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In the Arena

Pres. Obama Chides Congress on Debt Ceiling; Fire Rages Near Los Alamos Nuclear Lab; U.S. Troops Attacked by Taliban

Aired June 29, 2011 - 20:00   ET

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

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

Tonight's lead story, is the president leading? Barack Obama is a consensus man, a guy who does his best to get everyone together on the same page. So at a moment like this when we're facing a crisis -- and make no mistake, the debt crisis is real, folks. It could threaten our national economy and even our national security.

At a moment like this, can he get the job done? Can he get tough and wrestle this crisis down? Can he be a leader?

He held a press conference today, and I guess it was meant to show his command and his power, but there were no new ideas, no lines in the sand. Quite frankly, it was not a mission accomplished.

In a moment, we'll hear some strong and surprising criticism of President Obama, but first a look at the other stories we're drilling down on tonight.

(BEGIN VIDEO CLIP)

SPITZER: America's unions fight for survival. Sandy Pope wants to lead the teamsters but she has to beat a powerful incumbent whose name is Hoffa. She says unions must change or die.

And showdown on Capitol Hill. With the debt limit deadline only weeks away, both sides are negotiating in secret. E.D. Hill asks Senator Jeff Sessions, is this the way to get the deal done?

SEN. JEFF SESSIONS (R), ALABAMA: This is really wrong and I object to it.

SPITZER: Then same-sex marriage. President Obama has flirted with the idea. But today, did he actually come out in favor of it? We'll ask why he's trying to have it both ways.

(END OF VIDEO CLIP)

SPITZER: Now for the front page. In almost precisely one month America will not be able to pay its bills. At his first press conference in nearly four months the president issued a warning. The yellow light, he said, is flashing on the August 2nd debt ceiling deadline. Responding to criticism that he's been AWOL on the issue, the president fired back, blaming the crisis on those slackers in Congress. Take a listen.

(BEGIN VIDEO CLIP)

BARACK OBAMA, PRESIDENT OF THE UNITED STATES: They're in one week, they're out one week. And then they're saying Obama has got to step in. You need to be here. I've been here. I've been doing Afghanistan, and bin Laden and the Greek crisis. And -- you stay here. Let's get it done.

(END OF VIDEO CLIP)

SPITZER: Tough words, but does anyone believe he can resolve the crisis?

Joining me now from Cambridge is senior political analyst David Gergen and from Washington, chief political analyst Gloria Borger.

Gloria, let me start with you. You wrote a column on CNN.com today that was scathing. You basically said, you know, there are no grownups in the room and you took some hard shots at the president. Why?

GLORIA BORGER, CNN SENIOR POLITICAL ANALYST: Well, because the president was calling for leadership, and I think he's right to call for leadership from Republicans and Democrats in Congress. That's easy. But also he's got to lead, Eliot.

I mean I think we're heading into that 11th hour, as he put it, the yellow light is flashing. And it seemed to me that today was a political performance. It was a good political performance if you're a Democrat and you want to accuse Republicans of being for the rich and Democrats of wanting to save Medicare and all the rest.

But I think that what worried me, quite honestly, was when a president goes out this way and really attacks the other party it gives you a sense of how the deal inside the room could really be in the process of collapsing. I mean this doesn't help House Speaker John Boehner get back to that negotiating table, really does not.

SPITZER: Yes, Gloria, certainly none of the rhetoric today is going to make the Republicans cozy up to the president and say, gee, let's cut a deal with him.

David, let me go to you on this. What do you think he got wrong? You wrote a column also that was reasonably critical not only of the president but also of the Republican leadership. What should he have done differently?

DAVID GERGEN, CNN SENIOR POLITICAL ANALYST: Well, let me start with a proposition and I think Gloria is right. One had a very distinct sense today that they are not making the kind of progress the country needs in these talks or he would not have taken the tone he did today. BORGER: Right.

GERGEN: You don't go in -- if you're in -- if you're in a critical moment when you're trying to build trust, you don't go public and scold the other side and issue all these sort of snide insults about them. You know, you're more -- you're warmer, you're more sort of constructive.

And I think -- I think the president, seeing that things are not going well, has turned to sort of if he can't make them see the light, make them feel the heat. And the scolding I think is going to alienate the Republicans.

I do think he's playing a double game here. He's going to alienate the Republicans inside the beltway and I think it makes it harder to get a deal but it probably plays pretty well with the country. I think a lot of people will buy into some of the arguments he made today about the Republicans.

SPITZER: You know, David and Gloria as well, but what's interesting, though, is you're right. He was certainly -- there was an edge to it. There was almost a snide quality in his commentary about the Republicans.

BORGER: Yes.

SPITZER: But what's interesting he also did not draw any lines in the sand on some of the tough revenue issues, for instance, so he's getting criticized from the progressive side as well for not being tough enough and being very clear that unless revenue is part of this deal, there will be no deal.

Does that criticism also resonate with you?

BORGER: Yes, I think --

GERGEN: Gloria --

BORGER: Well, look, I think -- look. I think it does. I mean what we heard from the president was sort of the campaign talking points that we've heard from the Democrats on Capitol Hill, which is, you know, you don't want to end oil subsidies, the corporate titans are still going to get their jets, you know, which by the way, if you took back that tax break would save you $3 billion over a 10-year period.

That's not going to solve our fiscal crisis. So I think in a way -- I mean Nancy Pelosi was thrilled with what the -- the president said today. But the people who really want to get a deal done -- and by the way, that includes people on both sides of the aisle, kind of were scratching their head and saying, well, you know, this makes the job look that much more difficult.

SPITZER: You know, David, let me ask you this. It struck me as I was listening to the press conference, I don't know a whole lot more now about what the president really wants us to do on entitlement reform.

BORGER: Right.

SPITZER: Or defense cuts or on the revenue side than I knew before the press conference. And on the critical issues, has he informed us about what his reason to judgment is on any of the most serious issues yet?

GERGEN: Eliot, I think this is a broader issue. And on the overall issue of approaching the debt crisis, I don't think the president has really done the job of leadership that's expected of a chief executive. And that is to explain to the country just how serious this is. How tough the trade-offs are, how tough the options are. And prepare people for something serious.

He really has not laid the groundwork in the public mind for reforming Medicare or Medicaid and certainly not Social Security. He has not told us.

Gloria is reporting tonight that she's hearing from some sources that her sources that he may want to hold defense flat and freeze defense spending. Well, he hasn't told the country that. And ordinarily what we look to is a president who -- you know, who leads from out front.

And I think this whole process of leading from behind, this famous phrase that came from a White House aide who ought to be fired, you know, for political malfeasance, is I think becoming to really haunt him and the way he sort of gets things done.

White -- you have to walk away from this press conference today thinking we're a long way from a mega deal here. It looks like a patch at best.

BORGER: Well, you know, it's the same problem that he had with health care reform. He waited too long to kind of jump in the middle of it. He let Harry Reid and Nancy Pelosi -- two of the most unpopular politicians in America essentially -- do the health care bill.

And I think in this particular situation, one of reasons the president may not have told us all there is to know about what happens if we default is that he probably didn't want to start kind of a global scare, right, about -- because his words matter?

He described it today -- what was interesting to me was he called it a jobs issue and that was sort of one key to me that this was political because it's all about jobs as you head into an election.

SPITZER: Gloria --

BORGER: So he was turning this into that, which of course it is in one sense but that's not all it is.

SPITZER: Let me disagree with you. That's the first thing you've said that I actually don't agree with. I think using the jobs argument is correct and important because I think that is one way that he can explain to the public that the economic ramifications of this go beyond just unsettling Wall Street.

There may be many --

BORGER: Right.

SPITZER: And as hugely important as that is, there may be people out there who kind of say -- shrug their shoulders and say, who cares? But if they understand --

BORGER: But I -- do you think he underplayed it? Do you -- I mean I --

SPITZER: Look, I would have done it very differently but that's not the issue. David --

GERGEN: Yes, I would have -- Eliot, I actually think that he ducked telling us what the real consequences of default are and he should have laid it out. I don't know why he's so scared of spooking everybody.

The markets know how serious this is.

BORGER: Right.

GERGEN: You know, everybody on Wall Street understands just how serious it is. The IMF issued a strong statement today about severe consequences if we don't do this. What the president needs to do is connect up his criticism of the Republicans and sort of -- you know shame them into joining up a little bit on taxes and then really make it clear, hey, guys, if we don't do this, we're going to pay a huge price and you guys are going to take us over the side. We could have a second recession here.

BORGER: Well, you know, in a way --

SPITZER: Gloria --

BORGER: But in a way I think he was trying to do that. He was sort of trying to be the grownup in the room and look at these people in Congress, except he was really just talking about Republicans.

SPITZER: Gloria, I want to give you the last word because you made an important point in your column, one of several, which is that the tax implications, the revenue boosts that he wants.

BORGER: Yes.

SPITZER: We're going to look at loopholes. Closing those loopholes, he's talking small bore stuff.

BORGER: Well --

SPITZER: As you said, taking away the tax deduction for corporate jets isn't going to really have an impact on our deficit. He's -- has not been talking about the really tough loopholes -- mortgage deduction, charitable contribution deduction, the thing -- things capital gains that Bowles-Simpson talked about, the things that would have a general revenue effect.

BORGER: OK, but those are things -- those are things, Eliot, that will never pass the House of Representatives.

SPITZER: Correct.

BORGER: And one thing Boehner said today, which is absolutely true, is that you have to work within the realm of the possible and House Republicans, you know, just aren't going to do that. So maybe there's a possibility, someone said to me on the Hill, a Republican, who said maybe we can agree that we're going to do tax reform and get rid of those loopholes at some point in the future, but we can't do it right now.

SPITZER: All right, David Gergen, Gloria Borger, thanks as always.

Fortunately you're not -- this issue will not disappear tonight. We will continue this conversation in days and weeks ahead.

Coming up, high winds and wildfires continue to rage in Los Alamos. I'll ask a security expert is the nuclear lab in greater danger than ever? Stay with us.

(COMMERCIAL BREAK)

SPITZER: Imagine a nuclear facility on fire. Well, for the fourth day, a fire is raging near one of our country's three nuclear weapons factories. The fire has now scorched almost 70,000 acres of forest, and it's crept right up to the south end of the Los Alamos National Laboratory, home to thousands of barrels of nuclear waste and an estimated three metric tons of highly radioactive weapons grade plutonium.

CNN's Jim Walsh has been watching the progress of the fire closely.

Jim, welcome.

JAMES WALSH, CNN CONTRIBUTOR: Good to be with you, Eliot.

SPITZER: Well, you know, I'm -- it's great to have you back on the show. But whenever you're here, you're talking about nasty stuff. You know I'm not sure I want you on the show.

What is at risk in Los Alamos?

WALSH: First of all, you're not the first person to have told me that, unfortunately.

The risk here -- and I will say we should start off by saying that as of today, the latest news on this is that the winds have shifted. They are now pushing the fire back in a different sort of direction. That's good news. Of course winds are fickle, they can change. But as of right now we've seen a slight improvement in the situation.

I guess the danger is twofold really. One is that if you had the fire reach on to the facility and reach some of the buildings, there might be an environmental problem. That there might be a low-level waste or other hazardous materials that would get burned and then float up into the atmosphere.

And then the second sort of danger is - you know this is a nuclear weapons laboratory. This is one of three places in the United States of America that spends its time building and maintaining the integrity of a nuclear stockpile. And so environmental issues aside, if there were important facilities that were lost at the lab that might have implications for national security.

So those are the things that people are looking at. It's more unlikely than likely that this will happen, but you know, it's not zero. It's a possibility that's in the game.

SPITZER: Look, you can't look at Fukushima and what's going on at the nuclear facilities, and the Missouri River and say, gee, bad things necessarily are going to happen, but it seems that the unexpected, the unplanned for is coming up to bite us in the back every time we get near these nuclear facilities recently.

What is -- what is it -- what is the unknown unknown here that we haven't thought about? With Fukushima it was a tsunami on top of an earthquake and a convergence of things that suddenly created this terrorist situation.

What do we have to really think about here that could put thousands of barrels of plutonium in a situation that frankly they shouldn't be in?

WALSH: Well, I think those barrels of radioactive waste that you referred to, they're not all plutonium, they're a mix of different things but there's definitely plutonium on the site. That's where they manufacture plutonium into pits. Most of that is in sealed concrete buildings.

But your question is a fair one. And particularly given the past where we've had plans and the plans didn't work. Well, the good news here is about 10 years ago, Los Alamos had another big fire and it was a near miss. And the great thing about near misses is that it focuses the mind. It gets you focused on the problem. So they have had drills.

They have bought new equipment. They've come up with new plans. They have a bunch of stuff in place. They have done a bunch of things to try to deal with the situation. The problem is a plan is a plan. And you don't want to run that experiment because once you -- you know, have to face the reality of a major fire sweeping through Los Alamos, you're going to discover things that the plan didn't take account of. We don't know what those are, but I guarantee that they're there. So that's the problem. They have worked this problem -- you know, the fire chief, the lab, everyone involved. This is, after all, a federal agency -- I mean a federal facility of supreme importance. So people are prepared for it, but you don't know what you don't know, and you're not going to discover that until you're in the middle of a crisis.

SPITZER: Yes, but that's why -- look, again, this is not my area of expertise, but when you read about barrels that contain nuclear waste that are sitting out there essentially in open space surrounded by tents, canvas tents is what I was reading, it does make you wonder large about our federal and state policies about nuclear waste disposal.

I mean this has been the Achilles heel of the industry, whether it is for power in the private sector or weapons generation in the public sector. And frankly, there's more waste in the weapons creation sector than in the private sector. We clearly are not doing anything close to what we should be doing in terms of waste disposal for all this nuclear waste.

WALSH: Eliot, you're absolutely right. You put your finger on the big, long-term policy issue that had stared at us in the face for some years and it continues to be an issue. Now as we deal with this today, there are plans in place. So you've got those barrels of low- level radioactive waste. They're cleared out around them, so there's no fuel for the fire.

That doesn't mean a fire can't jump at that area, but they've had -- they've taken some precautions. They have a backup plan to spray them with a foam, a sort of rubber-like foam that would increase their fire retardancy.

But again, yes, this is a problem and it gets to the issue of disposal of waste, nuclear waste of all kind, low level and high level radioactive waste. These barrels were actually sort of waiting to be transported to some other interim disposal facility, but we don't have in this country one place where all the nuclear waste goes and is secure.

That was supposed to be Yucca Mountain. That fell apart as an option politically and otherwise and so we just keep creating the stuff with no place to put it.

SPITZER: You know, Jim, you said the critical word. You said they were waiting to be transported to another interim facility. Everything we've done with respect to nuclear waste has been interim. None of that reflects the sort of planning you need for something as -- potentially dangerous as this radioactive waste.

Anyway, Jim Walsh, always -- despite what I said before, always great to have you join us.

(LAUGHTER)

WALSH: Thank you, Eliot.

SPITZER: Coming up, we're leaving Afghanistan eventually, but we're leaving behind a mess. As Kabul recovers from last night's hotel attack, I'll ask a witness just how big is that mess.

(COMMERCIAL BREAK)

SPITZER: President Obama just announced the drawdown of U.S. troops in Afghanistan. One reason, the improved security conditions. Then came yesterday's suicide attack that killed a dozen people in a six-hour siege at Kabul's Hotel Intercontinental.

Dutch journalist Bette Dam was in the middle of the chaotic scene last night. I spoke to her a short time ago and she explained that stability in Afghanistan is as complicated as ever.

(BEGIN VIDEOTAPE)

SPITZER: Bette, thank you so much for joining us.

BETTE DAM, INDEPENDENT JOURNALIST: Yes, thank you for having me.

SPITZER: You have been there, you have studied this dynamic. There is some question, is it the Taliban, is it the Haqqani, is there any wisdom that you can shed on who actually is responsible for this?

DAM: The problem here is actually a political conflict between all these groups. One day it's the Taliban, the other day it's Haqqani. Sometimes even groups linked to the Karzai government are involved in violence. And that is what the real problem is.

We were talking about, was there enough security for the Intercontinental Hotel? Maybe that's not the right question. The right question is who is in charge here in Afghanistan? You know, the police, for example, is a very corrupt institution here. The minister is only thinking about his own projects and his own friends here in Afghanistan, so I'm not surprised that like nine insurgents can infiltrate a hotel like the Intercontinental yesterday.

It can happen any time soon. You can have a lot of barbed wire, you can blast walls, everything, but in the end it is a political solution and not a military one.

SPITZER: You have written a powerful column in which you argue just that. You say that really the issue here is not a physical security problem, it's the breakdown of a civil society where corruption is so rampant that the members of the government themselves almost generate this violence because everybody is simply looking for money and the corruption runs so deep.

Is that view that you just articulated shared by people within Afghanistan in a broad level?

DAM: Yes, definitely. That is shared here in Kabul among many Afghans. It's in the end a country -- who is leading the country and who is powerful. And nowadays, that's very unclear. Karzai only thinks about his own network and there are many other groups here who do the same, have weapons, trying to use the police for their own goals or have their own militias nowadays. On the other side you see here an ISAF operating mostly looking at a military solution for the conflict, using their soldiers to fight their way through Afghanistan.

And well -- and what we hear here is that this is not the solution. You have to look at the government, who is in charge of the police, who has to be in charge of the security.

SPITZER: All right, Bette Dam, thank you so much for joining us.

(END VIDEOTAPE)

SPITZER: It's easy to forget what it's like day in and day out for the Americans who are fighting the Taliban. In eastern Afghanistan on the border with Pakistan, it's not politics or corruption, but brute force that wins the day. It's here that the Taliban terrorists launch daily attacks against American men and women.

CNN's Nick Paton Walsh got caught in just such an attack. You'll want to watch this.

(BEGIN VIDEOTAPE)

NICK PATON WALSH, CNN INTERNATIONAL CORRESPONDENT (voice-over): Everywhere you look here in Kunar on Afghanistan's eastern border, the choices aren't good. Outpost Pirtle King is caught between hills full of Taliban. If the Americans leave, militants from Pakistan will flow through the valley. And if they stay, then every few days, this happens.

The mortars hit the base. The last attack was long enough ago there's panic. They're worried the Taliban have been preparing a big one.

(On camera): After days of nothing, the insurgents now have finally amassed around the compound and beginning to attack from all sides.

UNIDENTIFIED MALE: Come on, hustle up. Grab it and be ready.

N. WALSH (voice-over): They use mortars first, aiming for Taliban dug into the hills, but the incoming fire is very accurate here.

UNIDENTIFIED MALE: Go, go, go, go, go.

N. WALSH: They arrange cover from heavy machine guns.

UNIDENTIFIED MALE: Grab a round. As soon as they go cyclic, drop it.

N. WALSH: But the bullets are too close. Locals scatter. Just before huge American fire power has the last word.

Four massive airstrikes across the hills and then the Taliban fall silent. America knew why it came here but isn't sure why it's staying.

UNIDENTIFIED MALE: Can we get like a police call for like cigarette butts?

N. WALSH: Ten minutes later jets swoop in to strafe the hills. A show of force, but the Taliban are now either gone or dead. At least five killed by the soldiers' count.

The next morning it starts again. Mortars and rocket-propelled grenades pound the base.

(On camera): For the second time in just 15 hours the base is under attack, much heavier this time and it appears they have taken casualties.

(Voice-over): More airstrikes. This valley is vital strategically but doesn't want to be conquered. The medics fly in to collect one soldier. His injuries are not life-threatening.

There's no real victory to be had here, though. Just the question of how long they will stay growing louder.

Nick Paton Walsh, CNN, Kunar, Afghanistan.

(END VIDEOTAPE)

SPITZER: Wow, powerful and disturbing footage.

Coming up, the president is passionate about equality, but he still doesn't say he's in favor of same-sex marriage. Is it merely a choice of words or a calculated political decision? Stay with us.

(COMMERCIAL BREAK)

SPITZER: Now for tonight's "American Issue" segment. President Obama steps carefully around the issue of gay marriage. Tonight, he hosted a White House gay pride reception and he sounded a lot like a guy who supports gay marriage.

(BEGIN VIDEO CLIP)

OBAMA: The progress led not by Washington, but by ordinary citizens. It's playing out these legislatures like New York -- it's playing -- it's playing out in courtrooms. It's playing out in the ballot box, as people argue and debate over how to bring about the changes where we are creating a more perfect union.

(END VIDEO CLIP)

SPITZER: A more perfect union. It sure sounds like maybe he's finally taking a stand. Joining me now is L.Z. Granderson. He writes on gay issues for cnn.com. So he keeps inching up to it. The press conference today, you kind of thought maybe he was going to say something for same-sex marriage. He never quite says it. Why?

What's the calculus that goes behind this and where do you think he really in his heart of hearts, what does he think about this?

LZ GRANDERSON, CNN.COM OPINION WRITER: First of all, I think in his heart of hearts he has no problem at all with marriage equality. I do believe that the survey he did when he was running for Senate in Chicago came from the heart because he was running for a very finite number of people.

As it got bigger, as he became more national, he decided to play politics and sacrifice his true feelings. Why doesn't he say it? I think because the sound bite is a pretty powerful weapon.

I think I could hear Rush Limbaugh right now playing that over and over and over again to his base, I support same-sex marriages, and I don't think he wants to give him that.

SPITZER: Then let me ask you this tough question. Here you have the first African-American president who stands for the notion that we as a people can overcome discrimination, and yet you're saying that for political reasons he's unwilling to be honest about his true beliefs about what many people believe is the single greatest civil rights issue of the moment?

GRANDERSON: Yes.

SPITZER: Is that not deeply problematic? Does that trouble you?

GRANDERSON: Yes. Yes, it does, but it's politics and the entire field of politics troubles me.

SPITZER: Wait a minute. In the 1940s, '50s, '60s, Jim Crow, after Brown versus Board of Ed, we would have heaped a program on people who for political reasons did not speak honestly about the issues of desegregation.

GRANDERSON: I agree.

SPITZER: So does he deserve to be harshly criticized? If he believed he's for same-sex marriages, shouldn't we be deeply critical of him?

GRANDERSON: This is what we know of the president, right? He hasn't said those exact words, but look at his resume. Look at what he has done.

It's not as if he is against marriage equality either. He's sort of doing what he's been doing in a lot of other areas, which is leading from behind, right?

SPITZER: Which is not - the discussion earlier in the show, maybe it's not leadership, but let me ask you this. He also has said a couple of times or said repeatedly, said it a couple of times today, he has fulfilled his promise to the gay and lesbian community because, he says, he repealed "Don't Ask, Don't Tell."

He has refused, or had his attorney general refuse to defend the Defensive Marriage Act, an act that many people rightly in my view find deeply offensive. Is that enough?

GRANDERSON: He has fulfilled a checklist of political things he wanted to accomplish. He has not fulfilled the morality aspect of it, which would be coming out and saying I support marriage equality.

That's actually just as powerful, if not more powerful than the little checklist that he's been going down. I'm not trying to downplay what he's done.

Repealing "Don't Ask, Don't Tell" has been great, but you can't underestimate how powerful it would be for him to say I support same- sex marriage, I support marriage equality. I just don't think we'll hear that before the first debate.

SPITZER: I agree with you. If he hasn't done it now, he's not going to do it between now and the presidential race in my view because why get the risk and disrupt the waters.

But I also believe that for him to fulfill the mandate and the mission and the passionate energy of what his presidency is all about, at some point he's got to do it.

GRANDERSON: Yes, absolutely. I think it would be really smart for him to go ahead and wait until the campaign starts and just when it seems as if he's down and out says I support same-sex marriage.

I support marriage equality, because that will -- it will get some criticism, obviously, for waiting so long, but it will also invigorate his base and I think those are what you need as you get closer and closer to the election.

SPITZER: Let me quibble with one word. It's not going to get some criticism. It's going to get a ton of criticism. There are people on the other side of this issue who are deeply committed to their view that marriage historically.

And they make many arguments, not frivolous arguments, many religious arguments, and as much as I disagree with them, these are people of good faith who are very good, solid people, moral in every respect. They disagree with him.

GRANDERSON: Right.

SPITZER: This would be an earthquake politically for the president to say this. So you've got to understand that it would shatter a lot of China.

GRANDERSON: Absolutely. But here's the thing that those people you talked about don't understand. They're also being played by the game as well. Some of their candidates, some of the people that represent their interests, they're also in favor of marriage equality, but saying what they need to say to get their base saying. Saying what they need to say to play the game.

So I think it's important that we the media talk about that aspect as well, that there have been -- look at Mitt Romney. You know, he's flip-flopping all over the place on this issue.

SPITZER: Mitt Romney flip-flops on every issue. Let me ask you this. Time runs short. Don't you think it is inevitable 10 years from now, 15 years from now that across the nation with some exceptions, perhaps in some states, civil unions have been replaced by same-sex marriage legal.

Because when you look at the polling, I think it's like 70 percent of folks below the age of 35 say of course it should be legal. So isn't this a generational divide that reflects a cultural shift and at some point the United States moves towards same-sex marriage?

GRANDERSON: Absolutely. I fully expect to be a grandfather in a marriage with my partner who will then be my husband. I fully expect that.

And I also expect that years from now someone will look back at a documentary, look at the politicians, look at the speeches of the president and go why did you wait so long? Just the same way we did with civil rights.

SPITZER: LZ, that is the issue I think he's got to think about in terms of historical play. Shouldn't he get in front of this rather than as you said, leading from behind on this issue as he has on so many. All right, LZ Granderson. Great to have you with us.

GRANDERSON: Thank you.

SPITZER: Crashing through the debt ceiling. E.D. Hill asks a powerful voice in the Senate, is it Armageddon are or just a false alarm.

(COMMERCIAL BREAK)

E.D. HILL: August 2nd, that's the day President Obama says the U.S. runs out of enough money to pay its bills and the country risks setting off global financial chaos, unless Congress raises the debt ceiling. Listen to this.

(BEGIN VIDEO CLIP)

PRESIDENT OBAMA: By August 2nd, we run out of tools to make sure that all our bills are paid so that is a hard deadline. And I want to -- I want everybody to understand that this is a jobs issue.

This is not an abstraction. If the United States government for the first time cannot pay its bills, if it defaults, then the consequences for the U.S. economy will be significant. (END VIDEO CLIP)

HILL: Republican leaders challenge that. They say we're not at a crisis point and that the U.S. can pay the interest on the debt to keep creditors at bay while negotiations continue.

So which is it, global chaos or scare tactic? Republican Senator Jeff Sessions joins me now from Capitol Hill. Senator Sessions, great to see you.

SENATOR JEFF SESSIONS (R), ALABAMA: Thank you, E.D.

HILL: The IMF sent a report to the U.S. government this month saying that not increasing the debt ceiling as soon as possible could cause a severe shock to the global economy. Leader Boehner says the August 2nd deadline is artificial, what do you think?

SESSIONS: Well, I think everybody realizes the August 2nd deadline is a very important deadline. And an agreement to put us on a sound economic course is very, very important. It should be reached well before August 2nd.

My biggest concern is that the president continues to meet with just a few people or his vice president has, and they have proposed nothing.

As week after week, month after month has gone by, as to what they think should be done to change the debt course we are on and propose, thereby raising the debt limit.

We're not going to raise the debt limit unless we change the spending level in our country. It just is not going to happen.

HILL: Here's the sense I get. When talking to Republicans and Democrats, I've come away with the same feeling. And that's that both sides are making a gamble here that it's going to pay off with their constituents.

Republicans that if they refuse to increase the debt ceiling without these cuts, they're going to win with the folks who matter in the voting for them.

And that Democrats feel that if they aren't able to increase taxes in some way to offset this, that they're going to win if they just hold off. And that seems to be a very dangerous stand-off we're heading towards.

SESSIONS: Well, it's dangerous if we don't reach an agreement on legislation that can pass and raise the debt limit. I think we have to do that.

But if the president won't change any course, then perhaps the least dangerous option is that. So it's -- and I think it's -- the president is -- would be running a high risk if he doesn't come forward. Why wouldn't he come forward with a reasonable proposal that could work and that could gain support in the Congress? I can't imagine why he would not.

HILL: Well, I know that VICE PRESIDENT BIDEN got together with the Republicans and Democrats, tried to put something together. That didn't go anywhere.

SESSIONS: In secret. I don't know what that was.

YELLIN: The president now is getting involved. A lot of folks are saying from both sides too late, but hopefully something will happen here. I know that you know the players there as well as anybody.

If you were to put together a group with the president that can get something done, who is it for the Republicans and who is it for the Democrats?

SESSIONS: Well, look, I don't believe this idea that we can send one or two people to the White House and get out a notebook paper and write up a future financial plan for America involving $30 trillion.

I don't think that can be done. I think they need to present it in the regular order as legislation, advocate for it, let's debate it. Let's have amendments. The American people see this process.

Do you think it's healthy -- I'll ask you, is it healthy to do these things in secret, drop them in on August 1st and say it's got to be passed by august 2nd? I don't think that's good. This is really wrong and I object to it.

HILL: Where do you want the biggest cuts to come from? If you were to say, OK, we can really start having a serious discussion if you cut this. Where is that?

SESSIONS: Clearly wasteful Washington spending is where the most cuts ought to be. That's in the non-defense discretionary accounts that have increased 24 percent under President Obama in just the last two years. Defense is up about 2 percent. So this is --

HILL: I'm not a Washington insider, so what exactly is that kind of spending? Because I assume that Social Security, Medicaid, Medicare, and defense, those are the big ones that if you don't mess with them, we're never going to address this problem.

So what's the other one that, you know, Washington is really piddling around with that we could get rid of?

SESSIONS: Well, we don't have to get rid of it, but we've got about 60 percent of our spending in Medicare, Social Security, mandatory spending right there, and defense makes up almost half of the rest.

So we've got huge increases in these other accounts in just the last two years, and it's more than we can sustain. And the president's budget for next year calls for double-digit increases, 10 percent, 11 percent increases in the State Department, the Education Department and the Energy Department.

This kind of thinking is out of touch with reality and we've got to reduce our current level of spending, and it won't mean we're going to zero, it means maybe we're going back to two years, three years ago, what we were spending then.

The country can sustain those cuts and it would save a lot of money. But in addition, we absolutely have to consider and confront our surging entitlements. This 60 percent of money that's out of control and we need to figure out a way to do that in a way that strengthens those programs, not eliminates them.

HILL: Senator Sessions, always good to talk to you, thank you.

SESSIONS: Thank you.

HILL: Stay right there, we have much more coming up.

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SPITZER: Are unions bringing workers together or just driving government bankrupt? As states face mounting deficits, public sector unions have taken pay cuts and had their bargaining rights stripped. Private unions have faced wage give-bangs and decreasing memberships. Is this the end of unions in the United States?

Economist, Peter Morici thinks it should be. He says unions are driving business overseas, but Sandy Pope disagrees. She says the unions need a change in leadership, and she hopes to accomplish that by becoming the first ever female president of the Teamsters.

They both join me now. Welcome to both of you. Sandy, let me start with you. You've got to concede unions have lost the PR battle at a minimum over the last couple of years.

Where has the notion that unions build the middle class, are essential to equity and fairness, where has that notion gone?

SANDY POPE, CANDIDATE FOR PRESIDENT OF TEAMSTERS UNION: Well, we certainly have to bring that notion back. We need to communicate a lot more with our own membership in our unions, but also have our members talk to their neighbors and the people in the community and reach out, because really people should be demanding what we have, not the other way around.

SPITZER: Well, let me follow up on that. As you look across the national politics and you see state after state taking away public sector bargaining rights, you see private sector unions agreeing to wage concessions.

How do you explain those things when the wealthier are getting wealthier? What do you think has happened to the capacity of union leaders to articulate the need of the middle class that has representation? POPE: I think we have to get back to our roots, back to the members, educate them more about the issues so that they understand where their interests lie, and that just being anti-tax is not the way to go.

That taxes are good when they do things like support our elderly or pay for Social Security and Medicare and things like that and our education system and higher education as well. That's in the interests of everybody. And we need to get that message out to the public and through our members a lot more.

SPITZER: Peter, you have said, I believe, I don't have the direct quotation in front of me, but I believe you have said that unions are a leading indicator of economic decline. Why?

PETER MORICIN, ECONOMIST: I've said that right here on CNN. Where unions have been too strong, industries have fallen into bankruptcy, they have been unable to compete internationally.

You know, several years ago three of the four largest steel mills in America went bankrupt. Everybody said they were uncompetitive and couldn't make steel in the United States.

The real problem was excessive work rules, pension befits that were too generous, health care benefits that were too generous. It was a really miserable situation. The same thing happened to General Motors and Chrysler.

Unions can be constructive, but in recent years they have been fighting such a rear guard action and they have become so radicalized. I mean, listen to the rhetoric.

It's very left wing and it's not very appealing to an American electorate that is just left of center or just right of center, depending on the season. They're just not that way.

SPITZER: Let me interrupt to one second. Put aside the political rhetoric on either extreme of the political spectrum. I want to ask you as an economist and sort of an academic.

Do you disagree with the concept, with the notion of collective bargaining or merely the way certain unions have flexed their muscles in a way that you believe has had negative economic implications?

MORICI: I had dinner recently with the president of the AFL-CIO and I said if people want to have a union, they have a right to vote for one and be represented by one. My feeling is that unions have made themselves irrelevant by being too militant especially in situations where firms are under stressed.

If you look at the contrast between say Nissan and General Motors, there have been several attempts to organize Nissan here in North America. The last time around Mr. Goshen told his workers if you vote for this union, you'll make this plant less competitive and he believed them. You know something, he believed them for a reason because his workers don't want to have happened to them what happened at UAW factories and General Motors.

SPITZER: Let me break in for a second because time is short. Let me ask you this follow-up about that. I just had recently Bob Lutz, the former vice chairman of General Motors on the show and he was harshly critical not just of the union.

But also the executives who agreed to the union contract because he said everybody caved to the moment of flush economic circumstances and we all thought we were too rich.

So wasn't that over -- that exuberance to use Alan Greenspan's phrase, wasn't everybody responsible for that? And in fact in the steel sector, the steel workers contributed to the return of steel to the United States by making significant capital contributions and wage concessions.

MORICI: They have done a wonderful job of the steel workers making that union more cooperative with the new integrated mills and the existing U.S. steel I will acknowledge.

Certainly the open door policy practiced in the steel industry in the '60s and '70s contributed to its decline. Similarly, they're much like politicians, they're elected by boards.

Board are very political and basically look for short-term solutions, much like we're seeing with our budget deal.

SPITZER: Sandy, let me go back to you. The UAW was integral, many people would say and I think it's accurate, to the return of the auto sector to the United States.

When the federal government helped to bail out the auto industry, not Ford obviously, but Chrysler and General Motors, the UAW made significant concessions. Was that the right thing to do?

POPE: Well, I think our focus is wrong. I think we should be looking at reducing the costs of health care. I think we missed the boat on national health care. It costs $1,500 per car less to build a car in Canada than it does here.

The corporations and the unions should be working together to get a much more affordable health care system, like Medicare that's expanded to everybody. I think we're looking in the wrong direction, asking for the workers themselves to give up instead of expanding health care and making it more affordable.

SPITZER: OK. I'm going to go to Peter in one second on the issue of health care costs because I think you're exactly right about that, but I also do want to see if I can get you to answer should the UAW have made the wage concessions it did to help GM and Chrysler come back?

MORICI: Absolutely, they should have made those concessions. SPITZER: Wait, Peter. Sandy, I want your answer on that one.

MORICI: Excuse me.

POPE: I really -- I'm not there and it's hard for me to say as a person from another union. I know that there are times where concessions are necessary and it's very important that the members that the member - you know, having to take these cuts are partners and fully understanding what's involved.

But certainly we need shared sacrifice. If there's an expectation of members having to take cuts, then certainly the corporate executives and everybody all around should as well.

SPITZER: Sandy, fair point. I hate to cut you off. But Peter, let me come back to you. Doesn't Sandy make a critically important point? It was the health care costs at least as much as the wages and that is a systemic issue that isn't a union issue? And you have 20 seconds.

MORICI: The thing is at the UAW there was a systemic issue. We all pay too much for health care in the United States, but they had gold plated health care. If we had national health care, the UAW would have taken a cut in their benefits and wanted an add-on so I never believed that argument.

SPITZER: OK, but Peter, it was health care at large that was making us so uncompetitive. Anyway, we'll continue this debate down the road. Peter Morici, Sandy Pope, thanks for being here tonight. Thank you for watching. Good night from New York. "PIERS MORGAN TONIGHT" starts right now.