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CNN LARRY KING LIVE

Interview with T. Boone Pickens; Is Tea Party Racist?

Aired July 19, 2010 - 21:00   ET

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


(BEGIN VIDEO CLIP)

LARRY KING, CNN ANCHOR (voice-over): Tonight, T. Boone Pickens is back on the latest drama in the Gulf. Caps in place going to hold? What about the seat? The legendary oil man weighs in on the danger that could be lurking, could be looming, 5,000 feet below the surface.

Plus, is the tea party movement tearing apart? It fires one of its most vocal supporters. President Obama rips into republicans on the economy.

Then, are we safe? A scary report about U.S. security says who knows? Next on LARRY KING LIVE.

(END VIDEO CLIP)

KING (on-camera): We're going to learn a lot tonight because we welcome back one of our favorites, Boone Pickens, the legendary oil man, founder and chairman of BP capital management. Those are his initials, by the way, not associated with BP oil. He advocates the Pickens plan for reducing U.S. dependence on foreign oil. Four days of no new oil while testing continues in the Gulf Mexico, this followed 87 days of oil gushing into the Gulf. Is it over?

T. BOONE PICKENS, FOUNDER CHAIRMAN OF BP CAPITAL MANAGEMENT: You remember our first meeting was 38 days.

KING: Thirty-eight days.

PICKENS: It was 38, and I said --

KING: It was supposed to end and you said it's going to go another 38.

PICKENS: That's right.

KING: I remember.

PICKENS: And I think it will go a third 38.

KING: Well, it hasn't leak for four days. Why will it continue?

PICKENS: Well, they haven't killed the well. All they've done is shut it in. So, they got to kill the well. And that's going to take more time. KING: Will there be seepage?

PICKENS: Well, I don't think the seepage is coming from this wellbore. You have seeps on the bottom of the Gulf. And this -- the one that they're concerned about is almost two miles away.

KING: So, are more leaks likely?

PICKENS: No, I don't think so. I don't think so. No, I think -- I think we're ready. I would just assume they'd open the well up and capture the oil which they can do now. I would not -- I don't see any reason to keep the pressure on the well.

KING: That pressure inside continues to rise slowly, right?

PICKENS: It's two pounds an hour or something.

KING: What does it all mean? We're told that millions of gallons naturally seep from the ocean floor in the Gulf of Mexico every year.

PICKENS: That's right.

KING: So, there's natural leaks all the time?

PICKENS: Yes.

KING: So, what's it all about, Alfie?

PICKENS: Well, I mean, this is not a natural leak. You know that is actually a blowout. People keep calling it a leak. The last thing it is is a leak. It's a blowout, and it's produced at maybe as much as 50,000 barrels a day. That's a lot of oil. And so, they've now shut it in. And they're going to have to kill it. And they're going to have to kill it with cement. And that's going to have to come from the relief well. And the relief well is four feet eight inches away from the seven-inch casing which is blowing out.

KING: What worked? What stopped the leak?

PICKENS: When they shut it in at the top.

KING: Why didn't they do that 80 days ago?

PICKENS: I don't know.

KING: Someone said they didn't have the equipment.

PICKENS: Well, I think that's part of it. I don't think they exactly -- I think they got an idea or two when they tried to do what they call is a top kill. Do you remember?

KING: Yes, I remember.

PICKENS: I didn't think that had a chance.

KING: You were on that night, too.

PICKENS: Yes. I told you it didn't have a chance. But they came up with some ideas about how to cut that riser off and then stab on top of it and then pump into it. They didn't pump into it. They shut it off by closing the valves on it.

KING: How effective is the cleanup?

PICKENS: I think they're doing a pretty good job. I had one of my partners was at Destin this last week, and he said, there wasn't anything on the beach.

KING: Can they collect the spilled oil and make money from it?

PICKENS: No, no, that's not -- that's a loser, because they're spending $27 million a day, and the -- and they get a million dollars off the oil at 50,000 barrels a day.

KING: What is this going to do to BP? Do they go out of business?

PICKENS: No. They're not going to go out of business. I mean, they are the largest oil producer in the United States. 700,000 barrels a day and 2.5 billion cubic feet of gas a day is what they produce in the United States. So, those assets alone, not counting their marketing and refining, are worth probably $150 billion.

KING: Would you buy their stock?

PICKENS: I would, yes. In fact, I own their stock.

KING: So, you didn't sell?

PICKENS: No, I just bought it.

KING: Through all of this, you, had confidence in that company, even though on this program, you ripped that company? You're pretty rough on that company.

PICKENS: I don't recall that. I said leave them alone. Let them fix it. And then investigate.

KING: You said they goofed.

PICKENS: Well, I said it could be pilot error.

KING: But you have faith in them?

PICKENS: Well, I think you've -- I'm satisfied they're going to kill the well. And I think that you've taken too much out of the stock. I bought the stock at 36, so I'm a loser a buck today.

KING: What's the danger of other spills?

PICKENS: You know, this is the first one in 50 years. And, you know, not to be repetitious, but it has been awhile. But, you know, two pilots qualified, crashed an airliner. You can sure have pilot error and sometimes you do have. You don't quit -- you don't shut down the airlines for that. So here, they should go back to drilling.

KING: You don't agree with the moratorium?

PICKENS: No, I don't. Because this I do think you're going to find is probably a bad decision on the part of an engineer.

KING: That will be the -- like pilot error?

PICKENS: Right.

KING: OK. So, you'd call on the president to cancel the moratorium?

PICKENS: Could I?

KING: Would you ask him to?

PICKENS: No. No, I'm trying to get -- I'm trying to fix the OPEC issue. So, I don't want to show up in too many things trying to give somebody advice or help.

KING: How much headway have you made there?

PICKENS: Good. I mean, we've made good progress. And I think we'll have an energy plan for America before the year is out, and that will be the first energy plan America has ever had in 40 years. I think that will happen.

KING: So, there'll be a lot of firsts in this administration that apparently is not popular. Although, the Reagan popularity was only 41, 42 in his second year.

PICKENS: Yes.

KING: You're saying that good things will come from this.

PICKENS: Well, I'm so --

KING: You're predicting good things.

PICKENS: I'm focused on energy only. And I know what I'm talking about. And I don't want to -- I don't want to be distracted on other things.

KING: I got you.

PICKENS: Sure.

KING: You are a tunnel guy.

PICKENS: That's right. I am on this issue, because I'm running out of time.

KING: You're going to live forever. PICKENS: I'm not going to live forever, you know that. But I got to get this problem -- I got to get it solved.

KING: Boone called it right on one prediction. See if others come true. We'll ask some ahead.

(COMMERCIAL BREAK)

KING: Look how sharp T. Boone Pickens has been. May 27th, day 38, you said, I bet that we'll be here talking 38 days from now.

PICKENS: That's right.

KING: June 7th, day 49, you said I just wonder what the evening news is going to be like after 60 days. After 70 days. This is all you. After 80 days. I mean, we're all going to be dizzy what we see on this well. June 15th, day 57, now, everybody is thinking it's going to be August. I think it's not going to be over until the middle of September. you still hold by that?

PICKENS: Maybe September 1st.

KING: OK. Get it close. All right. Let's get your predictions on the relief well. By the way, do you think the people who have been damaged and they put aside $2 billion for them, you think BP is going to take care of people?

PICKENS: I think they're going to try to. I think they're going to do what they said they were going to do.

KING: So, they'll hold to their promise?

PICKENS: Yes.

KING: Does the federal government owe something?

PICKENS: No, I don't see the federal government is not -- I think they were slow getting the skimmers in there. And that part, they were slow making some decisions, but I don't think the government owes anybody anything.

KING: Did we refuse help from other countries?

PICKENS: I think we did.

KING: Was that a mistake?

PICKENS: Probably.

KING: Why do you think we would refuse someone --

PICKENS: I don't know. I don't understand it. We should have taken the help.

KING: The original April 20th explosion, we covered this, which killed 11 workers, you think an engineer made a mistake? PICKENS: Could have.

KING: What would be -- describe to me, I'm a neophyte here. I don't know what I'm talking about.

PICKENS: What could be the mistake?

KING: Yes.

PICKENS: I'll go pretty technical here.

KING: Try not to.

PICKENS: We ran a tapered string of casing from top to bottom. That wasn't the engineer's problem. That they shift the casing out to that locations and ran it (ph). He ran it. He cemented and they --

KING: Pushed the wrong button?

PICKENS: No. I think that he was in a hurry. And Halliburton recommended they run 22 centralizers, and they ran four. And that caused him a problem because the tapered string of casing is seven inch. The bottom part of it was probably against the wall of the hole. And when they cemented, they didn't get a cement job all the way around the casing. He didn't know that. I don't understand why somebody didn't run a cement bond log. They had Schlumberger on the location and didn't do it. OK. I'll conclude this pretty quick.

But he didn't get a cement job on the casing. And so, when he went in to now leave the hole for the completion engineer, he then need to take the 14.2 pounds per gallon mud which was holding 12,000- pound bottom hole pressure that he was circulating that out and replacing it with sea water. Good procedure if you had a cement job. But had no cement job, then --

KING: The mud is from the bottom, right?

PICKENS: No, the mud is from the top.

KING: The mud is from the top?

PICKENS: Sure. You mixed it up. It's 14.2 pounds per gallon. And so he has that to keep the well dead. And -- but he doesn't know whether he has a cement job or not.

KING: Is Halliburton play any part in fault here?

PICKENS: I don't think so. From my -- and I've had contact. I've had calls with Tony Hayward, and I have talked to others that have worked on the well. And, no, I don't -- from what I see, Halliburton advised them to run 22 centralizers, and they ran four.

KING: The safety valves didn't work. How do they make sure that doesn't happen again?

PICKENS: Well, it's -- I'm not sure why they didn't work. And that, I'm hazy about as to why the rams on the blowout preventer didn't function.

KING: Will, in your opinion, will we ever get, as you mentioned in air crashes, the proper agency comes out and investigates all the air crashes and eventually comes up with an answer. We're going to get an answer here?

PICKENS: Sure, you will. Yes, you'll get an answer. We'll know after they investigate where we -- where the --

KING: It seems hard to investigate underwater.

PICKENS: You got all the equipment. You'll have all the equipment to look at. You'll know what you got. They'll bring blowout preventers up and be able to take them apart and look at them.

KING: We'll ask you a rating of how the Obama administration did. And then I want to talk about the Pickens plan right after this.

(COMMERCIAL BREAK)

KING: We'll take a couple of calls. We want to cover a couple of areas with T. Boone Pickens. Why does the Pickens plan only call for reducing dependence on foreign oil?

PICKENS: Well, I really -- it's even narrower than that. I want to get off the Mid East oil. I want to get off OPEC oil, because I think it's a security issue for the country. But you know, it's exactly what the president said. When he got the nomination at Denver in July of 2008, on energy, he said in ten years, we will not import any oil from the Mid East. And I cheered him for that when he said it. And that's the oil we have to get off of first.

KING: OK. All right. Mr. Predictor, who's been right, take me ahead 20 years. It's 2030. How much dependence on oil from Middle East?

PICKENS: It's according to what the leadership wants.

KING: What do you think?

PICKENS: I think we got to go to our own resources. And we have resources to go to.

KING: Nothing from there then?

PICKENS: I'll take out the OPEC first. The oil from Canada and Mexico is fine with me. But North America is okay. But I just as soon get rid of the rest of it.

KING: And natural gas is still your big thing, right?

PICKENS: Well, you got 4,000 trillion cubic feet of natural gas in the United States. And it's 30 percent cleaner than oil. It's cheaper. It sells for 25 percent of the cost of oil --

KING: Seems logical. PICKENS: It sure does. You'd look like an idiot if we don't do it.

KING: China has passed the United States as the world's biggest energy consumer. We're still --

PICKENS: We predicted that.

KING: We're still the biggest per capita, though.

PICKENS: Yes.

KING: Right?

PICKENS: We are.

KING: Is China going to go way past us?

PICKENS: Sure, they will. Sure.

KING: In other areas, too?

PICKENS: They'll go way past us. But we have got to get on our own resources in this country. And you have plenty of resources. When you do that, you know, you got a billion dollars a day going out for foreign oil right now. And two-thirds of the trade deficit is oil. So, you start turning that around, can you imagine how many jobs it would create?

KING: We use 19 million barrels a day?

PICKENS: Yes, 20.

KING: It's a call for T. Boone Pickens. Bedford, Texas. Hello.

UNIDENTIFIED MALE: Yes, hi, Larry. Sure going to miss you. And Mr. Pickens, I got my 84th car. I actually got an oil lease I've signed for my land here. But I was wondering, where can I get my car converted to natural gas, so I can run my car on natural gas? Thank you so much and good luck on your project. I'm really way -- so powerful behind you.

KING: Thank you. When can a car go on natural gas?

PICKENS: You can get cars now -- if he lived in Paris, France, he could go shopping tonight for a passenger car and look at 40 to 45 cars that are on natural gas. BMWs, Mercedes, GM, Ford, all of them are made there. GM makes 18 and makes none in the United States.

KING: Why?

PICKENS: Because they haven't had a market for it. If there had been a market, GM would have made them.

KING: He couldn't convert his car to it? PICKENS: I don't advise that. But if -- what I'm after are the big users of diesel. And those are the 18-wheelers. There are 8 million of them. If I could get those 8 million on natural gas, I could cut OPEC in half. So, that's what I'm after. What I want the president to do, two things. One, I want him to tell us that he remembers very well what he said about OPEC -- Mid East oil, no Mid East oil in ten years. His first step would be all federal vehicles that are -- that we buy, the federal government does, would be by federal order, would be on our resources. They could be on battery, hybrid, natural gas, butane, propane, ethanol. I don't care. Just so it's American.

The second thing I'd like for him to do is to go to the American people and say this has nothing to do with politics. It's all about us, all Americans. In the next eight years, two of these ten years have gone, so he has eight years to make good on this. He has to put it in place. He isn't going to be here in eight years. But he's got to put it in place for it to happen. I think the American people would rise to the occasion and love every minute of it. They would -- what he would tell them is you have to be on natural resource -- our resources in the United States. Make your pick. We don't care. But just be on American resources in eight years.

KING: Another call. Martinsville, Virginia. Hello.

UNIDENTIFIED MALE: Yes. Good afternoon, Mr. Pickens. I worked as a mechanic for over 30 years in a chemical plant. And we followed a lot of strict safety rules. And also as a mechanic, we did a lot of preventive maintenance work. My question is, do you think that BP's preventative maintenance program failed? Is it a big result of this disaster that we're going through now?

PICKENS: No, I don't think it was a maintenance problem at all.

KING: Because?

PICKENS: I think that -- I think the problem was, first, didn't run the centralizer. Second, they got a bad cement job and did not run the cement bond log. It had nothing to do with maintenance.

KING: You think they did all the preventative maintenance they were supposed to do?

PICKENS: Yes, I do.

KING: And you would release -- you would stop the banning of the - you'd do the -- do away with the president's order on that? I just want to clear that up.

PICKENS: Do away with the president's order on what?

KING: On the moratorium on --

PICKENS: Yes. I'd go back to drilling is what I'd do. I want to get on American resources.

KING: Just wanted to clear it up. Good seeing you again, T. Boone. Stay healthy.

PICKENS: Thank you. Can you give me 15 seconds?

KING: Yes.

PICKENS: I hate to see you retire.

KING: I'm not retiring. I'm going to do other things. I'm going to do four specials a year on CNN.

PICKENS: OK. Well, that's great. I didn't know that. I'm not keeping up. I'm watching the BP deal a lot closer I am, Larry.

KING: There's an old Milton Burrell statement. Retire to what?

PICKENS: That's right.

KING: Wouldn't know what to do.

PICKENS: I'm older than you are.

KING: Right.

PICKENS: So, it's --

KING: Could you retire?

PICKENS: No. I owe too much money. Thanks.

KING: Well, you could pass some over here. We could get an early retirement together. No, I'm only kidding. I'm going to be around.

PICKENS: Oh, good. OK.

KING: I'll be here in another four months.

PICKENS: I know it.

KING: You'll be back before I'm gone from here.

PICKENS: I'll be back -- well, I'm not going to say that. I told you what my prediction was on the well.

KING: Maybe next week, you'll be back.

We'll get some Washington observers reactions to everything, including to what he just said, next.

(COMMERCIAL BREAK)

KING: I want to talk politics. Dana Loesch is an organizer with the Nationwide Tea Party Coalition. She's a blogger, talk radio host in the "Dana Show." Michael Reagan is chairman of the Reagan Group, son, of course, of the late President Ronald Reagan. Marc Lamont Hill, professor at Columbia University and contributor to the loop 21.com. And Alicia Menendez is senior adviser to the new Democrat network.

We'll start with you, Dana. The tea party leader, Mark Williams, and his Tea Party Express have been expelled by the National Tea Party Federation for racially insensitive comments that he made. Did you agree with that move?

DANA LOESCH, ORGANIZER, THE NATIONWIDE TEA PARTY COALITION: I think when I first heard about Mark Williams, I honestly thought Mark Williams who? And I don't, you know, I don't want to get all catty. I think this dude is a legend in his own mind. Why all this attention is being given to like one person? He's never represented an entire movement. He is, I think, to himself perhaps, he thought he did, but never to me and never to anybody that I know. And I just think that he says a lot of what he -- I think he says a lot of what he says for attention, honestly.

KING: Mark, was it correct to remove them and kind of expel them?

HILL: Absolutely, it was. This was one of the few responsible moves that comes from the Tea Party with regard to issues of race. It's very easy to dismiss him as just one irresponsible wayward member, when, in fact, we've heard these kind of comments repeatedly. When you go to Tea Party rallies, you hear these exact same remarks.

So I'm glad to hear that one person has been removed. What I'd like to see is an actual statement repudiating the racist wing of the Tea Party. To mea, that's a positive step forward.

KING: We're going to get to that. Michael, here's some of what Williams' wrote in his blog, a fictional letter from what Williams called colored people to Abraham Lincoln. "Dear Mr. Lincoln, we colored have taken a vote and decided that we don't cotton to this whole emancipation thing. Freedom means having to work for real, think for ourselves and take consequences along with rewards. That is just far too much to ask of us colored people, and we demand that it stop."

REAGAN: I got to agree, I don't know how you found Mark Williams. He's been floating through radio for 20 years. I know Mark Williams. He wrote it tongue and cheek and everybody took it very serious. When they are pointing at Mark Williams like he's leading up some wing of the Tea Party movement.

KING: But the tongue and cheek don't work.

REAGAN: What?

KING: It don't work in that case.

REAGAN: The fact of the matter is I don't know why you are taking Mark Williams so dog gone serious. Here's a guy who has had 37 radio shows in 12 years. And you are taking him like he is the spokesman and the president of the United States of America. He's not. He's Mark Williams. And you guys are taking him really too serious. KING: Is he cooky?

REAGAN: Yes, Mark Williams has been cooky. He tries to raise the level so people call him. I'll tell you right now he's probably sitting at home laughing his butt off that everybody is talking about Mark Williams.

KING: Alicia, is he right? Are we making too much of this?

MENENDEZ: I don't think so at all. In fact, I think a lot of what we saw from Mr. Williams we've seen from other members of the Tea Party. You had Tom Tancredo saying that he wanted to reinstate literacy tests. If that's not code for racism, I don't know what is.

Listen, I'm not saying everyone in the Tea Party is racist. Far from it. But I am saying that when you see racist elements, which may exist in either party, which may exist in your church or where you work -- then most of us when we see someone use the "N" word, when we see someone be discriminated against for the way they look, we refute it. We push those people away. You have to call into question why the Tea Party leadership would allow this to exist under their banner? That is the real question. Not one individual.

REAGAN: Would you name -- could she name one racist in the democrat party?

MENENDEZ: I can't name them, but I'm not going to say that they don't exist. If they came out --

(CROSS TALK)

MENENDEZ: I wouldn't want them to be part of the Democratic Party.

LOESCH: My whole thing here is that I'm very curious as to how people on the left can point out what they view as racism on the right when they don't repudiate people like, oh, I don't know, Shirley Sherrod speaking at an NCAAP banquet, going off about a member of the government, by the way, state director of the USDA of rural development for Georgia -- saying that she actually was basing whether or not she was going to help somebody on the color of their skin.

HILL: Are you actually -- Wait. Are you actually suggesting that Democrats have sort of drawn up some random Republicans, some random Tea Party member who is obscure and you are pointing to a state level agricultural legislator as if --

LOESCH: I'm asking for consistency here.

HILL: But there is consistency. I don't agree that you should deny someone access to resources based on their race.

LOESCH: -- to be representative of the Tea Party movement is like saying that every single person -- that Jeremiah Wright represents every single person who voted for Barack Obama.

HILL: That's not what it's about.

LOESCH: Good, I'm glad.

HILL: Let me finish the point. When you go to Tea Party rallies, when you talk to Tea Party members, there is a significant sector of the tea party which espouses these beliefs. They've even done studies.

LOESCH: Really?

HILL: There's a study out of University of Washington that says suggests -- that says that people in the Tea Party are 25 percent more likely to have negative attitudes toward blacks and Latinos than other people. Another study that says while 23 percent of the American public thinks that statements about black angst and black frustration over rights and benefits is overstated; in the Tea Party, it's at 51 percent. So there is actual data to a to suggest that Tea Party members --

LOESCH: Have you ever attended a Tea Party event?

HILL: I've been to four Tea Party rallies. I've also worked with David West in New York, who is a black member of the Tea Party movement.

(CROSS TALK)

KING: Does the Tea Party represent your philosophy?

REAGAN: There are many members of the Tea Party that do.

KING: The party itself?

REAGAN: I was at the original one in Sacramento a couple of years ago that was covered by the media. I spoke there. I just spoke in Ohio at a Tea Party. I'm speaking again shortly at a Tea Party. I talk about my values, what I believe in, what Ronald Reagan believed in and where we should go. These people are Democrats. They are Republicans. They are independents. And they have one thing in common. They're really upset with the way Washington is going, more and more government control every -- over every aspect of their lives. And they're mad and they are angry.

You go back to Thomas Jefferson, who said to his friend in New York, a judge. He said, there needs to be rebellion on occasions, about every 20 years. Well, we had one in 1980 and we're having another rebellion today because of Washington, D.C. That's what it's all about.

KING: You think your father would be a Tea Partier?

REAGAN: My father would be supportive of the Tea Party because he was supportive of grassroots America. That's exactly what this is.

HILL: We're all supportive of grassroots America.

KING: We'll come right back. We'll be right back.

(COMMERCIAL BREAK)

KING: Dana Loesch, would you agree that these inflammatory statements harm the whole party movement?

LOESCH: The whole Tea Party? I don't -- Mark Williams, I think, is accountable for himself. I've never looked at him as a leader of anything. I've never looked at him as anything more than Mark Williams. So I don't think that they -- honestly, I don't think that what he, does what he says hurts the movement because I know the people that are in this grassroots movement, and they're good people. And they are black and they're white and they're Latino. And four out of 10 of them, according to Gallup, are Democrats and independents.

The big thing that I am looking at here is we have the exact same goals that people on the left do. We have a different way of going about those goals. I am looking forward to making -- to bridging the gap when it comes to educational inequality, to getting jobs -- getting job creation going. And this back and forth BS that I keep seeing happen just isn't cutting it.

KING: Alicia, why don't we listen to that point of view?

MENENDEZ: I think it's a wonderful point of view and it actually does need to be included in our discourse. She's absolutely right. There are a lot of hard-working Americans who are angry, who are upset, who are a part of this movement because they are angry with both parties and they are angry with Washington and they are frustrated.

KING: So why take it out on one cooky guy?

MENENDEZ: They shouldn't be punished for one cooky guy. But I do think this is why it's important for the Tea Party to establish who its leadership is, so there can be a clear voice in these times of crisis, who can identify for the rest of us who may not know what the Tea Party stands for and what it doesn't stand for, because I think part of what we saw coming out of this is it was quite the cacophony over what the Tea Party is and what the tea party isn't. That's the best articulation I've ever heard of what this is.

KING: Michael, should you have a national spokesperson?

REAGAN: Why? This is a grassroots movement, state, county, national. It's a grassroots movement. Started in all these counties across the country. They have their own leaders of their organization.

HILL: That's what's going to happen.

KING: Are they going to endorse Democratic candidates across the country?

REAGAN: I imagine this whole thing having to do about race is about trying to discount them and have people not pay attention to them, because the Democrats are scared to hell what's going to happen in November.

HILL: That's why. It's not -- it's not the sign saying go back to Kenya.

REAGAN: But they're not endorsing anybody.

KING: One at a time.

REAGAN: They're not really endorsing anybody out there.

KING: No one will be endorsed?

REAGAN: -- as far as a national movement. I'm speaking to a group in Azuza (ph) in a couple of nights. They haven't endorsed anybody. They are worried about the Constitution of the United States.

KING: What's the problem? They're not going to endorse.

HILL: First of all, that's disingenuous. We've seen -- just in the last few months, we've seen major Senate and gubernatorial elections in California and South Carolina, in Arkansas and Arizona, where Tea Party membership played a key role in pushing forward Republican candidates. And there's nothing wrong with that. I don't have a problem with Tea Party members endorsing whomever they want.

But let's not be disingenuous here and act like this is a some universal, multi-racial, rainbow coalition of Americans. It's just not. Let's also not pretend that there isn't a serious image and branding problem of the Tea Party. If this is really a universal movement that's just about making America better, then you have to address these issues of race and racism.

REAGAN: Why?

HILL: Why? Because these prominent --

REAGAN: Why? Why?

HILL: Because you made a decision --

REAGAN: because it will make you feel better? You'll feel better if they do?

HILL: No, it doesn't because no matter --

REAGAN: This has nothing to do with race. This has to do with more money in the pocket. Less government in my life.

(CROSS TALK)

HILL: Michael, the Republican party has been about shrinking government since your father was president and no one made these accusations. This is about a series of incidents, a series of rallies, a series of protests, and a series of statements that have been made that clearly mark race. When you go to places and you hear lynch the president, when you see go back to Kenya signs being held up by Tea Party members, it's disingenuous to say that that's not race.

KING: Would you admit that some of the signs that have gone up, Hitler things and the like, don't help your cause?

LOESCH: Well, when there are people holding them up, but those signs that we saw, we knew they were the Tea Party Crashers website. In fact, we chased off one of the Tea Party Crashers in a rally that we had in March in Clayton, Missouri. We chased off one of those folks. We've also chased off Lyndon LaRouche people who came to -- they had these t-shirts and they had the signs that had the Hitler mustache and all of that stuff on Barack Obama.

That never gets reported. There was also the report of people carrying guns to Tea Party rallies. Except one of those was a man of color, but he was conveniently cropped out. So it only showed his waist where he had a --

HILL: That's a problem.

LOESCH: That's a huge problem.

KING: Are you saying there's a media bias against Tea Parties?

LOESCH: Yeah.

KING: Because it seems like they are getting a lot of coverage.

LOESCH: They get a lot of coverage.

HILL: You have a lot of racists.

REAGAN: We're with you.

LOESCH: When people call them racists, they get coverage.

(CROSS TALK)

REAGAN: I don't remember these kinds of shows taking place when the same kind of signs were showing up about George Bush, calling him Hitler, calling him --

HILL: I disagree.

: I don't remember all the shows based on George Bush and all of those accusations.

HILL: Actually, Michael, I was right here on Larry King talking about those signs. I said that was wrong, too. My issue again isn't offering political disagreement, even if it's spirited, even if I sometimes find it a little bit offensive. That's what free speech is about. Let's not pretend that these are not racially inflammatory statements. When you tell the president to go back to Kenya, how can that --

KING: All right. Let me get in a break.

REAGAN: And they kicked him out of the party. So what's the problem?

HILL: Right, you guys outed the one racist Tea Party member.

KING: We'll be right back after this.

(COMMERCIAL BREAK)

KING: OK, other things on the platter. The Senate is set to consider a bill tomorrow to extend the deadline to file for unemployment benefits. The president ripped into Republicans today for holding up a bill to extend those benefits. Let's watch.

(BEGIN VIDEO CLIP)

BARACK OBAMA, PRESIDENT OF THE UNITED STATES: After years of championing policies that turned a record surplus into a massive deficit, the same people who didn't have any problems spending hundreds of billions of dollars on tax breaks for the wealthiest Americans are now saying we shouldn't offer relief to middle class Americans, like Jim or Leslie or Denise, who really need help.

(END VIDEO CLIP)

(NEWS BREAK)

KING: Dana, the bill is going to cost 33 billion. Republicans have blocked a vote several times. It looks like it's probably going to pass tomorrow. Don't you think we should extend unemployment benefits? I mean, who needs it more?

LOESCH: Well, I want to preface this by saying I don't know any Republican who is against unemployment benefits. I think what the argument is here is what you just said, Larry, is extending them. We're at 99 weeks now. How far are we going to extend these? When people talk about having compassion for those who fell up on hard times, I know. I was raised by a single mother who worked three jobs. I know exactly where a lot of Americans are right now.

But I look back in 1983 when we had 10.8 percent unemployment, record high unemployment. We have unemployment benefits that were just 42 weeks. I keep wondering how much longer these are going to be extended, and why are we not looking at job creation, because job creation right now is where the problem is. I think --

KING: Alicia -- well said.

MENENDEZ: I don't think those two items are mutually exclusive. I think largely Congress is focused on job creation. They need to get even more serious about job creation. In the meanwhile, we have to be realistic about the fact that for every job, there are five applicants. And in the short term, while we're waiting for that job creation to kick in, we have to give these people a way to put food on the table.

Now, part of what I don't understand when Republicans start talking about the deficit is that, A, if we really want to tackle the deficit, then we have to get the economy back on track. And B, they had no trouble extending these tax cuts, which would actually add to the deficit 25 percent more than the unemployment benefits. So it's hard to believe is that they're doing this for anything other than political reasons.

REAGAN: And the Democrats aren't trying to extend them for political reasons at all.

MENENDEZ: This could be a bipartisan thing.

HILL: That's right, Michael, we don't posture.

KING: You don't believe it could be humanitarian? Everything's political?

REAGAN: Yes.

KING: Everything?

REAGAN: Yes.

KING: So if someone's out of work, you want to help them --

REAGAN: Is it happening in Washington, D.C.? Washington, D.C. is debating it, right?

HILL: You're so cynical, Michael.

(CROSS TALK)

REAGAN: Here's what the Republicans are saying: they're saying, listen, 33 billion is fine, but give us the cuts to be able to get there.

MENENDEZ: Cuts in what? What are we going to cut.

REAGAN: Barack -- Barack -- Barack -- listen, I didn't say a word when you all were talking. Barack Obama said that, in fact, the Democrats -- of the Republicans gave us the deficit. Absolutely right. That's why they're no longer in charge, because they gave us a deficit. They didn't do what Republicans are supposed to do.

The reality is they left us 200 billion dollars in debt. We're now 1.4 trillion dollars in debt. The Republicans are saying, we'll give you the 33 billion, but find a place to make cuts so we can do it.

KING: Mark, is that a good point?

HILL: I think Michael's actually more right than Dana on this point. I don't think the Republicans general point right now is that they won't extend unemployment benefits. It's that they want to find some other way of cutting the federal deficit, which I think is actually somewhat reasonable. The problem, however, is the Republican party hasn't done a decent job of giving us any spaces where that can happen. There is posturing happening on the left and the right. Of course, Republicans are pushing back because it's election season. Of course, Barack Obama is publicly spanking Democrats -- excuse me, republicans right now, because it tells the voters that he's the one fighting for worker's rights. There's absolutely no doubt about that.

Yes, Republicans have been absolutely disastrous in bloating spending and refusing to raise taxes on the wealthy. But he's also been part of the problem, because he's also bailed out Wall Street. He's also allowed speculators and predators to continue to live despite his Wall Street reforms and his huge bailouts.

So everyone has something -- everyone should be blamed for this. Barack Obama is doing the best he can right now. Unemployment benefits are a necessary part to sustain workers. Let's not pretend that people are going -- don't want to work and they're going to take unemployment benefits like some big welfare check, and not go out and stimulate the economy. What we need right now is to stimulate small business to incentivize companies to grow. They're not mutually exclusive. We can do that as --

REAGAN: Business and industry right now are scared to death of Washington, D.C. That's why they're not creating jobs, because they don't know when the next shoe will drop .

KING: Last time I checked, it's (INEUADIBLE)

REAGAN: No, I didn't say anything about aid. I'm being real about it.

KING: You just seem angry about it.

REAGAN: You know, people -- listen, Reagan.com, you'll find out a lot.

HILL: You seem pretty angry, Michael.

KING: Anyway, we're going to take a break. When we come back, we'll talk about your safety next.

(COMMERCIAL BREAK)

KING: Back with our panel. Fascinating "Washington Post" lead story today called "A Hidden World Growing Beyond Control." Here's a clip from the WashingtonPost.com.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: You think you know America. But you don't know top secret America. We're all aware there are three branches of government in the United States. But in response to 9/11, a fourth branch has emerged. It is protected from public scrutiny by extraordinary secrecy. Top secret America.

WILLIAM M. ARKIN, REPORTER, "THE WASHINGTON POST": This is a closed community. And since 9/11, it's become even more so. DANA PRIEST, REPORTER, "THE WASHINGTON POST": The money spigot was just opened after 9/11, and nobody dared say, I don't think we should be spending that much.

UNIDENTIFIED MALE: It has become so big, the lines of responsibility are so blurred, that even our nation's leaders don't have a handle on it.

(END VIDEO CLIP)

KING: What do you make of this, Alicia?

MENENDEZ: I feel like it's a suspense movie and I need to know how it ends. Listen, I think after September 11th sort of most Americans agreed more was more. And in the process, I think you got a lot of this bloat that we're seeing now. So I think good for the "Washington Post" for looking into this, for committing two years into this project. I'll be interested to see what they put out in the next few weeks.

KING: Michael, doesn't secrecy bother you?

REAGAN: We've always had secrecy. Listen, I was a member of the first family. We've always had secrecy. The reality of this is, are we safe? Have they thwarted attacks on the United States of America? Yes. How many there are, I don't know. But you know something? I go to bed at night feeling safe, because there are people out there who want to make sure I'm safe. I think the "Washington Post" opening up this Pandora's Box to try and say there's something clandestine going on here, we need to stop it -- you're opening a Pandora's box --

KING: Do you know how much money they're spending?

REAGAN: I don't care.

KING: You don't care? You care about Washington --

REAGAN: I don't care, because the first job of government -- look at the Constitution, check it out -- is about protecting the United States of America and their citizens. That's what the first job of government is.

KING: We don't have to know what it costs?

REAGAN: I don't ask my wife how much money she spends.

HILL: Perhaps you should, Michael. I go to bed feeling safer, too, knowing that we haven't had an attack. I want to continue that. I want the nation to continue to not have an attack. But I'd also like some level of transparency, so that we can know if this is even the reason that's producing the safety for us. We need transparency. We need to know what's going on.

REAGAN: I don't think we're smart enough to make that decision.

LOESCH: I have to disagree with Mark. We've had the Ft. Hood. We had the panty bomber in Detroit. We had the situation in New York. We've had some attacks. I still don't go to sleep all that easy. I'm very curious to know at least how much money is being spent on this. And if apparently there's like a redundancy anywhere, that's something that's nice to know.

REAGAN: Well, there's redundancy all through Washington.

HILL: Michael, you just can't have a problem with what Barack Obama is doing or Democrats are doing. I want to know if there's redundancy and inefficiency anywhere. I agree, there have been attacks.

REAGAN: Did I mention Obama or the Democrats? No. I didn't mention them at all. This has been going on since 9./11. I understand it. If we're going to check out that redundancy, let's go through the whole budget and look at all the redundancies.

(CROSS TALK)

REAGAN: I bet you we can find 33 billion dollars, and take care of those people on unemployment.

LOESCH: Oh, Pay-Go.

HILL: Why don't you help us do that, Michael, so we can stop paying unemployment benefits.

REAGAN: I'm good with it.

KING: Alicia, you think we're going to find out more here?

MENENDEZ: I think we're going to find out more. And I do think we have to be careful where the line is between transparency and protecting a lot of what is clearly meant to be classified and top secret. So it will be interesting to see how they're able to strike that balance, because I think it will set a standard moving forward.

KING: We're out of time. I guarantee this group will be back.

Michael Lohan exclusive tomorrow. His daughter Lindsay scheduled to report to jail. He'll be with us tomorrow to talk all about that. Right now, Anderson Cooper and "AC 360." Anderson?