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Parker Spitzer

Oil Executive Predicts $5-a-Gallon Gas by 2012; Debate on War in Afghanistan

Aired December 28, 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. Welcome to the program.

Our top story tonight, $5 a gallon for oil, Kathleen. It sounds crazy but a senior executive in the oil industry says that's where we'll be by 2012. It sounds improbable. It will do devastating things to our economy. And you know what it reminds us? Even though the lame-duck Congress supposedly did important stuff, it didn't do anything about energy.

They took the easy way out. They cut taxes. Raised spending. Have done nothing to transform our dependence on foreign oil. A real crisis in the making.

PARKER: Well, Eliot, you know, $5 would be a pretty harsh reality for most Americans. But what could possibly drive the price so high? Several factors play a role here. Crude oil at trading is more than $90 and climbing. America's consuming more than ever and of course global appetite is devouring oil at an unsustainable pace.

SPITZER: It is all these coalescing, the prices going up, up, up. And as we said, we could be facing five bucks a gallon by 2012. And joining us now to talk about this grim prediction, from Washington, former president of Shell Oil Company and author of "Why We Hate Oil Companies: Straight talk from an Energy Insider," John Hofmeister.

John, welcome to the show.

JOHN HOFMEISTER, CITIZENS FOR AFFORDABLE ENERGY: Thank you. Thank you for having me.

SPITZER: You know that sounds like a rhetorical question on the cover of your book. I guess virtually everybody does hate the oil companies. You've been the president of Shell and you've written about it. Thank you for being so honest in this really fascinating book about what's going on out there.

If I could, explain to us why you think the price of oil is trending up? What factors are coalescing to bring us there?

HOFMEISTER: Well, I think as you were saying in your introduction, we have done nothing in the 111th Congress to improve the supply side of hydrocarbons that we need every day in the economy. We use 20 million barrels of oil every day, Eliot. That's 10,000 gallons a second.

In 2008 when we had the last oil price spike, $147 for crude, we had all this drill, baby, drill rhetoric going around the country. We did nothing. We have had an anti-hydrocarbon administration that has proven by their actions that they would rather work on wind and solar and biofuels -- that's where the federal money is going -- and just let the oil industry, the coal industry, let them drift.

SPITZER: Yes.

HOFMEISTER: Or hold them back which is what they're doing now.

SPITZER: Now, John, I want to take the conversation first to the overseas impact. Something you have written about. And let's look. We have a graphic. Let's put it up on the screen here about U.S. consumption versus worldwide consumption.

And I think it is important that the public understand that foreign consumption has been going way, way up while U.S. consumption has not been. And so that foreign markets in China in particular are driving this pricing.

Can you explain what that is doing in the marketplace?

HOFMEISTER: We have never produced in the world more than 85 million barrels a day. The global system just has not been able to produce more than that. Meanwhile, China, you are absolutely right, there are more than 30 million new cars on the road in China in just the last two years.

Over the next two years, there will be another 30 million cars on the roads of China. And it's India. It's Malaysia. It's the whole Asian growth syndrome which is spiking oil demand unprecedented.

By 2012, we're going to need about 90 million barrels a day to meet daily global demand. We're stuck at 85. And then the U.S., we're actually going to be in decline because of the moratorium in the Gulf of Mexico.

So global demand drives the crude oil price. Crude oil price drives the gasoline price in the United States.

PARKER: John, you're recommending that we go back to 1970 levels of producing 10 million gallons a day -- a year?

HOFMEISTER: Ten million barrels a day.

PARKER: Excuse me, a day, exactly.

HOFMEISTER: That's right.

PARKER: And so why -- if we were doing that in 1970 and given that, you know, the consumption is up and all this other competition, why aren't we doing that now?

HOFMEISTER: We have grown to detest drilling in this country. When we were doing 10 million barrels a day, we were drilling off the coast of California. Since the Santa Barbara spill in 1969, we've stopped new drilling off California.

We can't drill in the eastern Gulf of Mexico. The president said in the -- in March of this past year that we should be drilling off the East Coast and off the eastern gulf. He's rescinded that. The secretary of the Interior announced on December 1st that he would postpone the next five-year plan for drilling leases from 2012 to 2017.

That basically says this administration is punting on new drilling off our coasts between now and the rest of the time they are in office if they get a second term. And $5 gasoline, I think is going to go in the face of them getting a second term because they haven't done anything about it in the meantime.

PARKER: What do you think it's going to take getting gasoline prices up to $5 a gallon for something to happen and what could happen when the prices reach that high? Americans are not going to be very eager to embrace that price.

HOFMEISTER: I think they will be frustrated and they will be angry. The fact that it's an election year, the American people could say, you know, the people in office haven't done their job. They haven't delivered affordable energy.

I said to candidate Obama in 2007 -- to him directly -- if you don't provide more hydrocarbons in the period of 2009 to 2012, you will not like the gas price which you will be running against when you go up for reelection in 2012.

SPITZER: John, you have been a big proponent of increasing hydrocarbon capacity. But you also believe that we're supportive of the cap in trade, in other words, imposing some sort of taxation on carbon production.

Why is that? You're the rare executive who embraced that -- rare oil executive who embraced that. Explain that and where do we go now in that department.

HOFMEISTER: I think if you're going to be producing hydrocarbons, you need to be responsible for the total cost, which is not just the economic cost but the social cost as well.

I believe that there is technology available to dramatically capture the carbon emissions that come from coal, gas and oil. Let's use that technology to create wealth. A cap in trade system can create wealth for this nation. It's not just cap and tax.

The cap and tax people are looking at Waxman-Markey which was basically a cap in tax bill because they missed -- they did not follow the pattern that the United States Climate Action Partnership put together. They've now ruined the reputation of cap and trade. SPITZER: John, I want -- I want to interrupt you because I agree with you on sort of a subtle point that people have got to understand. You said something hugely important. Capture the total cost to society of what you are producing. Economists call this an externality.

You're saying put on that tax but then you want to use it, I gather from what you're saying, to create clean coal. The sequestration of the carbon and where you submerge it below earth or you do it with natural gas. You want to use that tax to create alternative, clean energies. Even if they are carbon based. Is that how I understand you?

HOFMEISTER: Absolutely. We need a 21st century energy system to replace the old aging 20th century energy system. Let's use technology to its fullest advantage. To be able to continue to produce coal in responsible ways, to burn that coal through pulverization and gasification.

The gasification of the coal with carbon capture n sequestration puts a whole other 100-year life on the availability of clean coal. Affordable electricity for the nation. The same thing could be done in reducing emissions at refineries which, if everybody had to do it, it could be done.

SPITZER: Look, I totally agree which is why I think across the board tax that did capture that cost would be -- provide the funding source for the technology and the R&D you're talking about.

Now to put this in numbers, though, it is extraordinarily expensive and the Department of Energy had been funding some of these sequestration programs. They basically pulled back because people got scared by the money, by the dollars, about billions of dollars for each one of these coal plants.

Do you think that's the direction we should be going nonetheless?

HOFMEISTER: The answer, Eliot, is to raise production. If the companies could increase production, they are getting the revenue to pay the extra costs, aren't they? By raising to -- from seven million barrels a day to 10 million barrels a day -- lord knows we need it. We use 20 million a day.

That's added revenue to companies, that's higher profitability to companies. Now use some of that added profitability to put the technological improvements into refineries, into coal mining, into coal burning in coal plants, and it pays for itself because we are using more of it.

SPITZER: How about nukes? You have not mentioned nukes recently. Do you see them as being a critical part, at least bridging the gap until other technologies emerge?

HOFMEISTER: I think we should be expanding the nuclear fleet in a couple of ways. We should make a long-term commitment to a much higher number of nuclear plants so that we can commoditize the construction, the manufacturing and the development of nuclear energy going forward so it's less costly.

Commoditizing means make it the same, the way the French do. We should also explore the advances of thorium. Thorium is a form of fission that is safer, according to the experts, than nuclear and it is -- there's so much more of it. We're never going to run out of energy in this world.

What we never have had, however, in this country is an energy plan for the future that takes the next zero to 10 years and does what we need to do. The next 10 to 25 years. The next 25 years, 50-year plan. That's what you need. Guess what China is doing?

They're doing a 50-year plan. Guess what the EU is doing? They're doing a 50-year plan. What are we doing? We're waiting for the next election and watching the gas price in between. It's an absurd way to run the world's largest economy. But we've so politicized energy and the facets of energy. We can't get away from the politics of it.

PARKER: Well, John, speaking of China, you know, China has taken out the middle man and is buying directly from countries in Africa like Sudan and Nigeria. What effect does that have on us?

HOFMEISTER: It shrinks the global pool of oil available which is going to lead to price spiking in the crude oil price because they are getting a contracted price in China. We in the U.S. are left with what's in the available global pool which will be a much higher price. So they are taking care of themselves. And we're going to be exposed to rapidly changing and volatile crude oil prices.

PARKER: But you have a big message out there and some ideas that people need to hear. And I understand you've met with governors and mayors and you say you've talked to the president in 2007. Is anyone listening?

HOFMEISTER: In the current administration, it has been very difficult to get through the door. I got through the door once in the entire two-year period thus far. And the meeting was cut short.

There is not a keen interest in doing anything for hydrocarbons other than making them more expensive so that other forms of energy look relatively less expensive. That's not a way to go. We need a both/and answer. We need more hydrocarbons because we still have 250 million cars on the road.

The new Leaf, the new Nissan Leaf, the new Chevy Volt, they are only hundreds and thousands on the roads, not millions. To make a real dent in the gasoline demand is going to take another decade or longer.

And so in the meantime, where's our hydrocarbons coming from? We're not drilling for them. We're going to import them. It's going to be more expensive. It's foolish to do it this way.

SPITZER: John, I agree with much of what you are saying. But there is one word that I really do think we need to add to this conversation. That is the word efficiency. Over the timeline you're talking about, granted it will take a decade until efficiency really has an impact in the automotive sector because it takes that long until enough of the fleet is captured from the new regs. Should we not be increasing the miles per gallon we get from cars?

HOFMEISTER: Absolutely. In fact I go even further, Eliot. I say get rid of the internal combustion engine altogether.

SPITZER: That is dramatic.

HOFMEISTER: Put together a 25-year road map to get rid of the internal combustion engine. Replace it fully with batteries and with hydrogen fuel cells and appropriate mass transit systems in dense population areas. We can dramatically reduce the demand for oil in that way.

SPITZER: Look, it seems to me and this is what so captivate about your book and what you're proposing. There is a coalition that should be formed about what you're proposing because you're not just saying drill and forget the environment. We don't care.

You're saying drill but put on a carbon tax. Use that to fund sequestration. Yes, nukes, yes, efficiency. Yes, transform our entire economy. It sounds like such a centrist, sensible system.

And there are -- we were chatting with Ed Rendell yesterday. Governor of Pennsylvania. He's for all this. Why can you not form some sort of political coalition around this concept?

HOFMEISTER: In the two-year, four-year cycle of politics, in the winner/loser game of politics, there is no ability in that short time frame to pull people together because they are off running for office, number one. Number two, we've made such a complex government for ourselves.

Thirteen executive branch agencies govern energy, 26 congressional committees govern energy. They don't want to give it up. They want to keep governing energy. My suggestion is change the governance. Put into place the equivalent of a fed for the future of energy. To deal with supply, demand, environment and infrastructure.

Put an independent body in place that doesn't worry about the next election or who is in the majority party in the Congress, the House or the Senate or the White House. Because that is hurting the consumers, the voters of America by causing them to have less efficiency, less technology, higher cost energy, all of which is going to make our economy that much more vulnerable and that much weaker to global competition.

PARKER: Finally before we let you go, John, not to filibuster, but what kind of car do you drive?

HOFMEISTER: I have -- we got rid of our foreign made cars. And I have a Ford and a GM car.

PARKER: Well, that's very American of you. (LAUGHTER)

SPITZER: What's wrong with Chrysler? Come on. Chrysler is going to call you tomorrow morning and say they'll offer you a deal.

HOFMEISTER: We'll see if our children need a Chrysler.

PARKER: All right, John Hofmeister, thanks so much for being with us.

HOFMEISTER: Thank you.

SPITZER: Coming up, Iraq's prime minister says American troops are not welcomed beyond 2011. But what will that mean for the war- ravaged country? We'll have the latest stay with us.

(BEGIN VIDEO CLIP)

CLIFFORD MAY, PRES., FOUNDATION FOR DEFENSE OF DEMOCRACIES: The idea that we can afford to lose to the Taliban, which Christine is right to call savages, and allow that to happen to Afghanistan and then think that will not help al Qaeda and will not endanger Pakistan, I just think is incorrect.

(END OF VIDEO CLIP)

(COMMERCIAL BREAK)

SPITZER: 2010 is the deadliest year so far for American troops in Afghanistan. And reports point to a worsening security situation. New intelligence also points to an alarming trend. Rival militant groups joining forces in deadly raids along the Afghan/Pakistan border.

This is all unfolding just months before the U.S. troop withdrawal is supposed to begin in July of 2011.

PARKER: Joining us in "The Arena" to discuss conditions in Afghanistan, from Washington, D.C., Christine Fair. She spent the summer in Afghanistan and Pakistan and says the war has become mission pointless.

And Clifford May, president of the Foundation for the Defense of Democracies. He argues that pulling American troops out will hurt the fight against terrorists.

Thank you both for joining us.

MAY: Thank you.

CHRISTINE FAIR, ASST. PROFESSOR, GEORGETOWN UNIVERSITY: Thank you.

PARKER: Christine, let's start with you. You've said that the mission in Afghanistan is pointless. Why do you say that? FAIR: Well, I think there are a number of reasons. First of all, the known estimates of al Qaeda operatives in Afghanistan range anywhere from 50 to 200. And that's it. Al Qaeda's largely shifted to Pakistan. That's where the al Qaeda struggle is.

The Taliban are not as tightly interwoven with al Qaeda as often imagined. And the Taliban, quite frankly, are not our enemy. And I think that they're -- I mean, look, they're savages, for sure. I'm not in any way exculpating them from their savagery, but they're not our number one foe.

Groups like Lashkar-e-Taiba, al Qaeda, which are Pakistan based, they are our enemy and there is this enormous irony that by virtue of having 150-ish troops, American as well as NATO ISAF in Afghanistan, all of the logistical resupply moves through Pakistan, which means that we are absolutely restricted in terms of our options of pursuing our real national security interests because we're absolutely beholden to Pakistan to sustain a counterinsurgency which doesn't serve, in my view, our interests.

Instead, we should really pursue what Vice President Biden has argued for, albeit in my view with some modification. A counterterrorism-plus strategy that really focuses on groups like al Qaeda as well as groups like Lashkar-e-Taiba and Jaish-e-Mohammed that are not only based in the Federally Administered Tribal Areas along the border with Afghanistan but also deep within Pakistan such as the Punjab. Cities like Karachi where most of the high-value operatives have actually been arrested. So that's it in a nutshell.

SPITZER: Cliff, as I understand it, your perspective is that the very premise of what Christine is saying is wrong when she says al Qaeda and the Taliban are fundamentally distinct. You see the two as almost being merged at the hip and therefore saying if we're fighting al Qaeda we have to fight the Taliban. Am I correct in that?

MAY: Basically, I think you are, Eliot. I would say that for the U.S. to be defeated by the Taliban after all these years and after two presidents have made commitments to the battlefield in Afghanistan, that would be a very significant and consequential thing to have happen.

As for the Taliban and al Qaeda, keep in mind the Taliban lost power because it would not break with al Qaeda back in 2001. And I would argue, and I have great respect for Christine, but I have to say I would argue that the evidence suggests that if anything, the Taliban and al Qaeda have become more closely interconnected over the years since.

They have become more ideologically close. They have become operationally entwined. Their finances are entwined. A lot of the money that goes to the Taliban comes from the Gulf and Saudi Arabia through al Qaeda. Even their families have become intertwined. Over almost 10 years --

FAIR: That's not true. MAY: -- Taliban and al Qaeda families have intermarried. So I think the idea that we're going to lose -- with one conclusion on this.

SPITZER: Sure.

MAY: The idea that we can afford to lose to the Taliban, which Christine is right to call savages, and allow that to happen to Afghanistan and then think that will not help al Qaeda and will not endanger Pakistan, I just think is incorrect.

SPITZER: But, you know, you're using a word there that I certainly don't think it's fair to put in Christine's mouth which is to lose. She said that they are not the same enemy as al Qaeda. And the interesting thing here is that even General Petraeus has basically said -- said very overtly, negotiating with the Taliban and reaching an understanding with them is the only way to end this successfully.

MAY: This is --

SPITZER: So how do you square those positions?

MAY: This is a very important point. Eliot, this is a very important point you're making. There's no question and I talked to commanders when I was in Afghanistan about this that there were -- the Taliban is a network itself. And there are elements within the Taliban that are probably not that ideological.

And if they see the Taliban over all losing, they will defect to our side. But when you are talking about somebody like Mullah Omar who is the head of the Afghan Taliban, he is somebody you are not going to be able to negotiate with and General Petraeus doesn't think so.

I'm not going to argue that we necessarily have the best strategy in Afghanistan. I will argue that we have the best American general who is heading up that strategy, General Petraeus. His full complement of troops has arrived only this fall. We should allow him time to do what he wants to do.

We all want to play armchair general but I think we should be supporting this general and, by the way, this president in what is a very well considered if very complicated and difficult strategy that the Obama administration would say is -- and I think they're right on this -- is making progress, particularly in what was the -- the Taliban hot land of Helmand and Kandahar.

And they've also done a pretty good job protecting Kabul. They're not everywhere in the country. But they're making progress -- it's uneven but we should allow that progress to continue.

SPITZER: Cliff, in terms in terms of making progress, if we can put up just the maps that were internal U.N. determinations about whether or not we were making progress. There's a map from March and then in October of this year. That's March. And you can see the reddish area is high risk and then if you jump to the October map, just very recently, you see the area of high risk and -- is increasing the areas of low risk are diminishing.

So aren't we losing -- I mean, Christine, I want to come back to you. Do you think we are winning or losing at a simple military level right now?

FAIR: Well, look, you know, I was actually with UNAMA. And I have seen those maps going back to 2002. In 2002, people could drive from Kabul to Kandahar. Now that would only be a lunatic's folly. So in terms of being able to control the terrain, I mean, the evidence is overwhelming.

That simply hasn't happened. And point of fact, the true (INAUDIBLE) of troops that are required to win in this insurgency are not there. Admitting that the entire country is not at war, even if you only look at the south and the east -- I've done the math. We still need approximately 300,000 troops to succeed using Petraeus' own doctrine. And we're nowhere near that.

PARKER: Well, Cliff, I'm sure you have a lot to say about that. But you've said that we have the best general on the ground there but what about President Karzai? He -- you know, he's admitted to taking cash from Iran. You know, what do -- how do you feel about him? How is he helping us over there?

MAY: Yes, we've -- look. Among the problems we have, and we have many, and we're going to see more violence and that's what you get when you send more troops in to attack the Taliban. And, yes, the U.N. is going to find itself with more security risks, and that's what the map shows.

Frustrated Taliban takes it out on the U.N. but yes, we've got a problem with Karzai. He is not the perfect leader for Afghanistan. But he's the leader we have right now. And General Petraeus is addressing that. He's put General McMasters in charge of a program and a task force that is meant to try to wipe out -- you're not going to wipe it out, obviously. But try to greatly diminish the corruption and provide better leadership.

And the other big problem we have, and Christine is right about this, is that Taliban can retreat across the border into Pakistan, into those parts of Pakistan, wild and woolly parts. Christine has been there. I've been to parts -- to sections of it, where you do have al Qaeda.

Now if they were a way to get al Qaeda and destroy al Qaeda up there in Waziristan and Fatah and those regions, we should absolutely do it. I think Christine is wrong to say if we would just withdraw our troops from Afghanistan we'd have a better chance of getting at al Qaeda. But if we could --

FAIR: But that's not what I said.

SPITZER: OK, guys.

FAIR: I said counterterrorism. MAY: If we could destroy al Qaeda in Pakistan, that would mean a greater weakness for the Taliban. But defeat follows defeat and success follows success. And everybody including the Pakistanis are kind of hedging their bets to see who's going to win this battle on what we call nowadays the Af-Pak theater.

(CROSSTALK)

MAY: And I think it is the important theater in the global conflict we face.

SPITZER: Cliff and Christine, we will come right back. We've got to take a quick break. But we'll pick up right there in a moment.

PARKER: Stay with us.

(COMMERCIAL BREAK)

PARKER: We're joined once again by Clifford May and Christine Fair talking about Afghanistan.

SPITZER: Look, I want to come back to something you clearly both disagree with each other about the interconnectedness between al Qaeda and the Taliban. But something you seem to both agree on is that the role of Pakistan right now is not helpful to us.

They are not permitting us to do what we need to do either with al Qaeda in their own territory or the Taliban domestically to Pakistan or across the border in Afghanistan. How are we going to change that dynamic and get the ISI and the Pakistani government to do what we need to do and they're supposedly an ally?

MAY: Well, I think the most important way we're going to do that, Eliot, is by showing that we're there to win and that we mean to win. Everybody wants to align with the winner. And if there is a chance or a good chance that we are going to be defeated by the Taliban and that al Qaeda will then -- and I don't see how anyone can imagine the Taliban taking control in Kabul, and not giving refuge to -- to al Qaeda again.

If Pakistanis think that, it's going to empower them. But if they think the U.S. is going to win, they're going to want to be on the winning side. Winning generals have no problems getting recruits. Losing generals almost always do.

PARKER: Christine, you keep -- you have said that we're kind of missing the point with our Af-Pak policy, that India is really an important part of that. Can you -- what do you mean by that?

FAIR: A couple of things. First of all, Pakistan is absolutely letting douse what we need to do vis-a-vis Al Qaeda. Now, they are doing it problematically. They are letting us conduct our drone strikes with their input. We're bags those drone strikes from Pakistani airfields in Jacobabad as well as in Shamsi. So they are letting us do this. So they are actually cooperating on issues of Al Qaeda. Where they have been absolutely recalcitrant and where they will be recalcitrant is on the Taliban.

I will say that this debate is characterized by fake binaries. It's either we maintain this counterinsurgency presence or we go home. And people like we don't maintain this. I think we need to retract to a counterterrorism posture. Karzai doesn't want us to leave. He wants our money and training.

We retain prominent military bases that allow us to prosecute counterterrorism, ensconce in Afghanistan. The Afghan national security forces, while they are still en masse not terribly competent, we need to maintain that training focus.

With the ANSF there, it's virtually impossible at this juncture for the Taliban to take Kabul. So this is a fear-mongering specter that proponents of this war like to raise. It's just not a likely outcome given the current situation.

ELIOT SPITZER, CO-HOST, "PARKER SPITZER": Christine, time is short. I want to give Cliff his last shot. Matching Christine's answer, what would you do prescriptively if you had to give us a policy?

MAY: I think if I give you a policy I'd rely on General Petraeus. I think he knows more about this than any of us do. He's got his troops there, not as many as he would like, but I think we give him a chance to work that out and see what happens. This will not be fast.

I think it's also very important to keep this in mind. There are some people who believe, I don't think Christine is among them, that the Taliban represents an indigenous insurgency that's against the American occupation and is very popular inside Afghanistan. Not true. They are savages. They object to such things as women getting an education and having jobs. They express that not on TV shows and op- eds but by throwing acid the faces of little girls who go to school. We want to be against the Taliban.

Christine and I disagree on what the most effective strategy is to defeat the Taliban but I think we agree the Taliban should be defeated.

In Pakistan, there's a great range of people from those who absolutely want to have a secularized state and have all the freedoms that we have to those. I think there is a minority who want to see an Islamist state along the lines of Iran or Sudan. They are small minority but they are a very violent and brutal minority.

When I was last in Pakistan, four major terrorist attacks, including one on what is the equivalent of the Pakistani Pentagon. It lasted 25 hours. Pakistan is in danger. Right now the troops that are guarding the nuclear weapons in Pakistan are pro-western. If they ever become pro-Iranian or pro-Al Qaeda, we've got a very big problem.

PARKER: All right, Christine Faire and Clifford May, great discussion. Thank you both for joining us.

FAIR: Thank you.

MAY: Thank you.

PARKER: Coming up, a new plan to make President Obama the president of no. But will it work? We'll be right back.

(BEGIN VIDEO CLIP)

BRIAN BEUTLER, TALKING POINTS MEMO: I think it's also to widen schisms that already exist within the Democratic Party to try to force vulnerable members and members that aren't on the same page with the White House on these regulatory issues to stand on the other side of the aisle and join the Republicans against the president.

(END VIDEO CLIP)

(COMMERCIAL BREAK)

PARKER: When the new Congress convenes in Washington, the White House will be preparing for a battle with Republican party and its control of the House.

SPITZER: But the GOP has plans to expand its new power even more by using an arcane law to its advantage. Brian Beutler is a reporter for "Talking Points Memo" and he joins us tonight from Washington. Brian has spoken with several lawmakers about their plans to use the Congressional Review Act to force veto after veto of President Obama. Brian, good to have you with us.

BEUTLER: Thank you for having me.

PARKER: Hi, Brian. So this all sounds a little convoluted. Tell us how the law would work.

BEUTLER: Let me do my best. The way the law works is it allows by a simple majority vote in the Senate, no filibuster, congress, both the house and the Senate, to pass a resolution of disapproval of any executive branch regulation or rule making.

So if Republicans decided that they deeply oppose this new health care regulation that will incentivize doctors to have end of life counseling with their patients or the Volcker rule or environmental regulations, they can force votes in both the House and the Senate on those regulations.

And if the resolution of disapproval passes with the help of maybe some of Democrats who would have to take tough votes, then that resolution goes to President Obama's desk. And he either has to veto it or sign it.

PARKER: So the point is more or less to -- the party of no to force the president to become the president of no and veto all these pieces of legislation? BEUTLER: That's correct. I think it's also to widen schisms that already exist within the Democratic Party to try to force vulnerable members and maybe members that aren't on the same page with the White House on these regulatory issues to basically step on the other side of the aisle and join the Republicans against the president.

SPITZER: I think there's a larger aspect to this, which is that having lost the House, the common theory is that President Obama will now governor a great extent through the regulatory. Now what you are seeing is these will be subject to legislative challenge. So even his regulatory power will be checked by Republican Party.

Even though he may veto it, there's going to be another significant pressure brought to bear on every one of these individual regulations if they pursue this policy.

BEUTLER: That's exactly right. That's very well put.

SPITZER: Now, here's my question. Have you spoken to -- who on the hill have you spoken to who says they will be pursuing this and what are the regulations they intend to go after first?

BEUTLER: So I spoke to specifically to Senator Jim DeMint who is sort of a leader on the conservative wing of the Republican Party. I spoke to Senator Lindsey Graham from his same state on the other wing of the party. I've spoken to aides and consultants about this. This is something they certainly are looking at doing.

What triggered it for me as far as looking into it was this new FCC regulation on net neutrality. As soon as it came out, 30 Republicans were there signing the later saying they opposed it and they plan to or are suggesting they might force one of these votes next Congress on that issue.

And 30 is the magic number they need to force the floor vote where they would only need a majority to pass the resolution in disapproval. So they signaled, you know, just a week or so ago that this is something they are really strongly looking at.

PARKER: So who do you see as some of the Democrats who may be vulnerable to this kind of thing?

BEUTLER: Ben Nelson is basically the most conservative Democrat in the Senate. He's also up for reelection in 2012. Claire McCaskill is a moderate, also up in 2012. I think you could see a few more defections, maybe Mary Landrieu. This is just me speculating based on voting records in the 111th Congress.

They'd need about four for all of these if they keep all the Republicans united and, unless Harry Reid draws a really tough line on this, they could pretty easily get that.

SPITZER: What you have now is a third Republican strategy. Obviously you can repeal a law, which is something that would be hard but has been talked about in terms of health care in particular. You can defund certain efforts on the part of the executive branch, which is something they've spoken about. Now you are laying out a third potential strategy where you go after each individual regulation so there's really -- this is another arrow in the quiver of the Republican Party that wants to push back against the president's agenda.

BEUTLER: That's right. It's something that they are aware probably won't have any actual regulatory impact. It's more about messaging and it's more about broadcasting the American people or their base, what they see as problems with the White House's, you know, governing within the executive branch.

But as one Republican consultant put it to me, it's sorts of like message voting on steroids. Often there are test votes on amendments and things like that that happen in the House and the Senate that you know, they are supposed to have a big political import and then never really do.

These will be bigger because they are really going to spotlight how Obama is governing and force them to sign or veto. It's a question of how many they do and how much the conservative media and the main stream media gloms on to this and treats it as a real issue as oppose tot just a side show.

PARKER: So Brian we shouldn't be holding our breath in anticipation for the new bipartisan Congress?

(LAUGHTER)

BEUTLER: I wouldn't put money on it, but I'm not a betting man.

PARKER: All right. Brian Beutler, thanks for being here.

BEUTLER: Thank you both for having me.

PARKER: When we come back, after all the talk about a peace process in the Middle East, what if nobody really wants peace? We'll ask an expert if a solution is still possible. Stay tuned.

(BEGIN VIDEO CLIP)

PETER BEINART, SENIOR POLITICAL WRITER, "THE DAILY BEAST": I don't think Israelis are paying the price of not having peace very much today. There has not been much terrorism, thank goodness. There's not even been Hamas rocket attacks for a couple of years. And things in Israel are pretty good. But I think that will not last forever.

(END VIDEO CLIP)

(COMMERCIAL BREAK)

SPITZER: Late last year the Obama administration announced a reset in U.S. policy toward the Middle East with vigorous attempts to bring the parties together. The effort peaked on September 2nd of this year when Middle East leaders met for a day of diplomacy in Washington. This was billed as a major foreign policy moment.

Usually such a high-profile announcement indicates progress has been made behind the scenes leading many to predict an imminent breakthrough. It doesn't seem to have turned out that way. Later that month on September 26th, Israel's moratorium on new settlements in the West Bank ended, causing the Palestinian Authority to leave the negotiating table.

PARKER: More recently, Secretary of State Clinton acknowledged that the process is in crisis and indeed bilateral talks seem to have ended. What happened? Joining us is Peter Beinart, senior political writer of the "Daily Beast" and a major voice in the American debate about Israel and the Middle East. Thanks for coming in.

BEINART: Thank you.

SPITZER: Peter, unfortunately you are absolutely correct when all of this hubbub started about the new negotiations. You said it will not go anywhere. What happened and why? And is it just totally dead at this point?

BEINART: I don't think you have an Israeli leadership that really wants to do what it would take to get a Palestinian state. I don't think you have an Israeli government, leadership that wants to give back most of the West Bank. And you have a Palestinian leadership that's weak and divided and an American president that is not willing to put enough pressure -- not able to put enough pressure on those governments, the Palestinians and the Israelis to essentially make a deal.

SPITZER: Where is the Israeli public at this point? Is there a sense maybe it doesn't matter whether there's a formal piece that things are going along just fine? The Israeli economy is booming.

BEINART: Yes, I don't think Israelis are paying the price of not having peace very much today. There's not been much terrorism, thank goodness. There's not even been Hamas rocket attacks for a couple of years. And things in Israel are pretty good.

But I think that will not last forever. Sooner or later, if there is no peace process -- if there's no movement toward a Palestinian state, then I think Israelis practically will start paying the price again.

SPITZER: Let's play devil's advocate. Maybe it's the reality that Netanyahu is correct that Israel's best game is just to wait. Abbas is beginning to form what is a real state within the Palestinian authority. Hamas has been sort of enclosed and isn't doing as much as it used to. Hezbollah up in Lebanon has been quiet momentarily, at least.

So he's saying why give things back when we have a period of quiet and the rest of the world is focused on Afghanistan, on Iran and Iraq?

BEINART: First of all, I think settlement growth makes creating a two-state solution harder and harder every year. Secondly if you don't show the Palestinians that Abbas and the Salam Fayyad, the prime minister, are getting anything from opposing terrorism, which I think most Israelis would admit they are opposing terrorism, then I think you actually end up emboldening those people like Hamas to say, terror is actually the way we're going to get the Israelis to do something.

PARKER: What role should the U.S. play at this point?

BEINART: I think the point -- America was very involved in the peace process in the 1990s when our presidents had some time on their hands. The economy was booming. America didn't have a lot of global competition. We could afford to chase after the Israelis and the Palestinians.

I think you are seeing that the public mood in the United States and even amongst political elites is we have enough problems on our own soil. Also, America doesn't have the power it used to. I think one of the things is the peace process is moving outside of America's control. The Palestinians and the Israelis are not looking to us to lead as much as they used to.

SPITZER: I think it's that latter factor. It's not so much the president in years past actually spent time in the Oval Office plotting the day-to-day strategy. I think it's the perception of diminished U.S. leverage with respect to both Israel and Hamas and the Palestinian Authority where they are saying, after all these years, the United States has not yet flexed its genuine muscles withdrawing the financial aid, military aid. It's not going to now.

So I think people have in essence called our bluff saying no matter what they say, we continue to do what we want and there are no repercussions.

BEINART: Yes. The one thing the U.S. could always say, we could bring the Israelis to the table. We were the only people the Israelis trusted. We had leverage over them. Obama has not been able to move Netanyahu. So the Palestinians are saying, you know what, forget the U.S. We'll go and try to get the other countries to recognize the Palestinian state, and they are starting to do it.

SPITZER: But isn't there also another factor that we, and rightly so, care much more about whether Iran gets a nuclear bomb than weather Abbas and Netanyahu sit down and have a cup of coffee together?

BEINART: I think we care about both of them. Of course we should care whether Iran gets a nuclear weapon. But I think we also understand and the people in the administration believe that the lack of progress on this front is a radicalizing force in the Muslim world, and that radicalism comes back and hits us.

SPITZER: I think -- I agree 100 percent. That's a long-term debilitating factor hard to measure day by day. It's sort of like a cancer that grows very slowly and is invisible every day.

What role are the Arab leaders playing in the surrounding countries, in Egypt, in Syria? Are they constructive at this point or are they just standoffish?

BEINART: I think they have a problem themselves. First of all, they have never really been willing to stick their neck out on behalf of the Palestinians. They've never really been interested in the Palestinians except particularly for their own domestic mobilization.

What they have done is they said in 2002 they would all recognize Israel's right to exist if Israel returned to 1967 borders. They haven't been willing to go further than that, but at least they haven't retracted that offer.

SPITZER: Let's go to Iraq for a minute, metaphorically. We're basically being kicked out with Maliki saying there will be gone in 2011 and there will be no extension of the agreement to let troops they there. Is that by design? Do we want him to do that so that we have a way out? Is this good for U.S. policy? Is this another sign we're weak in that region and our leverage matters less?

BEINART: I think probably ideally we'd like to have some troops there but we've conceded that Iraq's destiny is going beyond our control. We hope that it doesn't blow up, but that if it doesn't blow up, we're not going to go in and save it. The biggest power in Iraq today outside of the Iraqis is Iran.

SPITZER: That's what worries many people. If once we are -- we leave, being kicked out essentially by Maliki, what will happen? Is there is Iranian pressure and Iranian power being demonstrated back in Iraq, will we not have fought the war and lost on both sides?

BEINART: I think the war will certainly look like a colossal blunder in retrospect. But I also believe that probably the Iranians will produce an Iraqi nationalist reaction and that the Iraqis in fact will not ultimately like to have their affairs controlled by the Iranians any more than they did like having their affairs controlled by the United States.

PARKER: One little quick question on Israel. Are the evangelical Zionists in this country still a political force or factor in --

BEINART: Absolutely. I think there are some people on the Israeli right who have essentially given up on American Jews knowing that American Jews have liberal values and actually think that their support over time will be sustained by American evangelical Christians, most whom don't give a wit about the human rights of the Palestinians.

I think the problem will be that that will make Israel more and more of a partisan issue, which is to say the divide between Republicans and Democrats will grow wider.

SPITZER: You used a phrase in an article saying Barack Obama would called smarter than he was brave. And are you saying there's been a lack of courage, a lack of fortitude, lack of backbone? And if so, where? BEINART: On Israel and the Palestinians. I understand they did what they did because they didn't want to incur political costs, I think ultimately, they looked the prospect of putting real pressure on Netanyahu in the face and they blinked. I also think that was an act of lack of courage.

SPITZER: Peter Beinart, thank you for joining us.

BEINART: Thank you.

PARKER: When we come back, what "The Empire Strikes Back," "All the President's Men" and "Airplane" have in common. Don't go away.

(COMMERCIAL BREAK)

(NEWS BREAK)

PARKER: And now postscript. Today the library of Congress announced the latest editions to the National Film Registry based on recommendations of film experts as well as the general public. So now there are 25 new films. That brings the total to 550 films total in the archive.

SPITZER: Movies are a true American art form. But unlike jazz, the broader musical film has a shelf life. After awhile it just falls apart. That's why Congress created the National Film Preservation board to safeguard the movies that matter.

For instance, one of the movies dates back to the days of Thomas Edison, the man who some say invented the movie. It's called "Newark Athlete."

PARKER: Not bad for 1891.

SPITZER: Wow.

PARKER: But I got say with the death of Leslie Nielsen this year I'm glad they chose "Airplane." Roger, Roger.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: The stewardess said -- where are the pilots?

UNIDENTIFIED MALE: Can you fly this plane and land it?

UNIDENTIFIED MALE: Surely you can't be serious.

UNIDENTIFIED MALE: I am serious. And don't call me Shirley.

(END VIDEO CLIP)

(LAUGHTER)

SPITZER: I think a lot of people would be happy to have him as a co-pilot these days given what's going on at the airports, nothing good going on out there. Anyway, a great movie. But what about the star wars series? Classic American filmmaking and some people think the best of the bunch was "The Empire Strikes Back." It, too, is included.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: Luke, I am your father.

UNIDENTIFIED MALE: No, that's not true. That's impossible.

(END VIDEO CLIP)

PARKER: It's not always good to find out who your real dad is. "May the force be with you."

SPITZER: Thank you.

PARKER: And since we're in the news business, it's hard to argue with this choice, "All the President's Men," How Woodward and Bernstein took down the most powerful man in Washington and broke the Watergate story.

(BEGIN VIDEO CLIP)

(MUSIC)

(END VIDEO CLIP)

SPITZER: And, of course, Kathleen, Bob Woodward is still doing it, every year another book, stories from the White House. It's an unbelievable career he's had.

PARKER: And he looks great for somebody who is 400 years old.

(LAUGHTER)

SPITZER: Anyway, I'm feeling inspired, Kathleen, and hungry for popcorn.

PARKER: Let me guess. Buttered or --

SPITZER: No. Butter is bad for you. Just salt.

PARKER: Salt, no butter.

SPITZER: Thanks so much for being with us. Be sure to join us tomorrow night.

PARKER: Goodnight from New York. "LARRY KING" starts right now.