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Piers Morgan Live

Thirty-six Days to Fiscal Cliff

Aired November 26, 2012 - 21:00   ET

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

PIERS MORGAN, CNN HOST: Tonight mutiny in the GOP. Republicans rethinking that no new taxes pledge.

(BEGIN VIDEO CLIP)

GROVER NORQUIST, PRESIDENT, AMERICANS FOR TAX REFORM: We've had some people discussing impure thoughts on national television.

(END VIDEO CLIP)

MORGAN: Will they now turn their backs on Grover Norquist to save America from the fiscal cliff? Tonight I'll ask the tax crusader himself if he's losing the fight.

Plus a true American icon. Willie Nelson. Back on the road again. At nearly 80 years old. I'll ask him the big question. Just how many girls has he loved before?

(BEGIN VIDEO CLIP)

WILLIE NELSON, SINGER: The reason divorces are so expensive is they're worth it.

(LAUGHTER)

(END VIDEO CLIP)

MORGAN: The hits just keep on coming for Willie Nelson and I don't just mean his songs.

(BEGIN VIDEO CLIP)

MORGAN: Did you wake up this morning and have a quick -- you know.

NELSON: Well, I probably did, I probably did.

(END VIDEO CLIP)

MORGAN: A very entertaining interview. This is PIERS MORGAN TONIGHT.

Good evening. Our big story tonight, teetering on the edge of the fiscal cliff with just 36 days to go until tax increases kick in. The White House and Congress are playing a high stakes game of let's make a deal. President Obama spoke with John Boehner this weekend, as well as Harry Reid, and expressed confidence the deal can't be reached before the deadline.

That seems to be what most Americans want. The latest CNN/ORC poll finds that two-thirds think a plunge at the fiscal cliff would be a crisis or at least a major problem. And 45 percent would blame the GOP, which might explain why some high-profile Republicans are re- thinking, Grover Norquist's anti-tax pledge.

(BEGIN VIDEO CLIP)

SEN. LINDSEY GRAHAM (R), SOUTH CAROLINA: When you're $16 trillion in debt, the only pledge we should be making to each other is to avoid becoming Greece.

REP. PETER KING (R), NEW YORK: A pledge you signed 20 years ago, 18 years ago, is for that Congress. The world has changed.

(END VIDEO CLIP)

MORGAN: Joining me now, the man in the middle of all this storm, Grover Norquist, president of Americans for Tax Reform.

Grover, welcome to you.

NORQUIST: Good to be with you.

MORGAN: So you're Captain Bligh, on the bounty, the mutiny has begun. How are you going to avoid being chopped out the boat?

NORQUIST: Well, of course, it's a little funny to watch a senator or a congressman who got himself elected by promising the citizen of his state that he would go to Washington to reform government, not raises taxes to pay for our problems. Deciding that when they haven't done that and the going gets rough that they have an argument with me? I'm sorry but, you know, the congressman and senators who you're mentioning are the same people who two years ago were being quoted as starting a revolt against Boehner when he was demanding the Boehner rules, spending restraint when the president wanted his debt ceiling increase.

So the same cast of characters are turning in the homework for the second time two years later, there's not some snowball rolling. The good news is that the people who made a commitment to the American voters, to their voters, to their constituents are keeping it, and the focus is where it should be, on the fact that for four years President Obama has not reined in spending. Done nothing useful on entitlement reform. And all he's done so far in these negotiations is demand $1.6 trillion of tax increase so he can spend more money, not reining in spending. We need to have some focus on spending problems because that's the problem we have.

MORGAN: Warren Buffett wrote this fascinating piece in the "New York Times" today. And I'll read you the bit and I know you've been very familiar with it today. "Suppose an investor you admire and trust comes to you with an investment idea. 'This is a good one,' he says enthusiastically. 'I'm in it, I think you should be, too.' Would your reply possibly be this? 'Well, it all depends on what my tax rate will be on the gain you're saying we're going to make. If the taxes are too high, I'd rather leave the money in my savings account, earning a quarter of 1 percent.'" And Warren Buffett says, "Only in Grover Norquist's imagination does such a response exist."

But he's absolutely right, isn't it? But why are you so concerned about protecting the vast wealth of America's small percentage of increasingly rich people? Why do you care?

NORQUIST: I'm in favor of not raising taxes on all the American people, and as you know the American people quite rightly understand that politicians who say, I'm going to tax the rich, have not finished the sentence. The sentence runs, I'm going to tax the rich first and then I'm coming for the middle class.

Obama in 2008 said he would only tax people who made more than $200,000 a year. In the last four years he's passed at least eight taxes on the middle class. But more importantly in 2012 he changed the promise. He has not promised people ever again that he won't raise taxes on you if you make less than $200,000.

The new promise, August 8th, Grand Junctions, Colorado, and repeated ever since. My plan is if you make less than $200,000 I won't raise your income taxes next year. So he's only promising not to raise your income taxes and only for 12 months.

MORGAN: Yes, but Grover, Grover, only -- Grover, only you in America believes there has to be this -- what I believe to be really fascicle now absolute pledge for life about these kind of things. Surely the nature of the modern world is very fast-moving, it's changing a lot. America clearly has huge economic problems heading for another fiscal cliff.

Everyone laughing at you from afar. The American public sick and tired of all the games going on. And there you, Grover Norquist, a very bright guy, still resolutely saying a pledge is a pledge is a pledge, it cannot be broken, when many of your own party now are saying, you know what, it doesn't make sense to just have this irresolute position anymore.

NORQUIST: Two things. The pledge is not for life, but everybody who signed the pledge including Peter King who tried to weasel out of it, shame on him as the "New York Sun" said today. I hope his wife understands the commitments last a little longer than two years or something. The commitment from the pledge --

MORGAN: Whoa, whoa. Hang on, hang on, hang on, hang on. That was a bit below the belt, Grover.

NORQUIST: Hey, if you think a commitment only is not for as long as you make it for, the commitment for the pledge, as Peter King well knows when he signed it, is that as long as you're in Congress you will rein in spending and reform government, not raise taxes. It's not for 500 years or two generations. It's only as long as you're in the House or the Senate. If he stayed too long, that's his problem. But you don't tell the bank, oh, the mortgage wasn't that a long time ago? If you make a commitment, you keep it. MORGAN: Right. But this pledge was first signed in 1986.

NORQUIST: By some people. Of course, every two years people often re-sign it. They make statements on it. Mr. Chambliss, who's one of the people you're saying was having doubts, just two years ago made a public letter saying he would never support a deal that had any tax increases, only revenues stemming from economic growth, not tax increases. That was two years ago, not 20 years ago, and it was a public statement that he made --

(CROSSTALK)

NORQUIST: To the people of his state.

MORGAN: Grover, here's my problem. Here's my problem.

NORQUIST: Yes.

MORGAN: Going back to Warren Buffett's piece and you have the ridiculous position that the wealthiest guy in America and one of the greatest investors in history, if not the greatest, demanding to be taxable. But what he said is very interesting, I think, is that between 1951 and 1954 when capital gains was 25 percent and marginal rates from dividends reached 91 percent in extreme cases. "I've sold securities and did pretty well. In the years from '56 to '69 the top marginal rate fell modestly but still a lofty 70 percent and tax on capital gains inched up at 27.5 percent. I was managing funds for investors then. Never did anybody mention taxes as a reason to forego investment."

Now here's the crucial line. "Under those burdensome rates moreover both unemployment and the gross domestic product increased at a rapid clip. The middle class and the rich alike gained ground. So the point he's making is that over these extended periods of time in his lifetime when he's been a very successful investor he saw no link between increasing capital gains tax or income taxes on unemployment or GDP or any of the triggers that you believe would be deflated by raising such taxes.

NORQUIST: Well, several things. He misses several points. His article -- he needs a better ghostwriter. The suggestion that the people had --

(CROSSTALK)

MORGAN: Actually I thought that was a rather good piece.

NORQUIST: Well, except it's factually incorrect. He talks about -- he says we ought to get back to 18.5 percent of GDP. Yes. That's where we were with Reagan tax rates and that's where we were with lower marginal tax rates and with -- with reasonable economic growth. We've got revenues of 18.5 percent of GDP. You don't get there by raising taxes, you get there through economic growth.

Again, growth is rather important and it's what we ought to do rather than raising taxes. If the economy grew at 4 percent a year instead of 2 percent a year for one decade, the federal government would net $5 trillion. That would pay down all of the debt that Obama's accumulated in the first four years.

If we had grown at Reagan rates of growth instead of Obama rates of growth, 11 million Americans would be at work today who are out of work. That's how you do it with the most regulations.

MORGAN: Now what if we had carried -- what if we had carried along the Bush rate of growth of the eight years before Obama?

NORQUIST: Well, there were three periods of growth or low growth during the Bush years. Just as there were two different periods during the Clinton years. The first two years --

MORGAN: Yes, but hang on, he ended up, Grover -- as you well know he ended up, President Bush, handing President Obama the greatest financial hospital past of most people's living memory.

NORQUIST: Yes.

MORGAN: So the idea that show these Republican economic policies have been this wondrous success story going back the last three decades is poppycock.

NORQUIST: Taxes are not the only policy. When he cut marginal tax rates on capital gains and dividends from 2002, there was four years of strong economic growth from '03 to '07. What you had -- you're right -- was Fannie Mae and Freddie Mac making loans they shouldn't have. The federal government mandated that loans be made that ought not to have been made. There was a financial collapse. It wasn't because tax rates were too low.

It was because financial institutions were making bad loans and selling to Fannie and Freddie and you had a collapse. Free market economists were warning about this for a decade, and it was Bush should have focused on that instead of being governor -- mayor of Baghdad for six years. It would have been more important to focus on Fannie and Freddie.

But that wasn't his tax policy. You can have financial problems from printing too much money, inflation under Carter, not just high tax rates but inflation. If Buffet would go back and look at how the Kennedy years did after the marginal tax rate cuts, the Reagan years, with marginal tax rate cuts, he'd understand that economic growth -- you know, he says he made a lot of money selling bonds. The question is, how much money the people who invested in those bonds made.

We need economic growth, not higher taxes. And if the government take a dollar away, that dollar is not available to be invested. The return on that dollar is zero. And for Buffet to not understand --

MORGAN: OK.

NORQUIST: -- that if you take money out of the economy it's gone is a little bit odd. He's willing to write it. If he wants to write a check, he should write a check and shut up about what everybody else should do.

MORGAN: Well, that's one view. I should think that it's interesting the richest guy in America thinks he should be paying more taxes.

NORQUIST: Then do so. Do so.

MORGAN: Grover Norquist --

NORQUIST: Take care.

MORGAN: You bring in policies that make all people like him do that. Anyway, Grover, as always combative fun, good to talk to you.

NORQUIST: Thank you.

MORGAN: And I want to bring in a man who argues Republicans shouldn't knuckle on this to the president. Rick Santorum was of course a man who ran for president himself but the author of "American Patriots" and joins me now.

Senator, how are you?

RICK SANTORUM (R), FORMER PRESIDENTIAL CANDIDATE: I'm doing great, Piers, how are you?

MORGAN: Very interesting this debate now in the Republican Party, especially involving Grover Norquist. He's a great character and he -- you know, he's led the way in this no tax pledge for a long time now. You're beginning to see it fracturing at the edges, senior Republicans coming out and saying, you know, we may have to compromise on this a bit.

What do you think?

SANTORUM: Well, I think what you heard Grover say and what others have said is that we do need more revenues. I mean the idea of getting up to 18.5 percent of GDP, which has been the historical average since World War II, is a good target to look for and there is no question that we're at about, what, 15 to 16 percent right now. Revenues are down. But the reason the revenues are down is principal because of growth. Not because of tax rates.

We collected 18.5 percent of GDP and more with the current tax rates when we had higher growth. And so the emphasis Republicans have made from the very beginning is let's focus on the revenue and not so much on the rates and I would say that Republicans can be flexible in looking at reforming the tax code. There are things we can do within the tax code that may encourage growth and raise more revenues.

There may be things that just straight out raise more revenues -- as some have suggested, eliminate certain deductions. So there's -- I think there is flexibility to raise revenues, to get back to that 18 percent of GDP. But remember, we're at almost 25 percent of GDP when it comes to spending.

Much higher than the norm than taxes are below the norm. And so the biggest problem creating the deficits that we have, the fiscal cliff that we're falling over is on spending. And so this preoccupation with talking about taxes is really talking about the smaller of the two problems that are causing the deficit.

MORGAN: Right. But when you have a negotiation that's going on at the moment, you know, 72 percent of Americans according to the CNN/ORC poll believe both Obama and the GOP should compromise to get things done. They're not going to wear another falling off a cliff. Surely on both sides there has to be a bit of give and take. Obama will have to give a bit, I think on the spending, as you say, and the GOP will certainly have to give a bit in terms of how you gather revenue.

And I don't really see the difference, ideologically, between all kinds of tricksy (ph) deductions and so on and a flat income tax increase on wealthy Americans. What's the ideological difference if in the end wealthier people in America are all paying a little bit more tax?

SANTORUM: Well, it's not really an ideological difference. Again, what can raise you the money efficiently and effectively to create economic growth that's going to create jobs for people? One of the things that I talked about during the campaign was cutting the corporate tax for manufacturing.

You want to create jobs that are here in America that are going to create good-paying jobs that create things that people will consume here in this country. Let's do something to get this manufacturing economy revved up and going. It's picked up a little with lower energy prices. But we could do things in the tax code to create jobs here and get some of that wealth, invest it in manufacturing plants and facilities, which are construction jobs and then the manufacturing jobs that come after that.

We had something -- we're doing something in our -- in my organization called Patriot Voices asking people to go to our Web sites, PatriotVoices.com, and sign up to take a pledge to try to buy made in America for Christmas.

It's hard to find things at some stores that are made in America. This is -- this is a problem that I think a lot of people see and can we do something in the tax code to create more incentives for people to manufacture here in America to create a stronger economy? The answer is yes and we should be.

MORGAN: Let's move on, Senator, if I may, before we finish to a news conference you hosted today on something very close to your heart, your daughter Bella and wife Karen is there as well. Tell me very quickly what that was about.

SANTORUM: It's the convention for the Rights of People with Disabilities, which sounds like a wonderful thing. But the problem is there's a provision in this -- in this international law which we would be adopting if the Senate ratifies this that puts the state, the state in the position of determining what is in the best interest of a disabled child. And as the -- as the father of a little girl who, if you look up the medical definition of her condition, says it's incompatible with life, I hesitate to think what those in government and in charge would think that -- how our daughter should be treated and what medical treatment should be available to her if her diagnosis is -- it's incompatible with life.

And so this would be something unprecedented in American law to give the state the ultimate authority as to what is in the best interest of your child. Historically the United States has been clear. Parents, unless they're unfit for some reason, get that decision. This would change under this convention, and that's why Karen and I stood forward today and along with Mike Lee from Utah, and said we have to oppose this.

And Harry Reid, unfortunately, has decided to call this up on Wednesday. So if people would go to our Web site, PatriotVoices.com, you can learn more about it and hopefully communicate with your member of Congress here in the Senate to let them know this is not something that's right for you and your family.

MORGAN: And finally, Senator, there's one-word answer to this which you've always struggled with in the past when I've asked you these things. There was a hint from you today you may run again in 2016. Yes or no?

SANTORUM: I -- the hint -- they said, would you consider running? I said, I'm open to that possibility, but we're a long way. I'm focused right now on trying to stay involved in the fray and make sure that we do the right thing up on Capitol Hill right now and also that this debate in the Republican Party about what the future of the party and where we're going to go that we're going to be very active and engaged to make sure that we stick to American founding principles.

MORGAN: OK.

SANTORUM: That's what I'm going to be doing.

MORGAN: So not a no then. Senator, good to talk to you.

SANTORUM: Thank you, Piers. Always a pleasure.

MORGAN: When we come back reaction to Rick Santorum and Grover Norquist from my political all-star. We go toe-to-toe on that and the return of Chris Christie.

(COMMERCIAL BREAK)

MORGAN: Have you thought that everything would change after Election Day? That it'd all be sunshine and roses for Democrats and Republicans? Well, think again. There's still plenty for the right to disagree about, everything from the fiscal cliff to Chris Christie.

And joining me now to battle it out, "New York Times" op-ed columnist, Charles Blow, and the Republican strategist, Alice Stewart. Let me start with you, Alice Stewart. I've heard from Grover Norquist and from Rick Santorum tonight, two leadings lights of the Republican Party. And they almost seem to be wrestling now with the possibility that this pledge that's really held them all to ransom for so long on income tax rises in particular may just have to be all in how they deal with that.

Why isn't the party just say, you know what, forget all the pledges before this election has just happened? We just got beaten again and beaten badly. It's time to rethink, regroup, and be open to new ideas.

ALICE STEWART, REPUBLICAN STRATEGIST: Well, the fact of the matter is this was a pledge that a lot of people that I've worked for have made to their constituents. But we don't have a problem in Washington with taxing. We have a problem, as Senator Santorum said and as Grover said, with overspending.

I talked with my congressman today, Tim Griffin, and he said let's say for argument's sake we give the president every single tax increase that he wants. Every single one of them on the wealthiest Americans and on all Americans. If we give them all of those we're still spending a trillion dollars more every year than we -- than we take in. And we simply can't sustain that. We need entitlement reform.

MORGAN: Charles Blow, but this is the point I was trying to make is that on both sides of the divide there has to be compromise. And the compromise the Republicans are going to have to make is surely on raising revenue through taxation. I just don't get why they're so intransigent about this pledge on income tax in particular if they're prepared to go for all kinds of dodging deductions and so on.

It's all the same thing. It's all about raising revenue through taxing the wealthier Americans a little bit more, isn't it?

CHARLES BLOW, NEW YORK TIMES OP-ED COLUMNIST: Right. And it's not an either/or proposition. Right? So you can't just say, can we get there only by raising revenue? No, you can't. Can you get there only by cutting spending? No, you probably can't. And when you look at revenue, there are two ways to get revenue. One of which you can't control and one of which you have less control over.

One -- the one you have less control over is the rate at which the economy grows and we can do -- we can put in place some policies that may speed that up, but you don't have as much control as you have over whether or not you raise revenue through taxation. And that has to be part of this negotiation, this has to be part of any deal that you come up with. And so when people -- you know, I've always thought that this pledge was the most outrageous thing that I have ever heard of in my life.

Because the idea that you would say that I'm going to sign something today not knowing what may come to this country five years, 10 years down the road if I should stay in the Congress or in the Senate for that long, and I will never change based on the conditions of that moment. That's not good governance. That's not being a full-fledged politician.

That is shackling yourself to a position before you know how things will play out. And I think that that is just an extraordinary thing that they ever did, and I'm very encouraged by the fact that at least some Republicans are coming around to the idea that they can no longer sustain that position.

MORGAN: OK, Alice, just move gears here. Let's move to the Republican Party and its future. Already a lot of buzz this week about potential candidates running in 2016. We've seen a bit of Marco Rubio buzz, a bit of Jeb Bush buzz, a lot of buzz around Chris Christie whose approval ratings in New Jersey have gone over 77 percent this week. Highest, I think, he's had since he took over there.

Clearly a wrestling going on now for who is going to be top jockey come the next race. What do you think?

STEWART: Well, I think Chris Christie did job number one when Sandy came through as governor. Having worked for Governor Huckabee, the first priority is to make sure that the people of your state are taken care of, and that involved working with the federal government hand in hand and that included President Obama and he certainly is someone that people are talking about.

But as we learned in this election, we also have to work with Latinos and African-Americans, so we've got a great bench in the GOP and we've got a lot to look forward to for 2016.

MORGAN: Charles Blow, it's very, very quick, one answer please, very quickly. Who would you most fear coming up against whoever the Democrat candidate will be in 2016?

BLOW: I'm not fearing anybody. But I was so hoping that Rick Santorum was going to say that he was going to run because I would love to have Rick Santorum back in the race. He gives me -- that's column material.

STEWART: He'd have my vote.

MORGAN: OK. Well, hopefully there will be column material, there usually is, and you two will be right at the forefront of it.

Thank you both very much indeed for joining me.

STEWART: Thanks, Piers.

BLOW: Thank you.

MORGAN: Coming up, the great American icon Willie Nelson. This is an interview you just want to sit back in your slippers with a whiskey and enjoy.

(COMMERCIAL BREAK)

MORGAN: Even at the age of 80 years old, Willie Nelson is a force to be reckoned with. He's recorded well over 100 albums. He won the Lifetime Achievement Award at the CMA early this month and he tells his own extraordinary story in the aptly named, "Roll Me Up and Smoke Me When I Die." A book that frankly no one but Willie Nelson could have written. And he joins me now.

Willie, I've always wanted to meet you.

NELSON: Well, same here.

MORGAN: You're like one of those great American icons.

NELSON: Thank you.

MORGAN: How do you feel about that?

NELSON: Well, I don't think about that.

(LAUGHTER)

MORGAN: You don't wake up --

NELSON: I'm not sure what that means. I'd have to go look it up.

MORGAN: You don't look in the mirror some mornings and think, I'm an icon?

NELSON: No.

(LAUGHTER)

I don't think I've ever done that.

(CROSSTALK)

NELSON: In the morning maybe I will now that I've been here, you know.

MORGAN: I always imagine when you walk around, you must be one of those entertainers that just everybody likes.

NELSON: Well, I'm not sure --

MORGAN: Do you ever get anyone have a go at you?

NELSON: There's the old saying, of all the people who don't like me, just think of the millions who have never heard of me.

(LAUGHTER)

MORGAN: But you've written this brilliant book, "Roll Me Up and Smoke Me When I Die: Musings from the Road."

And it -- what a hell of a journey it's been for you, isn't it? When you finished the book, what did you think of your life?

NELSON: Actually it was really an easy book to write. I was just more or less writing down the highway, looking out the window, and writing down what I was thinking, and really off the top of my head, and when I get bored with what I was thinking, I would throw a song in there. So that's about all there is to this book. It's not heavy.

MORGAN: No. No. It's got a nice sort of like whimsical tone to it. But what I meant was, you know, you're nearly 80 years old. You've had this extraordinary career, incredible life, four wives, seven children, all sorts of fistfights, drinking and your well-known love of marijuana and so on. What do you -- what do you make of what's happened to you in those 80 years?

NELSON: Well, it's kind of -- you can't think about all of that at once. It wouldn't be healthy, I don't think so.

(LAUGHTER)

MORGAN: But have you ended up in a happy place? Are you a happy guy?

NELSON: I'm very happy right now. Yes.

MORGAN: As happy as you've ever been?

NELSON: Yes. As happy as I ever hope to be right now.

MORGAN: Sinatra is said to name you as his favorite singer. What a moment that must have been.

NELSON: That was. That was. And of course, he was a great singer and to have him say that is a great compliment.

MORGAN: Did you ever meet him?

NELSON: Yes, I did. I played a couple of shows with him and we got to hang out a little bit a couple of times.

MORGAN: Did you go drinking together?

NELSON: We had a drink together. Yes.

MORGAN: Jack Daniels?

NELSON: I didn't check the labels.

(LAUGHTER)

MORGAN: Now when you last did an interview with this show Larry King was the host.

NELSON: Yes.

MORGAN: And you admitted to him halfway through that you were actually high at the time. You had infused yourself with some marijuana.

NELSON: Did I say that?

MORGAN: Yes. So I've got to ask you the question. Have you come similarly infused today?

NELSON: What's today?

(LAUGHTER)

MORGAN: It could be any day in the life.

NELSON: Yes. OK.

MORGAN: Did you make up this morning and have a quick you know?

NELSON: I probably did, I probably did. If I remember. It's -- got short-term stuff.

(LAUGHTER)

MORGAN: Do you take a lot of it?

NELSON: I think some people have more tolerance, you know, for smoking pot than others, and I know people who can take one hit and just go to sleep completely. And other guys can smoke a lot. You know, me and Snoop smoke a lot. In every country we've been in I guess. You know I was in Amsterdam one time. And Snoop called me and wanted me to sing on his record, and I said, OK. He said, where are you? And I said, I'm in Amsterdam. So he caught the next plane and come over. And we recorded a song together.

MORGAN: You and Snoop go to Amsterdam, the Mecca of dope really. And you both had a load of it, and then write some music together.

NELSON: Now we can go to Colorado.

(LAUGHTER)

MORGAN: Now what do you make of that?

NELSON: I think it's progress, and I think it's, you know, a great step forward and people are finally growing up and looking around the room and checking things out. And it seems ridiculous I think and have thought for years to let all the illegal drug dealers make all the money and the gun buyers trading guns for dope and getting people killed all over the border down there, when it's a simple thing to legalize it, tax it and regulate it. And fortunately Colorado and Washington saw that.

MORGAN: Are you planning a vacation there soon?

NELSON: Maybe they'll have a coffee house.

(LAUGHTER)

MORGAN: You can have the Willie Nelson coffee chain, couldn't you?

NELSON: Why not. Why not.

MORGAN: Now that will go very well. Let's take a break, want to come back and talk about politics with you.

NELSON: Sure.

MORGAN: A lot of stuff going on in the Middle East, just had the election.

NELSON: Sure.

MORGAN: Let's get your take on it.

(COMMERCIAL BREAK)

(MUSIC)

MORGAN: Willie Nelson's classic "Always On My Mind." He's also the author of two "New York Times" bestsellers. The latest, "Roll Me Up and Smoke Me When I Die: Musings from the Road." He's here with me along with the album "Heroes."

I love that song.

NELSON: "Always On My Mind." Yes.

MORGAN: One of my favorite ever songs. If you were consigned to a desert island and you could only listen to one song endlessly on a permanent replay, what would you choose?

NELSON: That would be really hard to say, because, you know, this is -- I just recorded a song with with Dolly Parton that I think is the best song that -- she wrote it.

MORGAN: Really?

NELSON: And I told her, I think this is the best song I've heard in a long time.

MORGAN: Let's turn to politics. You've always been political, but in a quite interesting way for a guy brought up in Texas. You have -- I wouldn't say massively liberal views but certainly more liberal than most Texans would have about issues from guns to drugs and so on.

Let's just go through a few of these. You started the Tea Pot Party after you were arrested in November 2010. You said, "We should bring home all of our troops from around the world, put them on our borders, legalize drugs and in doing so we will save thousands of lives and millions of dollars."

And we touched on that a little bit before the break. Do you really believe that?

NELSON: I believe that.

MORGAN: That could be a strategy that works?

NELSON: I do know it would work. It would be better than the one we have where there's still drugs available to anybody who wants them. I haven't had any problems buying marijuana -- excuse me -- anytime that I can remember in my -- ever since I've been smoking it. So it's a shame to let other people, illegal drug dealers, make all that money. There's plenty of money being lost there. And I think eventually the grownup in the room is going to see it.

MORGAN: When you look at the wars in Iraq and Afghanistan, what do you think about America's position in the world, its foreign policy in particular, in the last 12 years or so?

NELSON: Well, as you probably know I'm completely against war. I believe in self-defense. I believe if you get hit, you hit back. But preemptive wars I don't believe in. I don't think they're necessary. I think wars are started to make money. And make money for the people who start a war over here and a war over there and sell bombs to both sides.

MORGAN: When you look at what's happening in the Middle East, it's been a crisis most in my lifetime I can remember, pretty much most of yours. Do you see any hope there? Do you see any chance of actual peace in the Middle East?

NELSON: Well, if you believe in the bible, where it says two things. It says there will always be wars and rumors of wars. It also says that for a thousand years somewhere down in the future we're going to have peace. So hopefully those thousand years are coming up on us.

MORGAN: Are you fan of Barack Obama? Were you pleased he got re- elected?

NELSON: Yes, I'm glad he got re-elected. I think he has a lot of things in his favor, the things that he has ran on. The women all believe in the things that he's talking about. The blacks and the Hispanics and the women, and if you've got those three things on your side, you're going to win.

MORGAN: Would you categorize -- are you a Democrat? I mean, how would you describe yourself?

NELSON: I'm not really. And you know, what was his name? He said I wouldn't want to belong to any club that would have me in there.

(LAUGHTER)

MORGAN: Well, the -- was it Groucho Marx said that.

NELSON: Groucho Marx said that. Yes.

MORGAN: Groucho Marx. Yes. You never voted for anybody?

NELSON: Well, I have voted, yes.

MORGAN: Did you -- did you this time?

NELSON: No.

MORGAN: Why not? NELSON: Well, I had all kinds of excuses. I was traveling and I had to do an absentee and I couldn't do it and all that. But there's -- you know there was really no excuse. I was just -- didn't do it.

MORGAN: You didn't feel passionately enough about either candidate?

NELSON: I really felt like Obama was going to win, that he didn't really need one more vote that he already had sown up.

MORGAN: You grew up around guns. And what do you make of the gun debate in America?

NELSON: Well, you know, I've partied all my life, and, you know, when I was a young I had a BB gun, I had a rubber gun, I had shotguns and rifles and all those things, and I went deer hunting and bear hunting. And I have no problems at all with that. But you know, I don't know what I would do with a gun that would shoot 100 times.

MORGAN: I mean, I find it just staggering that you can just walk into stores in America and buy, you know, high-powered assault weapons and on the Internet get 6,000, 7,000 rounds of ammunition and go blow up a movie theater if you want to.

NELSON: I don't -- you know, I agree with that. I think it should be more regulated and I think a lot of guns, there's no need for civilians to own those. Those are for military.

MORGAN: Let's take another break, Willie. Let's come back and talk music and also all the girls you've loved before.

NELSON: Good.

MORGAN: Which could take some time, don't you think? Even half the stories I've heard are true.

NELSON: How much time we got?

(LAUGHTER)

(COMMERCIAL BREAK)

(MUSIC)

MORGAN: "Every Time He Drinks He Things of Her." Willie's son Lucas Nelson wrote it. And it's from Willie's newest album, "Heroes." And he's back with me now.

Talented guys your sons?

NELSON: Yes, they are.

MORGAN: One of them is here, he did illustrations for the book?

NELSON: Very proud of them.

MORGAN: One of them is writing for the album. NELSON: Yes.

MORGAN: Are you proud of them?

NELSON: Very much. Yes.

MORGAN: You have seven children.

NELSON: Yes.

MORGAN: From four wives. But your latest wife is the wife that you've had for over 20 years. Is here also in the audience. Was it practice the first three, Willie?

NELSON: Is it what?

MORGAN: Practice, the first three marriages?

(LAUGHTER)

NELSON: Well, I'm not sure practice is the right word.

(LAUGHTER)

I think if I was practicing I should have learned.

MORGAN: It's either that or you're an incurable romantic.

NELSON: You can say that, yes.

MORGAN: Do you think you've become a better husband?

NELSON: Well, yes, I think age has a lot to do with that, you know. You get older, you get wiser, I guess.

MORGAN: What have you learned about marriage?

NELSON: Nothing.

(LAUGHTER)

MORGAN: You had a great line about divorce?

NELSON: Yes, the reason divorces are so expensive is they're worth it.

(LAUGHTER)

MORGAN: And yet, although you say that, you also -- always stayed fond of your ex's, am I right?

NELSON: Oh, yes.

MORGAN: You must thought that was important?

NELSON: I do think it's important to -- you know, especially if you have children which we do, you know, you should stay friends and -- with your ex-wives.

MORGAN: Now I always ask guests, how many times have you been properly in love. And I can't think of a better person to ask, because you actually sang to all the girls I've loved before. So if I was to ask you, how many of all the girls you've loved before we would reach how many would it be?

NELSON: Well, you said properly in love.

MORGAN: Properly in love. Yes.

(LAUGHTER)

NELSON: We'll have to define properly. Yes.

MORGAN: How would you define properly?

NELSON: Well, I wouldn't -- what I said, I wouldn't have put it in there, but --

(LAUGHTER)

MORGAN: But given that I've thrown it out there, go. You know, we're actually -- like proper love.

NELSON: Well, I don't think there's anything improper. I think love is love is love is love. God is love is love.

MORGAN: How many times have you been in love in your life?

NELSON: I don't know. Today?

(LAUGHTER)

MORGAN: I'm hoping only once --

(CROSSTALK)

NELSON: I just signed 300 books a while ago, and I met a lot of pretty girls.

(LAUGHTER)

MORGAN: Does your wife put up with this kind of humor? She obviously does, she's laughing.

NELSON: Well, yes, she knows me.

MORGAN: She obviously knows you. You get on extremely well. I can tell this from the short time I spent with you both. Is she the -- is she the real love of your life, would you say?

NELSON: Well, for the moment she is.

(LAUGHTER)

MORGAN: She's just quite relieved.

NELSON: Yes.

MORGAN: The thought that it may come to a crashing end.

NELSON: No, we get along fine. And it's, you know, unusual for people who are as independent as we both are. She's had a career of her own before, you know, he and I met. She was a makeup artist in a movie. In fact, that's where I met her. Was a movie.

MORGAN: Do you ever sing your songs to her?

NELSON: Do I ever sing songs to her?

MORGAN: Yes.

NELSON: Oh, I guess I have. I play a lot of records for her.

MORGAN: Are you a romantic at heart?

NELSON: Hundred percent, yes.

MORGAN: If I was to say to you, come on, Willie, tell me the greatest moment of your life, it can't involve women or children, can't involve marriage and children, what would you choose?

(LAUGHTER)

NELSON: The greatest moment of my life that doesn't involve children or women?

MORGAN: Yes. If I could let you relive a moment, what would you choose?

NELSON: That's a difficult one. I've had a whole lot of really good moments.

MORGAN: What's the one? What's the a great life for you personally, for whatever reason?

NELSON: Every time I go do a show, where I show up and they show up, and they come and clap and pay good money to hear -- you know, hear me sing songs, it doesn't get any better than that. And the last show I had was too far ago. I need another show. I'm ready to go play. You know?

MORGAN: Willie, I could talk to you all day. Unfortunately, we've run out of time. But your new album is "Heroes." The book which is a terrific read, very entertaining. "Roll Me Up and Smoke Me When I Die." It's been a real pleasure.

NELSON: Thank you, Piers.

MORGAN: Nice to see you.

NELSON: You too. MORGAN: The great Willie nelson. And we'll be right back.

(COMMERCIAL BREAK)

MORGAN: I want to end tonight's show by paying a tribute to a man who held perhaps a unique position, of being loved by millions around the world for being supremely evil. I'm talking, of course, about the late great Larry Hagman. A man who made (INAUDIBLE) played the baddest bad guy on TV history, J.R. Ewing on "Dallas." Who else could possibly delivered lines like these.

(BEGIN VIDEO CLIP)

LARRY HAGMAN, ACTOR, "DALLAS": Revenge is never stupid, darling, it's the single most satisfying feeling in the world.

Marriage is like a salad. A real man has to learn to keep his tomatoes on top.

This is wonderful. The little witch is going to get spanked with her own broomstick.

(END VIDEO CLIP)

MORGAN: Larry, who was a brilliant actor beneath the sinister smirk, died on Friday in a Dallas hospital of complications from cancer. With his co-stars and best friends, Linda Gray and Patrick Duffy by his side.

I talked with all three of them in June. One of my favorite interviews on this show. Listen to what Larry told me about playing J.R.

(BEGIN VIDEO CLIP)

MORGAN: Do you like being, for what you were, the most evil man on television?

HAGMAN: Well, you know, I don't think I was an evil man, I was just like a Texas businessman, that's all.

MORGAN: Yes, evil.

(LAUGHTER)

HAGMAN: They keep bringing that up. I'm just doing what people do for business.

MORGAN: You can't start distancing yourself from being evil. J.R. was wonderfully evil. Magnificently evil. Constantly scheming and plotting, even against his own family. That is evil. Isn't it?

HAGMAN: Especially with his own family.

MORGAN: Exactly. But did you like the reputation?

HAGMAN: Of course I do, it is wonderful.

(END VIDEO CLIP)

MORGAN: After that interview, Larry Hagman gave me a J.R. style black hat of my own, which I treasure and if I look at it I think of J.R. cackle in a suitably evil manner and remember J.R.'s mantra, don't forgive, never forget and do unto others before they do unto you.

They don't make baddies like J.R. anymore, they don't make many actors as good as Larry Hagman any more. He'll be greatly missed.

WOLF BLITZER, CNN ANCHOR: Thanks, Piers. It's 10:00 p.m. here on the East Coast. We begin the way Anderson does every night, "Keeping Them Honest."