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Is Hagel the Right Man for the Pentagon? Are we Facing a New Cold War? What's in Store for Venezuela?

Aired January 13, 2013 - 10:00   ET


FAREED ZAKARIA, CNN HOST: This is GPS, the Global Public Square. Welcome to all of you in the United States and around the world. I'm Fareed Zakaria.

We have a series of feisty debates on today's show on the hot topics of the day. We start with President Obama's nomination of Senator Chuck Hagel to be the next Secretary of Defense. We have a clash you will want to watch.

Then, the relationship between the United States and Russia keeps getting worse. Whose fault is it, Moscow or Washington; a debate.

Also, the next fight in Washington will be over the debt ceiling. Can President Obama end this craziness and bypass Congress altogether? We'll talk about the out-of-the box solutions and whether they would work.

And, finally, this is the signature of the man who might be the next Treasury Secretary. We'll look back through history to see if there's any loopy precedent.

Speaking of Secretaries of the Treasury, we have three former holders of the office and many other statesmen and women offering advice to the president on a new GPS special tonight. It's called, "Memo to the President: Roadmap for a Second Term" tonight at 8:00 pm and 11:00 pm, Eastern and Pacific.

But, first, here's my take. Chuck Hagel's nomination as America's next Secretary of Defense has drawn fire from people who say he's outside of the mainstream. In fact, he's a pretty straightforward traditional Republican on most issues with reluctance to go to war borne of knowledge and experience.

Where Hagel does appear out of the mainstream in Washington's world of groupthink is on Iran, which I would argue is a good thing because Washington desperately needs fresh thinking on the topic.

In 2013, President Obama will face a crisis with regard to Iran. He has categorically ruled out containing an Iran with nuclear weapons. So either Iran will capitulate completely to American demands or the United States will go to war with that country.

Since the first option is extremely unlikely and the second extremely unattractive, the Obama administration needs to see if there is a path through which it could pressure Iran to make a deal. In a thoughtful essay in the current issue of Foreign Affairs, the Columbia Scholar Robert Jervis points out that this kind of coercive diplomacy, at least from Washington, has rarely worked.

He points out in Panama 1989, Iraq 1990, Serbia 1998, Afghanistan 2001 and Iraq 2003, Washington tried sanctions, pressure and the threat of force to get leaders to change course. It didn't work and Washington had to make good on its threat to go to war.

With North Korea, coercive diplomacy also failed, but, in this case, Washington decided military action choosing instead to contain the regime.

Making coercive diplomacy work requires a mixture of threats and promises. With regard to Iran, the administration has made the threats plenty of times with clarity and credibility.

But while the sticks have been handled shrewdly, the carrots have not. The United States has been unable to define for itself or for the world what would be an acceptable deal and, most importantly, what it is willing to do if Tehran agrees to such a deal.

Would sanctions be lifted? Which ones? Would the U.S. stop its efforts to overthrow the regime? Would it be willing to discuss normalization of relations with Iran?

There have been many obstacles in the path of a deal from the Iranian side, but Reza Marashi, a former State Department official, writing in the Cairo Review of Global Affairs, points out that, "Tehran has recently signaled its willingness to compromise."

He notes that, "Numerous Western, Chinese and Russian officials have acknowledged that Iranians focus their bottom line on uranium enrichment at the 3.5 percent level and sanctions relief.

Iran's enrichment of uranium to the 20 percent level; its corresponding stockpile; and its underground Fordow nuclear facility all are fair game for compromise, but for the right price." So let's try to find a price that makes a deal to the Iranians and to us.

There are also real obstacles to a negotiated deal in Washington, and that is where Chuck Hagel's voice could make a difference. We need to make an offer that Tehran can accept and that we feel comfortable with. Otherwise, 2013 will be the year that we accepted a nuclear Iran or we went to war.

For more on this, you can read my column in this week's Time Magazine. Let's get started.

When President Obama chose a conservative Republican for the post of Defense Secretary, you might have not expected opposition from the right, but you would have been wrong.

While many conservatives support Hagel's nomination, there is spirited opposition from the right. Perhaps the first public opposition to Chuck Hagel was a column in the Wall Street Journal by its Foreign Affairs Columnist Bret Stephens. He leveled a dramatic charge against the former senator.

One of the first full-throated defenses of Hagel came in the Daily Beast from Peter Beinart, the editor of that website's blog, "Open Zion" and the author of, "The Crisis of Zionism."

Joining me now are Bret Stephens and Peter Beinart.

So, Bret, let's start with you, you essentially accused Chuck Hagel of being an anti-Semite.


ZAKARIA: What do you -- what evidence do you have that that's the case?

STEPHENS: Look, he had this famous statement that I'm sure you've heard several hundred times by now about the Jewish lobby intimidating a lot of people.

And a lot of the discussion about that quote had to do with this line, "The Jewish lobby" as opposed to, say, the pro-Israel lobby, which is a very diverse collection of organizations, some of them with very different motives.

What got me really wasn't so much the adjective, although I found the adjective odd, it was the verb, "intimates." Chuck Hagel was, for 12 years, a senator from the State of Nebraska. I looked it up. There are about 6,100 Jews in the State of Nebraska.

I can imagine a lot of lobbies that might have intimated Hagel when he was in the Senate. The ethanol lobby, for example, the farm lobby, various other kinds of lobbies. The NRA, the pro-life lobby and so on.

It's hard to see how he levels the charge that this lobby intimidates people. Now, are there pro-Israel groups that are lobbying on behalf of Israel? Absolutely. Are their dozens, if not hundreds, of lobbies in Washington operating in the same way all the time?

So this peculiar charge that this particular Jewish lobby intimates senators was something I found very disturbing and, obviously, I was not alone in this view.

ZAKARIA: But you have Nicholas Kristof writing in the Times essentially about your column, "It is bullying and name-calling to denounce people as anti-Semitic because they won't embrace the policies of a far right Israeli government that regularly shoots itself in the foot in a world in which anti-Semitism actually does persist, this is devaluing the term so that it becomes simply a glib, right-wing insult."

STEPHENS: Well, here, you know, this is -- this is one of these kind of odd things. The suggestion is somehow to be pro-Israel is just to be this kind of far-right, pro-BB Netanyahu or people even further to his right. But that's simply just not true. That's simply a caricature.

And, by the way, absolutely the term anti-Semitic can be bandied about in a way that's invidious and unfair, but that doesn't mean that anti- Semitism doesn't exist.

And that doesn't mean that statements that kind of approach a kind of anti-Semitism aren't out there either. I didn't call him an anti- Semite. I said there was an odor of prejudice. This is something he has to address.

There are many other reasons, by the way, I oppose Hagel's nomination, but that is ...


ZAKARIA: All right, so (inaudible)...

BEINART: The column is titled, "Chuck Hagel's Jewish Problem."


BEINART: It's the -- and you leveled this charge. As far as I know, you didn't call Hagel to ask him. You didn't call any Jew in Nebraska. You didn't call the rabbi in Omaha who calls the charge, "extremely stupid." You didn't call the head of the Jewish Federal of Omaha, Nebraska, who says that the charge is absurd.

You simply leveled it. And it seems to me, we should have -- I say this as a Jew. We should have much higher standards then this kind of cavalier, defamation of people because you didn't like one phrase that they uttered seven or eight years ago.

Lobbies intimidate people. That's part of what they do. Whether it's the gun lobby or the health care lobby or unions, they're in the business of doing that.

And to say that because Chuck Hagel said it's true about the pro- Israel lobby, and used the term Jewish lobby, which I agree is inaccurate, but also happens to have been used by Malcolm Hoenlein, the head of the Conference of Presidents of major American Jewish organizations last December, I really think was extremely unfortunate and I really hope you'll think again before doing so in the future.

STEPHENS: Well, you know, again, you responded to my column by accusing me of being completely indifferent when it came to the subjects of homophobia or anti-Arab ...

BEINART: No, I didn't.

STEPHENS: Yes, you did.

BEINART: No, I said you had a different standard ...

STEPHENS: Or (inaudible)


BEINART: And you do have a different -- you would not have written this column ...

STEPHENS: You said that I didn't write about these subjects and I demonstrated ...

BEINART: No, I said you have a different standard ...

STEPHENS: And I demonstrated -- and I demonstrated to you that you do. Yes and, by the way, I do care about anti-Semitism. You know ...


STEPHENS: And people should stand up and say this is extremely -- you know this is extremely worrisome. This raises eyebrows. Is it dispositive? No, but it ought to raise eyebrows.

And what I've been stunned by is the alacrity with which people have moved to Hagel's defense largely because he takes views that are not necessarily congenial to Israel, including a lot of Jews.

People should ...


ZAKARIA: (inaudible)

BEINART: Wait a second, Ehud Barak and Israel's Deputy Foreign Minister Danny Ayalon have both said he's a friend to Israel. So I don't know who it is who is exactly saying he is not a friend to Israel. Those people seem to me have a lot of credibility on the subject.

ZAKARIA: You actually think that his views on Israel and the Middle East are ones you think the United States should be following more closely?

BEINART: I think the important thing about Hagel is that, in a way, he would be the Obama administration's Meir Dagan. Meir Dagan is the guy in Israel from the National Security establishment who pushed back when Benjamin Netanyahu, he felt, was talking too cavalierly about the prospect with war against Iran.

Hagel has not ruled out military force against Iran. He actually ruled it in in an op-ed last fall. But he has said again and again, in very Daganesque ways and very Eisenhoweresque ways, as you've made the point, Eisenhower was always saying let's not pretend we can control war once it's unleashed.

That is the point that Hagel has made again and again. I want that perspective in the Iran debate. I think that's part of what makes it important.

STEPHENS: You know what I find striking about this debate, and this, I think, helpfully brings us to the larger debate about Chuck Hagel's world view, is that if you are a skeptic of intervention -- U.S. intervention in Iran and certainly if you're against Israeli military intervention of Iran, as I think you are, Peter, you couldn't possibly send a worse signal than to appoint Chuck Hagel as your Defense Secretary.

You know the New York Times has a profile of Shimon Peres that was done back in July of last year, before the election, which -- in which -- it's about how Shimon Peres, the President of Israel, a largely symbolic position, adamantly opposed an Israeli strike because he said, "I guarantee you if it comes to it, the Americans are going to do it."

So a lot of the Israeli calculation back in September and October when they were thinking about a strike was no, let's hold off because we have some confidence that the Obama administration if it comes to it, will do it if it's necessary.

And a lot of the people who supported President Obama said mark my words, he's a -- you know he's a man of his word. He does this quite seriously.

Then, he turns around and appoints perhaps the most prominent skeptic of any kind of military intervention in Iran as his Defense Secretary.

If you're sitting in Israel, you're wondering just how reliable is the United States and maybe we should go it alone. So for that reason alone, simply the appointment of Chuck Hagel is going to make the Israelis more skittish and perhaps more prone to act.

BEINART: But here's the irony. Who said that military action against Iran could prove catastrophic? That was Robert Gates, our former Defense Secretary. Who said that it could embroil us in a conflict that we would regret? That was Leon Panetta, the guy who he is replacing.

It is true, Bret, I think you're right, that we need to be able to have the military option on the table, as Hagel repeatedly has said, but that surely - that can't mean that we cannot have a public conversation in this country about the tremendous dangers that war would bring.

That, it seems to me, is absolutely a conversation we have to have and it's being led by the -- from the Pentagon because it's people in the U.S. military who are most concerned about this.

ZAKARIA: All right, we're going to have to leave it at that. And we will have a chance to have both of you back to have another spirited conversation. Peter Beinart, Bret Stephens, thanks for joining us.

Up next, a new kind of Cold War, the participants are the same, the weapons, this time, are legislation. What's going on? We will tell you.


ZAKARIA: Relations between Washington and Moscow have reached a new low bringing back memories of the Cold War. The current tit-for-tat started when the U.S. Congress passed the so-called Magnitsky Act.

It blacklists Russian officials alleged to have been involved in the death of Russian lawyer Sergei Magnitsky, bans them from coming to the United States and freezes their assets. It's, in fact, a broader list than that.

Russia responded with a ban on U.S. adoptions from Russia and a threat to bar U.S. human rights abuses. Some say this is all evidence of a new Cold War.

Stephen Cohen is a professor of Russian history at NYU and William Browder was once the largest foreign investor in Russia. He was Sergei Magnitsky's former employer and he is, of course, one of the biggest proponents behind the Magnitsky Act.

Welcome to you both. William ...


ZAKARIA: Explain the importance of the Magnitsky Act from your point of view.

BROWDER: Well, I think, very simply, the Magnitsky Act is a piece of legislation which is sort of designed for the modern problems of what's going on in Russia.

In Russia, you have a regime which is basically out to steal as much money as possible from their own people and, in response to that, when people try to stop it in any way, like Sergei Magnitsky, they get killed.

And so what the Magnitsky Act does is it creates consequences for the corrupt, murdering kleptocrats that are running Russia today and it creates consequences outside of Russia by banning their visas and freezing their assets in America.

ZAKARIA: Stephen Cohen, you disagree with the Magnitsky Act. You wish Congress hadn't passed it.

STEPHEN COHEN, PROFESSOR OF RUSSIAN STUDIES, NEW YORK UNIVERSITY: I do wish it hadn't for many reasons. But the main one is, as you said in your introduction, I think Moscow and Washington are sliding into a new Cold War which would be very bad for American national security.

And the Magnitsky Act further poisons the relationship. Mr. Browder is right, to a certain extent, but it's not quite as simple as he says. Even though this may be, this act, just a lot words, it's going to have consequences.

For example, there are groups in Moscow and in the United States that have a whole list of names that they want to put on this block list. There are even people who want to put Putin's name on it on the grounds that he's abused civil liberties.

What would that mean for the relationship between President Obama and Putin if they want to have an urgent meeting, let's say, in the United States about missile defense or Syria.

This is a kind of Cold War atmospheric poisoning that we don't need at this time.

ZAKARIA: William, what do you think of this adoptions issue? Why did they choose it and what effect do you think it will have?

BROWDER: Well, very simply, what it shows, in the most harsh way, is what Putin is really all about. So the Magnitsky Act came about and the Russians said we have to react to it and so they looked at the possible reactions.

One reaction would be to sanction American businesses, but, then, Putin looked at it and said well, that might harm my own pocketbook. Then, they said, maybe well, just some type of reaction in terms of foreign policy.

But when they looked at the sort of portfolio of how they could react, what they realized was that there was really nothing they could not cooperate on because they're not cooperating at the moment already.

And so they looked through their portfolio and they said, wait a second, there's one thing that Americans want that we have which is they want to adopt our disabled orphans.

And so they said let's take that away from them not even looking for a second and what that meant for these unbelievably vulnerable children.

And so essentially what it shows is the venality, the absolute sort of lack of morals and the cowardice of Vladimir Putin.

ZAKARIA: Stephen, isn't it fair to say that Russia seems to be in some of -- along some of these dimensions moving backwards? That is that there is less freedom speech, civil society. The state seems more abusive than certainly people like you had hoped ten years ago?

COHEN: Certainly more than I had hoped. Speaking historically, since I'm a historian, Russia is now in one of its periodical cycles of repressive politics from the top. There's no doubt about that.

But, in the context of Russia's history, it's a very mild cycle of repression and it's accompanied, interestingly enough, from Putin, from the Kremlin by a certain opening up of the political system, including the electoral system.

But I want to come back to something that Mr. Browder said about Putin. I don't know where he gets his information, but there are very good sources that say something quite different.

First of all, at the beginning, Putin didn't like this ban on American adoptions of Russian orphans. And, in fact, Foreign Minister Lavrov, who rarely strays from Putin, opposed it. Things ran out of Putin's control, I think.

Secondly, to say that Russia is not cooperating in foreign affairs with America is an astonishing statement. We are nearly, largely dependent on Russia for supplying NATO troops in Afghanistan.

Russia could have slowed in retaliation to the Magnitsky bill that supply route. There were many things Russia could have done. This is -- even though it's obscene and it's bad, it's tragic, it's one of the mildest things Russia could have done.

ZAKARIA: All right, since I have you both here, I have to ask you, William, what do you make of the other news out of Russia, Gerard Depardieu deciding to take Russian citizenship? Are the French moving to Russia?

BROWDER: Well, I think there's one or two French people moving to Russia. Gerard Depardieu and, I think, Brigitte Bardot is very upset about the euthanasia of two elephants at the Lyon Zoo and so she's threatening to move to Russia s well. I don't think she's aware of the unbelievable animal cruelty they do in Russia.

Just to put some perspective on it, there are about three million education Russians who have left Russia, who have immigrated because of the corruption and the sort of retrograde society that they have there.

And Putin needed some kind of PR stunt and so he gets this sort of silly character to take Russian citizenship and puts it up on stage and hopes that's going to somehow dissuade everybody from leaving Russia. I think -- I don't think it served its purpose.

ZAKARIA: Stephen, is it a sign of anything or just fun and games?

COHEN: I -- No, it is fun and games and it's quite silly, but it has two potential serious consequences. First of all, it draws more attention in Russia to Putin's 13 percent flat tax. I mean that's a very low tax in a country where inequality of income is just gigantic, right up there with America's inequality of income.

And there's a lot of resentment among ordinary Russians that people who are making millions and millions and millions of dollars a year in Russia are paying only 13 percent.

There's another side, potential consequence. Putin, Russia is turning East. It's turning away from Europe and that's the subject for much longer discussion.

But, Putin, Russia's two main allies in Europe have been Germany and France. The German relationship has soured. The French relationship has not soured, but if this goes down, this actor is (inaudible) taking Russia.

By the way, he's not going to live in Russia. He just took the passport. But if this goes down badly in France, for any reason, it'll further fray Russia's ties with the West and abet further Russia's turn to the East and that's not good for any of us, I think.

ZAKARIA: Stephen Cohen, William Browder, thanks for joining us, fascinating conversation. Up next, What in the World? Why the country with the world's greatest oil reserves is in or a year of complete upheaval. A hint, it is not Saudi Arabia, it is not Iran, it is not Russia. I will explain.


ZAKARIA: Now, for our What in the World segment. For 14 years, Hugo Chavez has been a troubling global presence. He's been an avowed critic of American capitalism and, yet, he has generated billions selling oil to the United States.

He is a populist whom some revere, but others despise. One thing's for sure, Venezuela's president is a fighter. Last year, it seemed he had even defeated cancer, but the cancer is back and Chavez is set to be gravely ill.

The newly reelected president hasn't been seen for a month so when he couldn't attend his own swearing in ceremony on Thursday, it sparked a natural set of questions in Venezuela and around the world, what's next?

Whoever inherits the presidency, Chavez will cast a long shadow. Look at his record, on the one hand, the poorest are actually better off. According to the Center for Economic Policy and Research, poverty has declined by 50 percent since 2004. Extreme poverty has declined by 70 percent.

Over the same period, college enrollment doubled and millions of Venezuelans gained access to health care. Many are getting free housing. Chavez announced of television last year he would build 2 million homes for the poor.

But look deeper and you'll see that the programs that created these gains are built on an oil boom. They are badly designed and they are damaging the Venezuelan economy.

The economy is, frankly, in the shambles. Barclay's Research puts Venezuela's annual fiscal deficit at nearly 20 percent of GDP, one of the highest imbalances in the world. Total debt has more than doubled since 2008. And that is despite the fact that Venezuela has the greatest proven reserves of oil in the world. More than Saudi Arabia, Iran or Canada. When Hugo Chavez first came to power in 1999, oil was trading at $11 a barrel. Today, it is trading at $111 a barrel. Chavez has presided over the greatest windfall in his country's history. And, yet, Venezuela is probably the only petro-state in the world where people regularly suffer power outages. Infrastructure is crumbling and public security is abysmal.

Venezuela has one of the worst homicide rates in the world, worse even than Colombia, Honduras or Mexico. Our recent foreign affairs essay pointed out that Venezuelan exports to the U.S. from the start of Chavez's rule through 2011 added up to nearly $350 billion. That's ironic for a presidency which marketed itself as anti-American. But even that trend may be reversing. According to a "Financial Times" report for every ten barrels of crude that are exported to the United States, Venezuela now needs to import two back because it lacks refining capacity, which has been made worse by a recent explosion at a Venezuelan refinery. In other words, America is selling oil to Venezuela. Meanwhile, Chavez continues to ship a reported 100,000 barrels of subsidized crude oil to Cuba every day. Venezuela's people have gotten used to tall promises, free housing, essentially free gasoline, but increasingly, the state cannot afford it. It's popular to be anti-American and, yet, the money has been coming in from Washington.

Cuba remains a staunch ally, but if it stops receiving cheap oil, it will pull out its tens of thousands of doctors from Venezuela, which would destroy Venezuela's health care system. All these years a popular Hugo Chavez has been masking all these fundamental flaws in his economy using oil wealth. But the problems are building. The next leader of Venezuela will face the build up of all these problems and probably without Chavez's charisma or guile. If you think balancing the budget in Washington is difficult, spare a thought for what Caracas will have to do in the coming years.

Up next, the war in Afghanistan told through the lens of one deadly battle. That's the story behind a great recent book, "The Outpost." I'll speak to the author Jake Tapper, up next.


CANDY CROWLEY, CNN ANCHOR: I'm Candy Crowley in Washington with a check of the headlines. Former Egyptian President Hosni Mubarak will get a retrial. According to the state-run "Al-Ahram" newspaper, Mubarak was found guilty last June of ordering the killing of protesters in the uprising that led to his ouster. He is currently serving a life sentence. A date for his retrial has not been set.

Israeli police officers swarmed a Palestinian protest camp in the West Bank early this morning, taking 60 protesters into custody. They were, however, later released. In recent weeks the Israeli government had signaled its intention to build settlements in the area drawing the ire of Palestinian leaders who say it would isolate the proposed Palestinian capital of East Jerusalem from the rest of the West Bank.

Temperatures as much as 30 degrees below average are sweeping across western states and threatening to kill as much as a billion dollars worth of citrus fruits in California. That's according to "The L.A. Times." Overnight lows in rural California dipped into the mid-20s overnight while a freeze warning in Phoenix, Arizona, is in effect until Tuesday. Temperatures are expected to return to normal by the end of the week.

Those are your top stories. Now, back to "Fareed Zakaria GPS."

ZAKARIA: 11 years and 3 months ago, the war in Afghanistan began. This week, Afghan President Karzai met with President Obama to discuss how the war will end. My next guest Jake Tapper has a terrific book about the war called "The Outpost." The book focuses on one of the deadliest battles in the war, a battle that Tapper sees as a microcosm of the war effort as a whole. Tapper has, of course, covered the White House for ABC News for the past four years and will soon be an anchor here at CNN, as well as our chief Washington correspondent. Welcome to CNN. And welcome to GPS.


ZAKARIA: So, fascinating book. And, you know, to me, the stories you tell, as you say, it is a microcosm. So, one of them, they go to this village, the American troops go to this village in Nuristan and insurgents streaming in from the border and one of the villagers asked them, are you Soviets?


ZAKARIA: Are you Soviet soldiers? And the American starts to explain to them that the Soviets left, the Soviet Union has collapsed, there isn't any Soviet Union any more. I mean you're dealing with remote parts of the world where, you know, they just -- to what extent do they understand why we are in Afghanistan?

TAPPER: Right. I mean that's the amazing thing. Obviously, not only are the U.S. troops that have been sent to this part of the world not fighting al-Qaeda, they are involved with a population that has never heard of the World Trade Center, that some of them know of the World Trade Center, but they thought the World Trade Center was in response to the Americans invading Afghanistan. So, how much their action is connected to what happened on 9/11 is very much in doubt. But you are right, I do see it as a microcosm, because you have brave troops performing heroically, doing everything that is asked of them in this corner of the world and some of them make a difference, some of them win over the population, but, ultimately, it is a very, very impossible task for them to do without sufficient assets and sufficient manpower and the mission keeps changing.

ZAKARIA: When you talk about the, you know, these, the winning over the population. What I wonder about is, at some point you leave and the realities on the ground reemerge, don't you think?

TAPPER: Absolutely. And in fact, when I went to that part of the world last year - not last year, in 2011, that's what a villager in this one town that's focused on in the book, Kamdesh says that they were always stuck between the Americans and the insurgents and they knew who was going to be there in five years. The insurgents were going to be there, the Americans were not. Another thing that is interesting is, when they push into this part of the country, regional command east, eastern Afghanistan, which is, obviously, an incredibly dangerous part of the country, of the war. It's not until 2006. So, the war has been going on for more than four years, almost five years before we even really go into that part of the country. The colonel in charge of it at the time was now General Nick Nicholson (ph). He knows that a counterinsurgency strategy needs 14 years to work. 14. Does anybody in the U.S. think that when they push it in 2006, 2006 that we're still going to be there in 2020? You know?

ZAKARIA: This - the place that you're looking at is very close to Pakistan ...

TAPPER: Right. ZAKARIA: And that's where the insurgents are often coming from. The take safe harbor in Pakistan. Was there a talk about how at the end of the -- that is the crux of the problem. Because you are never going to be able to destroy this insurgency, because it houses itself and gets replenished in a foreign country.

TAPPER: All the time. I mean and in fact, Pakistan is mentioned so many more times in the book than bin Laden or al-Qaeda. It's like, you know, the enemy that dare not speak its name for the U.S. They can do what they can do. Obviously, the drone wars are being fought independent and separate in many ways. But, it's not just weapons and bad guys that are coming over the border, it's expertise. It's sharp shooters and snipers and people who teach the locals how to build IEDs.

ZAKARIA: The thing that struck me about this book, is all great stories about war often get, make you understand the disconnect between the very grand plan strategies at the top, even at the level of General McChrystal and company and what it translates into for the guy, the grand actually doing it. And I got a sense that those guys, American soldiers as good guys trying to do their best, but there was such a big disconnect.

TAPPER: It's unbelievable and it starts with the fact that they didn't have enough assets. It's not just a question of they needed more troops in Afghanistan in 2006. Although, probably any general would have argued that. And did. But they didn't have helicopters. They didn't have enough helicopters. So, when you don't have enough helicopters, you make decisions along the lines of, well, we're going to set up an outpost in this part of the country, which is very mountainous. We need to be near the road. We have to be near the road because that's the only way to resupply it, because we don't have helicopters. And that ends up costing people their lives.

ZAKARIA: Fascinating.

TAPPER: Thanks, Fareed.

ZAKARIA: Thank you. Buy the book. Thanks for joining us.

Up next, could a single coin save the U.S. economy? What if it was a trillion dollar coin? We'll explain.


ZAKARIA: Twitter and the blogosphere lit up this week with an idea for how the president could get past the debt limit without Congress. It seems an obscure paragraph in the little known Coinage Act allows the Treasury Secretary to mint a platinum coin of any denomination. So, the theory goes the Treasury Secretary could mint a trillion dollar platinum coin and use it to get $1 trillion worth of credit at the Fed? Will it work and how about some more realistic ideas for getting through our next crisis. Joining me now are Jeff Toobin, CNN's senior legal analyst and Bruce Bartlett, the columnist and former Treasury official in the Reagan administration. Jeff, quickly, the trillion dollar coin, this isn't going to work, is it? JEFFREY TOOBIN, CNN SENIOR LEGAL ANALYST: Well, legally, I think it could work. I think the law is unlike many laws, actually very clear. That this is something that is within the Secretary of the Treasury's authority. He could issue this coin and it would get the U.S. government past the immediate stumbling block of the failure to raise the debt ceiling. That's a legal matter. As a political matter, I think it's basically a nonstarter, because it seems comical, it seems ridiculous.

ZAKARIA: Bruce, you suggest an alternate strategy, which is one Bill Clinton has talked about and Colombia law professors do, which is the president should essentially say, I have the implicit authority to raise the debt ceiling without Congress, correct?

BRUCE BARTLETT, AUTHOR, "THE BENEFIT AND THE BURDEN": That's right. Of course, I'm not a legal scholar, but I do oppose the existence of the debt limit. I even testified before the Senate Finance Committee that we should get rid of it. I think it's a dreadful append - leftover from ancient history that simply creates opportunities for hostage taking by Congress, such as the one we're facing right now and in our foreign policy, we don't negotiate with hostage takers for a very good reason and I think that we need to get rid of this debt limit. But I'm perfectly willing to go along with the trillion dollar coin, if that's what's necessary to prevent this hostage from being taken.

ZAKARIA: So, Jeff, take us through the constitutional argument here because the, as I understand it, the point would be the president would say by - to Congress, by choosing to set taxes at a certain level and give us revenues at this level and by choosing to spend at a higher level, you are implicitly authorizing me to go out and borrow money, which I have to do as president to ensure that the laws are faithfully executed.

BARTLETT: Correct. And there is a provision of the 14th Amendment to the Constitution, which one could argue implies that the president has to pay the debts. And he could simply ignore the debt limit to ignore the law and simply order the Treasury bonds to be sold. Interestingly, the Obama administration, Jay Carney, the press secretary, has ruled out that approach. He has ruled out the simply unilateral use of the 14th Amendment.

ZAKARIA: Is the 14th Amendment - a weak argument? Would it?

BARTLETT: I think it's a lot more ambiguous, whether the president has that authority. That would be something that he would be arguing is implicit in the 14th Amendment, but it is far from obvious that that is one of his powers. The coin is a very specific power, granted to the Treasury Secretary in a law passed by Congress and signed by a president many years ago. So, I think just on a strictly legal basis, he'd be on a lot firmer ground, if he does the coin, than if he did the 14th amendment approach.

ZAKARIA: Bruce, you, again, predicted that this would be the big fight. That the fiscal cliff would not be the real issue. The debt ceiling would be. You see this as taking us close to the brink, again. Could it take us over the brink?

BARTLETT: Potentially. Keep in mind that we have two other -- in addition to the debt limit. We have, in effect, two other fiscal cliffs approaching. One is the appropriations bills for 2013, which have not yet been finished and we'll have a government shut down unless they have, unless those bills are enacted and the second is the $1.2 trillion sequester, which triggered the fiscal cliff, but was only delayed by two months and that runs out, as well. So, we have the debt limit, the sequester and the appropriations, all essentially coming due at more or less the same date. Sometime next month. And my assumption is, and I guess everybody else's is, is that these are somehow - whether they're all be rolled in together into one massive punt the ball down the road bill.

ZAKARIA: Jeff, if any of this does end up in the Supreme Court, you know, let's say the administration does some kind of legal maneuver, what's the history of this? When the court faces an executive legislative battle, do they say this is political, this is not constitutional?

TOOBIN: Yeah, most of the time in circumstances like this where you have the president and the legislative branch fighting, as they often have throughout history. The court really tries to stay out of it and says, look, this is, this is a political question. It's not a legal question. And we're not going to get involved. One of the very unsettled legal issues here, is you know, we talk about the legality of the coin or of the 14th Amendment. There is a legal doctrine called standing, which is who has the right to sue? And it's far from clear that anybody has the right to sue and challenge it. So, yo know, we can have a discussion about this. But, frankly, if the president does either of these things, it probably would never even be, be decided by a court, that a court would simply say, look, this is nobody has standing to challenge this. It is a political issue. You political branches figure it out, we're going to stay - we're going to stay uninvolved.

ZAKARIA: Which means the court is essentially telling Congress, if you think this is such a bad idea, you're trying to impeach the president.

TOOBIN: Exactly. And that would be the remedy, unlikely, but not any sort of the Supreme Court wagging its finger and saying, you can't do that.

ZAKARIA: All right, for everyone who had thought that we had gotten through all of our crises with the fiscal cliff. Happy new year. Thank you, Jeff Toobin, Bruce Bartlett, we will be right back.


ZAKARIA: The Tube, London's underground celebrated its 150th birthday this week. It started with just a four-mile stretch and is the oldest subway system in the world. That brings me to my question of the week. Which city can claim the biggest subway system in the world measured by length? Is it, A, Beijing, B, New York, C, London or D, Moscow. Stay tuned, we'll tell you the correct answer. Go to for more of the "GPS Challenge" and follow us on Twitter or subscribe to us on Facebook. Also, remember, if you miss a show go to The audio podcast is free, or you can buy the video version.

This week's book of the week is an eBook. David Frum's "Why Romney Lost." Frum as a conservative who believes that President Obama was vulnerable and could have been beaten. But he details how the Republican Party blew it. Trapped in a cocoon of TV commentators and consultants who fed it fantasies. It is very smart and it is quite short.

Now, for "The Last Look." Much has been made of the signature of Jacob Lew, who, if confirmed, will be the nation's next Treasury Secretary. And this could be on our currency. But on deeper examination, it seems that might never happen. Tim Geithner's regular signature is this, but he says he changed it to this more legible version to sign your dollar bills. We asked a few of our favorite formers if their signatures on green bucks were their regular signatures or whether they have changed them. Robert Rubin says nobody ever asked him to do so, but he, too, changed his signature for public consumption. Here's John Hancock (ph) for correspondence, and this one for cash. James Baker's autograph seems pretty consistent since high school, as evidenced here on a speeding ticket from a youthful indiscretion. In his later years you can see he altered his penmanship on his middle initial and switched from Junior to III. Paul O'Neill says, absolutely not. He would not change his signature, even for the mighty dollar. By the way, Secretaries Rubin, Baker and O'Neill will all be on a GPS special tonight called "Memo to the President: Road Map for a Second Term." They and the whole host of others will offer advice to the president on how to navigate the gridlock in Washington, the economy, foreign policy and more. That is tonight at 8:00 p.m. and 11:00 p.m. Eastern and Pacific right here on CNN.

The correct answer to our "GPS Challenge" question was, a, Beijing. It is 442 kilometers long and has nearly 6 million daily users. The second biggest subway system in the world is also in China. It is Shanghai. London and New York come third and fourth respectively. Thanks to all of you for being part of my program this week. I will see you next week. Stay tuned for "RELIABLE SOURCES."