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State of the Union
Political Realities Amidst the Celebration
Aired January 18, 2009 - 11:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
JOHN KING, CNN HOST: Welcome back to the third hour of STATE OF THE UNION.
Yes, we're going to here, not out here outdoors all the time. Most days, back in a nice, warm studio. But we'll be on the air for a full four hours every Sunday morning from now on, beginning at 9:00 a.m. Eastern, bringing you both the first and last word in Sunday talk. And we hope you'll make us your home on Sunday morning.
Joining me now, three political experts who know this town better than just about anyone else, three of our great contributors here on CNN making up the best political team on television, Democratic strategist Donna Brazile; Republican consultant Alex Castellanos; and CNN Senior Political Analyst and adviser to four presidents, David Gergen.
Thanks all for joining me.
And it is a glorious sight. You hear the band. The band is practicing on the west steps of the United States Capitol, the west front. And it is a reminder of the moment that is 48 hours away, plus one, 49 hours away, I guess.
Let's start with there, the moment.
DONNA BRAZILE, DEMOCRATIC STRATEGIST: Well, John, I will be sitting there on the Capitol grounds. I want -- I would like to bear witness to this moment in history.
KING: You won't let me have that ticket?
BRAZILE: No, John. No. I have one ticket and I'm going to use it.
When I got up this morning, John -- I'm a resident of Capitol Hill -- I teared up again. I teared up because I read in the paper that Obama's grandmother will be coming all the way from Kenya. And I thought about just how important it is.
I mean, his grandmother will be able to witness history. So this is truly a remarkable day. We all have great pride, and it's just a moment that we will all celebrate and remember.
KING: Alex, you're a conservative, a Republican, you help candidates sharpen, tighten, their message. For this president-elect at this moment, a Democrat, but how important are the words he first speaks from those steps? ALEX CASTELLANOS, REPUBLICAN STRATEGIST: Well, this is -- you know, these are the seeds of the next four or eight years for the Obama administration. And I think what he wants to do here is do a little something different than he's been doing in the past few weeks, when he's been lowering expectations, when he's been talking down the economy.
This is the time to lift the nation's eyes up over the horizon to the future, where we can go, what we can be if we all pull together. This is the time to remind the country that this is the land of endless promise and limitless frontiers.
This is an inspirational moment. This is not the policy day. This is the day to tell us what America could be.
KING: And as America watches the moment, David, what is your sense of the incoming, the comprehension of the moment around the country?
DAVID GERGEN, CNN SR. POLITICAL ANALYST: One sense is excitement building now with 49 hours left and counting. And throngs are starting to come to Washington. It's a very different crowd than what we ordinarily see at inaugurations.
Our past inaugurations have been mostly white and a few blacks speckled in. There are a lot more African-Americans coming now, there are Indian-Americans, there are people of all different backgrounds coming here.
GERGEN: And I think it gives a sense, this is going to be a very diverse inauguration. But to go back and echo Alex, it does seem to me that for most Americans right now, we're in a valley and he has to remind us that we're in a valley but keep his eye on the mountaintops and remind us where we can go and as just as King talked in his "I Have a Dream" speech, from mountaintop to mountaintop. It's a lot about what the speech needs to be.
KING: If I can carry a tune, I'd ask us all to jump in. "America the Beautiful" playing in the background. It's beautiful and it's a great setting and it reminds you of the magic of this moment every four years. But especially because we will make history. It puts a special burden on the president, the new president, doesn't it?
BRAZILE: There's no question. When he stands before the American people, reads from Article II, Section I of the United States Constitution, he will recite those 35 words that I'm sure David knows, it's been recited by every president, just watching that moment, bearing witness to a son of Africa, an African-American, looking beyond just a crowd but across the world, to see Barack Obama recite those words.
John, I go back to 1968, when Martin Luther King was organizing the sanitation workers in Memphis and the signs that they wore on their chest was "I am a man." And here it is, 41 years later, a black man. He doesn't have to proclaim his manhood, his dignity, his humanity. He has to take the oath of office as the next president of the United States.
KING: Watching pictures, we're sitting here with the Capitol behind us, we have pictures of the National Mall. I don't know if we have it ready to show but Alex, I want to talk to you about the power of the images. Barack Obama came into town yesterday on a train. This morning, without speaking a word, he sent a very important message, this new president, this first African-American president, also about to be the next commander-in-chief. At a time, there are 140,000 plus U.S. service men and women in Iraq, 30,000 or more in Afghanistan and he says more might be coming. He will be commander in chief and today, he went to the Tomb of the Unknowns, at Arlington National Cemetery, a wreath laying, not a word spoken but a message there as well.
CASTELLANOS: I don't think we've had a president as adroit and as capable of using images and using them well as Barack Obama since Ronald Reagan. He is the message in reaching across the aisle to a Rick Warren to help with the invocation to this morning, sending the message out to commander in chief to the military, reaching left and right.
You know, this is one of the few moments in the administration that you're able to do that because politics is put aside for the day. But not only that, because the grave threat, the economic threat, and the global threat, security threats that we have. So he's a talented communicator. It's the beginning, though. At end of that, he'll have to be backed up by policy. This is almost a threat, in a way, because right now you start with making everybody happy, left and right. At some point, you actually have to make decisions and then you begin to disappoint people. So let's enjoy it while we have it.
KING: We'll talk about some of the decisions a few moments ahead. But let's dwell on this moment for a minute, David. From your perspective, you've been inside the White House at times of joy and policy success and at times of peril. Barack Obama will for better or worse, get to experience all of those moments. But the first moment when he turns to the American people, not as a candidate, not as the president-elect, but as their president, he must, what?
GERGEN: I think the summons to unity, the summons to greatness is what inaugurals are about. It is -- this inaugural is more than almost any other represents the passing of the torch, as John Kennedy said in 1961. And because he's younger, because we've had this long period when Americans have been unhappy, because he represents a new generation, and of course, because he's an African-American, who speaks of hope, there's -- I -- it's hard to remember an inaugural which seems a sharper break from the past. And at a time when Americans wanted a sharp break from the past.
CASTELLANOS: He said something in his campaign that would fit this inaugural to a "T." And that's, we are the change we have been waiting for. He summoned Americans, he said, bottom-up to change this country. Now since then, we've heard government is going to take care of us and solve our problems. But the message I think, America wants to hear is what David was just talking about, that call to greatness. Each of us has a role to play in renewing this country. I think that's the key thing to look for in the inaugural speech.
KING: We'll continue our conversation in just a minute. We'll continue listening to the band as well on the west steps of the Capitol. Much more ahead on STATE OF THE UNION, including the remarkable story of a young boy just south of Baltimore. He'll be watching his new hero very closely come Tuesday.
And if you missed any of my exclusive interview with President- elect Barack Obama, we'll have an encore coming up shortly. One of the many, many perks of a four hour program. Stay with us.
(COMMERCIAL BREAK)
KING: Back now live to STATE OF THE UNION. A glorious city in any event, Washington, D.C., now filling up with visitors here for the historic inauguration of Barack Obama. The National Mall there, a view from the Capitol to the Washington Monument where the crowds will pack in, some people coming down to stake up some real estate, some just coming down for a curious look.
Washington is filling up and as we consider and ponder this historic inaugural and what comes next, the Obama administration, once again, I'm joined by Donna Brazile, Alex Castellanos and David Gergen. Before the break, we were talking about the moment. But then comes government and campaigning, when it turns to into government sometimes get messy and there are trap doors awaiting.
David, I just want your first thought on the expectations of this president. Does he have to deliver? When the economic anxiety transfers from George Bush's problem to Barack Obama's problem, how long is the clock before people say where are the jobs?
GERGEN: I know you've been deeply concerned about this, John. I was encouraged to see a "New York Times" poll this morning that said that actually the time horizon seems to have lengthened for many Americans during the transition, they now think within two to four years we'll have more progress on the economy.
Faster on Iraq, but on the economy, they're giving him more of a break. But I have a question about the politics of this because we're going to have such huge crowds here likely. I'm going to ask Alex this, does Donna have a view on this. When Barack Obama comes here and 2 million people arrive, who are part of a rallying around him, does that send a powerful message to the Congress, you better work with me?
Does it increase his political power to have this -- these big, huge crowds here because people look out and say, my goodness, this is the Obama that has come to the Capitol? What does it do?
CASTELLANOS: Oh, I think, certainly, that has been -- you know, he has -- the bottom-up Obama army, Obama 2.0 is certainly a chip that other presidents and leaders have not had.
And it's not just the people here. It's the people who are here who aren't, who are back home on the Internet and are connected to this event in a million ways all over the country. So, yes, it's very powerful.
But you know, there's also a little more counterintuitive way to look at how much time he has and how patient Americans are going to be with him. Americans are generally patient with their leader when things are not going well, not when things improve.
When things improve is when people get restless and say, what took you so long? Churchill was thrown out in England after the war was won, not before. And I think here Americans realize how serious the economic crisis is, how tough this is and, therefore, they're going to be very patient with him.
But as soon as things start getting a little better and we have something to fight about, we'll see the return of partisan bickering.
(LAUGHTER)
KING: This patience is a test for your party, it's not just a new Democratic president, but he has a Democratic Congress in that Capitol. And so (INAUDIBLE) maybe he wants to ask those people to hang around for a few months.
BRAZILE: Well, and it's also a co-equal branch of government. You know, the message that President-elect Obama is sending to his many supporters is, celebrate today but tomorrow we need you to go back out and organize.
He is going to turn the Democratic National Committee into an organizing machine, to break all of these supporters down by congressional districts so that they can engage their congressperson so that they can personally lobby their congressperson.
He's going take "we, the people" to a whole different level to help him during this moment of transition, to get these policy initiatives through the Congress.
KING: As he does that and if he can do that, it will be very important in the big, big, big fights ahead. Now as I say that, I want to talk policy with the help of the speaker of the house of representatives, Nancy Pelosi.
One of the things we're going to do every Sunday morning here on STATE OF THE UNION, is we're going to watch what goes on on the other Sunday talk shows around Washington. We might like to say, so you don't have to.
But the speaker, Nancy Pelosi, was on -- she was on "FOX News Sunday" today and she made a very dramatic, new statement. She says, yes, after they get through the stimulus package, Barack Obama wants to move on entitlement reform, Medicare and Social Security. And she says when those discussions are under way, everything, everything, including benefit cuts will be on the table.
Let's listen.
(BEGIN VIDEO CLIP FROM "FOX NEWS SUNDAY") REP. NANCY PELOSI, D-CALIF., SPEAKER OF THE HOUSE: We are committed to pay-as-you-go, not heaping mountains of debt on our children. And the investments that we make have to be job creating and bring money into the economy. So of course, the entitlements are an important part of you put everything on the table. The only thing we didn't want to put on the table is eliminating Social Security, Medicare, and Medicaid.
(END VIDEO CLIP)
KING: So keeping Medicare and Social Security intact, but everything on the table. David Gergen, you know, you worked for four presidents, it has always been the third rail to touch these programs. Bill Clinton tried to a degree.
George Bush, there is great debate about what he wanted to do, but he invested enormous capital after winning re-election on this and failed to get anything done. There are trap doors for no matter how popular a president is, some issues can shoot you right back to earth. Is...
GERGEN: Absolutely. Well, Barack Obama apparently believes it's a third rail not to touch these programs. But I cannot remember a program -- a president since Franklin Roosevelt who has come in with as audacious an agenda as he has.
Right now he wants to, in his first year, not only pass a stimulus program, but do health care, something that has eluded every president going back to Harry Truman, to have comprehensive health care reform.
He wants to have comprehensive energy reform, something that has eluded every president going back to the -- OPEC in the early 1970s. And now he -- this week he has put Medicare and Social Security on the table, something nobody has been able to do, he wants to do all of that.
KING: And Democrats so demonized George Bush when he tried to deal with Social Security. Will Republicans now say, have at it, Mr. Democratic President, Democratic Congress, you're on your own? Or are they willing to make the tough votes with this new president to cut back benefits in these programs and anger Americans who already are mad at Washington thinking this bailout money is going to big guys on Wall Street and not them?
CASTELLANOS: I think Republicans are looking for an opportunity to cut spending, and we're about a month or two away from Republicans -- I think a Republican revolt, in effect, standing up and saying, look, we can't keep pretending we're more prosperous than we are and have a pretend renewal of the economy and make some pretend jobs.
So I think you're going to see Republicans step up. But, you know, when the speaker says everything is on the table, she actually means it's on her side of the table.
(LAUGHTER) CASTELLANOS: She doesn't necessarily mean that she's going to put this in the center and start cutting. The good news for Barack Obama is, he is the most powerful president we have seen in this country in a long time.
Bush has handed him a much empowered White House with the bailout money, the empowered Treasury. We have one-party rule in Congress. He has tremendous charisma to reach out to the people. But it can't be done now.
GERGEN: But how -- he has no money. He's broke.
(CROSSTALK)
CASTELLANOS: If he can't -- if he can't tighten the belt now, it will -- on entitlements, it will just take him down.
KING: The power of prestige, we will see how he uses it. We've talked about the moment. We've talked about policy. We're going to take a quick break. And when we come back, the story of a young black teen from just south of Baltimore who is asking a lot of his new hero, Barack Obama.
And don't forget to be part of the world's biggest photo. If you're out there on the Mall tomorrow, take a picture at the exact moment Barack Obama raises his hand to be sworn in as our next president. Send it to themoment@cnn.com. And we'll make it part of an amazing new digital collage.
CNN's groundbreaking coverage continues later today at 2:00 p.m. Eastern. I'll be back with Wolf Blitzer, Anderson Cooper, and the rest of the best political team on television as an incredible concert begins the official celebration of this historic Inauguration. STATE OF THE UNION will be right back.
(COMMERCIAL BREAK)
(BEGIN VIDEO CLIP)
OBAMA: I hope that part of what my election communicates to Melvin is he can shoot for the stars. He can go as far as his work ethic and his imagination takes him. And what I also hope is that not only me, but all of us take responsibility for the millions of Melvins out there. There are so many young people with so much talent.
(END VIDEO CLIP)
KING: That's how President-elect Barack Obama answered the questions raised by a young man we spent some time with just outside of Baltimore this week. As you'll see, Melvin Thomas has a lot of hopes riding on the first black president.
(BEGIN VIDEOTAPE)
KING (voice-over): Melvin Thomas is last off the bus, like most 14-year-olds, in no rush to get to school. UNIDENTIFIED MALE: Melvin what do you got?
KING: Science is his favorite class, but he prefers the hallway banter, and lunch with his buddies.
(on camera): So what do the kids at school say about Barack Obama about to become president of the United States?
MELVIN THOMAS, HANOVER, MARYLAND: Sometimes they out of random somebody yells out "Obama" out in the hallway.
KING (voice-over): Melvin is relaxed in the game room, much more shy in front of the camera. But this soft-spoken young man has a story of change that could be as important as anything that Barack Obama does in Washington.
(on camera): If I were here a couple of years ago and say you were 10 or 11, 12, and I said, you know, who do you most admire? Who is your role model? Who do you say, you know, I want to be like that?
THOMAS: Michael Jordan.
KING: And if I asked you today, what's your answer? Who do you most admire?
THOMAS: Barack Obama.
KING: Melvin thinks a President Obama will mean more jobs and less of something else.
THOMAS: The hate against black people.
KING: He prefers video games to the news but got a glimpse of Obama early on and got excited.
THOMAS: I thought it was cool that the first African-American president was running.
KING: He playfully teased his mom when she backed Hillary Clinton in the Democratic primaries and later took a break from video games with younger brother Kyle to watch the Obama-McCain debates.
THOMAS: To be honest, I didn't -- I didn't get most of it, but I got some of it.
WOLF BLITZER, CNN ANCHOR: We're going to have to wait until more votes come in, and then we'll be able to make a projection.
KING: Bed by 10 p.m. on election night was frustrating, but rules are rules -- until they are broken.
THOMAS: Well, I had to go to sleep and my mom, she -- when I woke up, she was crying, and I said, Mom, why are you crying? Did somebody pass away? And she said, "No, Barack Obama won."
KING: And what did you feel then? THOMAS: I -- I felt really happy and I hugged her.
(END VIDEOTAPE)
KING: Melvin Thomas, talking about how happy he was the morning after Election Day. Well, he may be even more happy now. Melvin Thomas, because of his role in the school leadership group, has an invitation to the inauguration to the first African-American president. We're going to keep in touch with Melvin when he's here in Washington, and maybe bring you some of his observations, next week on "State of the Union."
Once again, though, I'm joined by Donna Brazile, Alex Castellanos, and David Gergen.
Help me understand. As much as anything that happens here, that's the question I'm fascinated about. You heard Melvin. Michael Jordan was his hero a year and a half ago; now Barack Obama.
What does it mean to young African-Americans, especially in the areas where you travel across the country and you're almost sometimes embarrassed to be an American? What does it mean?
BRAZILE: Well, you know, what Barack Obama did, throughout the campaign, was to inspire new generations to hope, to believe in the greatness of not just this country, but also to look at themselves and say, you know, I can do it; I can become president.
You know, I think about my little nephew. He's nine years old, had a hard time in first grade -- I hate to mention that...
(LAUGHTER)
... but now that he's an honor student -- he's an honor student, in just two years. This is a young guy who went from not really wanting to be part of the school, the curriculum. He had a hard time, post-Katrina, but now he wants to be like Barack Obama.
I have to warn President-elect Obama that he called the other day and wanted to know how old were the girls.
(LAUGHTER)
But Obama has inspired these young guys. He's inspired a whole new generation, black and white.
It goes beyond race, at this point. This is about the American dream, and making sure that it's available to all Americans, not just those who are privileged, but to every single person in this country. And that's what this election was really about.
KING: I want to bring Alex and David into the conversation. But first, just to help us understand the moment just a little bit more, I want to share a part of my interview with the president-elect, the other day, because I asked him about coming to this town.
That's a glorious building, but it was built at a time when there was still a moral stain on this country. Let's listen.
(BEGIN VIDEOTAPE)
KING: You are on the verge of putting your hand on the Lincoln Bible and taking the oath of office on the steps of the United States Capitol, built on the back of slaves.
OBAMA: Yes.
KING; And you'll walk down Pennsylvania Avenue and you will move into a historic house built on the backs of slaves.
OBAMA: Yes.
KING: You're known as no-drama Obama.
(LAUGHTER)
Some people say, well, he's too detached and he's so cool; you never see his emotions. This has to be incredibly overwhelming.
OBAMA: Well, look, if you think about the journey that this country has made, then it can't help but stir your heart. Obviously, it's an extraordinary personal moment, but, you know, you don't have to go back to slavery.
You can think about what Washington, D.C. was like 50 years ago or 60 years ago. And the notion that I now will be standing there and sworn in as the 44th president, I think, is something that, hopefully, our children take for granted, but our grandparents, I think, are still stunned by it. And it's a remarkable moment.
KING: A remarkable moment, but you're still pretty cool in describing it. In private, do you get more emotional?
John Lewis, for example -- he was beaten; he was jailed. He walked the walk of the journey he thinks you're helping, almost, complete. There's more to be done. And he says he might not be able to keep it together at the inauguration.
(LAUGHTER)
OBAMA: Well, I'm going to try to keep it together. But I will tell you that, during the convention, there's a moment, at the end of my convention speech, where I talk about Dr. King and what he accomplished.
And the first time we practiced it, I had to stop. I started choking up, because, you know, what you start thinking about is not just your own personal journey, but you think about all the women who walked instead of riding the bus, out in Montgomery and Birmingham, and what a moment like this would mean to them.
And what's remarkable is some of them are still alive. They're still there, and some of them are going to be standing there at the inauguration. (END VIDEOTAPE)
KING: David Gergen, Barack Obama, talking about the journey. Dr. King, in this town, on this mall, spoke about the journey. And we talked a bit about the sullied history of the construction of these glorious buildings, many of them here.
How far has Barack Obama advanced the journey?
GERGEN: Well, it's interesting. You know, Dr. King, in his last speech before he was assassinated, talked -- said he'd been up to the mountain top and he had seen the promised land, and he wasn't at all sure he would ever make it to the promised land, but he'd been up there.
And Barack Obama has spoken eloquently that -- that Martin Luther King was the Moses, but he's part of the Joshua generation, and maybe they can reach the promised land.
Now, I think the test is going to be that, when young Melvin grows up in Baltimore, whether Baltimore -- as you've said this yesterday on the air, when you drive through there or ride through there, sometimes you're embarrassed by what you see, the neighborhoods that you see.
The test is going to be to when Melvin grows up, you know, whether you can ride through Baltimore and say, you know...
KING: And, Alex, we are a nation of immigrants. The Statue of Liberty says so. But we're not always a perfect nation. And Barack Obama talked yesterday about trying to make this a more perfect union.
What is the significance, not just to African-Americans but to all Americans but especially those who are non-white Americans?
CASTELLANOS: Well, it's a -- you know, I have the immigrant's view of America, still. I came to this country, my family, with $11 and a suitcase. And my parents had two kids, didn't speak the language, in 1960.
We thought this freedom thing you guys had, here, was pretty neat.
(LAUGHTER)
And to see -- you know, this has always been the land of renewal and promise, and it has always kept that promise. There have been ups and downs, but it has always kept that promise, certainly, to my family.
And right now, when the country's being tested in so many ways, to see that it calls on all of us, regardless of our last name, regardless of color, to see that it calls on all of us to come to its aid, to do our part, you know, it's an inspiring thing.
It needs us now. I mean, this is the time to ask what we can each do for our country.
KING: We're going to end on that uplifting note this time. I want to thank you all for coming in on our first day. And we'll have you back many, many days ahead.
BRAZILE: Congratulations.
KING: We're going to ruin a lot of Sunday morning, but we'll enjoy them together in the weeks ahead.
Donna Brazile, Alex Castellanos, David Gergen, thank you very much.
And when we come back, we'll go outside the Beltway. I'll talk to some everyday folks who have some real concerns about the state of this union and just what the incoming president can do about it. You won't want to miss what they have to say. Stay with us.
(COMMERCIAL BREAK)
KING: Good morning, I'm John King, here on top of the Newseum overlooking the National Mall and the Capitol. Washington looks glorious as final preparations are made for Tuesday's inauguration. Let's take a moment though to catch up on what's going on outside of Washington, D.C.
The headlines this morning, beginning in war-torn Gaza, there's at least a glimmer of hope. Hamas leaders have just agreed to stop attacks on Israel for a week. This coming after yesterday's announcement by Israel that it would declare a unilateral cease-fire. During the 22 days of fighting, more than 1,200 people have been killed. Earlier on our program, incoming White House senior adviser David Axelrod spoke about how Barack Obama intends to quickly deal with the turmoil in the Middle East.
(BEGIN VIDEO CLIP)
DAVID AXELROD, INCOMING WHITE HOUSE SENIOR ADVISER: The president-elect has said repeatedly that he intends to engage early and aggressively with diplomacy all over the world, and using the men and women, the professionals who are in place who are great and wear appropriate special envoys.
KING: That fast though?
AXELROD: Well, I think that the events around the world demand that he act quickly and I think you'll see him act quickly.
(END VIDEO CLIP)
KING: And in New York City, the battered US Airways jet that crashing landed in the Hudson River two days ago has been lifted from the cold waters. As I'm sure you remember, the landing was so skillfully done tat none of the passengers or crew died in the freezing water. You see pictures there this morning of the jetliner this morning. Now back here to Washington and the inauguration of Barack Obama. Americans across the country are going to be watching on Tuesday and watching very intently, trying to get a gut feeling about this new president. So as we intend to do most weeks on this program, I sat down over coffee to get a sense of the national mood. I did it out in Ohio. This is the "Cleveland Plain Dealer" here and you'll see a copy of this newspaper in what's coming up. We went to the Coffee Cup family restaurant in Bedford, Ohio. I first asked those assembled with us if they thought Barack Obama as the new president could solve the nation's economic crisis.
(BEGIN VIDEO CLIP)
JACKIE SUDD, BEDFORD, OHIO: I think it's a bold expectation. I think it's a tough job for anybody. Hopefully he can change it.
KING: What do you think?
DELL SUDD, BEDFORD, OHIO: Well, I think we have a lot of tough issues here. This is a part of our local economy is tied to the auto industry in many, many ways. We've got a lot of tough issues, John, that relate to the auto industry in general, not only manufacturing but the sales side. And as Jackie said, I think they're scared about having their jobs and keeping their homes and their families together.
KING: Did you trust George Bush when he says I'm going to give all of this money out?
UNIDENTIFIED MALE: No.
Do you trust Barack Obama? It's the same pot of money.
UNIDENTIFIED MALE: No. I don't trust either one of them with that kind of money, to be honest with you. I don't see the necessity for it. I figured they saw this coming from a long way off and they should it stopped it then. Now is not the time I don't believe to try to change. I'm in construction, I've never seen it this bad in 50 years. I've been living here for 50 years and never seen it like this.
KING: What can they do to be different?
UNIDENTIFIED MALE: Well, you can change agenda. Use the money, use it right, change the policy, don't just give it away.
KING: Define use it right for me. I mean, do you have any idea where any of this money is going? I mean, it's your money.
UNIDENTIFIED MALE: If all of your big corporations are closing up that means they're doing something wrong. Why would you give them money to keep doing the same thing? Change the policies. Show us where the money will go.
KING: Show of hands, is there anyone here in this group who did not support Barack Obama for president? Two did not, three did not. And yet if I said, your hopes for Barack Obama right now, if I just said the name, Barack Obama right now what would you associate that with?
J. SUDD: He's going to be our new president so we need to support him now. He won the election, so he's our president. And I'll support him. We need to stick together as a country, that's our president.
KING: For you who didn't vote for him, what he can he do specifically for the three months or six months down the line for you to say, maybe next time I'll think about this?
D. SUDD: Actually I think he's already started in some of his actions in re-preparing for office. It's been very clear he's been very open-minded. He said publicly, look, if somebody's got a better idea than what I've got on my agenda, I'm open to it, I just want to do what's best here. And he's made a very favorite impression on me.
KING: Do you feel the same way?
LANCE MARTINSON, OHIO RESIDENT: I do. I just hope it's not politics as usual because this country can't stand politics as usual anymore. We need somebody like Grover Cleveland or somebody that will come in and just clean up the corruption that's between big money and the government and special interest groups. And until that happens, they hold the power and it's a shame because they're taking the nation down with them. And the everyday American is going to suffer.
(END VIDEOTAPE)
KING: Our thanks to the great people at the Coffee Cup for good conversation and a great breakfast. Up next, I'll show you some vintage video of a rising star in the Illinois State Senate. Give you one guess who it is.
Later, my exclusive interview with the president-elect. You'll see the whole thing coming up right here on this inaugural edition of STATE OF THE UNION.
(COMMERCIAL BREAK)
(BEGIN VIDEO CLIP)
OBAMA: I do think that there's an underlying anxiety in part because of their concerns about America's role in the world and the aftermath of the war and, in part, because they're concerned about domestic policy and how this war's going to impact the economy.
(END VIDEO CLIP)
KING: That was a younger, clearly ambitious, Illinois State Senator Barack Obama, his first interview on CNN back in 2003, just after the U.S. invasion of Iraq. In his most recent interview, almost certainly the last before he becomes president, Mr. Obama told me it's clear his priorities haven't changed. (BEGIN VIDEOTAPE)
OBAMA: I think that across the political spectrum, people are looking at what we have to do now to get this economy back on track and they are saying to themselves, we know we can't sustain this. That means we've got to make some tough decisions.
OBAMA: And I'm going to be using a significant amount of political capital.
(END VIDEOTAPE)
KING: If you're looking closely there, you see the gray hair, that most recent interviewed compared to that one six years ago. Let's bring in for the best political team on television, Soledad O'Brien, and our seniors moment here in the first program, our senior White House correspondent Ed Henry, our senior congressional correspondent Dana Bash, and our senior political correspondent Candy Crowley.
Let's just start, and, Candy, I want to start with you, because you came down on the train. Great imagery from the outside. Take us inside.
CANDY CROWLEY, CNN SENIOR POLITICAL CORRESPONDENT: Inside, I think it was a little less about imagery than it was about Obama talking to what he has been calling the real Americans, those 40 or so people that he brought along with him.
This was about keeping the mojo going, if you will, keeping people out there who voted for him, still with him because, as he warned in speech after speech along that train rail, is, look, we're going to make mistakes, it's going to be tough, so I'm going to need you.
And I think that's why probably all of us still get those e-mail blasts from Barack Obama. I'm still getting text messages from Barack Obama, from obviously he's not saying: "Dear Candy, love Barack."
(LAUGHTER)
CROWLEY: So you know, we're still getting those because they need this group to stay together, first, to talk to Congress, but then to just buy him some time.
KING: Well, you make an interesting point. On that point, let me -- again, every Sunday morning we're going look around at the other shows on television so you don't have to, and we'll bring you some of the highlights and we'll talk about it because we have the best reporters right here.
Let's listen, you mentioned the challenges ahead in keeping that coalition together. Let's listen for a minute to Larry Summers, incoming senior economic adviser, speaking on CBS about the challenges and trying to revive the economy.
(BEGIN VIDEO CLIP) LARRY SUMMERS, WHITE HOUSE SENIOR ECONOMIC ADVISER: Our overall focus is going to be on increasing spending. On that there's going to be a substantial tax cut for the American people. No one with an income of under $250,000 is going to see their taxes go up, working families are all going to get $1,000.
(END VIDEO CLIP)
KING: Dana Bash, a great focus on the moment and the celebration, but even before he has become president, all of these proposals, including all of that spending Larry Summers is talking about being debated where you work, up on Capitol Hill, carte blanche for the new president or some road bumps.
DANA BASH, CNN SENIOR CONGRESSIONAL CORRESPONDENT: No, not all. And that's why Larry Summers has basically moved into Congress. I mean, he was there every day last week talking to Republicans, talking to Democrats in the House and the Senate.
No, it is definitely not a done deal, particularly on this issue of the stimulus, especially with the goal that Barack Obama has, and that is to pull in Republican votes. Already you're seeing the Republican leadership in the House saying, uh-uh-uh, we don't -- you know, we don't think this is the right way to do it, it's too much spending, it's too much debt.
And so that is going to be still their big challenge if they want to accomplish their goal not just of jump-starting the economy, but doing it in a bipartisan way.
KING: And, Ed, how do they do that? A new administration comes in, you're always headstrong with power, it's his own party, too, and he won 53 percent of the vote, so do they have the attitude, as many Republicans would tell you when they were in the majority, and George W. Bush moved in, you know, in those days it was, you know, George Bush and Karl Rove said jump, and the Republicans in Congress -- many would now say, said, how high?
ED HENRY, CNN SENIOR WHITE HOUSE CORRESPONDENT: Barack Obama is dramatically trying to turn the page. When he went in for lunch with Senate Democrats, and Dana knows this, I'm told that he went behind closed doors and someone called him "Mr. President-elect," and he corrected him and said, until next week I'm still Barack.
And he tried to show, look, I'm not a different guy. I'm the guy who was just in the Senate lunch as a United States senator. But frankly, he's not anymore, he is different and he's changing fast. He doesn't have to just worry about the economy, he has got to worry about Iraq as well.
We've been learning, as David Axelrod told you this morning, that Wednesday right away he's going to bring the national security team in and tell the military commanders we need to change the mission in Iraq and, you know, pull out the combat troops within 16 months.
He's trying to fulfill that campaign promise. But on the other hand, that's just a meeting, that's not actually pulling troops out. In six months, if his defense secretary, Robert Gates, who is a Bush defense secretary, says, uh-uh, that's not a smart idea, what's he going to do? That's when the rubber is going to meet the road.
KING: So help us understand, help us Washington insiders understand. You know, Candy made a very important point of how they try to keep this coalition together. In the early days of the Bush administration -- or throughout the Bush administration, policy debates would happen and we would say, what do Christian conservatives think? Are they still with this president?
What do people think in the suburbs? Suburbs sway American politics. You did groundbreaking work last year on black America.
SOLEDAD O'BRIEN, CNN CORRESPONDENT: I think that the conversation is the same and he's going to do and he's going to have to do what Martin Luther King did, connect the story of particular individual groups to the success of America as a whole. It cannot be an individual struggle, a race to the finish line for one group. It has to be the team effort.
And Martin Luther King did that very, very well, sort of saying unless there's success and opportunity for African-Americans, you limit what happens here in America. And America is a nation of promise. To fulfill that promise, you have to take everybody across the finish line.
I think Barack Obama, who has echoed Martin Luther King a lot obviously in his speech, is going to follow through with that. So to his constituents who may feel, am I getting mine, and how do we hold this together, it's going to be, we have got to come across as a team or no one will win at all.
KING: And, Candy, you spent so much time with him during the campaign year, the transitions are ceremonial, but do you think they have -- do you get the sense they get the difference between campaigning and governing because the math is different, what you promise in a campaign you can't always deliver as government?
And you're also not a small-knit team. They were a very disciplined campaign organization. Now they've got to run a pretty unruly town.
CROWLEY: Now that they have to make sure that the undersecretary at the Commerce Department doesn't leak something, which is a little harder to control. Look, they've been in governing since almost the day after election.
The economic team has been in place over there. They've been with Paulson. So they already have moved into governance. But, you know, lest we make this sort of a couple "Kumbaya" moment for Barack Obama, call me Barack, also said, by the way, I'm going to veto the bill if you send it to me.
So it is not as though he can't play and doesn't understand. But he also understands the art of the practical and he knew that during the campaign and he knows it now. And he argued the art of the practical. If you send it to me I'll veto it and then you can't override it and I'll get what I want and we'll have had this big messy fight for nothing. End of story.
KING: Kumbaya in lower case.
(LAUGHTER)
KING: We'll continue this conversation with our great team in just a moment. Everyone stand by. We'll continue to preview Tuesday's historical Inauguration of President-elect Barack Obama.
And speaking of Obama, I guess I have to say this again, don't forget my exclusive interview with the president-elect is coming up. You won't want to miss what he has to say about his predecessor, President George W. Bush. Stay with us.
(COMMERCIAL BREAK)
KING: Good morning, again. I'm John King, joined here on the roof of the Newseum, and it is a beautiful sight overlooking the National Mall by four of the best political team on television: Soledad O'Brien, Ed Henry, Dana Bash, and Candy Crowley.
First impressions matter. And Barack Obama will take the oath. It will be a great celebration. But then he becomes president and many presidents have come in with great enthusiasm and then had a misstep.
I want to listen to Robert Gibbs, the incoming White House press secretary. He was on another news show this morning. And outside he talked about what Barack Obama might do in his early hours.
Let's listen.
(BEGIN VIDEO CLIP)
ROBERT GIBBS, INCOMING WHITE HOUSE PRESS SECRETARY: We've talked about banning torture and closing Guantanamo, the process by which that will happen.
GIBBS: I think those are probably the big things that could happen as early as the first week.
(END VIDEO CLIP)
KING: They're big things, Ed Henry. They were huge items during the campaign. And they're things Barack Obama wants to do right away. Any concern that he gets through this long list of things Democrats have waited eight years to do? George W. Bush was in the White House, you do something, it was gays in the military back in Bill Clinton's administration, that throws you off track.
HENRY: It could. And that's why one thing I'm hearing from senior aides is they're not going to do a lot of executive orders on the first day. They have given some thought to that. They are realizing the need to let the inaugural speech breathe a little bit. They need to let the history step in. Why step on those pictures and those dramatic moments?
But Wednesday, Thursday, Friday, we're going to see a flurry of activity. I think, sure, some of this stuff is going to kick up controversy. There is going to be an executive order, we're told, closing Guantanamo. But again, it's not going to close it immediately. It's going to take a long time to go through that legal process.
So some people on the left are not going to be satisfied with some of those moves. Another one we're told he is going to do is an executive probably on CAFE standards, making vehicles more fuel efficient. That could be controversial because environmentalists will love it.
But on the other hand, the car industry is already struggling. And you start forcing that down their throat, that could make that situation worse. So, you're right. You start making moves that the left really wants to do. And then you start angering other people. This is all of a sudden when you have to govern.
KING: And so let's do a little geography. The White House is that way from where we're sitting on Pennsylvania Avenue. Dana, in this building behind us, it's been interesting to watch some Democrats going so far as to say, well, we're going to work with Barack Obama. But let's be clear. We don't work for Barack Obama. Anything that will happen up there that could take Barack Obama off track?
BASH: Well, sure. I mean, look, you hear the House Speaker Nancy Pelosi, talking about a couple of things that she is being very vocal about wanting to do. Barack Obama himself has said, hold on. For example, the Bush tax cuts. She is clearly very publicly upset about the fact that Barack Obama said let's just wait. We're not going to roll back the tax cuts for the most wealthy. Let's just give it a couple years. She's saying no, we campaigned on. We have to do that and we have to do that now.
Another interesting thing is that Obama has been talking about not looking back and just looking forward. Just this morning Pelosi said, you know what? I think it's our responsibility to look into and investigate some of the things that the Bush administration from their perspective has done wrong. So those are just two examples of things that could throw Barack Obama off by some of the Democrats.
KING: So Candy, from your experience, is the bigger challenge managing the Democratic family or trying to deal with the Republicans?
CROWLEY: Oh, it's always your own party if they're in the majority. It's always your own party you have the problem with. But, look, Barack Obama has the sway right now. I mean, he's a guy with the power. They understand that on Capitol Hill. And he'll give them around the edges. But he's largely going to get what he wants at this point. You have to move quickly. I think he maybe has a little more time than most. By the end of this year, if they're going to sink a trillion plus in this economy, he owns it by December. So, you know, he has to work with them. But he hasn't got time for some of this. And I think in that first six months he just holds a lot of sway up there and you'll see them moving to him more than him moving to them.
KING: And when you listen to this long list, the auto industry, CAFE standards, Gitmo, taxes, executive orders, it's Washington talk. There are important issues, but --
O'BRIEN: You don't hear cleaning up schools. You don't hear investing in infrastructure, all those things that people would say, especially if you're looking at people in the inner city, would say those are all really important and we definitely have to get to those.
But don't forget about us. And that's a real concern. You know, again, there is all this good will on all these fronts. But at some point, you start losing your credibility, you start losing ground. I think they're going to have to come up with a pretty quickly a signal, a sign that they're reaching out and going to address those issues that are of particular importance to people who are impoverished in inner cities who feel like they're not being served.
KING: Soledad O'Brien, Ed Henry, Dana Bash, Candy Crowley, thank you very much. I think if I could sum up that conversation, it was enjoy the moment, Mr. President-elect. The inbox is pretty deep. We'll see you all again in the days ahead.
Much more ahead from here in the nation's capital. We'll take you to the Lincoln Memorial, where thousands of people will gather this afternoon for a massive inaugural concert. You'll hear from president-elect himself as we sat down for his last planned interview before taking the oath of office. Much more ahead right here on the inaugural edition of STATE OF THE UNION.
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KING: We're back at STATE OF THE UNION. I want to go to straight now to Kate Bolduan. She's down on the National Mall talking to people already arriving for this historic inauguration. Hey, Kate.
KATE BOLDUAN, CNN CORRESPONDENT: Hey there, John. Well, we are on the National Mall. This is where the focus will be come Tuesday. Let's give you a little perspective of what you could be dealing with if you're coming down here.
We're looking at the Capitol. That is where Barack Obama will be sworn in. You see the jumbotrons there. The sound equipment that is still going up. That may be the only way many people who will be coming will be able to catch a glimpse of the historic swearing in.
Let me show you why. You see this entire area, it looks like a busy tourist day here on the National Mall. You can expect and bet it's going to be much busier come Tuesday. See, that's the Washington Monument. That is a mile and a half from the Capitol, the west front where Barack Obama will be on Tuesday. Beyond that, two miles away from the Capitol is the Lincoln Memorial. This entire National Mall for the first time will be open to accommodate the potential of a record-breaking crowd. You can see people are already here. You can expect it will only get busier the next 48 hours, John.
KING: Kate, enjoy that space down there while you can. As Kate noted, the Lincoln Memorial, two miles plus away from the United States Capitol, at the far end of the National Mall. That's where we find our White House correspondent Suzanne Malveaux. She is there in advance of 2:30 this afternoon, the first official inaugural event, the big concert. Suzanne, give us a preview.
SUZANNE MALVEAUX, CNN WHITE HOUSE CORRESPONDENT: Hey, John. It's called "We Are One." The first kickoff concert, people are just beginning to gather and fill up space behind me. Denzel Washington at the podium there, practicing some of these readings. It's really going to be a chance for Barack Obama to address the crowd as well as Joe Biden. Their families will be here.
And essentially you're going to have top performers. You have Bono, Garth Brooks, Sheryl Crow, Beyonce, Mary Jay Blige, the Boss, just to name a few. They are all going to be performing not their greatest hits but rather things that really tap into the theme about we are one, tap into the theme about American values.
We're also going to see some famous folks who are going to read historical passages by Lincoln and Martin Luther King. Martin Luther King III will be here. Queen Latifah, Denzel Washington, all of them reading these passages.
It's a sense, a chance to be the kind of philosophical, to think about the links between Barack Obama and Abraham Lincoln and the inspiration that he draws upon Lincoln and what he wants to say to the crowd. Obviously, a lot of folks going to be out here this afternoon, John.
KING: Suzanne Malveaux at a historic sight, the Lincoln Memorial. We'll keep checking throughout the day. We'd like to pause right now for just a moment and welcome our viewers from around the world.
KING: Hello, I'm John King. And we're here, live, at the Newseum in beautiful Washington, D.C., overlooking the U.S. Capitol, where, in just two days, Barack Obama will be sworn in as the 44th president of the United States.
"State of the Union" is a new program here on CNN. We'll be on the area every Sunday for four full hours, here in the United States, bringing you the top newsmakers from here in Washington, D.C., and going on the road. I'll talk to citizens from every state in this great union.
That's all going to begin in earnest, more, next week. Today, we're also focusing, of course, on the inauguration of America's first African-American president.
On Friday, I sat down with the president-elect in Bedford Heights, Ohio in, the industrial Midwest. And I asked him what this historic event will mean on the ultimate personal level.
(BEGIN VIDEOTAPE)
KING: Mr. President-elect, thanks so much for joining us.
OBAMA: Thanks for having me.
KING: A lot of policy ground I want to cover, but I want to start with the moment. You are on the verge of putting your hand on the Lincoln Bible and taking the oath of office on the steps of the United States Capitol, built on the back of slaves.
OBAMA: Yes.
KING: And you'll walk down Pennsylvania Avenue and you will move into a historic house built on the backs of slaves.
OBAMA: Yes.
KING: You're known as no-drama Obama.
(LAUGHTER)
Some people say, well, he's too detached and he's so cool; you never see his emotions. This has to be incredibly overwhelming.
OBAMA: Well, look, if you think about the journey that this country has made, then it can't help but stir your heart. Obviously, it's an extraordinary personal moment, but, you know, you don't have to go back to slavery.
You can think about what Washington, D.C. was like 50 years ago or 60 years ago. And the notion that I now will be standing there and sworn in as the 44th president, I think, is something that, hopefully, our children take for granted. But our grandparents, I think, are still stunned by it. And it's a remarkable moment.
KING: A remarkable moment, but you're still pretty cool in describing it. In private, do you get more emotional?
John Lewis, for example -- he was beaten; he was jailed. He walked the walk of the journey he thinks you're helping, almost, complete. There's more to be done. And he says he might not be able to keep it together at the inauguration.
(LAUGHTER)
OBAMA: Well, I'm going to try to keep it together. But I will tell you that, during the convention, there's a moment, at the end of my convention speech, where I talk about Dr. King and what he accomplished.
And the first time we practiced it, I had to stop. I started choking up, because, you know, what you start thinking about is not just your own personal journey, but you think about all the women who walked instead of riding the bus, out in Montgomery and Birmingham, and what a moment like this would mean to them.
And what's remarkable is some of them are still alive. They're still there, and some of them are going to be standing there at the inauguration.
KING: We'll get back to the moment, but want to go through some policy ground. Let's start with where we are. We're in Ohio.
OBAMA: Right.
KING: This state is struggling. The country is struggling. This factory we're in today is a success story and it's one of the reasons you're here.
But if you go around this neighborhood, many of the factories are bleeding jobs and they're losing -- a lot of them are in the auto industry.
You had breakfast this morning with some local people. And if I could boil their economic concerns into one question, it would be, to their new president -- they want to know when will the bleeding stop?
OBAMA: Well, we're going to have a tough year, 2009. I don't think that any economist disputes that we're in the worst economic crisis since the Great Depression.
The good news is that we're getting a consensus around what needs to be done. We've got to have a bold, aggressive reinvestment and recovery package. It's working its way through Congress. That's going to help create or save 3 million to 4 million new jobs.
What we also need is to make sure that those jobs are in industries that can lay the foundation for long-term economic growth. And that's why this factory's so special, because you're seeing here are traditional manufacturing converted to focus on the wind turbines and wind power of the future.
And so what we want to do is to try to duplicate the success here. These folks use American steel. They've got American workers and their goods are being imported to create American energy. And what we want to see if we can do is to duplicate this, train workers.
We're still going to have to focus on stabilizing our financial system, and so I was glad that Congress gave us the authority to use much more wisely the money that's been allocated to stabilize the financial system, deal with home foreclosures in a serious way. And we've got to tough financial regulations so that we don't have Wall Street getting the country into the kind of crisis that we're in right now any more.
KING: You mentioned a solution, the stimulus plan, the "recovery plan," as you call it, the bailout plan, the TARP program, as they call it in Washington. You'll get that money. It's hard to find anybody who disputes the urgency. But you find a lot of people worried about the price tag.
OBAMA: And they should be.
KING: One of your key allies in Congress said just yesterday, $850 billion in stimulus may be a first step. They might need more.
You know what the bankers are saying on Wall Street, that the financial institutions are still losing money, many of them holding onto that federal money, even.
And they say, it might not be enough; $700 billion might not be enough.
OBAMA: Right.
KING: Are you going to have to, in your early days, draw a line, say we can't keep printing money; this is it?
OBAMA: Here's what we're going to have to do. We've got to distinguish between short term and long term. Short term, the most important thing is to put people back to work
All those folks who we had breakfast with -- if they're working, that means they're paying taxes. That means that they're buying goods and services. And the economy, instead of being on a downward spiral, starts back up on an upward spiral.
But what we also have to recognize is that the deficit levels that I'm inheriting, over $1 trillion coming out of last year, that that is unsustainable. At a certain point, other countries stop buying our debt. At a certain point, we'd end up having to raise interest rates, and it would end up creating more economic chaos and, potentially, inflation.
So what we need to do is to say that, instead of just printing more money, let's look at medium term and long term; let's get a handle on Social Security; let's get a handle on Medicare; let's eliminate waste in government where it exists; let's reform our Pentagon procurement practices.
All those things are going to have to be done in concert, and that's going to be tough. It's going to be tough because the only way to do it is if Democrats and Republicans both are willing to give up a little bit of what they consider to be their favorite programs.
And we're going to have to look at all this stuff in a fairly short period of time because we're not going to have five or 10 or 15 years to kick the can down the road. We've got to get started right now.
KING: Back a few years ago, Ross Perot used to get attention for saying there was this giant sucking sound of U.S. jobs going overseas.
OBAMA: Right.
KING: Many people now say they hear this constant flushing sound, $700 billion. They don't know where it's going, and they think it's going literally down the toilet. I want to read you a question. We asked some of our viewers what would they like to ask the president-elect. And John Stevens (ph) of Torrington, Connecticut, to the point you were just making about mortgages and foreclosures.
(BEGIN VIDEO CLIP)
(UNKNOWN): I'm unemployed, going to a foreclosure. The bank doesn't want to work with me. They've actually told me, on the phone that it's easier for them and more cost effective for them to take my home than to work out a payment plan with me.
(END VIDEO CLIP)
KING: Are there not specific things -- requirements for these banks, that if you're going to get billions of dollars in taxpayer money, you have to help these people?
OBAMA: That's my attitude, and that's what we're going to have in our plan.
Look, there's no doubt that we needed to stabilize the banking system. It could have been even more catastrophic, when we saw the stock market start collapsing in September. We could have seen a serious downward spiral.
But there is nothing wrong with us placing some conditions, making sure the money is not going to executive compensation; making sure that you're not seeing big dividend payoffs to shareholders; and making sure that money is being lent so that we can get credit flowing again, not just to individual homeowners who are losing their homes but also small businesses who are the life blood of this economy.
If they can't get credit, then they end up having to shutter their doors. And when they shutter their doors, people lose jobs. They then can't pay their mortgage, and you start down the road that we're on.
We want to reverse that path, and that means that the way we use the next $350 billion that Congress voted on -- and that was a very tough vote for a lot of people, so the -- and it was tough for me to have to request it.
We've got to make sure that it's transparent, that there's oversight, that the American people know exactly how the money's being used, and that dealing with home foreclosure is a central policy in that program.
KING: Up next, there's a hot-button issue Barack Obama could change, with the stroke of a pen, just minutes or hours after he assumes the presidency. We'll ask him what might be on his desk on day one.
And the question on everyone's mind: Has the Obama family decided on a first puppy?
(LAUGHTER)
More of my exclusive interview. And, later, a conversation with the incoming White House adviser, David Axelrod and a live response from his counterpart, the outgoing White House adviser Ed Gillespie.
Stay with "State of the Union," live from the Newseum, here in Washington, D.C.
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