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In the Arena
New Rounds of Meetings in Washington; Deals Behind Closed Doors; British Media Scandal Widens
Aired July 11, 2011 - 20:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
E.D. HILL, CNN CONTRIBUTOR: Good evening, welcome to the program. I'm E.D. Hill.
We begin tonight with the debt negotiations and the increasing pressure for both sides to find common ground. And unfortunately just the opposite is occurring. Lines are being drawn even deeper. Both parties are finger pointing and both sides accuse the other of being inflexible.
Well, the bottom line for us is that talks are going nowhere and fast. After yet another round, the president and Republicans announced the ball barely nudged forward. The Republicans are warning Speaker Boehner not to blink and accept any tax increases. Democrats are telling President Obama he must close the so-called tax loopholes.
Both sides seem to be far apart on any agreement. The only thing they really do seem to agree on is that they are the only ones already sacrificing enough.
Take a listen to the dueling press conferences earlier today.
(BEGIN VIDEO CLIP)
BARACK OBAMA, PRESIDENT OF THE UNITED STATES: I have bent over backwards to work with the Republicans, to try to come up with a formulation that doesn't require them to vote sometime in the next month to increase in taxes.
REP. JOHN BOEHNER (R), HOUSE SPEAKER: I want to get there. I want to do what I think is in the right -- the best interests of the country. But it takes two to tango and they're not there yet.
(END OF VIDEO CLIP)
HILL: We're going to have more on the dangerous game being played in Washington. But first here are the other stories we're digging into tonight.
(BEGIN VIDEO CLIP)
HILL: The scandal that won't go away. In Britain, new allegations against Rupert Murdoch's News Corp hacking the phones of a former British prime minister? Even targeting the royal family. Is the sun about to set on his media empire? And she's on the cover of "Newsweek" but is she after the White House or just more attention? I'll talk to the man who wrote the book on Sarah Palin. He says if she decides to run, she can win.
Then pulling the plug on Pakistan. We're holding back hundreds of millions of dollars in aid. Will that make them a better ally or push them into the arms of our enemy?
(END OF VIDEO CLIP)
HILL: Joining me now from Capitol Hill to discuss the top story that we've been talking about, that one that's really critical to all of us, is CNN congressional correspondent Kate Bolduan.
So what's the word there, Kate? Have they had any breakthrough in the negotiations? They just talk, talk, talk, and then seem to plan another time to talk and that's about it.
KATE BOLDUAN, CNN CONGRESSIONAL CORRESPONDENT: And I often feel like I'm just repeating myself. But we have to tell you, there's no breakthroughs really to report this evening.
The meeting at the White House today, E.D., lasted about an hour and 45 minutes. And I'm told from congressional sources that in that meeting the focus was largely today on the framework that had kind of been identified and kind of come to pass in the Biden talks.
These are talks that were bipartisan talks that lasted for weeks but then fell apart. Republicans saying that there was an impasse having to do with taxes. In that package of savings, if you will, that was identified. It was largely had to do with spending cuts. And Republicans, by their math, said that they had come to about $2 trillion plus in savings, but in this meeting, we're told that the president, he disputed their math, if you will, saying that according to his math it was more in the area of 1.7 trillion to 1.8 million in savings which is far away from the 2.4 they're really targeting at this point in terms of savings.
And that's really where they left it, kind of laying it out there on where they stand on this particular talk. While that meeting -- while those talks were bipartisan -- those old Biden talks, E.D. -- they were not agreed to at this point.
And that's really where they left it. And the president said go back to your caucuses, talk to them about where things stand. And we'll have to see where we can move from here, but really, if we had to break it down, E.D., the impasse is really -- comes down to a very simple thing. And at this point I know you know it.
It comes down to Democrats say that if they're going to accept these spending cuts, they have to have some revenue with it, the shared sacrifice that we keep hearing them talk about on the flip. And of course they say no major cuts to Medicare benefits.
On the flip side, Republicans, they are remaining firm and if anything are more dug in today. And the people that I've talked to saying that they -- now is not the right time to be raising taxes on anyone as the economy continues to be floundering. And they are remaining firm on that, saying nothing can pass the House which they need, of course, if tax increases are included, E.D.
HILL: Kate, yes, here's what I'm hearing. And it's really what concerns me the most. I've heard that when you get the president and you get Speaker Boehner in a room together and they chat, they can kind of come up with a basic understanding, but then as soon as they bring in the rest of the folks and they realize the president has to sell to his wing and Boehner has to sell to his, they can't get them in, because they get the ultimatums.
And without people backing off the ultimatums, there's no way to get to the center. And that's the concern that I think a lot of people have and the reason why they never seem to advance these talks.
BOLDUAN: Well, and that is a valid concern, because as we're hearing, bottom line, this -- no debt deal can pass without both Republican and Democratic votes. And that's why there's such an impasse here. Republicans can't do it on their own. Democrats can't do it on their own.
And while we did hear again today coming from the president that they did have good faith efforts and he even complimented Speaker Boehner on really working towards those discussions, what it comes to is this does have to be sold to the rank and file, the people that they're going to be asking to vote for said deal.
And the rank and file are making their voices known. We are hearing -- heard from more people today saying on the Republican side, tax increases are a no go. They can't support it. They don't think it's the way to go. And Democrats remaining firm in their own right saying that any cut to Medicare benefits they cannot support.
These are really philosophical differences that remain between these groups. And I will tell you I'm starting to hear more and more anger, if you will, E.D., from some members that this negotiation, this deal like other deals in the past is being negotiated behind closed doors as people very frustrated that this is not being debated in the open because they know very well that they're going to be asked to vote for something that could be a very tough vote and could frankly come back to haunt them.
HILL: Absolutely, especially with the election season right around the corner.
BOLDUAN: That's right.
HILL: All right.
BOLDUAN: Unfortunately that is of course where people have to keep their eyes. Election is right around the corner.
HILL: Yes. Thank you, Kate, very much.
BOLDUAN: Thanks, E.D. HILL: That really is it. You know they may have great intentions but they realize there's the reality of getting reelected. And that is coming up pretty quick.
My guest tonight is a senator from Wisconsin, and unlike most, he's not a career politician. As a kid, he worked as a fry cook. He went to night school to get his MBA and he started a business, one that actually hired people.
So this is a guy who's actually had to balance budgets. And he says Washington should operate more like a business.
Senator Ron Johnson, welcome.
SEN. RON JOHNSON (R), WISCONSIN: Well, E.D. Thanks for having me on.
HILL: First off, you know I look at this I think like a lot of Americans, I've got to go home. If I don't pay the phone bill, the phone gets cut off. If I don't pay the mortgage, I get kicked out. You know, if you don't pay the electricity, the lights don't go on.
How come Washington seems to think they can stop paying any kind of bill or not have enough money to pay it and just keep on spending?
JOHNSON: Because there's never been any limits here in Washington, which is why we're facing a debt that's almost equal to the size of our economy, $14.3 trillion.
And, E.D., you know, my objection to this process that's being conducted behind closed doors isn't about the election. It's just not a way to conduct business here.
HILL: Yes.
JOHNSON: The fact of the matter is, we're talking about a $3.7 trillion a year budget. And that is not something that should be conducted -- you know decided on in the course of a couple of meetings between a few people. This is something that should have been worked on for months in detail, fully vetted through the committee process.
It should have been -- it should have gone through the regular order, a process where the American people could see what's happening, what's being proposed.
HILL: But they haven't done that. I mean you and I talked about this last week. And you said to me this is absolutely shameful that they are doing it this way. But this is Washington. This is kind of -- you know, the pig we're stuck with right now.
So you've come up with an idea. You've got a plan to keep the sky from falling in. And you call it your debt ceiling budget. How does that work?
JOHNSON: Well, it's really not a plan in terms of actually trying to live under it. All I was trying to point out is the administration I believe has been incredibly irresponsible trying to scare the American people, trying to scare the markets.
And all I was trying to point out is it wouldn't have to be a crisis if they weren't scare mongering, it wouldn't have to be a crisis if you actually plan on living within your means for a short while until you actually structurally fixed our federal budget. But I mean the problem here is this business as usual in Washington is bankrupting America.
And we've got to stop conducting business as usual. We need to start living within our means. And there's actually a pretty simple solution. The House is working on it right now. It's called cut, cap and balance. You cut a little bit of spending off from the next couple of years' budget. You pass a law that puts caps -- puts us on a glide path toward establishing a balanced budget, and then you actually increase the debt ceiling but it's contingent on sending a constitutional amendment to the states, to the American people, to balance our budget.
Yes, bottom line, let's let the American people decide if we want this fiscal discipline. I think the American people would decide to put discipline here in Washington.
HILL: Well, I'm with you, because I like fiscal discipline. I like people spending only as much as they can afford to. However, I also recognize that we're in a very difficult situation right now. So some folks would say, look, the concept is great.
However, at this point when we're trying to create jobs, when we're trying to figure out how to get ourselves out of this economic nightmare, we can't afford to have all those cuts right now, especially in programs. More people are dependent on them. How do you respond to that?
JOHNSON: Well, first of all, what people are talking about, even the Paul Ryan budget only cuts about $89 billion in the first year. The Toomey budget cuts a little over $100 billion. That's about 2 percent of our entire federal budget.
In the business, if you ask a department head to cut 2 percent off their budget, they wouldn't even break a sweat doing that. So when all you -- when you hear about all these huge cuts, all we're really talking about is reducing the rate of growth and spending.
The president's budget goes from about $3.7 trillion up to about $5.7 trillion over 10 years. That would add $12 trillion to our debt in 10 years. The Ryan budget goes from about 3.5 trillion up to about 4.7. You're still increasing spending. You're just doing it at a slower rate.
HILL: OK. What you're saying -- what you're presenting there sounds reasonable. If it is so reasonable as you make it appear, why haven't they agreed on anything?
JOHNSON: It is reasonable. They haven't agreed on anything because it's business as usual in Washington. And let's face it, the Democrats want to defend all of their spending. They like the fact that the federal government right now spends 25 cents of every dollar of our economy. They want to defend that.
What we're saying is let's cap spending over a long period of time. Nobody is talking about cutting off the government and you know going to a balanced budget immediately, but over a glide path. Let's say 10 years, bring spending down to our long-term revenue generation percentage of about 18 to 19 percent.
That's how you create a balanced budget. That's how you live within your means. I think that's the type of spending discipline. Certainly I was sent here to enforce on Washington. I believe the American people would support that. And all we're saying is, Mr. President, we'll increase your debt ceiling as you've requested, just work with us to pass a constitutional amendment to the states and let the people decide.
I think that's pretty reasonable. That can be done very quickly. We wouldn't have to worry about talking about a crisis.
HILL: All right. Senator Johnson, thank you very much.
JOHNSON: Thanks for having me on.
HILL: We're going to get on the frequent speaking program, I guess, because we've been talking about this budget so much. I like talking to you. I'm hoping this thing gets done soon, though.
(LAUGHTER)
JOHNSON: So do I, E.D. So do I.
HILL: All right. Thank you very much.
We are going to continue discussing the stalemate with two guys -- you know, they know Washington inside out. They know what it takes to get deals done.
James Carville, David Gergen -- they'll join us later on.
Now coming up next, just when you thought that phone hacking scandal in Great Britain couldn't get any weirder, there are shocking new allegations. Who's been compromised? And how --
(BEGIN VIDEO CLIP)
Becky Anderson, CNN INTERNATIONAL ANCHOR: Now it comes to light there could be as many as 4,000 people whose phone messages have been listened to.
(END OF VIDEO CLIP)
HILL: Who's been compromised? How that threatens one of the world's great media giants? That when we come back.
(COMMERCIAL BREAK)
HILL: "In Depth" tonight. New allegations in the Murdoch scandal. After revelations that journalists tapped into phone -- private phone messages of celebrities, the royals, a young murder victim and more, media mogul Rupert Murdoch shut down his prized "News of World" tabloid.
But that hasn't ended the trouble. Today former British Prime Minister Gordon Brown accused two other Murdoch publications of illegal acts. With News Corp's stock dropping and its bid for a satellite company at stake, could the biggest victim of this scandal turn out to be Murdoch himself?
CNN's Becky Anderson spoke to me just moments ago from London.
(BEGIN VIDEOTAPE)
HILL: So Becky, every day we seem to get a little bit more and it seemed as if Rupert Murdoch had sort of stemmed the tide there by announcing that he was shuttering "News of the World."
Then today, even more. What's happened?
ANDERSON: Yes. It's quite remarkable. If he thought that he could fly into the U.K. at the weekend, draw a line onto this whole saga by closing down Britain's biggest selling Sunday tabloid, the he was absolutely wrong.
And this is a powerful man. Don't forget today. And if you blink today, E.D., you missed part of this story as things just grew and grew and grew. What we've learned today is that Gordon Brown, the former prime minister, believes that his phone was hacked by journalists at the "News of the World" and indeed that journalists at other papers within the News International camp, as it were in the "News of the World" was just part of a number of newspapers that News International own.
But journalists from other newspapers tried to block information from his accountants possibly a bank, and possibly his lawyers. And part -- and perhaps the worst of this is that journalists at one of these newspapers tried to access information about one of his children, and they only know this because at some point, over the past few years, he was wronged by one of the newspapers to say we believe your child has cystic fibrosis.
I mean a really, really said and appalling turn of events for Prime Minister Gordon Brown and indeed for News International. This has extended outside of the British tabloid newspaper now that was closed out at the weekend. Now we're talking about News International.
HILL: You know the wave that the business operates over there seems to be very different than the way things operate here. And it seems that there was a sense that some of this -- not all, but some of this had been going on.
Were the authorities aware of this? Did they sort of turn a blind eye until it passed that line and it went from, you know, scandalous to unacceptable? ANDERSON: Let's think about that for a moment. This saga has been going on and we've known about it to a certain extent as members of the general public now for six or seven years.
It really hit the headlines when we found out that Prince William and Harry's phones had been hacked by a private investigator and a royal correspondent effectively at the "News of the World." They were later imprisoned for that.
And then it sort of rumbled on a little bit. But while it was simply, and I say simply, the royal family and celebrities, the likes of Sienna Miller or Hugh Grant, for example, people didn't mind so much. It was when we found out just a week or so ago that the "News of the World" had hacked into the phone of a child who had disappeared, who had eventually -- turns out was murdered.
They hacked into her phone and actually deleted messages from her voicemail in order to hope they would get more information and her parents were left to believe that she was still alive for a period of time. That's when things got nasty. Then we find out there are allegations that family members of those who have died in Afghanistan and in Iraq, their phones may have been hacked.
Then we find out that the phones of those who were widowed in 9/11, for example, their phones may have been interfered with. That's when it went from sort of acceptable, people turned a blind eye, to this is now an appalling, and as James Murdoch said the other day, inhuman turn of events.
HILL: Now what about the people who allegedly did this hacking? Do we know exactly who they are at this point? Do we know how many of them there are?
ANDERSON: Well, this is the point. We don't know how many of them there were. News International, the "News the World," for a long period of time, said that there were just a rogue reporter involved in this. The rogue reporter went to prison as did Glen Mulcaire, who was the private investigator.
They always insisted that that was the end of the story. Now it comes to light that there could be as many as 4,000 people whose phone messages have been listened to, by -- let me tell you, we have no idea about the numbers but it could be many, many journalists at this stage, not just at the "News of the World" but possibly across the entire camp.
HILL: So this story is not over yet. Becky Anderson, thank you very much for giving us that update.
And coming up, the debt battle rages on. The president today threatening to veto anything less than a historic budget deal. But as the talks stall, can we hope at all for any kind of real compromise? David Gergen and James Carville join us next.
(COMMERCIAL BREAK) HILL: Welcome back. We are going back to our top story tonight. It's the stalled debt ceiling negotiations. The president drew a line in the sand today ruling out any kind of short term debt ceiling hike.
(BEGIN VIDEO CLIP)
OBAMA: I will not sign a 30-day or 60-day or 90-day extension. That is just not an acceptable approach. And if we think it's going to be hard -- if we think it's hard now, imagine how these guys are going to be thinking six months from now in the middle of election section when they're all up.
It's not going to get easier. It's going to get harder. So we might as well do it now. Pull off the Band-Aid. Eat our peas. Now's the time to do it. If not now, when?
(END OF VIDEO CLIP)
HILL: I don't think the Republicans have an appetite for eating peas right now. They drew their own line in the sand saying that they're not going to support any deficit plan that includes tax hikes.
And basically that's the problem we got. We have these two lines in the sand, they feel like they're miles apart, and we're less than two weeks away from the president's July 22nd deadline for a deal.
Joining me now are CNN senior political analyst David Gergen and James Carville, CNN political contributor and Democratic strategist.
Thank you both for being with me.
And David, let me start with you. Do you think they've kind of painted themselves -- the leadership -- into these corners that they're having a very tough time coming out from?
DAVID GERGEN, CNN SENIOR POLITICAL ANALYST: I do, E.D. I think that the Republicans have painted themselves in a corner some time ago by refusing to do anything on taxes, raise taxes at all. The Democrats have painted themselves in a corner saying we won't take any deal that does not significantly raise taxes.
And now today the president has painted himself into a corner saying I won't take any small deal, I won't take any interim deal. I must have a big deal. I think there's a good chance they're going to have a train wreck here before they have a deal.
I have to put my card on the table. I am in favor -- personally in favor of what Simpson-Bowles came out with, which was a plan that $2 of spending cuts for every $1 of tax increase is what I thought was the right approach. And it could have gotten bipartisan support. I wish the president had swung behind it at the time.
But we are where we are now. The parties are stuck. I do not think they can get the big mega deal the president has been talking about, $4 trillion. I think they're going to have a very hard time getting a mid sized deal. I think they're much more likely to come up with a short term, interim package in which it requires some compromise by both Democrats and Republicans.
But then the president has to compromise, too. He has to be willing to accept a short term deal. If the choice is between a default and a short term deal, there's no question he ought to go for the short term deal.
HILL: I'm not sure these guys can figure out how to pay a parking ticket let alone pay anything else.
GERGEN: James will (INAUDIBLE).
(CROSSTALK)
HILL: James, you are the brilliant strategist here. Let me throw one of my concerns out, and you tell me whether I'm absolutely crazy. It seems to me like both sides are banking on winning, that they're going to be able to prove to everybody that they really were willing to do something and it was the other side that, you know, kept it from going forward, that they're going to win with their base.
JAMES CARVILLE, CNN POLITICAL CONTRIBUTOR: (INAUDIBLE) First of all, as far as David and Senator Simpson and Erskine did a good job. They were calling for one-third in tax increases. What the president -- what the Republicans turned out and the president was talking about something between 20 and 25 percent. So they couldn't even get that through. And that's much less than what Erskine and Simpson were calling for.
The Republicans say it doesn't matter if you shut the government down. Actually if you listen to them, they said it doesn't matter. We'll be fine. We need to do that to get somebody's attention.
And remember that in the bank bailout, the first day it failed. And the stock market went down 770 points and it made a deal. It might take that kind of shock here to do it. But if you listen to Republican rhetoric, they're saying look, we are completely willing to let this thing shut down. And I don't think it's a very good idea, but we'll see in time. And I think the public is getting the signal here, I think.
HILL: You really seem speechless. The prospect of that happening does seem to be having you sort of in a pickle there.
GERGEN: When James Carville is speechless, we really are in a pickle here.
(LAUGHTER)
HILL: David, when we look at polls, and frankly I usually hate polls. However, this one just keeps on coming out regardless of the source. Keeps on coming about the same. And then is said, when you talk to folks, they don't want to raise the debt ceiling. They don't trust Washington to spend money that they give them wisely.
GERGEN: Well, one of the great disappointments in all of this is our political leaders have done such a lousy job preparing the public for hard choices. And one of these choices is raising the debt ceiling.
It is a serious matter. When Ronald Reagan was president as a conservative and we were approaching a deadline on the debt ceiling, he urged, his secretary of treasury urged, that the debt ceiling be lifted. You have to do that to pay your bills. And so the fact here we are on the 11th hour, in effect, in this fight, and that the public is still where it is, is a failure of leadership on the people in Washington to prepare the public for what must be done.
HILL: James, let me bring you back in. Do you think that there -- and again, if you were advising the guys on both sides.
CARVILLE: Right.
HILL: Would you tell them that you've done a lousy job selling this and how would you tell them to fix that now, when they really need to convince the base and their wings that there are deals that have to be cut, and that means compromise?
CARVILLE: Look, again, I think the president was willing -- according to the news accounts and Boehner, and I don't think it's been much in dispute. He was willing to go for $4 trillion, with a combination, he was willing to go to the Democrats with some pretty substantial things, raising the age for eligibility for Medicare.
(CROSSTALK)
HILL: Yes, I saw that.
CARVILLE: And these are some pretty big stuff. Yes.
HILL: Now the problem he runs into and so does Boehner is that you've got the wings in the party saying no.
CARVILLE: No, again, that's not --
HILL: You touch things --
CARVILLE: No, no. They don't have -- they don't have a conservative -- a right-wing of -- that's the whole point. That's not -- in other words there's 230 of them signed the thing. That's not a wing. That's literally the entire party. We're talking about 10 Democrats as opposed to the entire Republican Congressional Caucus. That's quite a difference there. That is not an equivalency.
GERGEN: Let me say one thing on behalf of the Republicans. I think it needs to be said. Those 230 all won elections by promising not to raise taxes. They came with a mandate. So, when Republicans took over the House, they understood and they had promised people we will not raise your taxes. We've got problems, we have to reduce spending. That voice is loud and clear in the countryside. There is- I think there is pressure on the Democrats to do a lot more on the spending side than to do it on the tax side. But at the end of the day, we are going to have to do taxes, too.
(CROSS TALK) CARVILLE: They were doing it in 80/20. And by the way the single most popular way to reduce the deficit, in every poll I've ever seen, is raise tax on the wealthy or cut tax exemptions. They weren't even talking about raising tax rates. They're not even talking about that.
GERGEN: James, you know, that $1 trillion out of the $4-trillion deal was supposed to come out of taxes. That's what they were talking about.
CARVILLE: That's 25 percent.
GERGEN: That is 25 percent, but there's a piece of it that is coming out of interest rates, just by getting-it's not coming out of spending. There's some illusory savings in that spending. What the Republicans feel, with some justification, is they signed on to some deals like this in the past, what happens, they get the spending cuts, but they never get the tax cuts. That they have been promised, they never get their side of the bargain. Or they get spending increases, and passive (UNINTELLIGIBLE) in exchange for tax cuts, they never side of the bargain. There's not a lost trust here, which is fundamental to what's going on right now.
I come back to this. I think this is going to come down, at the end of the day, to getting a very small deal. If they can get the Republicans and Democrats to agree to that, and say let's spend the next three or four months negotiating, we ought to do this.
HILL: Oh, great.
GERGEN: We ought to do this.
We have to wait another three to four months for this stuff.
GERGEN: Isn't that better than default?
HILL: James, is it?
CARVILLE: Obviously, again, the Republicans say it doesn't matter if you default.
GERGEN: That's not what the leadership is saying. That's not what Boehner is saying.
(CROSS TALK)
CARVILLE: Again, Boehner wanted to make the deal with the president.
GERGEN: But it is not what McConnell is saying.
CARVILLE: It was his caucus that wouldn't let him do that, David. It was his caucus. It's not the right wing. It's the entire caucus. Boehner wanted to do it. Rank and file and Republican opinion makers are saying it doesn't matter.
HILL: James, thank you very much for joining us. David Gergen, thank you, also
GERGEN: Thank you, E.D., good to see you.
HILL: Yeah, we've got a lot to figure out there in Washington.
Coming up, it's has been a source of irritation to many Americans that we give Pakistan billions of dollars in aid and we don't seem to get much in return. Now, the president says the gravy train is stopping, but could that do more harm than good?
(COMMERCIAL BREAK)
HILL: Well, a pretty gutsy move. Memo to Pakistan: We're cutting you off. The Obama administration is freezing some $800 million in aid to Pakistan. So what goodwill that do? Tonight we have a rare opportunity to hear from two of the top experts on the region. Former Congresswoman Jane Harman has served on all the major security committees in the House and has seen classified information most people don't get to. Peter Tomsen, was special envoy to Afghanistan under the first President Bush and has worked with leaders and militants in that region. He has just written this book, the definitive tome on the region. It is called "The Wars of Afghanistan." I spoke with both of them earlier this evening.
(BEGIN VIDEOTAPE)
HILL: Jane, let me ask you about the report today that five suspected militants were killed in what appears to be a U.S. drone attack in Pakistan. Do you think we're deciding to take on more of this responsibility ourselves? Not trusting the Pakistanis to take out the militants?
JANE HARMAN, FMR. U.S. REPRESENTATIVE: Well, we have been- President Obama has been ratcheting up the drone attacks for a long time. They've increased geometrically on his watch, but it's also true that some Pakistanis were killed by terror groups in a part of the country that hasn't seen violence today. Either way you look at this, E.D., we're in a downward spiral in terms of our relationship with the Pakistanis.
I think this going public with the cut in the military aid package is an expression of frustration that the private efforts have not succeeded. I would like to suggest that we need a game changer here. The Pakistanis have been worried about India for years. That drives their policy in Afghanistan and even in Pakistan. I think if we could ratchet up efforts to convene a regional conference, peace conference, including China, Russia, India and then the countries in the region, including Iran, we might have a chance of changing the scene here and getting the parties to talk more productively together. The goal would be, obviously, a healthy relationship with a country that holds 100 nuclear weapons, and is a Democratic ally of ours, historically.
HILL: Jane, you mention China. And Peter, I'd like to ask you: The aid that the president has said he's going to suspend at this point is about a third of the aid they get, you know, hundreds of millions of dollars. The question, I guess, we have, having been told for years that it was important to give them this money because it gave us sway, and it kept other players from stepping in and filling that void. What happens now? Couldn't China step in and say you know what, we're happy to give you that cash, and sort of move us out?
PETER TOMSEN, FMR. PRESIDENTIAL ENVOY TO AFGHANISTAN: They could, although the technology we're supplying, China doesn't have some of it. But they certainly could supply enough of it, maybe lower grade, and work with Pakistan to make up for the difference.
But in fact, this step that was taken, announced today, about the holding back of assistance that has been unconditioned now for 10 years, it should have been taken 10 years ago. We always should have had some strings attached to our assistance, especially the military assistance, and pulled those strings when the Pakistanis did not cooperate in the counterterrorism and counterinsurgency areas that they have pledged to do.
Their strategic direction has remained the same. To foster Islamic terrorism, there are three groups which we have declared to be foreign terrorist organizations, FDOs on the State Department terrorism list. And those groups were all founded by the Pakistani military intelligence, the ISI. Those groups are cooperating with ISI to send jihadis along the jihadi highway into Afghanistan, but those same camps train international terrorists, who strike the United States, and other countries around the world.
HILL: Admiral Mullen was making very harsh words last week about the Pakistani military and their collusion with militants.
Jane, you made a statement in Aspen, just recently. You said kind of the same thing that there should be non-negotiable demands that are attached to the aid we give them. What do you think is the most important thing they have to say they will do, and can prove it, for us to give them the money?
HARMAN: I'm not disagreeing with the comments just made. In fact, I was one of the ringleaders for conditioning our economic aid, the $7.5 billion package that Congress voted on while I was there, about a year ago. I wanted to condition it especially on assurances about nonproliferation. The conditions got dropped. We had some sort of more hortatory language in the bill and the Pakistanis were upset about that.
What would I like to see? I would like to see them agree to crack down on terror groups, which perhaps it's true they created, but why did they create them? They created them as an insurance policy against India occupying Afghanistan. Those groups are hurting Pakistanis. Actually more Muslims have been killed by Al Qaeda and related terror group violence than Westerners. It is one of the ironies. And just today, five more people or so were killed in Pakistan itself. I think those are conditions they actually should embrace, but I would still like to consider and urge this regional conference. I don't think we're going to work our way out of this by violence or certainly they're not going to. The way to work our way out of this is to talk to all the relevant parties and figure out a common set of interests. And I think that common set of interests is for Pakistan and India, finally, to have an detente between them and understand each country won't aggress on the other.
HILL: Let's go back to Pakistan. Just finally, Peter, can you tell me, based on the moves you've seen. We assume this is a U.S. drone. We know the United States has now said we're not giving you all the aid we initially promised. There will be strings attached. We went after bin Laden without telling them. Do you think the moves we're making now are going to improve the situation in any real way?
TOMSEN: I think they will. It's about time we got tougher with Pakistan. Our policy through a number of administrations, even before 9/11, has been basically caution and inaction. There are risks to getting tough with Pakistan. They do have some cards they can play with China, with Iran, they can ratchet up the insurgency inside Afghanistan. They, of course, as has been mentioned possess nuclear arms. There's risks on the other side; as long as the Pakistani military and ISI continue their policy of fostering the Islamist infrastructure, and it now is a successor to bin Laden, Ayman al Zawahiri, as the head of Al Qaeda. As long as the infrastructure is there, as long as the sanctuaries are churning out jihadists to go into different parts of the region, India, Afghanistan, and going abroad to strike foreign targets in the United States and our homeland or elsewhere, war will continue to tear the region generally.
HILL: All right. I appreciate you showing your expertise. I really got the chance to read part of the book this weekend. I will continue on this, "The Wars of Afghanistan", by Peter Tomsen. It is definitive work. And very fascinating to understand the region that is so critical to our national security.
TOMSEN: Thank you.
HILL: Also, thank you very much to Jane Harman, nine-term congresswoman, House Select Intelligence Committee and now the CEO of the Woodrow Wilson International Center for Scholars.
Thank you both for your time.
Coming up, Secretary Clinton lashes out at Syria after pro- government forces mob the U.S. embassy. We're on the scene in Damascus next.
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HILL: U.S. officials slammed the Syrian regime today as tension between the countries reaches a new high. Secretary of State Hillary Clinton had her strongest criticism for Assad yet.
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HILLARY CLINTON, U.S. SECRETARY OF STATE: President Assad is not indispensable, and we have absolutely nothing invested in him remaining in power. Our goal is to see that the will of the Syrian people for a Democratic transformation occurs.
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HILL: This, after protesters attacked the U.S. embassy in Syria. Arwa Damon is in Damascus and joins us now live with the very latest.
Arwa, Secretary of State Clinton said we really have no interest in Assad. We want the will of the people. Today we sort of see both. The people who are supporting Assad and attacking the embassy and the demonstrators who want him out. How do we know what the real will of the people is?
ARWA DAMON, CNN INTERNATIONAL CORRESPONDENT: Well, that's why it's always so challenging to report from a place like Syria, E.D., because when we do go out into the streets, when we are allowed to go out into the streets, in an official capacity, it is always in the presence of government minders. So when someone is even speaking about supporting the regime, it is always tainted by the fact that the government is effectively listening. Many people will say to you they know exactly what happens to those who dare speak out against the regime.
That's what the anti-government demonstrators are saying. They are being targeted because they are voicing their opposition, because they are calling for democracy. It makes it incredibly difficult to gauge exactly what is happening.
The president does still have a fair amount of support. There is still what people are calling the silent middle, merchant class. The people who whether they support the president or not are still not speaking out against them. It could be because they have benefited from his regime, it could be because they are afraid. We also at the same time have been seeing the voice of the anti-government demonstrators growing stronger by the day. To such an degree where they are now actually forcing the government into talks with them.
HILL: Finally, I want to ask you about the national dialogue. I understand there is some talk going on between the regime and some of the activists. What do you know about that?
DAMON: Yeah, it's a National Dialogue Conference that began on Sunday. It's going to continue into tomorrow. The Syrian government is billing it as being the first step toward setting the country on a path of democracy. It's is saying that it is going to create the framework to implement all of these reforms.
Now, the conference was opened by the vice president who interestingly acknowledged that the conference was taking place in an atmosphere of suspicion. The government acknowledges there is a very serious trust deficit between the government and the opposition. That being said, the majority of prominent opposition leaders boycotted and there was absolutely no representation of the street demonstrators. They're saying that they will not even begin to engage in talks with the government until their demands are met. And top on that list is an end to the violence, followed by the release of political prisoners, the withdrawal of the Syrian military and security apparatus from various cities and towns. But another thing that is interesting is that for those few opposition members who did in fact attend this conference, they voiced those very same demands very publicly. The Syrian government is saying the fact that this is being allowed to take place, the fact that it is intending on implementing these reforms, that it is listening to all sides is an indication that it truly wants to change. But this is an opposition that has, for decades now, been hearing all sorts of promises and pledges from this president, Bashir Al Assad, but also from his father before him. There is an incredible amount of skepticism. There is going to be one thing that is really going to cause the opposition to begin to believe that the government is genuine. That is when the bullets stop flying, E.D.
HILL: Right, well, listening is not the same as doing anything about the situation. Arwa Damon, live in Damascus. Thank you very much.
Coming up, Sarah Palin, front and center again. Why her latest interview is raising red flags, this time with other Republicans.
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HILL: In a new cover story in "Newsweek" magazine, Sarah Palin opens up on the Republican presidential field. You see why she's a riveting candidate. And how she might be the hardest of the Republicans to elect. And by the way, she says she can win. Is Palin just raising her profile or is she trying to softening up the field? Matt Lewis is a conservative blogger and author of "The Quotable Rogue: The Ideals of Sarah Palin In Her Own Words". He joins us now.
Welcome.
MATT LEWIS, SR. EDITOR, "THE DAILY CALL": Thank you.
HILL: You write that her reputation in Alaska was as a nonpartisan, however, when she took on the role as vice presidential contender, she seemed to take it on with great relish. It certainly wasn't as a nonpartisan. How did she change?
LEWIS: Yeah, first of all it's important to know about Sarah Palin. She with an 88 percent approval rating when she was governor of Alaska. She took on the Republican establishment and the oil companies. Again, very popular, very much a maverick, very much independent. But when you become a running mate, you have to adopt the policies of the principle. And lot of times the running mates, in the case of Sarah Palin was used to gin up the conservative base and the social conservatives. I don't think she did anything she didn't believe, but I think the perception that the American public got of her is unfortunately a bit skewed. They need to look back at her time as governor when they consider whether or not she could be a good president.
HILL: When she talks, she certainly doesn't sound nonpartisan right now. She comes across as a very strident conservative candidate. And as a candidate, and I was fascinated by your article in "Newsweek" because you give such an interesting glimpse into what they're like. And you point out that they're supposed to be one place and they have folks waiting overnight, they never show up, because they're unconventional. A lot of people say unconventional means you aren't the type of person someone can run a campaign for. You're just not able to trust that you're going to be where you are, do what you say you're going to do. You are kind of a wildcard.
LEWIS: First, I want to make the point, I didn't write the "Newsweek" article, although, it was a great article. I wrote about it. I wrote the book recently, or edited the book, "The Quotable Rogue, the Quotes of Sarah Palin."
But I thought it was a great interview. I think you are right, E.D., you know the U2 song, "She Moves In Mysterious Ways," that is Sarah Palin. And if she gets in and runs, it will not be as a conventional politician. She has never done anything in a conventional manner. I believe the world has changed and Sarah Palin is probably perceived that in a way. That a lot of strategists and pundits have not.
She will go into Iowa, if she gets in the race, in a very nontraditional way. She will have supporters who volunteer to give her time. It won't be one of the things where you have to get a local committee chairman, buy them off, or go to the Lincoln Day dinner and get them to endorse you. It will be a different kind of campaign. It's a new world, 21st century.
HILL But she does come across as undisciplined. I understand the desire to have somebody who is not the typical politician because they all drive us nuts. However, she doesn't come across as a person disciplined enough to do what it takes. From a party's perspective, if you are going to run somebody you want them to win. From a party's perspective, to do what she needs to do in order to actually win an election.
LEWIS: That will be the test, E.D. A lot of people would say the same exact thing about Michele Bachmann about a month ago. And Michelle Bachmann has sort of risen to the occasion. I think Sarah Palin could do that, too. Look, the only thing we know about her, is a lot of this is based on the last year where she has really kind of used Facebook and Twitter and been more of a political celebrity. If you look at her campaigns where she became mayor of Wasilla, if you look at her becoming governor of Alaska, even the campaign she waged on behalf of John McCain, I think she did a pretty darn good job. The speech she gave at the convention, debate against Joe Biden, did very well.
HILL: Let me ask you this: Is she willing to go back to just being a politician. Right now, she's a celebrity. She commands over $100,000 for a speech. She's got a reality show. She's a news commentator. She is kind of a star.
LEWIS: She is. That's a great question. In fact, E.D., I think you could argue that Palin could conceivably be more powerful and more effective and more helpful to the conservative cause by sort of being --
HILL: Away from there.
LEWIS: Exactly, being like an Oprah of the right.
HILL: OK.
LEWIS: But look, it's the most powerful position in the world. This is her shot to do it. She might do it.
HILL: All right. Matt Lewis, thank you very much.
LEWIS: Thank you.
HILL: I'm E.D. Hill in New York. Thank you for joining us, spending some time. PIERS MORGAN TONIGHT, starts right now.
