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Parker Spitzer

Gun Battle; Democrats Fighting Tax Bill; House Holds Fate of Tax Bill; A Third Bush Term: Progressives Respond to Obama Tax compromise; Obama Meets with CEOs; Michelle Rhee Speaks Out on Improving Our Schools

Aired December 15, 2010 - 20:00   ET

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


KATHLEEN PARKER, CNN ANCHOR: Good evening. I'm Kathleen Parker.

ELIOT SPITZER, CNN ANCHOR: And I'm Eliot Spitzer.

You've probably seen some of the video, the chilling moment in a Florida school board meeting yesterday. A 56-year-old man stands before the Panama City school board and opens fire at close range.

Thank goodness no school board members were killed. Not even hit. The gunman eventually shot himself.

What you probably have not seen is the raw video of what happened. We've done our best to piece together the footage to show you exactly how it unfolded. But we should warn you, this video is extremely disturbing.

(BEGIN VIDEO CLIP)

CLAY DUKE, SHOOTER: Everybody in this room, except for the (EXPLETIVE DELETED), behind that counter, hit the road. Leave. You may leave. You may leave. Women can leave. Six men stay. Everyone else leaves.

UNIDENTIFIED MALE: He's talking. John, go ahead.

(CROSSTALK)

WILLIAM HUSFELT, SCHOOL SUPERINTENDENT, BAY DISTRICT SCHOOLS: No. No, Ginger. Ginger, no. Ginger.

If you're going to kill yourself or kill us or whatever, at least let us know what's going on because I'll be very honest with you, I swear, I don't know who your wife is or what she did. They don't sign the papers. I'm the one who signs them. Will you let them go? I mean, you are obviously upset at me. So why are they here?

DUKE: They're part of it.

HUSFELT: Part of what?

DUKE: The scandal.

HUSFELT: Sir, I don't know what you were in --

DUKE: This is to stop the taxes, OK? You said we don't need no taxes --

HUSFELT: No, that's not --

DUKE: Plenty of money. Then as soon as you gutted the school system, then you turned around and said, oh, now we need this half cent sales tax again.

HUSFELT: I said we need sales tax from the very beginning. I campaigned on that. Yes, I did. You can find -- you can look over the materials. I said from the beginning the half cent sales tax is the most equitable way because everybody pays it, not just property owners.

Let's just listen to me for a minute. I don't want anybody to get hurt. And I've got a feeling is what you want is the cops come in and kill you because you're mad. Because you said you're going to die.

DUKE: You're going to die today.

HUSFELT: But why? If this is -- this isn't worth it. This is a problem -- please don't. Please don't. Please.

DUKE: I'm going to kill -- don't you understand?

(END OF VIDEO CLIP)

PARKER: Unbelievable. Utterly, utterly chilling. And what I can't believe, Eliot, is how calm all these people were. They sat there and tried to reason with this person who -- you know, who claims that his wife was fired and that's why he came.

The most incredible moment, one of them anyway, was -- was this woman, one of the board members, Ginger Littleton, came up behind that man with her purse, hit his hand and tried to knock the gun out of his hand. Talk about -- boy, that took guts.

SPITZER: Yes.

PARKER: I mean, she's my hero. And that's -- and the supervisor, you know, he tried to take complete control of the meeting.

SPITZER: Yes.

PARKER: And get this fellow to communicate with him and release the others. To have that kind of state of mind in that moment is amazing.

SPITZER: Clay Duke, who's the shooter, was an ex-convict. He'd been convicted in 2000 of aggravated shooting into a vehicle after he threatened to kill a former girlfriend. Clearly a guy who had, you know, no business having a gun under any circumstances. A convicted felon.

You know --

(CROSSTALK) PARKER: The gun shows are particularly a big problem. People come in there and buy guns. They can get past the background checks which ought to -- you know, which ought to be required in every single case. I think something like 40 percent of sales at gun shows are not -- are tax free.

SPITZER: Here's what I'd like to see. I'd like to see all the people lining up on the Republican side saying, I want to be president, from Sarah Palin to Mitt Romney, to Mike Huckabee, on down the line, let them stand up tomorrow and tell us where they stand on the assault weapons ban, letting ATF do background checks, a 72-hour wait before you buy a handgun.

If they will not after this video support that, I say shame on every one of those guys because they're the ones who have stood in the way of rational policy and I for one -- and I think most of the American public are fed up with the gamesmanship they breed every day.

PARKER: Well, I think we also maybe --

SPITZER: And I want to -- let's find out --

PARKER: Maybe we need rename the conversation and stop saying gun control because that sort of sounds like, oh, we're going to come in and take all your guns away. You know let's talk about how we are going to become a more civil society and keep guns out of the hands of people who don't -- who should not have them.

SPITZER: Yes.

PARKER: Recognizing that --

SPITZER: You're right.

PARKER: -- sane, responsible Americans ought to be able to own guns.

SPITZER: Correct.

PARKER: Joining us now to talk more about guns and gun control is Kevin Williamson. He's the deputy managing editor of the "National Review" and he's against gun control, and Mayor Jeffery Jones of Paterson, New Jersey, which has a serious crime problem. He's for more gun control.

Thanks for joining us, gentlemen.

MAYOR JEFFERY JONES, PATERSON, NEW JERSEY: Thank you.

PARKER: Mayor, we have lots of books -- laws on the books. Why aren't they enough to control -- keep guns out of the hands of the wrong people?

JONES: Well, I think, in part, the laws on the books are about folks who are abiding by the law. We're talking about an element of folks who could care less. And so there has to be a much more aggressive approach, particularly when millions of the guns that are coming to my city seem to be coming from other states.

PARKER: Why do we have to have this hard position and not see that there are certain sort of compromise positions we can take that makes sense? I mean most normal people out there --

(CROSSTALK)

PARKER: I want to have my own guns in my house but I don't want --

KEVIN WILLIAMSON, DEPUTY MANAGING EDITOR, NATIONAL REVIEW: You're not talking about any sort of especially dangerous gun. If you want to deal with the most dangerous guns in America, then what you have to do with these hunting rifles is by far the most powerful weapons we have.

Everyone says, well, we don't want to go after hunters and their legitimate weapons. Well, those are by far the most powerful guns on the street. You know if Pope John Paul had been shot with your granddad's deer rifle instead of a 9 millimeter pistol, he would have died a martyr, you know? He wouldn't --

(CROSSTALK)

PARKER: But what's your point? What's your point?

WILLIAMSON: So well, the point is that we talk about, well, we're going to do something about assault weapons which are mostly squirrel guns, you know, they're 223 caliber, small, not very powerful rifles. Whereas your average sort of hunting rifle is 10 times more powerful. It's a much more dangerous weapon.

People should start using, you know, Elmer Fudd's deer rifle in crimes, they would actually be much, much more dangerous than these so-called assault weapons which are sort of scary looking but they aren't actually very dangerous guns.

PARKER: OK, well, take that off this table for the moment and --

JONES: And we'll put on the table more (INAUDIBLE) for everybody walking around on the local community and let them know that I'm either gang neutral or I don't care if you shoot me in the back, whatever the case is.

Because -- I mean I do understand and appreciate the benefit of anyone to this Constitution affords them to bear arms. I get that part. That's not my question. But show me one weapon, period, that doesn't kill. And tell me about the individual who holds the weapon.

They're on the streets. The people who have them don't have a clue what they're doing. They're being extremely reckless. And I know that, yes, the social conditions are a part of that and all these other things. But the bottom line still is there are too many on my streets.

SPITZER: Yes. And let me ask --

(CROSSTALK) PARKER: So what would be the solution for you, though?

JONES: Well, there are a number of solutions. Get them off my streets. But since I can't because they're coming in through ways through --

PARKER: So what? Eliminate guns from the whole country?

JONES: I'm not --

(CROSSTALK)

JONES: I'm not.

SPITZER: Well, no, but hey, listen --

(CROSSTALK)

JONES: -- to just give away guns because my police officers need them.

PARKER: Right. But if you're saying you don't want guns coming into your city from other places, then we have to go to these other places and eliminate guns?

JONES: Well --

SPITZER: I think what the mayor is saying is what we need to do is control the way they're sold in those few centers where we know they're being sold to criminals. We know that.

PARKER: OK. Well, obviously. What's wrong with that?

SPITZER: And the other question -- no, no. But don't say obvious because that is what has been opposed by the NRA. And I'm not trying to turn them into a villainous group here, although I fundamentally disagree with them. But they have used their political strength -- they're entitled to do that, of course -- to prevent the ATF from using trace data even -- and transfer that data to local police departments --

JONES: That's a big --

SPITZER: And that just seems to be insane.

JONES: That's the big concern, correct.

SPITZER: How can you be opposed to using the trace data so that you can find out where the guns are coming from?

WILLIAMSON: Well, I think their argument there mostly is privacy concerns. They don't trust the government in the long term to keep up its commitments to Americans' Second Amendment rights. And they don't want a national registry of who owns guns because they do believe that at some point they'll be seized. And I don't think that's an entirely irrational or paranoid belief. SPITZER: But I just think what you hear from the mayor is a legitimate and a desperate cry for solutions. And what you hear from the NRA is the theological belief in the right to own guns even against the enormous weight of the evidence of a mayor who's trying to keep his streets safe. And you have this sort of theology on the other side that is unbending and I hate to say causation but then you see incidents like this.

Isn't there some --

(CROSSTALK)

WILLIAMSON: A theological commitment is the belief that guns are the root problem but the truth is we have in the United States much higher rates of crimes involving stabbings, bludgeonings, people beating each other to death, driving over each other with cars. And other countries, too.

The Canadians have twice as many guns per capita as we do. Their murder rate is something like a sixth of ours. Your guns are really not the fundamental issue. In the last shooting I covered in Philadelphia was a guy who -- you know shot a cop, had a gun, shouldn't have had it.

Guy had 19 felony convictions. There's no reason this guy should have been walking around on the street. But what everyone wants to talk about -- what the editorial in the newspaper was the next day was my god, why don't we have stricter gun control laws?

PARKER: Well, and the bottom line is --

WILLIAMSON: Why don't we have stricter felon control laws?

PARKER: In 2009 --

(CROSSTALK)

PARKER: In 2009, gun sales were up 12 percent and the crime rate was down.

WILLIAMSON: Yes.

PARKER: So it's hard to --

(CROSSTALK)

PARKER: Well, you can't draw a cause and effect line from gun ownership to crime.

SPITZER: Mister Mayor?

JONES: Your question. You started a question before about what really is the problem with the question what we seek. There should be an avenue when a community such as mine, urban, 52 different nationalities and ethnic groups, one out of 72,000 people on an 8.2 square mile foot print, that once we've exhausted all of what we believe to be reasonable actions to address this proliferation of guns in our schools, on our public streets, we should be able to call someone. Reach out to someone.

Who that someone is, be it the state AG's office, or the U.S. attorney general's office, someone, something should be able to come in and walk with us and work with us. Because of the resources. Because of the manpower. To help us figure it out.

That is not -- that open dialogue does not exist that I know of. That's where the cry comes from. We're an urban center that is strapped. $76 million in debt. I didn't create it. But I have to deal with it. With that comes this other fear that not only do I lose my house, I may lose my life, and nobody can help me. That is serious.

PARKER: That is serious.

All right, Kevin Williamson, Mayor Jeff Jones, thank you for being with us.

SPITZER: Coming up, the White House says it has finally won the war over its tax proposal. The congressman who's leading the revolt against it says not so fast. He's our next guest. Stay with us.

(BEGIN VIDEO CLIP)

SPITZER: Do you have enough folks who are standing with you to create a real, genuine threat that this bill would no pass?

REP. PETER DEFAZIO (D), OREGON: Well, that's a good question because, you know, the White House is putting on tremendous pressure making phone calls. The president is making phone calls, saying this is the end of his presidency if he doesn't get this bad deal.

You know, I don't feel that way. I think this is potentially the end of his possibility of being reelected if he gets this deal and it's a trap.

(END OF VIDEO CLIP)

(COMMERCIAL BREAK)

SPITZER: Is President Obama's tax cut compromise going to pass the House? The White House certainly thinks so declaring victory already.

PARKER: Tonight's headliner, Democratic Congressman Peter DeFazio of Oregon still begs to differ. He joins us here tonight from Capitol Hill.

Welcome back, Congressman.

DEFAZIO: Yes, I don't think it's quite a done deal yet. You know last week we had a historic, nearly unanimous vote of the caucus in opposition of the package as is. There are no significant changes in the Senate. We're tussling with our leadership right now over what amendments we might be allowed to offer. And I think some have a prospect of actually winning.

SPITZER: It seems from everything we've heard that most of the focus is on the estate tax component of this. And is that indeed where you're looking to offer amendments where you think you have a real shot of changing the contours of this deal?

DEFAZIO: Well, I'd like to do a lot more than that. The estate tax is pretty nearly a consensus position of the caucus. But there's a growing concern over the Social Security provisions.

I mean for the first time in history, we're going to basically deprive Social Security of $120 billion of income. And now it's going to become another program that needs to get allocations by borrowing by the federal government. Bad idea. Take the new deal. Potentially a new raw deal.

PARKER: You've been kind of a stick in the mud on a lot of issues that the president has wanted with -- you voted against the stimulus, you voted against the bailout. Some people are wondering whether you're really a Republican.

(LAUGHTER)

DEFAZIO: Look, if we had done my version of the stimulus, which would have had enough investment to do a 21st century transportation plan and rebuild the crumbling bridges in this country and put millions to work, I don't think we'd be in the minority today.

Instead, Larry Summers won that debate with the president. We gave people tax cuts they didn't know about that didn't put anybody back to work. They were so small. And we didn't begin to rebuild our infrastructure, didn't do a transportation bill, and here we are in the minority.

SPITZER: Do you have enough folks who are standing with you to create a real, genuine threat that this bill would not pass?

DEFAZIO: Well, that's a good question because, you know, the White House is putting on tremendous pressure, making phone calls. The president is making phone calls, saying this is the end of his presidency if he doesn't get this bad deal.

You know I don't feel that way. I think this is potentially the end of his possibility of being reelected if he gets this deal. And it's a trap. It's a trap on Social Security and on progressivity and our tax system.

And a tax on huge cuts to programs we care about because this adds half a trillion bucks to the deficit next year. And then next year, the new Republicans come in, whoa, we got to cut back out of everything because we have a $1.7 trillion Obama deficit. They won't be talking about their role in creating that. SPITZER: Congressman, I could not agree with you more in terms of what you just said. I'd never seen anybody as effective at lobbying for George Bush's economic policies as President Obama.

And here's my question to you. Have you gone to the White House to say, look, you're now creating an additional trillion-dollar deficit over the next two years? Where are you going to cut in next year's budget? What are you sacrificing? We need to know what trade-offs you're making because that really is the policy choice they're making?

DEFAZIO: I don't think they're thinking that far ahead. They're just focused on getting this deal done. They're scared to death that middle class tax cuts expire on the 1st of January.

Guess what? That's next year's taxes. We could take care of that the first, the second, the third week of January, or we could take care of it anytime next year retroactively. And take care of the middle class. But they're rushing this through as though Armageddon happens.

And the only Armageddon is for unemployed people. And that shouldn't have even been part of this deal. It shouldn't have even been on the table. It should be a no-brainer that we're going to extend unemployment benefits. And I can find a way to pay for it if the Republicans insist on that.

PARKER: Congressman, I want to back up a minute to something you said a little while ago. You said that the president had called people in the House and said, look, if this doesn't get through, it's the end of my presidency? Who did he say that to?

DEFAZIO: I won't name the members, you know, because they said this to me -- you know, I mean, not for public disclosure, but I've talked to at least one member who had that call.

PARKER: You agree with that?

DEFAZIO: I think it's the opposite. If we were taking -- you know, if this was effective investment to put people back to work different than the Bush tax cuts, different than the trickledown, different than Larry Summers, you know, borrow and spend for consumption, buying goods made in China.

If it's something different than that and we're borrowing the money and it was a real investment, it was really going to put people back to work, I would be the person who'd be standing there fighting with them.

It isn't that. I believe six months from today people are going to say, where are all the jobs? What happened? You borrowed all that money and then a year from today, the Republicans are going to dare him to try and replace that money in Social Security to let the tax go back up. They say, you're going to raise the tax on every working American? And oh by the way, we can't afford to subsidize Social Security anymore.

This moves up the depletion date for Social Security by 15 years. And it doubles the problem Social Security has. So instead of being depleted in 2040 and paying 75 percent of benefits, Social Security will be depleted in 2023 and only be able to pay 50 percent of benefits.

That's one felt stroke in this bill. Brilliant on the part of the Republicans. And just abysmally stupid on the part of White House advisers.

SPITZER: The Republicans, because they were the ones a week and a half ago, they got elected, they came back into the majority, because they're screaming about the deficit. Now they're adding $1 trillion to it at least.

Have they been confronted with this reality that they for the sake of the tax cut for the rich are adding huge, huge sums to the deficit? What did they say when you pushed them on that issue?

DEFAZIO: Well, as I said earlier today, I spoke to Staffer Floyd Flake, a conservative, truly conservative and honest Republican from Arizona. He raised that exact point. He would get to -- you know, balance in a different way than I would, but he raised the point of the cost of this package, as did Mike Pence, a senior Republican leader, so I think -- and I had a conversation afterward with a couple of Republicans who said, you know, there's growing concern in our caucus over this deal.

Because, you know, the House Republicans were cut out as much as the House Democrats. I mean this was a deal between one Republican senator and the vice president of the United States. And it's a bad deal. And I think more and more people are coming to that realization.

SPITZER: You know, I got to say there's -- to put the best face on it, at least the schizophrenia and the Republican argument. They got elected on a deficit crisis concern. And then they come right in and they come out and support with the president this huge tax cut that we can't afford.

I just don't see how you square that circle. And I hope you keep pounding away at that grotesque inconsistency.

DEFAZIO: Oh, absolutely, I will. And I -- and in fact, that's why I think putting everything forward into next year except for the unemployment benefits would be a way to kind of call that question on him and point at hypocrisy if they don't figure out a way to pay for borrowing another $450 billion.

SPITZER: Thank you, Congressman, look forward to having you back to report on how things go in the next couple of days.

Still ahead, President Obama met with 20 top business leaders in the White House today. We'll speak to one of those CEOs to find out if fences were mended or bridges were burned. Stay with us.

(BEGIN VIDEO CLIP) SPITZER: We're not just saying let's tax for the sake of taxing. We're saying tax for the sake of the infrastructure investments to build the future. We are losing to nations that are -- investing more wisely than we are. And giving the money to the wealthy who will not invest it. It doesn't help our growth. Everybody seems to agree on that.

TIM PHILLIPS, CONSERVATIVE GRASSROOTS ORGANIZER: You just hit a great point. You said wisely investing.

SPITZER: That's right.

PHILLIPS: I don't trust for a moment the government to pick how best to spend $1 trillion over the private sector.

(END OF VIDEO CLIP)

(COMMERCIAL BREAK)

PHILLIPS: The president's tax compromise, or as I like to call it, his tax capitulation, passed the Senate today by a vote of 81-19. It now moves on to the House where opposition from both the left and the right could delay or even derail that bill.

PARKER: Meanwhile, senators' attention turned to two critical issues, ratification of the new START treaty and a huge trillion-dollar plus spending bill. Conservative Senator Jim DeMint, looking to run out the clock on the lame duck session, has asked both bills be read aloud on the floor.

SPITZER: I will not listen to that.

PARKER: That's thousands of pages read for dozens of hours. While any Senate business is frozen. Most boring story time ever.

SPITZER: That would not -- I bet even C-SPAN watchers aren't going to keep their TVs on for that.

Anyway, joining us in "The Arena" to help us make sense of this nonsense, conservative activist and free market advocate Tim Phillips, president of Americans for Prosperity, and a liberal policy expert and strategist Erica Payne, president of the Agenda Project.

Welcome, Erica and Tim.

PHILLIPS: You bet.

PARKER: Welcome.

SPITZER: Tim, let me begin with you. Thanks for coming back.

PHILLIPS: You bet.

SPITZER: Look, everybody begins, every -- CBO, everybody, even the Republicans, that over the next two years this will add close to $1 trillion to the deficit. Where are you going to cut to square the circle? You can't be both for the trillion-dollar tax cut without cutting an equal amount of spending if you're going to be true to your principles, as I understand them.

PHILLIPS: There are a number of areas to cut. I think the new House majority coming up in January is going to make some of those tough cuts on entitlements. I think we're going to dig into that. On defense spending, which we're going to have to look at and make some cuts on. And also some of the other welfare and domestic programs.

But you can't say after 19 months of 9 percent plus unemployment now is the time to raise taxes. It's not. That's the worst stretch of unemployment since World War II, Eliot. That's no time to raising taxes on folks.

ERICA PAYNE, FOUNDER, THE AGENDA PROJECT: Tim, I'll concede that tax cuts for people who make less than a certain amount certainly are stimulative. So if you're making 50 grand a year and you add a few hundred dollars into your paycheck, you're going to go out and spend that money, and that has a stimulative effect on the economy.

But when the Senate voted a week or so ago they had a choice to vote for tax cuts for everybody except for people who make more than $1 million a year. And the Republicans voted to stop that extension of the tax cuts because they wanted to hold out for those people who make more than $1 million a year.

PHILLIPS: You're giving the same old tired argument. Class warfare and envy. And the politics of envy is a loser. It just lost in the last election. Pelosi had the opportunity to put this tax vote up in the terms you're talking about in September. She didn't do it because she knew what we knew. The American people don't agree with that kind of politics.

SPITZER: Tim, let me ask you this question. If you had a choice between spending $100 and a tax cut for people who are extraordinarily wealthy or using that same $100 as a tax cut for research and development as an immediate write-off for capital investment, which would you rather do?

PHILLIPS: It's a false choice. You can do both. And you mentioned --

SPITZER: What?

PHILLIPS: You mentioned I -- let's talk about economic growth for a minute as well. We have a corporate tax rate, this 39 percent. The Germans and the French are beating us on that. And yet you would oppose that. I guarantee that you will.

PAYNE: Tim, I guarantee that I wouldn't.

PHILLIPS: There you go.

PAYNE: I guarantee you that I wouldn't. I actually think --

PHILLIPS: Good, we agree on something. PAYNE: That we can bring the corporate tax rate lower.

PHILLIPS: Good.

PAYNE: And I think we can take out some of the loopholes which are actually American businesses standing behind the skirts of taxpayers to try to prop up their business.

SPITZER: Let me come at it from another perspective. There was a very powerful article written by Fareed Zakaria, who's our colleague here at CNN, in which he made the point that China is investing $1.5 trillion in critical sectors over the next 10 years.

They are outperforming us, out-innovating us. They're going to take away our few remaining export sectors very, very quickly. Those investments are government driven. They have to pay for them. In other words, we're not just saying let's tax for the sake of taxing. We're saying tax for the sake of the infrastructure investments to build the future.

We are losing to nations that are investing more wisely than we are and giving the money to the wealthy who will not invest it. It doesn't help our growth. Everybody seems to agree on that.

PHILLIPS: You just hit a great point. You said wisely investing.

SPITZER: That's right.

PHILLIPS: I don't trust for a moment the government to pick how best to spend $1 trillion over the private sector. Yet with stimulus 1 -- I'm sorry, stimulus is a bad word, no one says it anymore.

(CROSSTALK)

SPITZER: I'll take it.

PHILLIPS: I don't think -- I'm sorry, I don't. And that million bucks didn't do anything. And they always say, look, oh we saved jobs. I say, how can you prove that? That's a joke. I mean that trillion should better be invested in the private sector.

I don't trust government to make those decisions. You want to pick winners and losers using the government.

SPITZER: No.

PHILLIPS: I don't think that's the right way to go.

PARKER: Can we quit here a minute here and go to the omnibus bill?

SPITZER: Sure.

PARKER: Which is now been introduced in the Senate and there's six -- what is it, 6,000 earmarks representing an estimated $8 billion in spending. Many of which come from Republican senators. Of course, the Republicans are now saying, oh no, we're not going to pass this. This is a bill that has to fund the government so they can keep running. If they don't pass it, the lights go out on the Capitol Hill. So how can Republican senators object to a bill that they floated themselves with earmarks?

PHILLIPS: Two things. One, if they have earmarks that they secretly negotiate, and it looks like they did, they ought to be ashamed of themselves and they're hypocrites. And they are. And whether it's -- whether it's Mitch McConnell or whoever, that's hypocritical in the extreme and we want to call them out on it.

And we oppose that because they took an earmark ban in the Senate Republican caucus.

PARKER: Right.

PHILLIPS: That they need to stick with. So shame on them who have done it and we're going to call them out on it and we are. And we're doing it here on national TV. But we're also doing it in e-mail communication to our members.

And it is hypocritical to turn around and oppose it. Now, with Jim DeMint demanding everything be read, I think he should do that. These guys have had the entire year to get this budget done.

Eliot, and you've run budgets --

SPITZER: I know. I agree. I'm just smiling --

(CROSSTALK)

PHILLIPS: They've had the whole year --

(CROSSTALK)

PHILLIPS: I wish they would have gone there and read it one word every minute. Good for him.

SPITZER: This is like the old fashioned filibuster in the "Mr. Smith Goes to Washington." He's actually going to sit up -- I want you to sit through it and listen to it.

(CROSSTALK)

PHILLIPS: Well, that's asking a bit too far, I'm afraid.

SPITZER: Look, I agree with you about calling out those who, on day one, say no more earmarks, and then day two, slide them in -- you know, over the transom.

PHILLIPS: Yes.

SPITZER: Shouldn't be done that way. Couldn't agree with you more.

Erica, I want to ask you the hard question, though. Your piece of the Democratic Party was in a state of elation when Barack Obama was elected. Finally the progressive voice was going to be heard, transformation, all the -- all the excitement. What happened?

I mean suddenly we have a continuation of George Bush's policies. From Afghanistan to tax policy. What is the progressive wing of the Democratic Party going to do?

PAYNE: Well, I mean one thing that started happening nine years ago was that a group of millionaires and billionaires started to build the kind of intellectual and communications infrastructure on the left that the right started building in 1964 after the Barry Goldwater election.

And so what happened was (INAUDIBLE), Heritage, Cato, AEI, et cetera that are a bunch of institutions that a bunch of Americans haven't heard of that --

PHILLIPS: So it's so our fault?

(CROSSTALK)

PHILLIPS: It's our fault that progressives don't like Obama anymore?

SPITZER: No, no. I think she's saying --

PAYNE: No, I mean I'm saying different.

(CROSSTALK)

SPITZER: I think she's saying it in a complimentary way. You built a foundation.

PAYNE: You all built a structure and one of the things that the Agenda Project is based on is the idea that politicians are the least important part of politics. And so what conservatives did --

PHILLIPS: I agree with that point, by the way.

PAYNE: -- they built a set of institutions that ultimately turned the country in a direction that we're now dealing with. And so liberals started to wake up a few years ago. And they started to say we need to build that set of institutions. And I think that the wealthy liberals started to build that set of institutions, built a set of institutions that are too close to the electoral process rather than to the intellectual idea development process. And so they got their guy in office. And they realized that politicians are the least important part of politics. And so the smart liberals will go back now and return to the work that they started nine years ago that they didn't finish and that they didn't invest in the way that they should have. And hopefully they'll start to build, you know, our version of Hoover and heritage and all those.

PHILLIPS: I will tell you this, the -- when I look at what happened with a lot of economic groups on the free market side, they got too close to the Republican Party. I think they were burned by that. I can tell you Americans for Prosperity, we're not going to make that mistake. We're going to call out Republicans and we have. We've repeatedly hit them on the earmark battle going back to 2006. I do agree with you on that. I think we need stronger institutional forces --

PAYNE: Yes.

PHILLIPS: -- philosophical and less party related.

PAYNE: I mean, Tim, I'll tell you something. The deficit commission, I mean, this is sort of classic Washington. The deficit commission just came out and said, here are these things that we need to think about doing to get this in control. Two weeks later, they're passing a budget and passing a tax cut bill that is going to add to the problem that they just set up a commission to solve.

PHILLIPS: Right.

PAYNE: So the fact that these two things --

PHILLIPS: And both parties were trashing the deficit commission --

PAYNE: And it's not three month later.

KATHLEEN PARKER, HOST: Right. Exactly.

PAYNE: They're sitting on top of each other waiting to go into the Senate hearing room, you know what I'm saying?

PARKER: OK. Erica Payne, Tim Phillips, thanks for joining us.

PHILLIPS: You bet.

PAYNE: Thanks a lot.

ELIOT SPITZER, HOST: Still ahead, President Obama met with 20 top business leaders at the White House today. We'll speak to one of those CEOs to find out if fences were mended or bridges were burned. Stay with us.

(BEGIN VIDEO CLIP)

SPITZER: Is that going to cause Motorola to hire a single additional person when you just look at the fact that those tax cuts were extended?

GREG BROWN, PRES & CEO, MOTOROLA SOLUTIONS: Well, I think it's hard to point to one specific piece of legislation, Eliot, and say yes, that individual item is going to spark something. I think you have to view it in total context.

SPITZER: But it's not going to -- I mean, but it's not going to create additional demand. It's not going to create additional demand for your products such that you're going to need to hire additional people at your manufacturing facilities.

(END VIDEO CLIP)

(COMMERCIAL BREAK) SPITZER: American CEOs have complained loudly about the president's plan on taxes and financial regulation. Meanwhile, President Obama has his own complaints. He wants business leaders to shake loose some of the $1.9 trillion they're hoarding and create new jobs.

PARKER: A group of CEOs came to the White House today to talk taxes, trade and the deficit, among other things. Motorola CEO Greg Brown was there and can tell us a little bit more about what was discussed.

Hi, Greg. American industry has complained bitterly about this president. And, you know, so tell us what you object to. What specific policies of the president do you find objectionable?

GREG BROWN, PRES & CEO, MOTOROLA SOLUTIONS: That seems to be what people want to talk about. Let's talk about the areas of disagreement or that there's a winner and a loser. Today was about -- and it was a critical meeting. And I think we're at a critical time. It was a unification to say, look, we're all in it together. There's no winner or loser. There's no private sector versus public sector. Some things are moving in the right direction. Let's accelerate it. Let's build on it. And let's stick together to accelerate the recovery that we all want and need.

PARKER: Well, we all know that we need jobs most of all. And so did you all speak about specific measures that we can -- that can be applied to get jobs moving in this country?

BROWN: We did.

PARKER: I know that half of Motorola's jobs are elsewhere in other countries. How do we get some of those jobs back here? What has to happen?

BROWN: I think there's a few things. So let's start with free trade. I think there's a misnomer that a bilateral free trade agreement is a proxy for moving jobs offshore. That's not true. For every job created or every 10 jobs created offshore, there's clearly more jobs associated and expanded domestically. So free trade agreements open up markets for U.S. product and services and allow multinational corporations to expand both in-country and internationally.

SPITZER: The Bush tax cuts, and you support their extension, I know.

BROWN: I do.

SPITZER: Is that going to cause Motorola to hire a single additional person when you just look at the fact that those tax cuts were extended?

BROWN: Well, I think it's hard to point to one specific piece of legislation, Eliot, and say yes, that individual item is going to spark something. I think you have to view it in total context.

SPITZER: But it's not going to -- I mean, but it's going to create additional demand. It's not going to create additional demand for your products such that you're going to need to hire additional people at your manufacturing facilities.

BROWN: Generally, I agree with you. But what I would say is no tax increases continues the economic recovery which is still embryonic and allows for continuity. The last thing I would want to do is to raise taxes now and run the risk of any dislocation or disruption in the recovery that's beginning to take place. Your point is well taken.

SPITZER: I certainly agree with you, but you also have to look at the other side of the ledger. Corporate profits last quarter were the highest in 60 years coming in about $1.7 trillion just in a quarter. Corporations are sitting with about $1.9 trillion on their books, and yet nobody is being hired. That is the conundrum we're trying to deal with right now. So if you could pick one -- and Motorola, am I correct, that's 65 percent of your sales are from government, right?

BROWN: Yes. In the Motorola Solutions business, which is you thought -- that's right, Eliot, 65 government, 35 percent enterprise.

SPITZER: So if because we cut the taxes there's no money left for a stimulus, in fact, that might cause you to force people to be laid off because you depended upon the stimulus dollars to put in place the first responder programs for fire departments, et cetera. That's how they're being paid for.

BROWN: Yes, but I would say this. So we talked about this issue of structural unemployment and how we retrain the necessary skills around science, technology, mathematics. Are there things that can be done with public/private partnerships? Community colleges and the like? So we have to make sure that the people in the U.S. have the requisite skills to compete. And I think we're in the middle of transition. I think we've gone through industrial expansion, then tech expansion, to your point, a lot of technology deployed and systems used. Utilization increases productivity, but sometimes it's at the expense of headcount or jobs. As we move in that transition, what are the kinds of skill we need and what are the kinds of things we need to do to regain that job expansion and subsequently economic recovery? That was some of the items discussed today.

SPITZER: Look, I could not agree with you more that our job training programs here need to be fundamentally restructured, educational system. All of those things I think we would all agree on. And I hate to get too wonky either with you or the audience. But there's little thing called capacity utilization which has always struck me, certainly from your perspective in the manufacturing field to be the sort of the threshold issue in terms of hiring. And right now as an economy, we can even throw this up in the screen for our viewers. As an economy, we're down at about 75 percent. You need to be in the low 80s before you get hiring back. Am I right, Greg, that until that gets to about 80, we're not going to get real hiring in our economy?

BROWN: Well, I don't know about the individual metric of 80 for capacity utilization, but you're right, and there's a circularity here that all talks about demand creation. And with demand creation or consumer spending, which is, as you know, Eliot, 70 percent of the economy in the U.S. is driven by consumer spending, that's demand. To stimulate demand, there has to be access to credit. There has to be an investment environment here in the U.S. that's conducive to go spend money for corporations. And it's circular and interdependent.

PARKER: What is it exactly that you need in order to get off of that $1.2 trillion that businesses are sitting on right now? What can we do to shake that change loose?

BROWN: Well, Motorola doesn't have that much liquidity but in general, I think that corporate tax reform. I think making the R&D tax credit. In 1990, 20 years ago, the U.S. was number one, had the most competitive R&D tax credit. And it had some level of predictability. Today, we're 19th most competitive in R&D tax credit and it is annually renewed. So we have the worst of both worlds. We don't have a competitive R&D tax credit and we don't have the certainty to invest because it's annually renewed. That seems like low hanging fruit to me and is right up the power alley, the kind of things we need to do with the public and private sector to move this needle forward. And that's a good example of why I think we should be able to do that sooner rather than later. All right.

PARKER: OK, Greg Brown, thank you so much for joining us. We'll be right back.

(BEGIN VIDEO CLIP)

MICHELLE RHEE, FMR. CHANCELLOR, D.C. PUBLIC SCHOOLS: We closed down 15 percent of the schools in the system because the schools were not performing well.

PARKER: How did communities accept those changes?

RHEE: The way to become the least popular person in a community is to tell people that you're closing a school. It's not a popular move.

(END VIDEO CLIP)

(COMMERCIAL BREAK)

PARKER: In our "Best Idea" segment, we've got someone who when it comes to education has had a lot of them. I'm talking about ideas.

SPITZER: Former D.C.'s school's chancellor Michelle Rhee's newest idea landed her on the cover of "Newsweek" magazine and she's here to tell us about it.

Welcome, Michelle. Thank you for coming.

MICHELLE RHEE, FMR. CHANCELLOR, D.C. PUBLIC SCHOOLS: Thanks for having me.

PARKER: Thanks, Michelle. OK. Let's just start by agreeing that America's educational system is broken. Explain to us how.

RHEE: There is no doubt about it. The evidence is unassailable that we are in the middle of a crisis in public education in this country today. Last week, the results came out about the PISA examination which basically showed that China is first, the U.S. is not. In fact, we are at the bottom when you look at our kid's math results. And so --

SPITZER: Compared to what we see --

RHEE: That's right, so compared to other developed nations. So we are not going to be competitive in the long run until we fix our public education system.

PARKER: Your premise is that big corporations have always had a voice in how policies are created in Washington, pharmaceuticals, auto manufacturers, on and on, but that students have never had an organized voice and that's what you're trying to do.

RHEE: That's right. There has to date been no, you know, special interest group or organized interest group that's advocating on behalf of children that has a national presence, that creates some of the balance that's needed because you've got the teachers unions. They're a national organization. They are very, very strong.

PARKER: So are teacher unions, meaning teachers and students' objectives are odds with one another?

RHEE: You know, sometimes they are aligned. So, for example, teachers unions want more professional development for their members. We think that's great. It benefits kids. We have no problem with that. There are other policies however, that the teachers unions are in favor of, which prioritize adult jobs and job security ahead of what's in the best interest of children.

Right now in public school districts across the country, we are actually -- we don't allow schools to pay the best teachers more money to keep them in the profession. That's crazy, right?

PARKER: Of course.

RHEE: If you have people who are seeing outsized results, then we should be able to reward that and show them the value of the work that they're doing every day.

SPITZER: But here's the outcome. I know law firms that pay all of their members, partners or associates, identical salary based on how many years they've been there regardless of how much they produce. And so, I agree with you. I would rather see teachers paid based upon some measure of how well they --

RHEE: The bonuses that lawyers get are hugely different, let me --

SPITZER: No, no, not in these firms. No, no, not in these firms. It actually is the case. So even there, is pay alone going to be enough?

RHEE: Pay alone is not going to be enough. And I'll tell you that in those law firms they have no problem firing their lowest performers either, right? There aren't rules that mandate --

SPITZER: That is true. Certainly true.

RHEE: -- that they have those people in place forever. And right now in public education, we have tenure which means that the teachers essentially after two years have a job for life regardless of performance. You can never build a high quality organization if you can't manage your talent.

PARKER: Putting money in the right places is the biggest challenge and you have taken a sort of -- you've copied the corporate culture a little bit in creating a new organization to make sure the dollars are properly allocated. Tell us about that.

RHEE: So "StudentsFirst" is the new organization. And what we are trying to do is make sure that we're focusing in on kids, first and foremost. So if you look right now in public education, we have more than doubled the amount of money that we spend per child in education over the last three decades in America. But our results actually haven't gotten any better. And so --

PARKER: You actually wrote, and I think this is important to repeat.

RHEE: Yes.

PARKER: That this will be the first generation that is not better educated than the preceding one.

RHEE: That's right. The children in school today will be less educated than their parents were. The first time that that's happened in American society.

SPITZER: Education has always been a local issue. It is one of the -- for a lot of reasons, historical and political. There has not been a national effort to raise standards. No Child Left Behind was step one perhaps and "Race to the Top" with Arne Duncan, the secretary of Education, is step two. Is that working? Does he embrace the principles you laid out just a few minutes ago about the priorities?

RHEE: Absolutely.

SPITZER: And will it work? Is there enough money behind it? And how would you change it?

RHEE: So there's no doubt that what the president and secretary have been doing is absolutely aligned to what we're talking about. They've been talking about competition. They've been talking about choice. They've been talking about teacher equality. And I think that they're taking also the right tact and saying that, you know, more money to field the programs through formula funding is not the answer. That's why "Race to the Top" was so unusual.

PARKER: Michelle Rhee, we've got to take a quick break. We'll be back in a moment with more of this fascinating conversation.

(COMMERCIAL BREAK)

PARKER: We're back now with innovative educator Michelle Rhee.

SPITZER: All right. Now, if you were called in by a mayor or governor and that person said to you, Michelle, give me the three things I can wave a wand over the educational system tomorrow morning. What are the three things you would change? Assume you were there in D.C. What would you do to that system?

RHEE: So the three most important things, one, are making sure that we have the best educators in our schools and in our classrooms, which means that you have to have policies that prioritize kids instead of adult jobs. The second is empowering parents and families with choice, so that being in an excellent school is not a matter of luck, which is what it is now, but more a matter of fact. And the last is that we have to put dollars where they actually have impact on student achievement instead of wasting --

SPITZER: Can we go through these three?

RHEE: Sure.

SPITZER: Let's start with putting the best educators in the classroom.

RHEE: Yes.

SPITZER: How do we do it? Is it a matter of training, where we're hiring them from, not paying them enough? What is the -- how do we create better educators in that classroom and other nations are doing it?

RHEE: So it's actually pretty simple. We need to be able to first of all differentiate amongst our teachers and be willing to do that. Not just say everybody's great, because everybody is not great. There are some people who are fabulous. We need to pay them a whole lot more money. We need to recognize and reward the best people. And we need to identify the people who are not cutting it. And we need to quickly improve them or move them out.

PARKER: In other words, you need to hurt feelings.

RHEE: Yes.

PARKER: And you tried to do this in Washington, D.C.

RHEE: And hurt a lot of feelings along the way.

PARKER: And you hurt a lot of feelings, but you tried to get teachers to agree to forfeit tenure in exchange for better pay, for better teaching, right?

RHEE: Yes, and we actually succeeded in that. Ultimately, we signed a contract in Washington, D.C. where tenure seniority and lock-step pay are no longer issues. And 80 percent of the teachers who voted for the contract voted in favor of that.

SPITZER: How do you differentiate? You talk about differentiating good from not so good?

RHEE: Yes.

SPITZER: The critical measures are what? Are they numerical? Is it test? Is it subject of evaluation? How did you do it?

RHEE: Yes. You -- the number one factor in evaluating a teacher has to be whether or not they are effective at moving student achievement levels forward. And that means that you have to look at standardized test scores. Now, that should be the only measure? No. But it should be the majority of what you look at. You also want to look at their classroom practice. So go into their classrooms and see whether they're engaging kids.

SPITZER: OK, so you use tests. You pay the ones who are better more. And you fire the ones who are no good.

RHEE: That's right.

SPITZER: OK. Teachers, presuming parents and choice.

RHEE: Yes.

SPITZER: Explain that more. Is that choice within the public school system? Is it a charter school system? Is it vouchers? How do you -- how does this work?

RHEE: It's got -- we have to have more of an open market system. Right now, we essentially have a government monopoly. And I don't think that a government monopoly can ever produce a quality product. So right now, you have lots of families who are trapped in failing schools. They have no other options. And the only way that we can improve the situation I think is if we give parents options. And I think that it should extend obviously to making sure that you have a better environment for charter schools to be successful and also thinking about vouchers.

PARKER: Michelle, I want to get back to your organization. You have acknowledged that sometimes compromise is not the route, that this is a fight, and you're known to be feisty. You've also acknowledged that this is a political fight. So you -- will you be endorsing candidates?

RHEE: We'll absolutely be endorsing candidates. You know, up until now, when people are running for political office, whether it's school board or city council, you know, where do you get your money, where do you know the votes are going to come from? It comes from special interest groups like the unions. And so then you're beholden to them and their agenda. And again, there's been no interest group that says, here's what is best for kids, and we're going to bring you our members as voters and some resources to back your campaign up.

PARKER: So let's say Eliot and I sign up and we send you our check for $64. What are we going to get?

RHEE: You're going to get a lot of information about the local dynamic in your city and in your community. So we will specifically be telling you there's a school board meeting on this issue, we need you to show up and voice your support for it. We need you to e-mail or call your congressman or your city council member because they're about to vote on an important issue, and you need to let them know that you're watching them and you're going to hold them accountable for doing the right thing for kids.

PARKER: All right. Michelle Rhee, thank you, as always, for a great conversation.

RHEE: Thank you.

SPITZER: Good luck.

RHEE: Thanks.

PARKER: We'll be right back.

(COMMERCIAL BREAK)

JOE JOHNS, CNN SENIOR CORRESPONDENT: Hello, I'm Joe Johns. More of "PARKER SPITZER" in a moment. First, the latest.

New details about the U.S. border agent killed in a gun battle in Arizona last night. The head of the border patrol says -- border union says Brian Terry was shot after he was confronted by a group of bandits believed to be targeting illegal immigrants. Four suspects are in custody. Authorities are searching for a fifth.

The Consumer Product Safety Commission has voted for new safety standards for cribs including banning drop-side cribs. The ban goes into effect by June.

Tonight on "360," the last ditch effort to repeal "Don't Ask, Don't Tell." It passed in the House today. Will it make it through the Senate before the end of the lame duck session?

That's the latest. Now back to "PARKER SPITZER."

PARKER: That's all for tonight. Make sure to be with us tomorrow. We'll be talking about how the U.S. is really doing in Afghanistan.

SPITZER: The long awaited White House review on Afghanistan is coming tomorrow. And we'll drill down to tell you what we've learned about what's really going on there.

PARKER: Good night and thanks for joining us. "LARRY KING LIVE" starts right now.