office this past week said, if you included tort reform, malpractice reforms in health care, you could save $54 billion.

This has been one of the big Republican complaints. Now you're both having a hard time getting Republicans to come on board to this bill. Should the Democrats make this outreach gesture? Call their bluff, if you think it's a bluff, and say, we will put significant tort reform in the health care bill, we will save money, like you say, now you have to give us something?

STABENOW: Well, John, first of all, when you look at caps -- my state has caps on damages, as they're talking about, and unfortunately, our doctors continue to see their premiums go through the roof. So it's a question of how to do that.

What we're doing in this legislation is focusing on new technologies for electronic medical records, information for physicians, ways to be able to cut down on medical errors... KING: Should I take that as a no?

STABENOW: Well, I think there's a different way to come at it. The Republicans have a very traditional focus, over and over again, whether or not it has worked.

And it certainly has not been working in my state, in other states across the country. So the broader issue is, how do we bring down costs, and frankly, stop business as usual with the insurance companies, making sure that the right decisions are made for people.

KING: Senator Casey, is that a legitimate way to reach out to the Republicans, try to get them on board, give them something, and then say, but in exchange, we need your votes on other things?

CASEY: John, I voted in the summer on Health Education Labor Pensions Committee for a health care bill. We accepted over 160 Republican amendments. We had lots and lots of outreach. The time for acting is now. I think the vote this week in the Finance Committee will be critically important, and then merging it with our bill.

But I don't think the way to go is to limit the rights of Americans who are injured by negligent or intentional conduct.

And the idea -- and I'm sure you could construct a strategy where you can save money, but I don't want to support a policy where you're saving money on the backs of injured workers and adversely impacting their families.

A $250,000 cap on damages, in my humble opinion, is insulting to our system of justice. That is not justice, as we have come to understand it.

KING: Senator Casey in Pennsylvania, Senator Stabenow here, I'm sorry we're out of time. We will bring you both back, you've both from critical states in the jobs and health care debate. We will have you back as this moves forward, you have my word on that.

Up next, a visit to Kentucky's horse and coal country, spectacular countryside, affluent communities, look at that, guess what, the recession hits them too.

We will be right back.

(COMMERCIAL BREAK)

KING: You hear it often in political campaigns, the theme that there are two Americas, one for the well-to-do, and one for those who struggle to get by.

KING: And there's no doubt many Americans see a growing gap between the rich and the poor. But guess what? The recession is hitting everyone. We traveled to Kentucky this week. I want to show you two examples. This is Fayette County where Lexington is, 8.7 percent unemployment, right? The median income just under $50,000. The median house value is $110,000. That's up here in horse country. Then we went down here Hazard in coal country, Perry County. And look at the different. The unemployment arrest is higher. The median income well below, $30,000 here, nearly $50,000 here. And look at this, the median house value half in Perry County what it is in more affluent Fayette County.

So in our "American Dispatch" this week, we wanted to travel the back roads of Kentucky for a first-hand look at just how the recession is hurting just about everyone.

(BEGIN VIDEOTAPE)

KING (voice-over): Breeding thoroughbreds is the McLean family business. The farm, a 1,000 acre slice in the rolling hills of Kentucky's legendary Bluegrass Country. Kipling is one of Crestwood's four stallions. They're kept separately and it is their work that brothers Pope and Marc McLean say have the biggest impact on Crestwood's reputation and financial success.

(on camera): They prove their value how?

POPE MCLEAN JR., CRESTWOOD FARM: By when they're progeny does well on the racetrack. They when they -- can't bluff that. Whenever the stallion has one of the surprisingly -- gets entered in the race, we get notified.

MARC MCLEAN, CRESTWOOD FARM: When you're watching all your babies run, it's kind of fun every weekend because they're babies of yours, but they're other peoples, but pulling for your side every weekend, just about.

KING (voice-over): Fun, but it is also a trying time as each the sport of kings feels the sting of a global recession.

P. MCLEAN: A lot of buyers from Europe come in and they're not -- they've dialed back their participation. Domestic buyers have certainly dialed back their participation as well. The sales this year are down approximately 40 percent. The money spent. And so that has a pretty significant impact on all of the commercial breeders. KING: Kentucky is to horse racing what Detroit is to the American auto industry as Pope McLean sees at least one more tough year, maybe more, for Crestwood and the industry as a whole. This might be a slice of the economy identified with the rich, but here in Kentucky, it is a major industry and responsible for about 100,000 jobs in the state.

P. MCLEAN: I think a lot of farms are hurting and then you have the credit squeeze has hurt a lot of farms, too. It's probably been about even maybe or down a little bit. I'm sure it's not going to be a real stellar year for anybody, I wouldn't think. I feel pretty sure that there will be quite a few farms that will go out of business.

KING: It is 120 miles from horse country to Hazard. First, the lush farmland, then the winding roads of gritty Appalachian coal country. Out of business is a Main Street staple. JOANNE CARON, UNEMPLOYED FACTORY WORKER: My girls used to love shopping there.

KING: Another one here.

CARON: Yeah.

KING: Joanne Caron has lived in Hazard 10 years.

CARON: When I first got here, things were booming. There were a lot more factories that were open and businesses and you can see businesses are closing all over.

KING: Perry County was poor to begin with and unemployment is on a steady climb, just shy of 13 percent now. One hundred and 50 jobs at a uniform company early this year and Weyerhaeuser closed its lumber plant in March. Joanne Caron, among the 180 workers abruptly sent home.

CARON: This is my letter. After careful conversation, Weyerhaeuser has decided to indefinitely close the east Kentucky facility effective today. Unfortunately this closure results in the elimination of your position.

KING: Her unemployment check is $746, twice a month. Joanne also cashed in her 401(k) and is dipping into that, despite the long- term risk.

CARON: My daughter likes to eat and she likes clothes and you like to have heat and air-conditioning, so, it's the choices we have to make, I mean.

KING: Two older daughters are out of college, but like Joanne, can't find work.

CARON: Everything I told them as they were growing up, go to college, get a degree so you can get a good job, it's just not working out that way.

KING: She's been looking for seven months. Nothing. It's her first trip back to the Weyerhaeuser plant since she lost her job.

CARON: Last I worked was 7:00 a.m. to 7:00 p.m., 12-hour shifts, it's sad to see it like this. It really is. I made a lot of good friends working in there and we had a good time. It wasn't a glamorous job, but we had fun and we got along, and I miss seeing those people every day.

(END VIDEOTAPE)

KING: As you know, one of our goals is to get out of Washington as often as we can to visit folks like that and we've made it a pledge on "State of the Union" to visit all 50 states in our first year. So far, we've been to 39, including Kentucky, South Carolina, North Dakota and West Virginia. Where should we go next? You can e-mail us at StateoftheUnion@CNN.com. Up next for our viewers here in the United States, Howard Kurtz and his "Reliable Sources" dissect the media blitz surrounding the president's Nobel Peace Prize.

(COMMERCIAL BREAK)

KING: I'm John King and this is "State of the Union."

The White House fires back at FOX News. Is picking a fight over fair and balanced a good idea for a president with so much on his plate? We'll ask the White House communications director Anita Dunn.

Plus, the David Letterman affair fallout continues, but as the late-night comedian apologizes again, can he really be surprised that this story refuses to go away. In this hour of "State of the Union," Howard Kurtz, as always, breaks it down with his "Reliable Sources."

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