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STATE OF THE UNION WITH JOHN KING

Interview with Senator John McCain; Interview with Senators Bob Casey and Debbie Stabenow; Assistant Surgeon General Gets the Last Word; Recession for Rich and Poor

Aired October 11, 2009 - 20:00   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.

(BEGIN VIDEOTAPE)

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

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

SEN. JOHN MCCAIN (R), ARIZONA: I do not.

KING: One on one with the ranking Republican on the Armed Services Committee, Arizona senator, John McCain.

We'll 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.

DR. ANNE SCHUCHAT, ASSISTANT SURGEON GENERAL: We are seeing more illness, more hospitalizations and more deaths each week.

KING: And fresh warnings on the deadly H1N1 flu. The assistant Surgeon General, Dr. Anne Schuchat, gets "The Last Word."

This is the STATE OF THE UNION report for Sunday, October 11th.

(END VIDEOTAPE)

KING: 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 devine all of 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 or Afghanistan. He has not convinced the Israelis to do what he says is necessary to sit down with the Palestinians. Were you surprised?

MCCAIN: Well, 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 humanity and his gratitude for winning the Nobel Peace Prize and then he spends much of his day in the situation room in a war counsel 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've had discussions 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)

BARACK OBAMA, PRESIDENT OF THE UNITED STATES: 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 would provide a larger safe haven for which al Qaeda would plot to kill more Americans.

(END VIDEO CLIP)

KING: And yet, one week ago...

MCCAIN: I 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)

GEN. JIM JONES (RET.), NATIONAL SECURITY ADVISER: The al Qaeda 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 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 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, a 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 Qaeda in the respect that one poses a threat and the other one, 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 we would -- should find very distasteful to see them in power anywhere.

KING: You said the -- you hope the president takes the advice of his advisors. 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 Qaeda 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 did succeed there.

But should we risk -- should we risk going against the advice and counsel of our best and strongest adviser? 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 in 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, with 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 have to win there. Whether we should have gone in there 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 agreement for militaries to succeed. 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 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 debate of more troops in Afghanistan. In the past week, we have seen General Jones, right here on this program...

MCCAIN: I saw it.

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

(BEGIN VIDEO CLIP)

JONES: Ideally it's better for military advice to come up through the chain of command.

(END VIDEO CLIP)

KING: So then the question in town 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.

KING: 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 adopts 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 don't -- I really don't know, because I'd 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 have been laid out and agreed to by General Petraeus and Admiral Mullen I think would be an error of historic proportions.

kg 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 last convince President Obama to listen to General McChrystal and General Petraeus above all others.

To the degree that you enter the Senate floor and 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 -- 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 catering to the left?

MCCAIN: No. I have the greatest 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'd like to...

KING: And do you think he's wrong again? MCCAIN: I think -- I don't know exactly because I don't know 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 other issues. Iran has agreed to let 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's 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 Guard individuals, was very belligerent.

I also worry about kind of a rope-a-dope strategy from the Iranians that the North Koreans has been playing us with -- many, many years. I think we need to have hard deadlines, so we'll see. I trust but verify, what 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 this $787 billion stimulus passed early in the year.

Should the president do more now through government spending, though tax incentives, or should he wait because, as you have said 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 businesses in America. I would look at proposals that help create jobs. This unemployment in my state 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 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 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. Looks like a close vote, but it appears it will get to the floor of the United States Senate. Two Republicans that 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 leadership, I would take heat for it. That's what leadership is all about."

And a 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, and 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, is going rogue, and it's about to be a book cover. And that is the title of your running mate, Governor Palin's new book.

And it is already a best seller. It's not on the book stands yet. And a lot of people...

MCCAIN: It's being sold.

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 is 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, FMR. MCCAIN CAMPAIGN MANAGER: 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, I am honored...

KING: Why the bad blood?

MCCAIN: Look, wherever there's a political campaign, and I've been involved in them for many, many years, there's always tensions with that. You know, with the high-pressure situation, there's always tensions that develop within a 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 or 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 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)

DON LEMON, CNN ANCHOR: Hello, everyone. Don Lemon here live at the CNN world headquarters in Atlanta. Got a couple of headlines for you this hour.

Several thousand people marched from the White House to the capitol today in the National Equality March, dramatizing their demands for legal protection and calling on President Barack Obama to fulfill promises he made during last year's campaign. Among their top demands, to make good on his pledge in the military's Don't Ask, Don't Tell policy. The president had said it before and he said it again during last night's speech to the nation's largest gay rights group.

The family of one of the Arizona sweat lodge victims says well, she was in top shape and had no preexisting medical conditions. 38-year- old Kirby Brown of West Town, New York was an avid hiker and surfer. She and 40-year-old James Short of Milwaukee died Thursday after being overcome in the crudely built hut. Nineteen others were taken to the hospital. One remains in critical condition.

The Spiritual Warrior Retreat was being conducted by self-help expert author, James Arthur Ray. Police say they are focusing on Ray and his staff to determine if criminal negligence played a role in that.

I'm Don Lemon. I'll see you back here at 10:00 p.m. Eastern. "STATE OF THE UNION" with John King returns in just a moment.

(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 let's inform our viewers, did say this, "The word marriage means only a legal union between one man and one woman as husband as 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 repeal it?

SEN. ROBERT CASEY (D), PENNSYLVANIA: John, I think 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 to -- 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.

And he also mentioned that the hate crimes legislation at long last is moving forward. I was a co-sponsor of that.

(CROSSTALK)

KING: 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 the 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 am not sure there is a 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?

SEN. DEBBIE STABENOW (D), MICHIGAN: 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 are a man or a woman or sexual orientation. So I think the president is putting the priorities in the right place.

KING: Why is this so hard? If I ask 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 autoworkers 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: Because 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 co-sponsor of the hate crimes and support eliminating the policies that discriminate among talented people in our military. I support making sure that there are legal protects for everyone. But I think the patch work of state policies now make it difficult and we all to have take another look.

KING: You both just listened to Senator McCain. As we talk about his proposals, I want to go through a little bit of time line to underscore the administration's position in what some 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 strong terms about what he called the 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 Qaeda in Pakistan and Afghanistan and to prevent their return to either country in 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 from which al Qaeda would plot to kill moral Americans.

(END VIDEO CLIP)

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

(BEGIN VIDEO CLIP)

JONES: The al Qaeda 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 -- in imminent danger of falling.

(END VIDEO CLIP)

KING: Senator Casey, you were just there a couple of months ago. If you believe, 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 a -- 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 is right?

CASEY: Right now what we have before us is not just a question of a troop increase or not and what the levels should be, but you 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 the 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 is 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 their border and threaten Islamabad and Pakistan.

We've got make sure that that threat is dealt with.

KING: Some common ground, as Senator Casey. 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 to 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's 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 you now I think is 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 are tremendous allegations of fraud. Part of counter insurgency involves a stable partner.

And they're now assessing what is 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 who are putting in harm's way. It needs to deserving of the sacrifice that they're making.

KING: We're short on time. Let's go quickly to a couple of health care question. 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 reform. 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 this legislation is focusing on new technologies, for electronic medical records, information for physicians, ways to be able to cut down on medical care...

KING: Should I take that as a no?

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

KING: Senator Casey, is that a legitimate way to reach out to the Republicans? Try to get them to 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 the Health Education Labor Pensions Committee for a health care bill. We add -- 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 saving money on the backs of injured workers and adverse impact on 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, I'm sorry, we're out of time. We will bring you both back. You're both from critical states in the jobs and health care debate. We'll have you back as this move forward. You have my word on that.

Don't go anywhere because when we come back, answers to your questions about the spread of the H1N1 flu and the new vaccine. One of the government's top doctors right here to answer this next.

(COMMERCIAL BREAK)

KING: Thirty-five newsmakers, analysts and reporters were out on the Sunday talk shows today but only one gets "The Last Word." That honor today goes to the Assistant Surgeon General, Dr. Anne Schuchat.

Doctor, thank you for joining us. And we wanted you in today because of all the confusion and the questions about the H1N1 vaccine. I just want to hold up the "Elkhart Truth" here. The big headline across the top, "Should You Get a Swine Flu Shot, and If So, Which One Do You Get?"

Alarming statistics this past week. 76 pediatric deaths. Almost catching up to what we've seen in recent years for the seasonal flu with months left in the flu season. Why, I guess many parents would ask.

SCHUCHAT: Yes. We are concerned. More children have been dying recently and it 's because it's a new strain of influenza that we really aren't protected against. So everyone is at risk and unfortunately children are taking a toll on -- from the virus.

KING: And you have seven more months in the flu season and you have skepticism. And rising skepticism among American parents as to whether getting the vaccine is a good idea.

I want to show you this poll. I know you're familiar with it. Would you grant permission for your child to get the H1N1 flu shot at school? Likely 59 percent, unlikely 38 percent. What happens to the magnitude of the public health problem if 4 in 10 children don't get this vaccine?

SCHUCHAT: Well, you know, it's a really important time right you now. Parents need their questions to be answered. It's normal for people to want to get their questions answered before they make decisions about the health of their children.

As a doctor and a public health expert, I've been looking at the facts. The risk of influenza including severe complications from influenza is a lot higher than any theoretical problem with the vaccine.

KING: And -- higher than any theoretical problem, and yet there seems to be -- there's a mistrust across the political spectrum of government institutions. Why is it do you think many Americans, many parents, aren't quite sure? Number one, it's new.

SCHUCHAT: You know a lot of people are saying it's new you but it's important to know that the seasonal flu vaccine is made exactly the same way as this H1N1 vaccine. A hundred million people including a lot of children get the seasonal flu vaccine every year and it has a really good safety record.

So I think parents are wondering, is it this something new? Has it been fully tested? What I can say is that everything we know right now suggests a very good safety profile for the vaccine.

KING: Let's put to you some of the questions we're getting on Facebook and on Twitter. Here's one from CameronCools (ph) on Facebook, "How far apart should an individual wait before he or she gets both the seasonal flu shot and the H1N1 vaccine and should the mist be avoided if you're receiving both?

SCHUCHAT: Well, what we found out recently from the NIH was good news about the shots. It's fine to get seasonal flu shot and the H1N1 shot on the same day, the same visit. With the sprays or the mists, we don't think you should get a seasonal spray and a seasonal mist -- an H1N1 mist at the same visit. They should be spread out about three weeks. But it's just fine to get two shots or a shot and the mist on the same day.

KING: Here's another question from mtgoldenaagle, this one's from Twitter. "My 5-year-old son has asthma. Should I get the H1N1 shot and should I be more concerned about exposure to H1N1 than the regular flu?"

SCHUCHAT: Right now what we're seeing is virtually all H1N1. And we think it's very important for children with asthma to get the vaccines, both the H1N1 vaccine and the seasonal vaccine.

We may not see seasonal strains for some time. They may come in December to May, their usual season, but we know that the H1N1 strains are already here. So I think it's -- children with asthma have suffered disproportionately and it's great that the parents are asking about that because it's -- vaccine is the best way to protect your children. KING: Here's another one. You mentioned we're seeing H1N1. Here's from KlopusNow. "Both my kids' school classes have had multiple cases of H1N1. Is there any point in getting vaccinated now?"

SCHUCHAT: You know I hear that a lot. It turns out that only about 5 to 10 percent of people, even in the very affected communities have already gotten this infection. So the vast majority of people are still at risk. We think vaccines are the best way to protect yourself and your kids from this virus.

KING: Help with context. If you've had 76 pediatric deaths already and you're watching the data come in about this spreading across the country and it is so very early in the flu season, what is your projection now about how bad of a pandemic we're looking at?

SCHUCHAT: You know, with influenza, it's really hard to make predictions. I hope we will not have a lot more pediatric deaths or deaths in general. But as an expert in the field, I have to say that this is going to be a challenging time. This is a time to get your questions answered and learn about the vaccines. They're not in widespread availability yet. But in the next couple of weeks, we'll have more and more out there and we hope that people will take advantage of them.

KING: And what's the biggest surprise you've seen so far as you watch the data come in and you watch this alarming number of pediatric deaths?

SCHUCHAT: You know, I think for me the surprise is really the misinformation. There are so many myths out there. There's so many rumors. People are wondering if the vaccine is going to be forced on them. This is a voluntary vaccination program. We want parents to make the decisions for their kids. This is about protecting your family based on the information that you get so...

KING: Is there anyone that should be forced on? Health care workers? School workers? Is there any one that should be mandatory in your view?

SCHUCHAT: Well, from the federal perspective, we're not mandating the vaccine for anyone. There is one state -- New York -- and a number of hospitals that have put out mandates for their workers.

The issue there is about protecting patients and they've made the decision that they don't want their employees spreading flu to the vulnerable people who come in for care.

KING: Let me ask you lastly. Is your you projection now better or worse than if we were having this conversation a month ago?

SCHUCHAT: We're learning a lot more every day. But we are seeing this increase in disease, including deaths and intensive care unit courses. So it's still way early in the flu season for us to know what's going to happen. I think we need to stay informed and I think people should take advantage of the vaccine when it is available to them. KING: Thank you. Dr. Anne Schuchat, we appreciate your time and we hope you'll keep in touch with us.

SCHUCHAT: My pleasure.

KING: Thank you so much.

Up next, a visit to Kentucky's horse and coal country for an upclose look at the painful reach of a recession that is leaving its mark on affluent communities as well as those more familiar with struggles. Stay with us.

(COMMERCIAL BREAK)

KING: If you follow politics, you hear the theme all the time that there are two Americas -- one for the well-to-do and one those who struggle to get by. And there's no doubt many Americans see a growing gap between the rich and the poor.

We want on our travel this week to answer this question. Is it any different the pain of the recession in affluent areas like Fayette County, Kentucky? The population there under -- just under 300,000. The unemployment rate, that's pretty stinging. 8.7 percent.

Check the affluence here. In median income, $46,000 plus. Median house value, $110. Not rich but certainly not poor.

Now we travel over to coal country here in Perry County. Look at the big difference. 12.7 percent unemployment. It's higher. The median income, much lower. $30,000 compared to nearly $50,000. And the median house value -- there's the biggest difference. More than half, $52,000 here.

So in our "American Dispatch," we traveled the back roads of Kentucky for a firsthand 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. That's 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's also a trying time as even 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 and Pope McLean sees at least one more tough year, maybe more, for Crestwood and the industry as a whole.

This may 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 (on camera): Another one here.

CARON: Yeah.

KING (voice-over): 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 -- I mean 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 has 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, you know, 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: Our thanks to Joanne and the people of Crestwood Farm for sharing their stories with us.

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. Take care.

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