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IN THE ARENA

Beginning of the End for Unions?; Is U.S. Education Policy Failing?

Aired June 14, 2011 - 20:00   ET

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


ELIOT SPITZER, HOST: Good evening. Welcome to the program. I'm Eliot Spitzer.

Breaking news tonight. The Wisconsin law that has torn that state apart, the one that takes away collective bargaining rights, tonight it has been reinstated and now becomes law.

Right now thousands of angry protesters are crowding the halls of the capitol in Madison as they have been for months. They're making their anger clear at Governor Scott Walker, the man who has bet his office on changing the way unions do business.

The Wisconsin State Supreme Court has rejected a challenge to the law. Now tens of thousands of workers will lose their right to bargain as a union. And they will pay more for their health and pension benefits.

Already, other states are moving to do the same thing. Are we seeing the beginning of the end of the American union? We'll have more on this breaking news in just a moment as well as some strong debate about last night's debate.

But first a look at the other stories we're drilling down on tonight.

(BEGIN VIDEO CLIP)

SPITZER: Straight talk and campaign politics. A contradiction? Not when Alan Simpson talks about his own party.

ALAN SIMPSON, FORMER U.S. SENATOR: If you can't learn to compromise an issue without compromising yourself, you ought to go home.

SPITZER: And does Iraq owe us money? Congressman Dana Rohrabacher sure thinks so. He told the Iraqi government and was shown the door.

E.D. Hill asks, after eight years of fighting and dying, are Americans no longer welcome?

Then, who is this man? A national survey says only 9 percent of fourth-graders know. I'll ask the secretary of education. Is our education policy still failing to make the grade? (END OF VIDEO CLIP)

SPITZER: Now for more on our breaking story. The return of that controversial anti-union law in Wisconsin. Joining me now is former labor secretary, Robert Reich, author of "Aftershock," and CNN's senior political analyst David Gergen.

Welcome to you both.

Secretary Reich, let me start with you. Is this the opening salvo in an assault on the right of workers in this nation to organize and bargain collectively?

ROBERT REICH, FORMER LABOR SECRETARY: Hello, good evening, Eliot.

Yes, I think it is. I mean, Wisconsin, remember, was the first state to authorize public sector collective bargaining. And it seems to be the first one to lead the charge against it now under a governor who seems absolutely intent on getting rid of bargaining rights.

We have a number of Republican governors around the country who are making direct assaults not only on public employees but also on private employees and their right to organize.

And if I were going to be cynical about all of this, Eliot -- I try not to be cynical -- I would say that this is part of a Republican plan to undermine organized labor. It's political in nature. Organized labor is very important to the Democrats. And this is a major step for Republicans.

SPITZER: You know, David, I think folks will be quick to observe, and rightly so, this law only affects public sector unions. But one of the realities of the past 20 years is that union growth has been limited almost exclusively to the public sector. And so if the public sector right to organize is eliminated, then that might be the death knell of the meaningful union movement in this nation.

Is this what you expect to see from other Republicans around the nation having seen what Scott Walker has done in Wisconsin?

DAVID GERGEN, CNN SENIOR POLITICAL ANALYST: Well, I certainly don't think it's the death knell of public unions nor private employee unions. What we've had, a long struggle, as you well know and Bob Reich knows, going back a century about workers' rights, whether workers are unprotected and being victimized, or whether unions have become too powerful in this.

There is a pushback now against public employee unions that is very popular in some states, especially where those are heavily unionized and there have been heavy benefits. But it's not unlike what happened in Detroit with the automobile unions. And that is, in good times promises were made that could not be kept when times got lean. And contracts had to be renegotiated.

And in Detroit you've got -- you know, we see a comeback now of both General Motors and Chrysler, in part because of that. And so this is very controversial. And it's understandable in particular why employee -- public employee unions are protesting about the collective bargaining rights being sort of decimated.

I think that the issue that these Republican governors are pushing about these benefits are too expensive and you've got to do something about pensions, you've got to do something about health care costs, just as has been going on in the private sector.

I think those have a lot more legitimacy, but where I think Scott Walker really did cross a line for a lot of union people and union sympathizers is by basically trying to take away a lot of their collective bargaining rights.

SPITZER: You know, David, let me pick up on that and asks Secretary Reich that question, because I think the distinction between what Scott Walker -- Governor Walker has done in Wisconsin and what was done in Detroit with the auto industry, there's a difference between asking for shared pain and givebacks on the one hand and fundamentally changing the legal structure, saying to the union members, you can no longer even bargain as a union, bargain collectively.

And Secretary Reich, is this a distinction that is fundamental, or, as David observed, are these basically similar patterns of just givebacks given the reality of the economic moment?

REICH: Well, I think David Gergen has a very good point. The reality of the economic moment does give more force and effect and to some extent more legitimacy to governors who are seeking to break public sector unions and also governors such as in New Hampshire and Missouri that are going after private sector unions, and saying no, we're going to make this a so-called open shop state and you don't have to join a union if you don't want to, even though it's a unionized organization and a unionized plant.

But this is undercover of a much broader agenda here. And the agenda has been going back years and years. I mean, unions, public sector and private sector unions, have been the backbone of the middle class, the working class, and the Democratic Party.

Republican efforts to undermine unions -- and they've looked for this opportunity, this is the opportunity they have been seeking to put people against people, working people against people who are other working people. Whether it's unionized versus non-unionized or public sector unions versus non-public sector unions, or to some extent immigrants against native-born.

I mean, this whole approach that we are kind of a poor nation, we are scrambling after crumbs, if you get something and that means less for me, without recognition that we are richer than we've ever been, the GDP is higher than it was before the great recession, but most of the gains of economic growth certainly over the past 30 years, Eliot, have gone to the top 1 percent.

This is a deflection of the big picture and the big debate that we ought to be having in this country about what has happened to the gains of economic growth.

SPITZER: David, let me give you a chance to respond to that. I mean I think Secretary Reich makes a fascinating point about the distribution of income and the accretion of wealth over the last 30 years, certainly.

The question is, is there something, is there a train of thought through the Republican agenda that would permit you to see this is part of a coherent whole, or is this, as you just suggested, perhaps a bridge too far politically that's going to cost them in the long run?

GERGEN: Well, look, I'm very sympathetic with the argument that we have a lot of inequities in this country and it's really -- we've got to deal with this question about the rich pulling away from the middle class and the people of the middle class going downhill.

That -- we must have more equality of opportunity. And I do agree with Bob Reich that it's very, very important for lower middle income people, middle-class people, to have an equal shot in life. I think -- and frankly I'm among those who'd say let's go back to the Clinton tax levels, which were higher on people at the high end.

Having said that, it is also true that in too many states there has been this kind of complicit or implicit kind of bargain that's gone on between Democratic legislatures that have given -- you know given major benefits to unions in exchange for votes. And we all know that goes on.

And you know, with these states that are hard pressed I think it's not unreasonable that a Chris Christie could come in and say, you've got to find some way to have some givebacks here. A lot of these contracts, you know, simply are unsustainable in this current economic environment.

SPITZER: All right, question is --

(CROSSTALK)

REICH: If I could.

SPITZER: Sure.

REICH: Just very, very briefly. I think that David is right. But there is a distinction between unilaterally and arbitrarily taking away bargaining rights, which is what's going on in Wisconsin on the one hand.

GERGEN: I agree with that.

REICH: And on the other hand seeking some concessions.

SPITZER: A critical, critical distinction I think we all agree to. Let's use this as a good pivot point to get to the debate of last night, where it strikes me, and I want you to respond to this obviously, that we saw an extraordinarily conservative uniformity on the stage last night on domestic economic policy, domestic social policy, and even a newborn isolationism on foreign policy among all the Republican candidates.

And so we've got perhaps in the next presidential race the greatest chasm that I can remember between the two parties about where -- what the trajectory of this nation should be.

David, do you agree with that assessment?

GERGEN: I wrote in a blog after the debate last night, Eliot, will the Democratic Party continue to move left? I thought we did see very -- a very pronounced move to the right among the candidates on that stage last night.

You know, after it was over, it was interesting to me that Ron Paul, the libertarian who is -- you know, he wants to minimize the role of government in society, whether it's economic policy or foreign policy, said after the debate last night to Anderson that he felt this was a much more congenial group on stage with him this year than back in 2008, when he was a candidate, and had other Republicans standing up with him on the stage.

SPITZER: You know, I think that's exactly right. I mean the party has moved towards Ron Paul, not vice versa.

Secretary Reich, let me ask you this. Did you hear anything last night? We heard very much the same thing from all the candidates about cutting taxes, deregulation. Anything there that gives you as an economist comfort that jobs would be created because of the policies they were espousing?

REICH: Eliot, I don't see the logic. You can't create jobs if consumers are scared, they have a huge debt load, their wages are going down, their jobs are disappearing, they're not going to spend. And if you say government has got to cut spending, where's the spending going to come from?

I mean, there's a fundamental kind of logical flaw at the core of this. You know, after the debate last night I went back to the "Great Speeches of America," a volume I have on my -- on my bookcase, and I looked back at Herbert Hoover's statements after the great crash of 1929 and leading up to the election of 1932.

And what he was talking about was cutting public spending, balancing the budget, privatization, deregulation. I mean, his statements, Herbert Hoover and his secretary of the treasury, Andrew Mellon, could have been -- well, they could have been the speech writers for the Republicans last night.

SPITZER: Look, I agree. Much of what they're talking about sounds like Hoover.

(CROSSTALK)

SPITZER: As a factual matter, one of President Hoover's speeches is in your volume of "Great American Speeches"? This is news to me.

REICH: Well, great in the sense of influential. SPITZER: All right. OK. I just wanted to make sure this --

(CROSSTALK)

GERGEN: Well, I just want to -- I do think -- you know, for the historical record I think it's worth pointing out in 1932 in Pittsburgh, Franklin Roosevelt gave a famous speech calling for cutting spending and balanced budgets. Herbert Hoover wasn't alone in that. But --

(CROSSTALK)

REICH: David, you're absolutely -- you're absolutely right. And I -- but I think that the important thing is that we learned a lot. I assumed we learned a lot during the 1930s, '40s, '50s. I mean, even Richard Nixon has said we're all Keynesians now. And to go back to the 1920s, pre all of that learning, is absolutely -- I mean, it's just extraordinary.

SPITZER: Look, we've got to move on and --

(CROSSTALK)

GERGEN: Yes, but can I say one thing --

SPITZER: Absolutely.

GERGEN: Can I say one thing briefly, Eliot?

SPITZER: Of course.

GERGEN: Yes. And that is, I don't think we're hearing from the president either about ways to create jobs. And the Larry Summers column that was in the "Financial Times" yesterday saying that we're in danger of stumbling into a lost decade was important. It really broke with the White House.

It echoed some of the things that Bob Reich has been saying here the last couple of weeks. And that is the administration needs to look to ways to create jobs and not sit here thinking this has been a bump on the road.

SPITZER: You know, David, that's exactly right. In my view the vapid proposals on the Republican Party side are matched only by the vapid nature of what's not coming out of the White House right now. And it's too bad.

The Larry Summers column was spectacular. Talked about our being already halfway through a lost decade. An important point.

Anyway, thank you, Robert Reich, David Gergen. As always, great to have you.

REICH: Thanks, Eliot.

GERGEN: Thank you. SPITZER: Now that we've seen the current crop of candidates all together, who jumped out as the winner or loser in the crowd? Here now to delve deeper is our own E.D. Hill and CNN's senior political analyst Jeffrey Toobin.

Thank you both for being here.

E.D., all right, winners and losers. Who's up, who's down in this game?

E.D. HILL, CNN CONTRIBUTOR: Well, I think it's pretty early in the game. I didn't really see a whole lot of winners. I think you looked for more of the losers. The people who lost the base that they really were going to go after.

Santorum, I think, was swept by Bachmann. Pawlenty swept by Romney. And Cain by Paul. So I think you sort of saw people move farther back in the pack, not necessarily farther forward.

SPITZER: If somebody's going back, somebody's going forward. The way I used to run a race. But OK, I hear your point. I mean in every one of those -- fascinating point.

HILL: Yes. They're not talking about in the --

SPITZER: You had two people vying for the same --

(CROSSTALK)

HILL: In the mind of the average American did somebody really push ahead?

SPITZER: Right.

HILL: No. Did some people sort of fall backward? Yes.

SPITZER: Jeffrey?

JEFFREY TOOBIN, CNN SENIOR LEGAL ANALYST: The history of debates is that people remember moments rather than sort of the overall effect. And the only moment I think that's going to be remembered from this debate is when John King challenged Tim Pawlenty and said, you said on a Sunday talk show that Obamacare was Romney -- I forgot how he did the word.

HILL: Obamneycare.

SPITZER: Obamneycare. Obamneycare.

TOOBIN: Obamneycare. Obamneycare.

SPITZER: Right.

TOOBIN: Just why don't you say it to his face? Why don't you say it to Romney's face. And Pawlenty had a deer-in-the-headlights look. SPITZER: Yes.

TOOBIN: And John pressed him on it. He said, why don't you say it? And he looked frozen and terrified and lousy for a presidential candidate. And I think that's the only enduring image for this debate.

SPITZER: Yes, look, I totally agree. Tim Pawlenty who had had great expectations going, governor of Minnesota, two-term, people liked him, completely failed. He did not leave any mark upon the audience except that he was not even strong enough to continue his own critique of Mitt Romney. So he's a loser.

Doesn't that make Mitt Romney a winner, though? Isn't he now established as the frontrunner?

HILL: Well, I think yes, absolutely. He establishes as a frontrunner. Yes. Is he a winner? I'm not sure. He certainly didn't hurt himself last night. You know he -- I think that's one of the key things you look at in these debates, also. You see a lot of people stumble. He didn't stumble.

(CROSSTALK)

TOOBIN: I think there's also a sexist assumption that Michele Bachmann and Sarah Palin are sort of similar. You know what? They're not. Michele Bachmann knows a lot about a lot of things. And she is a very good speaker. She's very knowledgeable. She unfortunately is wedded to some false facts, like Obamacare will cost 800,000 -- 800,000 jobs which is just invented and false.

But I mean she is going to be a formidable candidate in this race. And a lot of people are going to vote for her.

SPITZER: OK. Last question. Time runs short. Did we see the Republican nominee on that stage, or is there somebody among what I -- the group I call the missing four, Huntsman, Perry, Christie, Giuliani -- Rick Perry, governor of Texas, here in New York tonight talking to a lot of Wall Street guys who can shower money on somebody they think will deregulate, lead to us cataclysm one more time. They love people like that --

HILL: Well, whatever money is left over after the -- after Obama last week.

SPITZER: Yes. Yes. All right. Are those four -- are we going to get a candidate from those four?

HILL: I think the only candidate out of those four would be possibly Rick Perry.

TOOBIN: Well, and Huntsman is running. I mean, Huntsman announced this week that he's running.

You know, I think to run for president you have to run for president. And all these people who are, you know, publicly agonizing, the hell with them. Good for Mitt Romney. Good for Tim Pawlenty. Good for Huntsman.

I mean like run for president. Even Newt Gingrich I guess managed to buy a ticket.

SPITZER: We forgot he was there last night.

TOOBIN: You know, because he doesn't have any staff. And I guess he went on Expedia or something and got a ticket.

HILL: He got there.

TOOBIN: But you know, good for him. He's actually trying.

SPITZER: You're talking about --

TOOBIN: No, I mean that's how you -- that's how you run for president.

(LAUGHTER)

HILL: Yes, right.

SPITZER: Newt Gingrich did not look like he was having fun last night, did he?

HILL: No.

(LAUGHTER)

HILL: No. I'm not sure what's going on with Newt Gingrich. An intelligent man, yes. A person who is in this to win it? I don't think so.

SPITZER: OK. Real quickly. You think Rick Perry is a serious candidate? I know that's your home state, you've got to be nice to your governor, but really.

HILL: You know I think it's real tough for the nation to go and turn to another Texan this fast.

TOOBIN: Yes, I think governors of Texas were kind of out --

(CROSSTALK)

SPITZER: I'm with you.

TOOBIN: We're done with that for a while.

SPITZER: We're done with Texas. Plus, you know, he was on the show, said he balanced the budget, then the next week, whoops, you've got a $25 billion deficit, you know.

TOOBIN: He's also the guy who talked about possibly having Texas secede from the union.

SPITZER: Yes. TOOBIN: You know, we have a whole war about that. I don't think that's --

(CROSSTALK)

SPITZER: All right, guys. Jeff Toobin, always great to have you.

E.D. Hill, you're going to join us later with a story about Iraq. Tell us about it.

HILL: Yes. I mean can you imagine after all we have done for Iraq that a congressional delegation goes over there and gets kicked out of the country? What do they do? Why are the Iraqis so upset that the government would tell them head out? We'll find out.

SPITZER: All right. Cannot wait. Looking forward to it.

When we come back, another perspective on last night's debate, this time from a woman who's Muslim, moderate, and angry about some of the comments she hears. Don't go away.

(COMMERCIAL BREAK)

SPITZER: Now for tonight's "American Issue." Irshad Manji has devoted her life's work to normalizing Islam and making it a mainstream religion in America. An uphill battle. She teaches at New York University and is author of the new book "Allah, Liberty and Love: The Courage to Reconcile Faith and Freedom."

Welcome, Irshad.

IRSHAD MANJI, AUTHOR, "ALLAH, LIBERTY AND LOVE": Thanks, Eliot.

SPITZER: A frequent guest here, always fascinating conversation. Before we get started, I want to show you a moment from last night's GOP presidential debate, where the issue of hiring those who are Islamic, those who are Muslim, to be in the Cabinet was raised and a question was asked to Herman Cain, a presidential candidate. Take a listen.

(BEGIN VIDEO CLIP)

UNIDENTIFIED REPORTER: You recently said you would not appoint a Muslim to your Cabinet, then you kind of backed off that a little bit and said you that would first want to know if they are committed to the Constitution.

You expressed concern that, quote, "A lot of Muslims are not totally dedicated to this country."

Are American Muslims as a group less committed to the Constitution than, say, Christians or Jews?

HERMAN CAIN (R), 2012 PRESIDENTIAL CANDIDATE: First, the statement was, would I be comfortable with a Muslim in my administration, not that I wouldn't appoint one. That's the exact transcript. And I would not be comfortable because you have peaceful Muslims and then you have militant Muslims, those that are trying to kill us.

And so when I said I wouldn't be comfortable, I was thinking about the ones that are trying to kill us.

(END OF VIDEO CLIP)

SPITZER: All right. You hear that where those who are Islamic or of Muslim faith are specifically singled out as somehow being different. How do you react to that?

MANJI: So it would first of all be very lazy and easy for me, you, anybody, to accuse him of Muslim baiting. I think it's more constructive and healing, actually, Eliot, to try to understand where Herman Cains and other Americans high defenses about Muslims is coming from.

And I think it's coming from the suspicion that we as Muslims are not telling the truth about what's really going on in our community. Let me give you a quick example because I think, you know, precision is important here.

For example, when Major Nidal Malik Hasan, you know, opens fire on fellow soldiers at Fort Hood, Texas with the words "Allahu Akbar," God is great, spilling from his lips, and a mainstream moderate organization like the Council on American Islamic Relations says no, no, no, don't misunderstand, Islam has nothing to do with this, Americans, you know, can't be blamed for scratching their heads and wondering, well, wait a minute, this guy is how the shouting "Allahu Akbar," you're saying Islam has nothing to do with this. Help us out here.

There's a disconnect. And many moderate Muslims are not willing to step up to the plate to say, you know what, maybe he's got a particular interpretation of Islam that we need to challenge boldly. We're not hearing that from moderate Muslims yet.

SPITZER: Well, that's the point. I mean what you have written about so persuasively and spoken about so eloquently is that this sort of conception of Islam that we take away from those events is a uniformity, speaks to a uniformity that is wrong and does not understand either the history of the religion, which you write about.

MANJI: Right. Right.

SPITZER: Or what those -- most of those who follow the Islamic faith are really all about.

MANJI: Yes, but it's we Muslims, Eliot, who if we want to showcase the diversity of thought within Islam, we are the ones who need to spark -- start showing that diversity of thought.

SPITZER: Correct. Right. Right.

MANJI: We need to break our silences. We need to stop being so mute.

SPITZER: And that is part of the transformation you say you've gone through from anger to aspiration, right?

MANJI: Yes.

SPITZER: Explain this.

MANJI: Sure. So my previous book, "The Trouble with Islam Today," was really motivated by a raw anger about the absurdity, the hypocrisy, the stupidity that's so often being tolerated in the name of my beloved faith of Islam.

Now I'm still angry about a lot of what's going on, but you know what I've come to realize in the -- you know, in the decade since I wrote that book and coming to this point now? That I'm not alone. That there's a community of reform-minded Muslims, not the least of whom constitute the Arab Spring, who are hungering, busting in fact, to reconcile faith and freedom.

So I've come to realize that voices like mine, though you rarely hear them on television or anywhere else, are not voices in the wilderness.

SPITZER: And this is the absence of what you refer to as the moral courage.

MANJI: Yes. Moral courage actually is a phrase that Robert F. Kennedy, you know, popularized back in the 1960s. It's about speaking up when everybody else wants to shut you up.

And I'm arguing in this book that both Muslims and non-Muslims need to develop the moral courage to speak truth to power. Non- Muslims need to stop worrying about being -- you know about offending others by asking questions that we Muslims need to hear.

SPITZER: OK.

MANJI: And Muslims need to speak up within our communities. So this is a book for everybody, not just Muslims.

SPITZER: And this is the distinction that you describe as the distinction between faith and dogma.

MANJI: Yes.

SPITZER: Tell us about that quickly because it seems like --

MANJI: Very briefly. I have faith. I don't have dogma. Faith is secure enough to handle questions. Dogma, on the other hand, can't handle questions because dogma by definition is rigid and brittle and it snaps under the spotlight of questions, and therefore in my view deserves to be threatened.

SPITZER: And this goes to something, and I hope I don't pronounce it wrong, ijtihad. MANJI: Sure. Yes, beautiful.

SPITZER: Which is what? Explain that.

MANJI: Ijtihad is Islam's own tradition of independent thinking and creative reasoning. And I know that to many American ears that sounds perilously like jihad. And in fact it comes from the same root, "to struggle." But unlike any notion of violent struggle, Eliot, ijtihad is all about struggling with the mind in order to comprehend the world.

SPITZER: And you make the fascinating observation that when ijtihad was part of the Islamic tradition and were dominant up to about a thousand years ago.

MANJI: Right.

SPITZER: Islam was in fact perhaps the dominant intellectual religion in the world in terms of --

MANJI: And that's exactly right. Yes.

SPITZER: And then it was suppressed.

MANJI: Right. For all kinds of political reasons. But the point is this. That we as Muslims in America are perfectly poised to rediscover ijtihad, to practice it again, and in that way to really, you know, bring the practice of our faith up for the 21st century.

SPITZER: All right. Irshad Manji, as always, thank you for that passionate and fascinating insights.

Up ahead we've asked politicians to give us their cuts, their compromises. For the most part they've given us a song and a dance. Not Alan Simpson. He's the real deal with real ideas. He'll share them with us when we come back.

(COMMERCIAL BREAK)

SPITZER: In tonight's "Checks and Balances," even while Republican presidential candidates talked tough on the federal budget last night, the government is headed for a train wreck.

If there's no deal to raise our national borrowing limit by August 2nd, the U.S. will be unable to pay its bills for the first time in history.

Senator Alan Simpson is one of the few people inside or outside Washington trying to wrestle the budget under control. He joined me in Washington earlier today.

(BEGIN VIDEOTAPE)

SPITZER: Senator, as always, thank you so much for joining us. So the Republicans are off and running. The presidential race is heating up. Is there somebody in that field who's your choice who's going to deal with your issues the way you want them to?

ALAN SIMPSON, FORMER U.S. SENATOR: I don't know. We'll find out how tough they are. They all talk about it. All the sitting representatives and senators talk about the dire situation, this and the country, the debt of 14.3, the deficit of 1.7, and they don't do anything about it.

SPITZER: We are getting awfully close, both to the August 2nd default deadline. There's no budget for next year. Is this a train wreck in slow motion that we're watching as nobody's willing to make the hard decisions?

SIMPSON: I remember those votes about extending the debt limit. And always you break somebody's knuckles at the end and you get the votes. The difference is this time the economy is totally different. So August 2nd, and listen to Geithner, he's telling the truth, he will have robbed every pirate cove. He will have opened every treasure chest. And he'll say this is it, there ain't no more left unless you raise -- at that point they're going to react. They never respond. We, Congress people, never respond. We react. And they will react in a way that there will be spending, there will have to be taxes. You can't run a country without taxes. Ronald Reagan increased taxes 11 times, for God's sakes, in his eight years, to make the country run. Let's get serious here.

SPITZER: But what we've seen and what we're seeing right now is on the Republican side absolute rigidity, no additional revenue. On the Democratic side, apparently a real hesitancy to talk at all about Medicare, which has become a political third rail, it probably always was. So where can this compromise come from? And right now, the president seems to be on the sidelines and not playing a leadership role, saying guys, here's the deal.

SIMPSON: It's disappointing to me. I wouldn't have done this job if the president said everything is on the table. I respect the president. If a president asked me it do something, I would do it. It doesn't matter what party. But what's really disappointing is to hear him talk about bipartisanship all over the place to the big forums and then get into an intimate fund-raiser where he just rams it to Ryan and the Republican Party. That's not right.

(BEGIN VIDEO CLIP)

BARACK OBAMA, PRESIDENT OF THE UNITED STATES: This vision is less about reducing the deficit than it is about changing the basic social compact in America. Ronald Reagan's own budget director said there's nothing serious or courageous about this plan. There's nothing serious about a plan that claims to reduce the deficit by spending a trillion dollars on tax cuts for millionaires and billionaires. And I don't think there's anything courageous about asking for sacrifice from those who can least afford it and don't have any clout on Capitol Hill.

(END VIDEO CLIP)

SIMPSON: And it's not fair. And it may be fair in his line of politics but it's sure poisoning the well.

SPITZER: Look, Joe Biden right now is carrying the water --

SIMPSON: God bless Joe Biden.

SPITZER: Trying to pull folks together. Are you hearing that there's any consensus forming where you have the Democrats and the Republicans willing even behind closed doors until things can coalesce to sort of cross these hard boundaries on the revenue for the Republicans and entitlements and Medicare for the Democrats?

SIMPSON: I've known Joe for over 30 years. He's a dear friend. I really, really respect him and admire him. He got me into this lovely chore. Hey, Al, I've got a real deal for you on this. Anyway, I'll tell you, if Joe can't get it done, nobody will get it done.

SPITZER: Look, you were just pretty hard on the president in terms of what you said, he's poisoning the well.

SIMPSON: Well, it was Ryan. It was bad to watch. And he didn't mention Ryan. He just mentioned the Republicans. That's not -- you know, how does that help heal? It doesn't help at all. Go ahead. Excuse me.

SPITZER: Have you gone to the president and said, look, Mr. President, I've picked up all the pieces of my life, came here with Erskine Bowles and put together this package that is the right package, we need you to stop poisoning the well, get out there and market it, use the position of the presidency to bring everybody together instead of playing this partisanship? Have you told him that?

SIMPSON: Not in that sense. But I did tell him I was disappointed in the way that he invited Ryan to that event and then without using Ryan's name just cremated Republicans. When it came to that line, "not on my watch," it looked like it was almost contrived applause. I mean, you can't do it that way and then as I say go out of the city and chop him up. But I tell you, he has to listen to Joe Biden this trip. If Joe can't do anything, forget all this.

SPITZER: Right.

SIMPSON: We won't go anywhere without Joe Biden and this crew. Nowhere.

SPITZER: Look, one of the things that strikes me when I listen to the Republican presidential candidates is that none of them seems to be willing to accept any revenue increases. I mean, there's an orthodoxy in their world view. Is the public going to buy into that or does the public when it hears you and Erskine Bowles understand that these guys are talking from a different era?

SIMPSON: They're talking b.s. because when Erskine and I go out on the road and we talk for 50 minutes and take questions, we'll get a standing ovation because we don't b.s. them. We tell them the truth. If you spend more than you earn, you lose your butt. And if you spend a buck and borrow 41 cents and do it every day -- it used to be 40 cents. It's 41 now. And keep doing it. You've got to be stupid. If you can't learn to compromise an issue without compromising yourself, you ought to go home.

SPITZER: OK. Now last night, I heard Michele Bachmann running for the president, she gets a lot of applause, seems to have a lot of support. She said, eh, August 2nd, who cares? We won't default, we'll pay the interest, we just won't do anything else. So there's some sense within the Republican Party, Tim Geithner notwithstanding, all the markets notwithstanding, so August 2nd comes and goes, no big deal. Is that getting --

SIMPSON: There have always been Republicans like that. I think Jack Kemp felt that. I think there are a lot of people who felt that through the years. The only difference is if you equate it with your own home and you're sitting in your house and you spend a buck and you're borrowing 41 cents, they come and take your house.

SPITZER: Right.

SIMPSON: That ain't going to happen here. But I'll tell you, something will happen that Bachmann doesn't understand. It's called bondholders who have sheets of our paper and say I want some money for the paper, you jerks haven't done anything, and I want some money for the paper.

SPITZER: Well, let me ask you this. Can she be a credible candidate for president when she says things like this?

SIMPSON: I don't know. All I know is that it seems to me that she's had some -- what do we call that? Rough patches when she described that the Concord and Lexington took place in New Hampshire. You've got to kind of wonder, just check it out. I would want to check that out.

SPITZER: The indomitable Senator Simpson, thank you so much for being here.

SIMPSON: It's a pleasure always.

SPITZER: Thank you, sir.

(END VIDEOTAPE)

SPITZER: It is always great to talk to Senator Alan Simpson. He does not mince words.

Up next, a U.S. congressman was asked to leave Iraq. Why? E.D. Hill has the inside story when we come back.

(COMMERCIAL BREAK)

E.D. HILL, CNN CONTRIBUTOR: Turning now to the war zone. About 4,400 Americans have given their lives to liberate and secure Iraq. And the Iraqis are not always grateful for that sacrifice. Many of them argue the United States destroyed the country before rebuilding it. Still, what happened over the weekend may be shocking to you. Several U.S. congressmen, led by Representative Dana Rohrabacher, were visiting Baghdad when they were abruptly told to leave. That after Representative Rohrabacher suggested to the Iraqi government that they should repay the United States for the cost of the war when they have the money. Well, that didn't sit well.

Congressman Dana Rohrabacher joined me a short time ago to explain what happened.

(BEGIN VIDEOTAPE)

HILL: The government spokesman in Iraq made this statement about what happened over the weekend. He said, "We as a government reject such statements," the statement you made about repayment, "and we have informed the American embassy that these congressmen are not welcome in Iraq."

Did that kind of shock you, that after all we have done, the lives as you mentioned that we have sacrificed, the money we have poured into that country, that the government would tell you get out?

REP. DANA ROHRABACHER (R) CALIFORNIA: Well, thousands of Americans have had loved ones lost in Iraq trying to free those people from the Saddam Hussein dictatorship. Thousands and thousands of Americans have had their young people come home without legs, had parts of their faces blown off trying to free those people from the Saddam Hussein dictatorship. We spent trillion, a trillion dollars trying to free those people from the Saddam Hussein dictatorship and help them build a more democratic society. Yet now it seems there is no gratitude on the part of the people who now are in charge of the Iraqi government. And that should give us pause if we're thinking about spending any more money or leaving our troops over there any longer. They just aren't grateful for what we've done.

HILL: Probably like you, you checked in on how the military is reacting to this. I go on these military discussion boards. And one of the guys on there posted this, and I think it was -- I think it was pretty accurate. He said, you know, why don't we give them a bill for wrecking our economy while trying to get rid of their menace Saddam? Why don't we give them the bill for the funerals and for all the children that won't get to see their moms and dads?

ROHRABACHER: That's right.

HILL: And they still have oil revenues. If they put a stop to the corruption, they could pay their workers, fix their streets and sewer systems themselves.

ROHRABACHER: Well, under Saddam Hussein, they would have no future at all because it was the tyranny and the corruption of Saddam Hussein that kept that country in poverty and living under repression. We were the ones who gave our lives. American people gave their lives, their children, and we expended billions of dollars, which now we're -- is hurting our economy. To ask for them to think about repaying this when they get their own oil revenues and are prosperous, I think that they took that as an insult? Give me a break. HILL: This sentiment isn't something that is new. American forces go in places when they're called to, take Libya, for example. We come in sort of riding the white horses and, you know, wearing the white hats and very quickly we seem to be turned into the villains in too many places. Why does that happen?

ROHRABACHER: Well, I was supporting the president's efforts to help the people in Libya win their freedom from Gadhafi. But you know, I asked them -- I'm on the Foreign Affairs Committee and I have contacts with those people, and they too refuse to agree that once they were free and because they have enormous oil wealth there, they refuse to agree that they would repay us.

Now, when France helped us win our independence from Great Britain, we paid France back and we were grateful. We have a picture of Lafayette on the wall in Congress. We were grateful for what the French did to help us. And these people obviously, they were -- you know, Prime Minister Maliki was insulted that I even asked him to consider repayment back because we're in a financial crisis now and they're soon to be prosperous with our oil money. That tells us a lot about them and it also should give us pause about giving them any more money or leaving our troops there.

HILL: Well, at least pause to consider what we expect in return. If we go in there expecting much more than nothing, we're going to be sadly disappointed.

ROHRABACHER: Well, I'm not going to apologize -- he asked me for an apology, said we have insulted them for asking for a payback. And I am not about to ask for any -- or give them any apology. I have nothing to apologize for representing all of the American people who have sacrificed so much to help those people be free, and now they're not grateful at all for it.

(END VIDEOTAPE)

HILL: Congressman Dana Rohrabacher from Washington.

Coming up next, an exclusive interview with the secretary of education, who has some tough talk regarding what he expects from America's teachers.

(BEGIN VIDEO CLIP)

ARNE DUNCAN, EDUCATION SECRETARY: Half the battle's intellectual. Half the battle's the heart. You want people who are hard-working, who are committed, who want to get better. But, Eliot, what I really think, I look at people's heart. Do they have the passion for this? This is tough, tough work, and this is not for the faint of heart.

(END VIDEO CLIP)

(COMMERCIAL BREAK)

SPITZER: The U.S. Congress is like a student who constantly asks for extensions on the big paper. This time the undone homework is the No Child Left Behind program. Congress has failed to reauthorize President Bush's prized education program for four years running.

Meanwhile, President Obama's education secretary, Arne Duncan, is taking matters into his own hands to confront what he sees as the most urgent problems facing us today. I spoke with Secretary Duncan in his office a short time ago in an exclusive interview.

(BEGIN VIDEOTAPE)

SPITZER: Mr. Secretary, thanks so much for taking the time. You're laying out an expansive agenda. It takes not only finances but a structure, a law that gives you the power to do what you want to do.

No Child Left Behind stuck in a quagmire. You called it a train wreck in slow motion. What is happening now? Why on Capitol Hill can't you get the reauthorization, the funding and the authority you need?

DUNCAN: You probably understand Capitol Hill better than I do. I'm still learning every day. But in all seriousness, folks there are working real hard and I'm optimistic that we will get reauthorization and we'll do it in a bipartisan way, and that's really important to me.

My issue is timing. This law is four years overdue. It was written 10 years ago, did some good things, but a lot of it is broken now. A lot of it needs to be fixed at a time we have to get better faster than we ever have. We have a law that's hurting governors, hurting state school superintendents, hurting districts from getting where we need to go. So I have to challenge Congress. I want them to fix it. I want them to fix it now in real-time, not in Washington time, and if they don't, then we're prepared to do some waivers and work with states to help them get where they need to go. But my absolute plan A is to have Congress reauthorize.

SPITZER: That's plan A. If there's plan B and you have to grant waivers, you've said, and this is a wise use of your authority, you will grant waivers giving states the authority to be exempt from some of the obligations of the statute if they impose certain reforms. What are the reforms you want?

DUNCAN: If you have a high bar -- let me just give you an example. Tennessee, like in many states under No Child Left Behind dummied down standards because the law created this perverse incentive. So we go back a year or two. In Tennessee, they were telling their children 91 percent were at grade level in math -- 91 percent. They didn't raise standards, decided to stop lying to children, showed real courage, raised standards. In math now, 38 percent of children are at grade level. Went from 91 percent to 38 percent. But guess what, Eliot? For the first time that state is telling the truth. What I want is that state not to get crushed by the current law.

I've got to reward courage. I've got to reward excellence. I've got to help them continue to look at growth and gains, see how it's getting better. So for me the real trade-off is where governors, where state leaders are stepping up, setting a high bar, I want to give them a lot more flexibility. I want to give them a lot more tools to hit that high bar where folks are dummying things down and having low expectations. Well, then I'm going to challenge them with everything I have.

SPITZER: Do we now understand what it takes to be a great teacher? Is there enough studies just becoming a science, not an art? Can you then predict who to recruit?

DUNCAN: I think that's difficult. And what you want is people -- to me, half the battle's intellectual. Half the battle's the heart. You want people who are hard-working, who are committed, who want to get better. But, Eliot, what I really think, I look at people's heart. Do they have a passion for this? This is tough, tough work and this is not for the faint of heart. And there are going to be days where you go home and cry. It's very difficult. But you want people who in their heart believe that every single child, regardless of family background, regardless of socioeconomic status, regardless of neighborhood, every single child can be successful. And I'm going to find a way to help them fulfill their potential. So you need people willing to work hard, who are committed and learn, but do they have that core fundamental belief in their heart? If they have that, great things are going to happen.

SPITZER: Another sort of pervasive part of the discussion about education relates to competition. Competition as in every sector improves performance. How do you inject more competition into the public school system? Is it charters? Is it vouchers? How do you do this to --

DUNCAN: A piece of it I think these are often false debates. We just need more good schools. So great traditional schools we should be replicating and taking them to scale. Bad traditional schools we should be phasing out.

Great charter schools have done actually a pretty good job of replicating. There are some great networks around the country. Bad charter schools we should be phasing out. But we know for all the challenges we face that are real and keep me up at night, I'm actually very optimistic. We have never had so many high performing schools. I think we've never had so many high performing high poverty schools around this country. The question is do we have the courage to take to scale what's working and do we have the courage to stop doing what is hurting children? That's what this is about.

SPITZER: Can some of these ideas be taken to scale? When you look at some of the charters, the KIPP academies, for instance, they're spectacular. Can they be brought to scale or are they too dependent upon those individuals who bring sort of the past you were just talking about?

DUNCAN: They unquestionably can be taken to scale. What we are doing for the first time this year, Eliot, we told the country let's take the bottom five percent of school, not the 95 percent but that one in 20 where it's simply not working for children and let's do things radically differently and we'll help support those efforts but this can't be marginal change, incremental change. So for the first time as a country, this school year, we have almost a thousand schools around this country that have chronically underperformed often for decades. They're being turned around. We're seeing some remarkable successes. We're seeing some that are going to struggle. It's going to take more time, but for the first time our country's in the business of challenging the status quo. We're going to get better and better and better.

For far too long, we've just been complacent. We've just accepted it. We've acted like poor children that children probably couldn't learn. That drives me crazy. We're showing some courage. This is going to lead us over time exactly where we need to go.

SPITZER: Last question. And I -- as a parent of three teenagers, having gone through this, I know how difficult it can be. We're talking about teachers, accountability, the infrastructure, the funding. Parents.

DUNCAN: Yes.

SPITZER: Parents obviously an integral part of this. It's an area where it's probably most difficult for you to change patterns of behavior. But where can you try and how do you succeed?

DUNCAN: Well, you and I are dads first and foremost. And you have three children. I have a third-grader and a first-grader. And the most important thing I can do is be a good partner to my children's teachers. And great teachers are extraordinarily important. They can't do this alone. We have to be in there working with them. We have to have those TVs off at night. I try to read to my children every single night before they go to bed when I'm not on the road.

And I was at a school yesterday here in D.C. that has a great parental program, actually focused specifically around dads. I think too often dads aren't engaged, particularly at the primary grades. So we can bully pulpit this. I think we've actually underinvested here. We're looking to double funding in our budget for parental engagement but where parents are full and equal partners with schools with teachers, great things happen. When they're not, when schools and parents are disconnected or worse fighting with each other, children fall through those cracks.

SPITZER: Right. Look, I can tell you that the most devastating moment I had when I was in public life was going to schools and asking kids if anybody when they went home ever asked them about what they were doing in school and the answer would be no.

DUNCAN: So here's what I think on that. I think the vast majority of parents, we can do a much better job of engaging with and really helping them be part of the solution, opening schools up and potlucks and after school programs and GED and ESL. And I think schools should be community centers with a whole host of activities. But I also think for that child where mom might be on crack and dad's in jail or missing, then the community has to step up. SPITZER: Right.

DUNCAN: A church, a faith-based institution, not for profit, a social service agency, somebody -- and we know in kindergarten who those children are. Someone in that community has to say this young boy, this young girl, we are not going to let them fall through the cracks, we're going to stay with them through good times and bad, we all have to as a society, we all have to rally in those situations.

SPITZER: Mr. Secretary, thanks for your time.

DUNCAN: Thanks for the opportunity.

SPITZER: I appreciate it.

(END VIDEOTAPE)

(COMMERCIAL BREAK)

SPITZER: Thank you for joining us "In the Arena." Good night from New York.

"PIERS MORGAN TONIGHT" starts right now.