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Sound of Sunday

Aired November 1, 2009 - 11:00   ET


KING: I'm John King, and this is STATE OF THE UNION.


KING (voice-over): It's 11:00 a.m. Eastern, time for "State of the Union's Sound of Sunday."

KING: Eleven government officials, politicians and analysts have had their say, Treasury secretary and a White House senior adviser, the top Republican in the House and conservative radio talk show host, Rush Limbaugh. We've watched the Sunday shows so you don't have to. We'll break it all down with James Carville and Mary Matalin and the best political team on television. STATE OF THE UNION "Sound of Sunday" for November 1st.


KING: The economy is growing again and the Obama White House says its big stimulus legislation is one of the reasons, but with the celebration comes a warning that it may be a while before the rebound generates jobs.


TIMOTHY GEITHNER, TREASURY SECRETARY: This is going to be a different recovery than in the past because Americans are going to have to save more. A lot of damage was caused by this crisis. It is going to take some time for us to grow out of this. It could be a little choppy. It could be uneven and it is going to take a while, but I think again, this is encouraging signs.


KING: No surprise Republicans have a very different view. They say the nearly $800 billion stimulus didn't pass much bang for the buck.


REP. JOHN BOEHNER (R), MINORITY LEADER: Three million Americans have lost their jobs since the stimulus was signed into law. And yes, the economy grew last month, but after a trillion dollars of an economic stimulus plan was spent, probably another $7 or $8 trillion that the Fed has pumped into the economy, I would hope that we've seen some economic growth, but Americans all around the country continue to ask the question, where are the jobs? (END VIDEO CLIP)

KING: Rush Limbaugh is again taking after the president this time for traveling to Dover Air Force Base in Delaware for the ceremony welcoming home military and drug enforcement personnel killed in Afghanistan. The commander-in-chief thought it important that he salute the fallen.


RUSH LIMBAUGH, RADIO HOST: It was a photo-op precisely because he's having big time trouble on this whole Afghanistan dithering situation. He found one family that would allow photos to be taken. None of the others did, and of course, when you have a sycophantic media following you around, able to promote and amplify whatever you want, then he can create the impression that he has all this great concern.

VALERIE JARRETT, WHITE HOUSE SENIOR ADVISER: He wouldn't have done it in public if the families had objected. So the first and foremost thing is what's important to the families. And I think that if it's important for us all to recognize what's at stake. And so when you talk about numbers like 40,000 troops as I said a minute ago, I think it's a reminder of how deep the sacrifice is.


KING: As you can see, we've been watching all of the other Sunday shows so maybe you don't have to. Back with us from New Orleans to break things down, CNN political contributor and Democratic strategist, James Carville, and CNN political contributor and Republican strategist Mary Matalin. You see them together only right here on STATE OF THE UNION.

Let's start, Mary and James, with the economy. Secretary Geithner out today, you heard him there. It's getting better, but it's going to be choppy. Politically, Mary, you went through this with the first President Bush. When you have an economy that you think is coming back, but you also know unemployment may still go up, some rough times ahead, how do you craft the balance in the message?

MATALIN: Well, you have to have some sort of consistency and some sort of -- you have to at least pass the laugh test. So this week when they released the jobs that were created or saved for which there's no metric, they said there were 640,239 of them, that's -- does not pass the laugh test.

That would make them then each worth $230,617 whatever. It's just not -- it defies common sense and it defies the human experience to say the herky-jerky things that they've been saying, particularly the vice president. So they have put in place programs that are concerning people because of the debt that they're incurring which people understand is going to translate into raised taxes which we can afford. What they're doing right now is not fixable by some political spin.

KING: James, how did they do?

CARVILLE: John, I think a couple of things hit. First of all, the debate is how many jobs did the stimulus package create? Not did it create jobs, arguing 600,000, half a million, some people say more, but that's a big debate. The thing to remember is when Barack Obama took office, there were two tools that a president had. One is monetary policy and that is -- how do you -- they can't lower interest rates because they're at zero. And they were facing these huge deficits.

The only thing they can do was have a temporary stimulus to try to create some demand economies. It worked pretty good, 3.5 percent growth was way ahead of what anybody -- considerably ahead of what people were predicting here.

So it looked like anybody else -- everybody has their fingers crossed to see if this thing can continue. At some point when it starts to create jobs, but right now that was pretty sort of impressive work that came in here, this growth number and hopefully it will translate to something better. And it's very difficult for them to talk about growth if people don't see it in job numbers, but I'm told and all economists agree that jobs come after economic growth. You have to have growth first and at least we got that in the previous quarter.

KING: But Mary mentioned the vice president -- go ahead, Mary.

MATALIN: We have growth -- it's this -- growth is attendant to these one-shot deals, Cash for Clunkers or first-time homebuyers. There's never been an economy in the history of the world -- or government in the history of the world that's been able to expand the economy, only the private sector, only job creators. The government does not create jobs that grow the economy. They rob Peter to pay Paul and that's what they've done here.

And people understand it, they intuitively understand it, economists understand it, Christina Romer understands it and it's only going to lead -- all they're growing is the debt and the deficit which is going to lead to tax increases which is going to further hamper any kind of recovery. And that there's such uncertainty in the business world, particularly for small businesses, they don't know what mandates from health care they're going to be charged with, what new taxes, what energy cap and trade business. They're not hiring anybody, so they have slowed whatever recovery the private sector would have been able to generate.

KING: James, on Mary's point -- on Mary's point there, in this environment, if they try to move on to the climate change legislation which includes cap and trade, if they try to move on to other things that involve those big questions that some would say are tax increases. They certainly are an adjustment or a restructuring in the economy, would other Democrats be hesitant right now heading into the midterm election year to walk down the path just because of the further shock to the system?

CARVILLE: Yes. I think Democrats are going to be fairly hesitant here given what's happening and everybody is kind of holding their breath waiting and hopefully there will be some job numbers that get the point.

But a significant thing was reported this morning where Senator Gregg, I think it was, and Senator Conrad talked about having some kind of commission to deal with the deficit. This will be fascinating to see if they'll go through with this and what they come up with. And it will be a straight up and down vote.

A vast majority of the Republicans in the House and Senate have signed pledges to not raise taxes under any circumstances. This is going to be, this whole deficit thing, and I think that when you look at the budget that the president is going to put out in February, they are very cognizant of what they're faced with here. So these are going to be some sort of interesting and very difficult times ahead fiscally for the United States.

KING: Let's listen. I want you to listen to something the vice president told our Ed Henry, and I want to set it up in context for our viewers this way. One of the reasons I love these conversations is because you have Mr. Carville, who is the architect of a Clinton campaign in 1992 that had the slogan of "It's the economy, stupid." Sitting next to his beautiful wife Ms. Matalin who of course worked for George H.W. bush who was on the receiving end of the Clinton campaign in that election.

The vice president sat down with our senior White House correspondent, Ed Henry. I want you to listen to this and tell me after if he's striking the right balance. This is not easy for the administration. They want to say the economy's coming back, but they also know there are millions out there who don't have a job. Let's listen to the vice president answering Ed's question. The question was, have we hit bottom?


JOE BIDEN, VICE PRESIDENT OF THE UNITED STATES: I'm confident we've hit bottom. The question, look, we're not going to be satisfied, Ed, until we're able -- I'm able to sit in front of you and say look, this month we grew jobs. The net effect is growing jobs. It doesn't say a lot to people to say, you know, there would have been a million more or 1,000,006 more jobs lost but for this. My grand pop used to have an expression, Ed. We lived in Scranton, Pennsylvania. He said when the guy in Dixon City, a suburb is out of work, it's an economic slowdown. When your brother-in-law is out of work, it's a recession. When you're out of work, it's a depression. And it's a depression for millions of people.


KING: How's that balance, James?

CARVILLE: I thought he did pretty good, actually. As a slogan, I don't know if we've hit bottom, stupid is the best. But I thought it came across as a kind of understanding of what was going on and I can see his face when I was watching the interview. You know, you're asking me if we hit bottom, I'll take credit for that. But it's humorous in one sense, but, I thought he did fine, I really did.

MATALIN: The problem, John is at some point the messenger becomes non-credible. So when we were faced with the situation and we knew that the -- how to resolve it and it would take time and it would require the private sector and not tax raising and all the rest of it, at one point my beloved poppy who I love more than life itself as much I love my husband said message I care, remember during the New Hampshire primary.

KING: I remember it well.

MATALIN: So if people just didn't -- but people didn't -- it's just not -- it wasn't credible. Joe Biden is not credible because he has been -- he runs out with his pom-poms. He's a cheerleader, it's working. And then a few weeks later he says, well, it's not working, but that's because we didn't know how bad it was. And then he comes out, he gets his -- it's, we're at rock bottom or we're -- he has just got to -- he should chill.

They should send the economic people out there and they should just stop trying to be cheerleaders and pom-pom-raisers every time they have a new number which, by the way, I cannot say enough times, there is no metric whatsoever to claim 6,000 -- or 6,239 jobs were saved or created by the stimulus.

And in fact, the AP, for whom you used to work years ago, said these figures were off in some cases by a magnitude of 10, by a magnitude of a 100. They cannot collect this data. There's no metric to measure it. It's prima facie laughable. So he should just -- he should just go off, go back to Afghanistan or go somewhere else.


MATALIN: Every time I see him had I just want to get another job.

CARVILLE: I think that you can go on and you can see it, and I think the 3.5 percent growth is -- I think there's a metric to that and a number of, you know, jobs (INAUDIBLE) -- but the majority of jobs retained were teachers, which seem to me to be a pretty good person to keep a job in the -- you know, the 25 students or whatever they have in the class. But...


MATALIN: You know how that happened? The states that -- this is classic redistribution. The states that provided for -- had a balanced budget, provided for an ongoing services that they're supposed to render to the people? They paid for bailing out states that didn't manage themselves as well.

KING: All right. We're going to take...


MATALIN: ... the first thing you're going to cut is teachers, then you're badly managing your state.

KING: We're going to take a quick break. I can tell you I'm still counting on that AP pension. So we'll keep them solvent, bail them out if we have to. James and Mary are going to stay with us through the hour. We're also going to bring in the best political team on television. A lot more to talk about. Big elections on Tuesday, health care debate here in the United States, political uncertainty in Afghanistan, and a whole lot more. Stay with us.


KING: We're back with James Carville and Mary Matalin, joining me here in Washington, trust me, we're closing in on (INAUDIBLE), Republican strategist Ed Rollins, senior White House correspondent Ed Henry, senior political analyst Gloria Borger, senior political correspondent Candy Crowley, and our chief medical correspondent Dr. Sanjay Gupta.

Welcome, all. Let's continue the conversation and let's move on to health care. We have got the Carville-Matalin couple laughing down in New Orleans. They're lucky, see, they're in their own home listening us to this morning.

A very interesting moment just a little bit ago on another Sunday program, Joe Lieberman, he is the Democrat-turned-independent senator from Connecticut, if you need 60 votes to cut off health care debate, you need his vote unless you find one that we don't know about in the Republican ranks.

He does not like a public option. He does not even like the public option leader Reid has said that would allow states to opt out. So Joe Lieberman says he's willing to go to the mat.


SEN. JOE LIEBERMAN (I), CONNECTICUT: I feel so strongly about the creation of another government health insurance entitlement, the government going into the health insurance business, I think it's such a mistake that I would use the power I have as a single senator to stop a final vote.


KING: Ed Henry, you cover the White House. I think we could sum that up as, 1600 Pennsylvania Avenue, we have a problem.

ED HENRY, CNN SENIOR WHITE HOUSE CORRESPONDENT: Yes, we do. And the president -- this shows again, the president has got to get more involved to start pushing some of these folks to figure out whether he has the votes or not.

And I think consistency there, I mean, Joe Lieberman a few years ago was talking, as liberals have been pointing out in the last few days, about doing away with the filibuster because it was stopping progress in the United States Senate. Now he's talking about using the filibuster himself. It shows that this thing, while it looked about three or four days ago, maybe there was some progress with Harry Reid finally getting this bill to the floor, maybe it's starting to go back off the rails.

GLORIA BORGER, CNN SENIOR POLITICAL ANALYST: And I think it shows also that this notion of a trigger may come back and get some more life now so that you allow the insurance companies to handle it. And if they don't behave as they say they're going to behave, then a public option would be triggered in.

That is something that Joe Lieberman might be able to swallow along with a couple of his Republican colleagues there. So they may be back to square one on that.

CANDY CROWLEY, CNN SENIOR POLITICAL CORRESPONDENT: And clearly, this form of trigger is not going to work as it currently stands because we know all of the Republicans are against them, and now Joe Lieberman. So they don't have the 60.

The question is, will they get it at all? I think probably what it shows right now, because there are many forms of this that they might be able to -- just something to call a public health option, I think, would be enough for the White House to go, OK, we've got that, let's move on.

They also -- I think what this shows is sort of the wisdom of Harry Reid here, who took a look at this and said, OK, I'll go to the mat for you, and threw it out there knowing he didn't have the votes, but he did what he had to do for his own self-interest in Nevada as well as for -- you know, to send a signal to the more liberal part of Democratic Party, fine, we'll fight for it, but, you know, you're on your own.




KING: More politics in a minute, but I want to put a medical question to the doctor.

Do doctors in America think a public option to compete with insurance companies helps? Does it get -- I guess, does it help with the bureaucracy you go through, number one? But, number two, does it help -- does it get the patient better care?

DR. SANJAY GUPTA, CNN CHIEF MEDICAL CORRESPONDENT: Well, you know, it's hard to sort of categorically assign some sort of opinion to all doctors. In fact, the American Medical Association has had some differing opinions even within its own ranks. They say that they do support a public option, but there have been other organized medical groups that say that they do not.

Whether or not it leads to better outcomes in the end, I don't think that's a question really you can answer. You probably will get more people covered, which is, I think, the reason the AMA supported it. But whether or not coverage actually translates to better outcomes, I don't think anyone has been able to prove that, including in Massachusetts where I was.

KING: So let's come back to the politics. Ed, and then James and Mary. Joe Lieberman is an independent, but he has a chairmanship. He caucuses with the Democrats.

Ed Rollins, if you're in Ronald Reagan's White House and somebody is doing this to you in your party, do you pick up the phone and do you say, he is right in your face on our biggest initiative...

ED ROLLINS, REPUBLICAN STRATEGIST, CNN CONTRIBUTOR: You mean like someone like Arlen Specter?

KING: Somebody like that, yes. Yes, exactly.



ROLLINS: That I had to deal with on many occasions.

KING: Do you pick up the phone of the leadership and say, look, this guy is in your face on the number one issue right now in the country, strip him of his chairmanship?

ROLLINS: I would strip him of his chairmanship. Although the Senate is a very peculiar place. It is a club and, you know, they make certain promises. I do think that Harry Reid didn't count his votes accurately and he may been bold and tried to figure he would get it -- work it on the floor.

But I think they don't think they have the 60 votes and I think the reality is that anything that is going to come 60 votes, any attempt to shut off the cloture debate, what have you, is going to be real difficult. And I think they're going to have to compromise down from here on out because the battle is only going to intensify.

KING: James, you went through this in the last campaign where Senator Lieberman had a challenger who beat him in the primary. And then of course, he ran and won as an independent.

KING: What would you do right now as a Democrat when you have him being so outspoken on the number one issue for this president and your party right now?

CARVILLE: Well first of all, I think what the majority leader would say is remember he said he would filibuster it on the floor. The bill is going get to the floor and they have an expression and it's an old sports expression, just keep moving the chains downfield. So you can't get a vote on the floor until you get it on the floor. It's going to get on the floor.

I think that Senator Reid feels like that at the time that it's on the floor, he's going to be able to negotiate, he's going to be able to put something together and bring Senator Lieberman and Senator Snowe or maybe both or one of them alone, but they're not -- they're publicly and privately, they're not near as upset or gloomy about this thing as I would have thought. And what they keep saying is and you hear this a lot in the White House, too, just keep moving the chains, move it to the next process. When we get there, we'll deal with it. And that seems to be the feeling. It's going to be tight, exactly right, the president's going to have to get really involved at a point, but there's a lot of negotiation left to do in this thing.

BORGER: You know, it's interesting, you're actually going have a moving target on the floor of the Senate which is something we never see. We never really see negotiations take place and this is -- you know, they're going to be out there off the Senate floor negotiating as a bill is on the Senate floor because it is so fluid right now and we haven't seen this in years and years.

ROLLINS: But also, you haven't seen a bill that is going to have as many amendments comes forth. Sometimes in the House, you do, but this is going to be just numerous amendment after amendment and someone like Wyden, who is very smart on the issue, has a very good amendment and so the bill that's there on the floor is not going to be the bill...

GUPTA: So much of this ultimately is not going to be a national plan anymore. It sounds like so much of it is going to be divested to the states, the budget, exactly what the quality of the care is going to be.

KING: Let's have Mary into the conversation in the context of if you have this moving target and you're the Democrats and you have a rebel in your ranks in Senator Lieberman, Mary, how do you deal with it? MATALIN: Well, Senator Lieberman's posture today is a testament to the upshot of the bully tactics. What goes around comes around and he doesn't feel any kind of loyalty to a party who dumped him after he was their vice presidential nominee for which he was chosen because he has such impeccable integrity. He is -- he exudes integrity. When he speaks, people will listen. He will carry a weight greater than one senator. And with all of these moving targets, it just adds to the cacophony and the confusion.

But the upshot is people, voters see, the electorate see a highly-tuned in, already intensely opposed to this, any of these various plans, electorate, sees people they know with whom they associate integrity and honesty and he doesn't like it. So think of it from 50,000 feet because if they get anything through, it's all the better for Republicans in 2010.

KING: A quick break for us. James, we have to work in a quick break here. Quick break here, we'll be back with everybody. We've got a good group and a feisty group, a little hard to manage actually. We'll be back in just a minute, we've got a lot more to talk about. (COMMERCIAL BREAK)

KING: We're back. And here in Washington, Ed Rollins, Ed Henry, Gloria Borger, Candy Crowley and Dr. Sanjay Gupta. And with us from New Orleans this morning, James Carville and Mary Matalin. Let's stay on health care for another minute. The House Republican leader was here this morning and in a political debate, a lot of people have said, well, you don't like the president's plan or you don't like the Democratic plan, but where's yours? And Mr. Boehner -- John Boehner, this morning said soon, stay tuned.


BOEHNER: What I am hopeful for is to take these eight or nine ideas and put them together in a bill that's being scored right now by the Congressional Budget Office and presented on the House floor during this debate. I'm hopeful that Speaker Pelosi will allow us to offer an alternative.


KING: I don't think she will, Ed Rollins. I'm willing to bet actually a sizable amount of money on that fact, but, is it too late for the Republicans? He came in with the 1,990 pages, and I know the Republicans are against it, they think it's a bad idea -- but at least you can look and read at what the Democrats would do. Have the Republicans failed the specificity test?

ROLLINS: They did and the truth of the matter is in the past when Bob Dole was the majority leader, he had an alternative. He was very serious about portability and insurance reform and what have you. There hasn't really been anything that we have put forth other than a big no. Now that has been effective to the certain constituencies, but at the end of the day to come in at this point in time and say I'm going to have a plan, no one is going to pay a bit of attention to it. If I was Nancy Pelosi, I would let them have their open rule and let all of the Republicans vote for it and let all the Democrats vote for it.

CROWLEY: Sure, but practically speaking you're absolutely right. It is too late for the Republicans to have input, were they to have input at all and that is going to be one of those things we'll never know, but it might not. I mean, to me, you've got to be able to go out next year and run and say, yeah, we did have a plan. Here was our plan. We put it out there. It may not give them much political cover, but at least they'll be able to say we did have something. Here are our ideas and here's what they did.

KING: But hang on one second. Before we continue the conversation, I want to bring in another voice. He's the former governor of Massachusetts. He ran for president in the last cycle and lost the nomination to John McCain. Massachusetts is a state that has a big health care plan and they're dealing with a cost issue now, but they have greatly expanded coverage. Mitt Romney, the Republican governor, was in charge when that happened. Dr. Gupta sat down with him this week and one of Mr. Romney's regrets at the moment is he says I've got a pretty good plan I think here yet the president and nobody else in Washington seems to be calling to ask.

(BEGIN VIDEO CLIP) ROMNEY: I think it's unfortunate that Congress and the president, in considering something as important as health care for the entire nation, didn't stop and say let's look at the places where they have been experiments. Let's see the pros, the cons, let's see what's working, what's not working. The Republicans have been interested in what we did here. But I've gotten no calls from my Democratic friends and really no analysis done at the federal level to say what can we learn from the Massachusetts experience that might be helpful in fashioning a federal plan?


KING: What can we learn from the Massachusetts experience?

GUPTA: It's interesting because he goes on to say that they have the opportunity to decouple costs completely between access and the cost. These two things, he wants to increase the access and lower health care costs. He was very candid in saying look, we did not address cost. We addressed access. What President Obama has said since the beginning is that cost has to be the first thing that they address. So in some ways, it's a model of increasing access but not a model of health care reform, at least not on the national level. So you know, I'm not sure what exactly they would learn from that. The other part of it goes back to what you asked earlier.

GUPTA: A lot more people have a card that they can put in their wallet, John, can they get to see a doctor. Can they get better health care. ERs are as flooded if not more so than ever before, so I'm not sure how that all plays out. If universal access is the goal, they have 97, 98 percent coverage.

BORGER: You know and just because Mitt Romney did not get a call does not mean that they did not look at the Massachusetts program. It means that they didn't talk to Mitt Romney. There are plenty of Democrats in that state the White House could talk to.

ROLLINS: And the bottom line is this was a Democrat legislative plan. Romney took this and ran with it because he thought it would help him with presidential politics. At the end of the day, whatever the Kennedy influence inserting in that bill, the late Ted Kennedy.

GUPTA: The one thing former Governor Romney does say is that look, we got 98, 98 percent without any sort of public option. We have the subsidies, we have other programs, but that's the point that he keeps making. And he uses the argument again.

KING: Let's bring the New Orleans visitors into the mix here. And as I do, I want to do it this way, because Sanjay makes an important point. In Massachusetts, they expanded access. Now the current Democratic Governor Deval Patrick is dealing with the very difficult issues of trying to reduce costs and some say that might be what happens here. But the Democrats know they need to get a bill passed. They will pass something and then in two years, three years or five years, we'll be looking at this again because you're going to make all the math add up. CARVILLE: That's very -- that's likely, but what people say is you can start. Going back to what Governor Romney said, first of all, Senator Kennedy was very, very instrumental in that. He was at the press conference when that was announced and praised Governor Romney. He was the chairman of the Senate Health Committee and it was an overwhelmingly Democratic legislature in Massachusetts.

When I heard Governor Romney say that, I said he cannot really be saying this, can he? I was a little bit stunned at that because he's a generally pretty careful politician.

But I wanted to make a point, look, my friend Paul Begala pointed out, with the first Social Security piece of legislation passed, there were a lot of things it did not do and they approved it and made it better as time went on. And I suspect that will be true with the healthcare situation. But I have to say, it's further along by far than at any point ever in modern American history.

HENRY: What is interesting is there's going to be this debate about whether the president, when you see those 1,900 pages stacked up here and the Republicans can use that as a prop. Would it have been smarter for this White House to go and pick off the five or six things. I mean, John Boehner said this morning on this program again, you've got eight or nine specific things that we could do right now with Democrats. Call them out. Have eight or nine straight votes on these things instead of the massive plan and try ...

BORGER: They should have done that earlier.

KING: But Mary -- Mary, what should the Republican posture be now? If you think you have Obama in a box, politically, you just leave him there and vote no or should there be some, let's have a circuit breaker and try to cut a more incremental bipartisan deal?

MATALIN: Well at the risk of being called by my husband a conservative, a pure conservative, Republicans lost their way when they stopped being conservative. And if they changed their posture now, they'll be back to where they were in 2006.

They have narrow targeted reforms that are scratching the itch of what's bothering the American public about health care. They should keep talking about them and they should keep in their posture of being opposed to all of this expansive stuff that we cannot come back in three years and regroup on because we're at a tipping point on the kind of debt that we can sustain here.

And it's again, it's the reason the Republicans have been outshouted through all of this is because it's largely been a fight between centrist Democrats. Praise Jesus for these blue dogs who have stopped it and illuminated so many people on this.

It should be centrist Democrats, a lot of these conservatives, pure conservatives would vote for a blue dog Democrat before one of these kinds of Republicans that are an echo, not a choice. So Republicans are great where they are. If everybody is not tattooing those nine things that Boehner wants to do on their forehead, they'll get it by 2010.

KING: OK, we need to take a quick break, we need to make some money here. This is not a public option program. We need to make a little money. Quick break, we'll be right back, we've got a great group and we're going to change the subject to you know what, Tuesday is a big election day and we're going to talk to you about what it might mean for you at home and what it means for the president and his party.


KING: We're back with our group and a great group it is to discuss the stakes in Tuesday's elections. There's a governor's race here in Virginia, there's a governor's race up here in New Jersey. But a lot of attention in the last 24 hours focused on a congressional special election up here in upstate New York. Here are the three candidates as of yesterday morning, Bill Owens, the Democrat, Doug Hoffman, the conservative and Dede Scozzafava, she was the Republican candidate. She dropped out. She came under attack from conservative groups, Sarah Palin among those, who rallied around the conservative candidate even though she was the endorsed Republican candidate. A big question now for the Republican Party about how to handle this. The House Republican leader was here this morning. He had endorsed the Republican candidate who dropped out and John Boehner said he doesn't like the tone of this race.


BOEHNER: I'm a big believer of Ronald Reagan's 11th commandment, never talk ill about another Republican.

KING: That was not followed in this race.

BOEHNER: I know.


KING: Among the conservatives who were saying forget the endorsed Republican candidate, rally around the conservative nominee, was Rush Limbaugh who had this message this morning.


LIMBAUGH: The Republican Party needs to learn something. If it goes country club blue blood moderate, it's going to lose. If it goes Reagan conservative and commits to it, it's going to win landslides.


KING: Let's go to New Orleans first in this block. Mary, if you're somebody like the Republican Dede Scozzafava, who dropped out of this race and you're more say more moderate than Rush Limbaugh or Sarah Palin, would you for the life of you run in a congressional primary next year knowing that even if you win it, they might come after you? MATALIN: Everybody's trying to make -- to extrapolate something from this race that didn't occur. This wasn't some conservative and conservatives aren't just going to run out and primary everything. What the objection was for the nominee was car check and taxes. The Democrat was running to the right of her on raising taxes. Those are the very issues that are at the heart of all these races.

MATALIN: The Democrats and the independents that are supporting Hoffman are doing so because, by 2-1 margins, they have a very low favorability of Nancy Pelosi and all of that -- that entails, which means raising taxes, raising the debt, not addressing the deficit.

That was the issue in this race. That doesn't mean that all -- yes, if a Republican is a tax-raiser and a card check advocate, they should be primaried.

If they're -- if we want to be -- if you're for card check and you're for raising taxes, there's a party you can join. It starts with a D...


... and I don't think that means a national fanning out of primary, but in this case, it was legitimate. And he's going to win on the issues that are drawing independents and conservative Democrats, which is what Republicans need to retain -- or reassert themselves into the majority.

KING: Is it isolated like that, James?

CARVILLE: Well, what happened here, I think, is historical.

No, I think what happens, historically -- and give Rush and Glenn Beck and Sarah Palin and people credit. They said, we're conservatives first; then we're Republicans.

So the implied message in that is, if you're not a conservative, there's not a place for you. And for those Republicans who are more moderate, we have a home for you. We're Democrats first. And, you know, we have a long history of cobbling together coalitions. We actually do believe in the big tent.

No, this is -- this is not -- this is something that -- and to their credit, they have worked to have a party that is, at its very core, conservative. They make fun of -- they call them "rhinos." They never liked Arlen Specter in their party. They don't much care for Olympia Snowe. That's -- that's a fact. And I think people are starting to feel that.

And I think this is something -- and they would argue, by the way, and Rush does, that the way that we win elections is not by this sort of big-tent foolishness; the way we win elections is by having a pure, strong, right-wing party. And we'll see how it goes. I mean, look, they're for it and I'm for it. I hope they do it.

KING: Ed, Mr. Carville said earlier today that Ronald Reagan's tent has collapsed. You worked very closely with Ronald Reagan. Has his tent collapsed?

ROLLINS: It's -- it's alive and well. The bottom line is, New York is very unique. Special elections are even more unique. There's a conservative party in New York. You can get the nomination and usually you get 3,000 or 4,000 votes. And most Republican candidates get both the conservative and the Republican -- there's multiple parties up there.

I think, this particular case, if she was hand-picked by the county bosses, she was so out of the mainstream. I think Sarah Palin played a very big role. She basically went in there and said it's very legitimate for conservatives elsewhere to come in.

A big difference between one special election and 435. So I don't think you're going to find a whole bunch of people -- and the bottom line, she probably would have beat him in a head-to-head primary for the Republican or conservative nomination. It's just this thing has built and built and taken on a life of its own.

HENRY: Can I just say how all this kind of stuff plays here in Washington and affects the health care debate? When Harry Reid introduced his bill this week, he was talking about how hard it is to find consensus because you can only find moderates -- you can count them on two fingers, not even two hands anymore.


He was joking, but it's true. And then, if you -- Mary pointed out earlier today, look at Joe Lieberman. The Democrats had a purity test, as well, with Joe Lieberman. That tried to scare him out, and now we see this in upstate New York with the Republicans.

Everybody is crowding out the middle. And if these -- these purity tests, ideological purity tests, continue, that's why it's harder and harder to get health care.

BORGER: And if you're afraid, if you don't toe the line, you're going to get primaried, then it's a problem, and then you do have to become more and more pure, if you don't want someone, if you're a Republican, running to your right all the time and challenging you in a primary.

So, you know, in the short term, this may be good for them in the race, but in the long term, this could be a big problem.


ROLLINS: These safe districts -- you have to be pretty darn liberal to win a seat in Massachusetts or Nancy Pelosi's seat or California Democrats. So it's the reapportionment where you've got 200 seats on each side that are basically pretty safe.

BORGER: I agree with that.

CROWLEY: The 50,000-foot view of the Republican Party, right now, is that there is this split. And that's why this race has gotten so much attention, is that there is definitely a -- what would we call this -- a rebirth of the Republican Party that hasn't happened yet because they can't figure out who they want to be.

And so that's why we're paying attention to this race, as special as it might be. Maybe it doesn't say anything, but it does fit the storyline for Republicans.

KING: All right. We're going to take a quick break. When we come back, our lightning round, election edition, predictions from this amazing group. They'll tell you today what will happen Tuesday. I promise.



KING: Time for the lightning round, here. Elections Tuesday. They'll elect a governor in New Jersey, a governor in Virginia. There are some special congressional elections. There are mayoral elections around the country.

When we wake up Wednesday morning, Ed Rollins, the line on Tuesday night will be...

ROLLINS: Taxes. This was a -- this was an election, in the gubernatorial races about taxes, and even more important, the Obama campaign, which is the best I've ever seen, did not have legs; it did not transfer to other races.

HENRY: The headline Wednesday will be the New York Yankees will either clinch the World Series or gotten closer.


I was not allowed to bring a Yankees cap because the anchor, apparently, is from Boston, so he won't -- won't let me.

KING: A Yankees cap in this room would be shredded. I'm sorry.

BORGER: Yeah, right. I'm going to go out on a limb and we're going to -- and say that we in the media will say this was a split decision and that both sides have some reason to worry.

KING: That was wussy.


BORGER: Yeah, well, because it is. When they -- if they split the governorships and New York 23, there's going to be reason to worry on both sides.

CROWLEY: So I'm going to out-wussy Gloria and say... (LAUGHTER)

... that, when we wake up on Wednesday morning, whoever lost in the biggest race will say it didn't mean a darn thing; it was all about local issues and bad campaigns, and whoever won is going to say, well, what this means is that the Obama agenda is either good or bad or he's losing or he's winning.

BORGER: We're just giving them their spin for...


KING: What do you think of all these political people?

GUPTA: Was there just an election?


No. I just -- you know, it's funny being in Washington for today because, obviously, a lot of people talking about this. You know, I wonder how much the rest of the country really pays...

KING: You travel all the time, though. Are people cranky, when you travel, people...

GUPTA: I think they're cranky about specific issues. I think health care, obviously, is something that, as Ed Henry mentioned, will probably have an influence on a lot of these things. But I think people are so -- so engrossed in their own lives to pay attention to these specific races. At least as headlines, I'm not sure I'd see that.

KING: All right. Let's go -- let's go straight -- live to New Orleans. Now, James Carville, we will wake up Wednesday morning and you will be spinning what?


I'll say that Candy is a very wise woman.

CARVILLE: The side that is perceived had done better will say that. It has a real message and the side that is perceived to have done worse will say no, these are just local elections and they're entirely meaningless. And there's probably some message in the side that wins. But look, we could also point out that Governor Warner won in Virginia in 2001 and it didn't -- Democrats didn't do that well in 2002. But everybody will tend to be pretty predictable. And I think Candy will wake up Wednesday morning and say Candy is very wise.

MATALIN: Candy is all wise and knowing but Ed Rollins had the best answer. It's about taxes. It's about that. The dynamic didn't change. These are each local in their own way, but the overriding issue of taxes and debt and the expanding government is a dynamic that's not going to change, going to run into 2010. So Ed, you get the gold star, ding ding ding ding.

ROLLINS: Thank you, Mary, much love to you.

CARVILLE: We only have about 30 seconds left. But is it -- we tend to overdo these things. It's two gubernatorial elections. But in terms of we did have a historic election last year. You mentioned that. Is that what you watch for? Do you watch for turnout, percentage of African-Americans, young people come out?

ROLLINS: I thought the they had put a campaign together that they would with keep together. I thought --

KING: That was their plan.

ROLLINS: And they should have. And they didn't. And the bottom line is you have the national chairman of the Democratic Party in Virginia, his state is getting trounced. You basically had New Jersey where 40 percent, 60 percent of the people in the state want someone other than the incoming governor. All of these voters, the Democratic voters --

HENRY: But you look for an early sign too because in 1993 when the Republicans took Virginia and New Jersey governorships, that was a real sign of momentum for them and real problems for Bill Clinton on the issues Ed mentioned, like taxes.

BORGER: But historically the intensity is always with the party that is not in power. And I think you're going to see that you'll see that Republican voters coming out there.

ROLLINS: We hope so. CARVILLE: Well, maybe the White House needs to throw its weight around.

KING: Here we go. All right, we're out of time. I want to thank everybody, Mary and James in New Orleans, Ed, Ed, Gloria, Candy and Dr. Gupta for making his house call here with us. You should come back. We learn from you. I know you don't learn from us.

Coming up, our CNN diner discussion this week from the first state of our union, Delaware. Their residents share their thoughts on the economy and what they think of their former senator who just happens to now be the vice president. Stay with us. (COMMERCIAL BREAK)

KING: Most of you know we've made it our mission to visit all 50 states in the first year of the program. Most of you probably also figured out we're not going in order. Our 42nd state we visited this week was the state of Delaware, which just happened to be the fist state to join the union. Let's take a little peek at Delaware. It's primary industries are agriculture, local fishing, manufacturing and still a mining industry in the state of Delaware.

Here's the unemployment picture right now. From September 2007 when it was 3.2 percent, pretty good, pretty low, September 2008, up to 5.1, now 8.2 percent unemployment in the state of Delaware.

Among its residents, a famous man, Vice President Joe Biden who served in the senate, United States Senate for Delaware for 36 years. He of course now lives here in Washington but he makes it home quite a bit. We went down to the Riverfront Market in Wilmington, Delaware, and we wanted to ask people how they feel about the new government report about the economy and about their former senator turned vice president.


KING: The government reported this week that the economy was growing in the third quarter, it's the first time in more than two years, and everyone has been waiting in this recession, when are we coming out? Do you feel here, do you see evidence the economy is coming back?

MALCOLM SMOOK, RETIREE: My impression is that the government- sponsored programs can't last forever and when they stop, we're going to see a big drop in the economy.

KING: So we'll have a temporary up and then boom?

SMOOK: Exactly. And I think that the underwriting of housing these days is building up to another crash in the real estate business. I think it's inevitable. They're going through exactly the same operation that we saw prior to the last drop.

KING: That's a pretty sober assessment. Do you share that? ALECIA KINLOCK, WORKS AT RIVERFRONT MARKET: Well, I believe the economy is really depressed right now, there's a lot of people out of work, a lot of educated people that's out of work. And I'm just really blessed to have a job right now.

DEBBIE ROBINSON, SMALL BUSINESS OWNER: I don't think the economy has gotten better. I agree with her. I think it will. It's going to take a while. I'm a small business owner, I have not seen any changes. As a matter of fact, it's gotten steadily worse to the fact where I've take be on a second job.

KING: Will you be more careful this Christmas season than maybe last season or the year before because trying to keep costs down?

KINLOCK: Well, I'm just going to plan ahead for the holidays and do the layaway thing.

ROBINSON: I've already started looking for the deals. And I'm never -- I've always been a last-minute shopper because that's when I had the time, but now I don't have the time or the money so I'm planning ahead.

KING: We've been traveling the country all year. This is our 42nd state. But it's the first time we've been in Joe Biden's home state. What do you make of him? He was your senator for nearly 40 years, now he's the vice president.

SMOOK: I'm going to say I never voted for him. He isn't my favorite politician by any means. He likes to put his foot in his mouth from time to time. I think that doesn't do the country any good or doesn't do him any good personally.

KING: What do you think?

KINLOCK: Well, I totally disagree. I think Vice President Biden is doing a great job and President Barack Obama made an excellent choice, and I appreciate Vice President Biden's honesty. KING: Honesty. Do you think what some people call putting his foot in his mouth, you think he's just saying what he thinks?

KINLOCK: Exactly.

ROBINSON: I agree. I think his experience helped us a lot, put Delaware on the map now. Nobody even knew where we existed.

KING: Let me ask you lastly about this momentous decision the president faces about whether to send 10, 20, maybe 40,000 more troops into Afghanistan.

SMOOK: We've made a commitment there. It's very difficult to walk away from a commitment like that. It would look a lot like Vietnam, that we just walked away from a situation that we could have done something positive about. So my feeling I guess is regrettably that we should send more soldiers to support those that are already there. KING: What's your take? You served eight years in the Air Force. As you answer what you think should be done in Afghanistan, how much do the troops, the men and women in uniform, watch the body language and the words of the commander-in-chief at a time like this?

KINLOCK: I think they pay very close attention to the words of the commander-in-chief. And I do believe that they ought to start bringing the troops home because the mission is not accomplished they initially set out on. So I think they've lost focus on the mission over there and it's time to come home.

ROBINSON: I would like to see the troops come home. I know it does look like another Vietnam and that's how it feels.


KING: Great conversation and a great grilled mahi mahi sandwich at the Riverfront Market in Wilmington, Delaware.

KING: We'd like to welcome back our international viewers. I'm John King, and this is STATE OF THE UNION.


KING (voice-over): After one of the deepest recessions in U.S. history, this bold claim from the White House.


KING: In an interview you will see only on CNN, the vice president says the Obama stimulus is helping power the recovery. But Republicans ask a powerful question: Where are the jobs? We'll talk exclusively with the House GOP leader John Boehner about the economy and his new health care outline.

Plus, Virginia and New Jersey pick new governors, but are voters also sending a national message? We'll ask STATE OF THE UNION's exclusive duo, James Carville and Mary Matalin. And our "American Dispatch" from New Jersey, where an underdog candidate for governor tests whether voter frustration for both parties can add up to an independent surprise.

Plus, he was one of the key architects of 1994's "Republican revolution." Is another GOP rebound in the offing? Mississippi Governor Haley Barbour gets "The Last Word." This is the STATE OF THE UNION report from Sunday, November 1st.