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State of the Union

Interview With Peter Orszag; Interview With Senators Leahy, Sessions

Aired July 19, 2009 - 09:00   ET


KING: I'm John King. This is "State of the Union."

The unemployment rate keeps climbing, despite the president's bold stimulus promise.


OBAMA: We intend to help save or create 2.5 million jobs.


KING: And the Obama health care plan hits an enormous speed bump.


REP. JOHN BOEHNER, R-OHIO: The bill will actually increase costs in our health care system.


KING: White House Budget Director Peter Orszag gives us his take on the economy and answers critics of the health care plan.

Question after pointed question for Supreme Court nominee Sonia Sotomayor, and now the Senate prepares to cast its judgment. Insight from the leaders of the Judiciary Committee, Democrat Patrick Leahy and Republican Jeff Sessions.

And today's "American Dispatch" from Newark, New Jersey, a city fighting to rebound from a history of crime, unemployment, and despair.

This is CNN's "State of the Union" report for Sunday, July 19th.

Our guests in a moment. But first some breaking news this morning. Video of a U.S. soldier the Taliban says it captured in Afghanistan late last month. The man on the video addresses several topics, including his thoughts on being held captive.


(UNKNOWN): Scared I won't be able to go home. It is very unnerving to be a prisoner.


KING: The U.S. military has just issued its first statement on the matter. Joining us is CNN Pentagon correspondent, Barbara Starr. Barbara.

BARBARA STARR, CNN PENTAGON CORRESPONDENT: John, good morning. A U.S. official in Afghanistan, U.S. military official, issuing this statement. Let me read it for people, saying, quote, "we're simply saying that we strongly condemn this public exploitation and humiliation of a prisoner. It's a violation of the international law of war, and we continue to use all resources available to us to return this soldier to safety."

This had been kept very quiet, John. There had been a brief statement a couple of weeks ago when the soldier was first captured. U.S. military troops had been scouring eastern Afghanistan for days now, looking for any clue, any hint about where he was being held. They were aware that there was very likely to be a video. They were waiting for it. Now that they have seen it, they consider it a proof of life, that the soldier is alive, is in militant, most likely, Taliban hands. Military officials tell us this morning they are continuing to use all available means to try and find him. John.

KING: And Barbara, now that we see this troubling video, obviously, some will recognize this soldier. Where is the Pentagon in terms of releasing his name to the public?

STARR: I have to tell you, quite candidly, we do expect the release of the name at any moment now. His family has been informed. His family has been kept apprised of the situation all the way along. We are told they are very familiar with the video that has come out. They have military officers with them, helping them through this very difficult situation.

It is very clear, obviously, his friends and family see this, they know exactly who he is. But the news media, most of us, waiting for the Pentagon to officially announce his name. Nothing really is more sensitive than when a U.S. soldier is being held in enemy hands. John.

KING: Barbara Starr, tracking this troubling breaking news for us this morning. Barbara, come back to us at a moment's notice when there are new developments. And thank you very much, this morning.

STARR: Certainly.

KING: And moving on, there were some sobering moments this past week for Americans looking for signs of economic recovery and for progress on the pocketbook issues that squeeze family budgets. Rising unemployment for one, including Michigan, now the first state in a generation to see its jobless rate climb past 15 percent.

And here in Washington, a setback in the president's push for sweeping health care reform. The Congressional Budget Office said the leading Democratic plans wouldn't reduce medical costs, but in fact raise them. President Obama says it's no time to slow down, but even now some Democrats are joining Republicans who say these proposals cost too much and that Congress needs to take more time to work this through. With us now to take the pulse of the economy and the health care debate is the White House Budget Director, Peter Orszag. Welcome back.

ORSZAG: Good to be here.

KING: I want to start with this dramatic cover of Newsweek magazine, Senator Edward Kennedy, a leading voice on health care reform for decades, who is missing from the day-to-day debate here in Washington because of his own health issues. He writes in Newsweek magazine a long essay about why health care reform matters to him, and on the big question troubling Washington right now, how do we pay for this. Senator Kennedy, knowing his leadership does not think this is a good idea, writes this, "I'm open to many options, including a surtax on the wealthy, as long as it meets the principle laid down by President Obama, that there will be no tax increases on anyone making less than $250,000 a year. "

Now, that surtax is the centerpiece of the House proposal. Senators have wanted to do other things -- we'll move on to the specifics in a minute -- but with Senator Kennedy saying that, will the White House -- are you prepared to say that the surtax should be the leading proposal to pay for this?

ORSZAG: Well, first, it's not actually the centerpiece of the House bill. The House bill has more than $500 billion in savings from Medicare and Medicaid, which is the majority of the cost.

We've also said that the bill has to be deficit-neutral. The president yesterday said he will not sign a bill that is not deficit- neutral. To get there, some additional revenue in the short-term is necessary. The House has one approach. We put forward a different approach. The Senate is considering yet more options.

The key thing is we need to get there in a way that is deficit- neutral.

KING: But you say the president has a plan, the House has a plan, the Senate has a plan. There are many, as you know, saying it's time for the president to settle this squabbling within the Democratic Party. That he needs to step forward and lead. That the risk is, if he doesn't do it now, that this whole thing could go off the cliff.

ORSZAG: Well, look, this is the legislative process, and this is what normally happens.

I think we are making good progress. You had the Senate HELP Committee actually report out a bill next week. The Energy and Commerce Committee in the House will be marking up a bill, and the Senate Finance Committee is in intense discussions to move forward too. So there's been a lot of progress here.

KING: A lot or progress, but not a lot of consensus yet on how to pay for it, which is the big problem. I want you to listen to the Democratic chairman of the Senate Finance Committee. He wants to pay for a lot of this, yes, like the House bill, squeeze some savings out, but when you need the extra revenue, Senator Max Baucus, the chairman, would like to get that by taxing health care benefits that many Americans get from their employers. The president doesn't like that idea. Max Baucus says this.


BAUCUS: Basically, the president does not -- is not helping us. He does not want the exclusion. That's making it difficult.


KING: You disagree with him policy-wise, but to have a Democratic chairman say the president is not helping us. They're almost begging for more intervention from the president in the Senate.

ORSZAG: Well, there has been a lot of discussion with the Senate Finance Committee. That particular proposal is one that the president doesn't favor, but we've put on the table lots of other proposals, and we are working closely with the Senate Finance Committee to get to where we need to be.

Remember, none of this is easy. There's a reason why this hasn't happened in 50 years, and we're making a lot of progress.

KING: The House bill, which has that surtax and the savings, the Congressional Budget Office, which you were once the leader of that office, says that it would not be deficit-neutral, as the president has insisted again in the past 24 hours. It says it would add $239, $240 billion to the deficit over 10 years.

ORSZAG: Only because it is keeping current Medicare reimbursement rates for doctors, which was always baked into the cake. Everyone anticipates that even absent health care reform, that would be taken care of. If you take that off the table, in terms of new policy, the House bill is deficit-neutral.

KING: You want to leave the legislative process to run its course. So let me ask you, take off your budget director hat and talk to me as someone who understands the economy, with your academic training. When it comes to the overall economy, what would hurt the economy less? The House proposal, the surtax on upper-income Americans, or taking away the exclusion and ending up taxing health care benefits? In terms of the impact on the rest of the economy, does it make a difference?

ORSZAG: Well, they would have different effects. I mean, to raise the same amount of revenue, the exclusion would be affecting more people. So again, this isn't a simple yes/no kind of answer.

KING: It's affecting more people, good or bad? Is it spreading more pain or is it causing more pain?

ORSZAG: Again, it depends what your objective is. So look, the key thing here is, we do need to make sure that this -- first, we need to get this done, because it hasn't been done in 50 years. The current system is unsustainable. We can't go on with not only such rapidly rising costs, but individuals facing constraints on preexisting conditions and difficulty obtaining insurance and what have you. We need to get it done. It needs to be deficit-neutral. And in the short run, some additional revenue is going to be required.

KING: Some additional revenue going to be required.

I want you to listen to the man who holds the job that you once held. Because he looked at the leading House plan and the HELP Committee plan that you mentioned that has passed in the Senate. And you have been adamant from day one, as the president has been, that the goal here is not just the moral imperative of helping the uninsured, but the policy imperative, the financial imperative of stopping a government health care cost that keeps going up like that and at least getting them here. Listen to Doug Elmendorf.

(BEGIN VIDEO CLIP) DOUG ELMENDORF, DIRECTOR, CBO: In the legislation that has been reported, we do not see the sort of fundamental changes that would be necessary to reduce the trajectory of federal health spending by a significant amount. And on the contrary, the legislation significantly expands the federal responsibility for health care costs.


KING: So this doesn't do what you need it to do, the proposals, as they now stand. You know him well. You had that job. You take issue with that, or is he right?

ORSZAG: Well, let's actually look at what the Congressional Budget Office put out on Friday night with regard to the House bill. And again, taking doctor payments off the table, that bill is deficit- neutral over 10 years. There are out-year deficits that we want to bring down even further.

I think the single most important thing that's missing from the legislation at this point is our proposal for an independent commission of doctors to help the policy-making process be more flexible, lead to higher quality and lower costs over time.

KING: Why is that (inaudible)....

ORSZAG: That is a big game changer. Well, I think ultimately, it will be.

KING: Ultimately...

ORSZAG: We sent -- I sent up a letter on Friday to the leadership of both the House and Senate, laying out, including legislative text, the first time we've sent up specific legislative text, laying out a proposal to do that. We think it's really important.

KING: But the president, in his weekly addressed, talked about special interests. He said special interests are trying to knock this off the track. As you know, Republicans say, one of the reasons you're having a hard time paying for this is because you won't budge on taxing benefits and they say it's because another special interest, they would use that label, labor unions are putting so much pressure on the White House and leading Democrats.

ORSZAG: Well, I'm not sure that that's the president's concern. I think the president is concerned with proposals that would tax -- that would eliminate the exclusion has to do with what it would do to employer-sponsored insurance.

Remember, actually, this is a key thing no one has picked up on. The House bill actually expands employer-sponsored insurance coverage by a couple million people. Part of the reason for that is it doesn't affect the tax exclusion. So one needs to be very careful in that exclusion not to undermine the coverage that most people already have.

KING: Now, the president has been adamant, he wants this passed by the House, passed by the Senate, even if he disagrees with a little bit of this and a little bit of that, both pass them by August so that then you can all get together and try to strike the grand compromise.

There are many in Congress, as you know, who say that's an arbitrary deadline. Among them is Mike Ross. He is one of the conservative Blue Dog Democrats who says he wants to get this done and he wants to get it done this year, but...


REP. MIKE ROSS (D), ARKANSAS: Whether we get it done in -- before August or after August, what's the hurry? We've been trying to do this since Teddy Roosevelt. What's important, I believe, is that we slow down, we get it right, and that we do it this year.


KING: The August deadline has been in almost everything the president has said about this. But when he had the hastily arranged event on Friday and then again in his weekly radio/YouTube address this weekend, he does not mention August. Is that deadline now off the table?

ORSZAG: No, it's still the goal. And we think...

KING: Still the goal or the still the president's insistence?

ORSZAG: We think we can make that. We're working towards that. And we have to remember, there are some who are advocating the delay simply because they don't have anything to put on the table.

The typical Washington bureaucratic game of, if you don't have a better alternative, just delay in the hope that that kills something, is partly what is playing out here. Not with regard to many members of Congress and senators who are actually actively participating in the debate, that's great.

But there are those who are advocating delay just as a desperation move to try to kill this. KING: I assume you don't include Mike Ross and the Blue Dog Democrats in that group.

ORSZAG: No, he has been constructive -- he's in the constructive group.

KING: So there's a constructive group in the House that says, we would like a little more time to think this over. There is a group in the Senate, six senators sent the president a letter this week, Republicans and Democrats.

The Republicans, you would very much need to make this a bipartisan plan in the Senate. They say, Mr. President, we want to get there this year, we share your goals, but we need more time. Why not?

ORSZAG: Well, and the discussions are occurring. I mean, with regard to the Blue Dogs, there were discussions over the weekend, same thing with regard to the Senate Finance Committee. Those are happening -- continuing happening today and they will be ongoing. I think there's a lot of progress and discussions are quite active.

KING: Let me wrap this up by a couple of quick questions. The president said this was his deadline. Now you say it's his goal. That's a softening.

ORSZAG: Well, we want to get it done by August -- by the August recess, and we think we can.

KING: And on the issue of presidential leadership, there are a lot of people who say, they understand the president's strategy at the beginning, but they say this has now frayed to the point where if he wants to guarantee this gets done this year, that he needs to get his hands dirty.

And if you talk to people on Capitol Hill, even close allies of this president, they're trying to question the reluctance. And many say that maybe he doesn't want his fingerprints on it now because of the experience of Bill Clinton.

It became "Clinton-care," because they put together such a detailed plan and sent it up to Congress, and when it failed, he suffered the big price for it. Is the president too timid to get involved here?

ORSZAG: No, I don't think so. And people are reacting too much to the ebb and flow of what's happening on a day-to-day basis. Again, this hasn't happened in 50 years for a reason, it's complicated. Legislative process is working. I think people are sort of reaching judgment about who's going to win the marathon based on who's ahead at like mile 19, not a good way of judging things. We're making a lot of progress.

KING: All right. We'll continue our conversation. Much more to discuss with the budget director, Peter Orszag, including his take on whether the economy is beginning to bounce back or still heading deeper into recession. Stay with us.


KING: We're back with the White House budget director, Peter Orszag.

And, Peter, I want to start with one of my hometown newspapers. And significant as we discuss the economy, because this is my first- paying job, delivering The Boston Herald.

ORSZAG: My hometown too.

KING: If you look at The Boston Herald, "How Low Can We Go?" And that's a question Americans ask themselves every day, but particularly on Sunday morning as they sit around for breakfast and reflect, how low can we go?

As we speak today, is the U.S. economy in the early days of a recovery? Are we moving this way, or are we still going into a deepening recession?

ORSZAG: I think that where we are is the sense of freefall that we had back in December -- remember, GDP was falling 6 percent on an annualized basis at the end of last year, beginning of this year, jobs were declining by 700,000 a month. That, we've stepped back from that precipice, but we're not yet in the growth zone.

Most private sector forecasters are suggesting that won't happen until later this year.

KING: Later this year. And because of that, there's an impact on what you do, essentially keeping the budget math of the United States government. I want to show some numbers on the screen for our viewers, because this is what you predicted in your budget, which is a few months back.

When you first came into office, you predicted the employment rate would average 8.1 percent this year. It is now 9.5 percent and going higher by almost all accounts. The stimulus plan would create 3.5 million jobs, create or save. That was what the president said when the stimulus plan or the recovery plan was sold a few months back. The economy since it passed has lost 2.65 million jobs. And as you noted, your budget predicted the GDP, the growth of the economy would be negative 1.2 percent, in the first quarter it fell more than 5 percent. At what point does that send Peter Orszag back to the table? Because those aren't just abstract numbers.

That means you're paying out more in unemployment benefits from the government's standpoint, and you're taking in a lot less money in taxes. At what point, and we've had this conversation before, are you back at the table saying, something has got to give?

ORSZAG: Well, again, for this year, actually, that temporary increase in the budget deficit that comes from lower tax revenue and higher spending on unemployment benefits and food stamps and what have you is helping to cushion the blow on economic activity, along with the Recovery Act and other steps that we've taken.

And indeed, a big part of this stepping back from the freefall appears to be those automatic stabilizers that are built into the budget and the Recovery Act. Goldman Sachs says that the Recovery Act -- and Mark Zandi too, the Recovery Act is adding 3 percent on an annualized basis to GDP during the second quarter. That's a very big number.

KING: That may be a big number, but I want to just show our viewers what this means in budget math, so they don't think we're having some wacky economic conversation.


KING: This year, fiscal 2009, versus last year, government expenditures are up $457 billion. Revenues are down nearly $350 billion. Just in April alone, federal tax revenue plunged $138 billion, down 34 percent from last year.

Yes, some of spending, as you say, is vital to helping people cushion the blow, but are you now looking at the budget, saying we cannot sustain these huge, growing deficits, so -- there are some things the president very much wants to do; there are some things that may well be good policy goals that we're going to either cut or delay.

ORSZAG: Well, look, we have to separate what's happening this year, where most of that is being driven by this economic downturn, and actually, ironically, is beneficial, in terms of offsetting some of the blow from what happens as we recover and after we -- after the economy recovers.

We do need some fiscal discipline there. We're going to have more to say about that as we move forward into next year's budget. But for right now, the numbers that you're talking about, those are actually, you know, not only a reflection of the economic downturn but actually helping to mitigate it.

KING: Helping to mitigate it.

I want to go back to the timeline of how this has played out. Because, as you know, even the vice president has said that, at the beginning, you underestimated the depths of the recession.

And I want to go back. Days after taking office, the president said he needed stimulus money from the Congress, somewhere in the ballpark of $800 billion, and he needed it now.


PRESIDENT BARACK OBAMA: We're moving quickly because we're told that, if we don't move quickly, that the economy is going to keep on getting worse, and we'll have another 2 million or 3 million or 4 million jobs lost this year.


KING: And it was just two months later after that spending passed, the president sounded pretty optimistic.


OBAMA: What you're starting to see is glimmers of hope across the economy.


KING: But this past week, a much more cautious message from the president, and when it comes to the stimulus spending, he sounded a tad self-defensive.


OBAMA: The Recovery Act was not designed to work in four months. It was designed to work over two years.


KING: You know the debate. Do we need more stimulus for the economy?

And did you just underestimate the depth of the ditch?

ORSZAG: Well, again, first, everyone -- almost everyone, not quite everyone, but almost everyone, in November or December, didn't realize how big the hole actually was, firstly.

Second thing, the Recovery Act was always intended to peak towards the end of this year and into early next year. So it is -- it is actually slightly ahead of -- despite all the media hoopla about the spendout from the Recovery Act, more than $220 billion has been obligated or gone out the door in form of tax relief, slightly higher than what was initially projected.

So we need to give this some time to work. It was always intended to peak later on this year, and it's on schedule for doing so.

KING: I'm going to ask you to walk over to the wall with me. Because I want to show what this means, in terms of a graph, and then ask you to help people at home trying to figure this out.

But if you look at the yellow line, this is where you thought the unemployment rate -- here's the year's playout. This is the unemployment rate, 3 percent up to 10 percent.

Here's how, if you look at Bureau of Labor and Statistics, this is how it would have picked out with the recovery plan. Then the idea was the administration said, if we pass the Recovery Plan, it would go down, something like this.

But this, in red -- and I'm going to stretch this out so we can see it better -- this is what has actually happened. The red line is what has actually happened. So at what point, Peter Orszag, does this red line -- most people now expect it to go past 10 percent -- at what point does this come down?

And would more money here have made it better?

ORSZAG: Well, first, I think a lot of the debate has been confused, because this is the impact of the Recovery Act. So, yes, the world has turned out somewhat worse than initially thought back in, you know, the end of last year, but the Recovery Act is still helping.

So, in other words, if you had your dotted blue line, it would look like this.

Now I'm moving your screen.

KING: That's OK.

ORSZAG: Most private-sector forecasters are projecting that the economy will start to recover toward the end of this year. Unemployment will lag somewhat. Unemployment normally -- firms usually, even after the economy starts to pick up again -- they still remain reluctant to hire people for some period of time. So the unemployment rate is going to remain elevated, too elevated and there are too many people who are suffering, for some period of time.

It's going to -- this was not a, sort of, overnight thing that happened, the problem that we face. And it's going to take some time to work our way out of it.

KING: So lastly, help the family out there watching that, maybe, had to put off a summer vacation or squeeze a summer vacation, what is it in the economy -- when all this data comes into you, what are you looking for?

Is it still a credit crunch problem? Is it a consumer spending problem? What is it that you say, "When I see this, I will know that we're going up"?

ORSZAG: Well, there are some good signs. I think that sense of panic and fear in financial markets earlier in the year and into last year has dissipated in some degrees.

But we'd start -- we're -- you know, we're focused on what's happening to job growth. We're focused on what's happening to consumption, the net exports, the key drivers of economic activity.

There's a lot of incoming data. During these kinds of periods, also, you're going to get mixed signals. For example, the unemployment rate remains high. The second quarter GDP numbers, even though they're likely to still show a decline, are likely to look a lot better than the first quarter, which is a sign of progress.

So mixed messages are part of what happens during these kinds of periods, where a sense of free fall's over, but we're not yet at point of sustained growth.

KING: Is there one thing that's, sort of, just holding the door shut?

ORSZAG: No, I think it's a variety of things. And again, this took a while to build up. It's going to take a while for us to get out of it.

KING: All right. The White House budget director, Peter Orszag. Peter, thank you very much.

And the questioning is over for Judge Sonia Sotomayor, and even critics say they expect easy confirmation for the nation's highest court. So how might her view of the law change your life?

We'll talk with the Senate Judiciary Committee's top Democrat and top Republican when "State of the Union" returns.


KING: I'm John King and this is "State of the Union." Here are stories breaking this Sunday morning.

A civilian helicopter crashed during takeoff today from a NATO air base in Kandahar in southern Afghanistan. Sixteen people were killed, five others injured.

Officials say the Russian-made chopper was on a mission to support peacekeeping forces in Afghanistan. NATO says no military personnel were wounded or killed and stresses that the chopper was not shot down.

U.S. officials confirm that this man was a U.S. soldier who disappeared in Afghanistan nearly three weeks ago. The 28-minute video allegedly made last Tuesday was posted on a Taliban Web site.

KING: The soldier's name has not been released. U.S. military officials condemn this video as a public exploitation of a prisoner and a violation of international law.

And Americans today continue to celebrate the life and legacy of the legendary CBS anchor Walter Cronkite, who passed away Friday. Howie Kurtz will devote most of the next hour to his memory, but first, we thought it would be best to simply allow Mr. Cronkite to speak for himself.


CRONKITE: Good evening from the CBS News control center in New York, this is Walter Cronkite reporting.

(UNKNOWN): The eagle has landed.


(UNKNOWN): We're going to be busy for a minute. CRONKITE: Wally, say something. I'm speechless.

From Dallas, Texas, the flash, apparently official, President Kennedy died at 1:00 p.m. Central Standard Time, 2:00 Eastern Standard Time. Some 38 minutes ago.

Old anchormen, you see, don't fade away, they just keep coming back for more. And that's the way it is, Friday, March 6th, 1981. I'll be away on assignment, and Dan Rather will be sitting in here for the next few years. Good night.



KING: A beautiful shot of the Capitol. Look at that blue sky on a Sunday morning here in Washington, D.C.

While there isn't much doubt that Supreme Court nominee Sonia Sotomayor will be confirmed by the Senate, there has been plenty of debate over just what kind of justice she would be. So what did we learn during last week's confirmation drama? Joining us now, the two top members of the Senate Judiciary Committee. The Democratic Chairman Patrick Leahy is in his home state of Vermont, and the Republican -- ranking Republican, Jeff Sessions of Alabama, with me here in the Washington studio.

And Senator Sessions, let me start with you. Your leader in the United States Senate, Mitch McConnell, let it be known on Friday afternoon that he was going to vote against Sonia Sotomayor. And among his reasons, he said this. "Judge Sotomayor's record of written statements suggests an alarming lack of respect for the notion of equal justice, and therefore, in my view, an insufficient willingness to abide by the judicial oath."

That is the leader of Republicans in the Senate, but as the ranking Republican on the committee, the man who's most enmeshed in the details, many of your colleagues will follow your lead perhaps even more than leader McConnell's lead. How is Jeff Sessions going to vote on Sonia Sotomayor?

SESSIONS: Well, I will first say that McConnell has followed this closely. He's made a number of speeches, he studied her record. He's a student of the law. He takes judicial matters very seriously, and I think his opinion will have a lot of weight.

I have not announced what I am going to do yet.

KING: Here's your opportunity.

SESSIONS: Well, I think I'll pass again at this point.

We're looking at the record of the transcripts, the testimony, and the hearing. We have submitted some additional questions, and we'll be getting answers back from the nominee relatively soon, I think, on that. And so then we'll go through that process. But I was troubled by a number of the things that the nominee has said, a number of the rulings that she has made, and I think it is a very serious and awesome responsibility to launch someone on a lifetime appointment with the power, in effect, to actually amend the Constitution, if they are not faithful to it when they render a ruling that alters its classical meaning.

KING: I want to get to the chairman in a minute, but it sounds to me like you're leaning no?


SESSIONS: I have a lot of concerns. I've made a number of speeches and set those forth before the hearings. And so there's been no ambiguity about my concerns.

KING: And when will the vote be? Chairman Leahy wants to have it on Tuesday, but you have the right as Republicans to push that off under the rules of the committee and buy an extra week. Are you going to insist on that extra week?

SESSIONS: I think the July 28th date will be the day that we'll look to have that vote. Yes.

KING: So, Mr. Chairman, I want to bring you into the discussion. And as I do so, as Republicans like Senator Sessions and Senator McConnell air their concerns, we're also hearing a lot of -- I wouldn't call them jitters, but reservations from the left as well. Because as they listen to the hearings, they didn't hear what I would say is enough to reassure them. I want you to listen to one exchange. This was Republican Senator Lindsey Graham asking -- excuse me, Judge Sotomayor a question. Let's listen.

I'm sorry. We lost the audio and the sound there, but the point was, Senator Leahy, that many liberal groups or left-leaning groups said, you know what, she sounded an awful a lot like Roberts and Alito in the way she answered some of the questions, especially about precedent and following the Constitution. Are you satisfied that you are getting what you want, sir, someone who fits your views of a justice?

LEAHY: You know, unlike a lot of other senators -- and I've been here for votes on every single member of the Supreme Court, current members of the Supreme Court -- I don't meet with the pressure groups of either the right or the left. I listen to what the nominee says themselves.

And we had 17 hours of hearings of her. She has sat on 3,600 cases, and then before that, she had years as a prosecutor. Her record is pretty clear.

It's certainly easy enough for somebody to make up their mind how they'll vote or not based on these 17 hours of hearings, longer than most nominees ever have, 3,600 cases. Certainly she's had more experience on the trial bench and the court of appeals bench than any nominee to the U.S. Supreme Court in decades. And her experience as a prosecutor -- no, I find it pretty easy to make up my mind.

I will vote for her.

I don't expect her to sit there and say, look, I'm going to rule this way or that way, depending upon whether this group on the right or this group on the left want me to. She said she's going to make up her mind, as she always has, based on the cases before her. That's what a judge is supposed to do.

KING: I want to get to some of her views and a little bit more of the hearing. But let me ask you first, Mr. Chairman, how many Republican votes do you think she will get in committee and how many on the floor?

LEAHY: Well, I have no idea how many she'll get in committee or on the floor, but she will have Republican votes. I saw Senator Martinez from Florida, Mel Martinez from Florida came out for her. Senator Snowe of Maine has come out for her. Others, Senator Lugar, who is certainly one of the most distinguished Republican leaders, actually, the senior most Republican in the U.S. Senate, has come out for her.

I would hope it will be a bipartisan vote. She deserves it.

Now, I understand Mitch McConnell and I've worked with Senator McConnell on different things, but like the other leaders of the Republican Party, he came out very, very early against her, and he doesn't want to change his mind.

LEAHY: You had one leader of the Republican Party call her the equivalent of the head of the Ku Klux Klan. Another leader of the Republican Party called her a bigot. To Senator McConnell's credit, he has not used those things, but the leadership of the Republican Party came out against her long before we ever had the hearing, long before they had a chance to look at her record. I think that's unfair.

KING: All right. Let's go more with the political status behind it. Let's look more at her view, including this. As the White House asked Democratic senators, please don't ask her about Roe v. Wade, please don't press on abortion or any specific cases, because if the Democrats start pressing, it opens the door for the Republicans to press.

But she did have from the newest member of the Senate, the newest member of your committee, Democrat Al Franken, he ignored the White House pressure, asked her some pretty specific questions about abortion rights, including this.


SEN. AL FRANKEN (D-MN), JUDICIARY COMMITTEE: Do you believe that this right to privacy includes the right to have an abortion?

JUDGE SONIA SOTOMAYOR, SUPREME COURT NOMINEE: The court has said in many cases, and as I think has been repeated in the court's jurisprudence in Casey, that there is a right to privacy that women have with respect to the termination of their pregnancies in certain situations.


KING: Senator Sessions, do you have any doubt if a Roe v. Wade- type case comes before the court that she is a vote for abortion rights?

SESSIONS: Well, it does seem that way. The organization she was involved with, the Puerto Rican Legal Defense Fund, had filed a number of very aggressive briefs in the case...

KING: Now, she says she was an advocate in those days and that was her job.

SESSIONS: Well, that's all right. But they -- I mean, she voluntarily joined and was on the board and her organization advocated that the federal Constitution required that it pay for abortions and the group also opposed any parental consent laws on abortions. So I would assume that that answer was where she will be.

KING: And...

LEAHY: You know...

KING: Go ahead.

LEAHY: ... first off, let me clear up one thing. No one in the White House suggested to me what questions I should ask or I shouldn't ask. And had they done that, I would have just hung up the phone.

I made it very clear in talking to my fellow Democrats on there, you ask any questions you want. We're not there -- it's not the White House conducting this nomination hearing, it's the United States Senate. So nobody had any restrictions on what to ask.

But I would hope that people would not think we picked a Supreme Court justice on just one issue, the issue of abortion. I voted for Supreme Court justices who I'm sure totally disagree with the idea of having abortion legal, just as I voted for some who disagree with the idea of making all abortions illegal. That should not be the issue.

And the idea of trying to say, well, you know, she was on the Puerto Rican defense thing and so we have to ask some questions about that, I hope we don't go back to the day when we used to have African- Americans up for confirmation and say, yes, but you belong to the NAACP, so, you know, we're really suspicious of you.

Come on. Stop the racial politics. This is a person...

SESSIONS: Well, come on, Pat, you...

LEAHY: No, no, no, but...

SESSION: I want to disagree on that. LEAHY: ... that's what it comes across. That's what it comes across. It comes across...


SESSIONS: Make them...

LEAHY: ... that if you belong to a group that tries to help Hispanics, help them in school, help them in other things, somehow you're suspicious. The same arguments were used against Thurgood Marshall and others. I think it's wrong.

The fact is, she has had more experience on the federal bench than any other nominee, and certainly, Jeff, since you and I have been...

(CROSSTALK) SESSIONS: But, Pat, I want to correct something. No Republican leader said she was a bigot. You've overstated that. There's nothing wrong with us asking about her...

LEAHY: I was talking about Newt Gingrich.

SESSIONS: Her (INAUDIBLE) views about positions -- legal positions that she took as a member of any organization. That's a normal thing to do. And I don't think that was unfair. She said that she thought she was fairly treated. Other commentators, objective leaders, civil rights leaders have said that.

We gave our absolute best to make sure this was a fair hearing, but it had to be vigorous. We had to ask about things that people cared about, her speeches, her prior pleadings that she did and some of her decisions, which are troubling.

But, Pat, you gave us a fair hearing. I appreciate that. A lot of people felt we were pretty tight on time, but you -- when the hearing came up, we had an opportunity. And I appreciate that.

KING: Gentlemen, we're about to run out of time.

LEAHY: And I appreciate that, Jeff.

KING: Senator, let me...

LEAHY: I appreciate that, Jeff. The leader I was talking about...

KING: Hang on. Hang on one sec, Senator Leahy.

LEAHY: ... was Newt Gingrich.

KING: Senator Leahy, please.

LEAHY: The leader I was talking about, Newt Gingrich.

KING: He called her a racist, I believe, at the beginning. But let's -- he did not get a vote. And I think that both of you have received wide acclaim. This is more contentious than the hearing was, this few seconds right here.


KING: We're out of time and I want to ask you each to take about 30 seconds, please, because we're probably going to be back at this again in six months or a year. The president is likely to get at least one more pick.

What did you learn from this process? You know, there is frustration voiced by everybody that, of course, you can't ask about specific cases, but couldn't we learn more about these people? We're going to give a 30- or 40-year job on the Supreme Court. It's your last chance. What did we learn from this process that you think can make the next one better? Mr. Chairman, to you first.

LEAHY: Well, I think that -- and I will compliment Jeff and the others. We tried to make sure everybody had a chance to ask all of the questions they wanted. It is inherently frustrating, because you cannot ask how you're going to rule.

That is a very difficult thing, but I think we got a pretty good idea of somebody who is a mainstream judge who has a great deal of experience.

KING: Are you happy with the way this went, the model for the future or build on it?

SESSIONS: I think we learned a lot on -- people did not press her to answer questions about future rulings. That would have been improper. I think that was good. I think we can always learn and do better. But my goal was to have the best hearing we've ever had.

I don't know if we achieved that, but I think we came close. Most people were pretty complimentary. And your network, commentators were complimentary. So I hope that we achieve that and we can continue to talk openly about some of the most serious social and legal issues facing our country.

KING: We're out of time, but I'm going to try one more time. On the scale of 1 to 10, how likely is Sonia Sotomayor to get Jeff Session's vote?

SESSIONS: Well, I'm not prepared to say at this time. And we'll consider it and announce it at an appropriate time.

KING: They pay me to try. Senator Sessions, thank you so much for coming. Mr. Chairman...

LEAHY: I would love to have Jeff's vote, I can assure you.

KING: Enjoy a beautiful day in Burlington, sir. We will see you again. Thank you both, gentleman.

And ahead, we'll take you to Newark, New Jersey, and check in with a young mayor who, despite high unemployment and other steep challenges, says it's time to give his city a second look. (COMMERCIAL BREAK)

KING: In this next week CNN will air "Black in America 2," our documentary looking at life with an African-American in the United States. We decided to base our travels this, our "American Dispatch" on just that theme.

So we went to Newark, New Jersey, 53 percent, a little more of the population in the city is African-American. The unemployment rate is heading up at 13.5 percent. But there is a glimmer of hope, the population is also going up after years of decline. People are moving back to Newark.

Now the city has a 40-year-old African-American mayor, elected three years ago, listen to this, on a promise of hope and dramatic change. Sound familiar? President Obama offered Cory Booker a job in the White House. But he says he has unfinished business.


KING: If we were on main street anywhere America, and I said, Newark, New Jersey, what would they say back?

MAYOR CORY BOOKER (D), NEWARK: People have this 1960s-'70s vision of Newark that's fixed in their minds. Well, if you walk around Newark today you're going to still see challenges. Look, we have -- there is definitely rising unemployment, we definitely have a rising foreclosure rate.

But we're doing things that are surprising a lot of folks. That we've led the nation now three years in a row for not just a small reduction in murders and shootings, 25 percent, 35, we're over 40 percent now and pushing numbers down.

So I'm trying to get America, number one, to wake up to the truth of Newark.

KING: So why is crime down?

BOOKER: It's not one thing. People think there is one answer to solve our problems. They're living in an incredibly simplistic world. The reality is, you have to do everything you can do change it.

So it's different policing tactics. It's clergy patrol. I have a senior citizen police academy now. It's getting technology up like cameras. KING: When you try to reform schools, where's the pushback?

BOOKER: People are often wedded to the way things are. We have got to deal with whatever interest group there is resisting change and get them as a partner in producing progress. And it's hard.

KING: Is that the diplomatic way of saying, grab the teacher's unions by the ear sometimes?

BOOKER: I think it's a diplomatic way of saying that we've created an environment where often people are more concerned about interest groups and not children. And you have to appeal to the better angels of any group.

KING: Have you seen stimulus money fast enough for your tastes or would you like to have it quicker?

BOOKER: There is not a government leader in America, I think, that wouldn't want more money to do more things right now. Because, you know, look, I wish we could be getting more shovels in the ground. A lot of the money was passed through the states, which is just very frustrating sometimes.

So it's not an easy, simplistic story. In some ways it has been a triumph already, some ways it has been very frustrating.

KING: You could give some advice to the people, as he hits around six months, his poll numbers have come from the stratosphere down back to planet Earth. What was it like for a young mayor who came into the city, and people said, well, the old administration was stale, many thought it was corrupt. How long did it take before it was, "give the new guy a chance" to "this is Cory Booker's problem"?

BOOKER: Well, I think that's the first piece of advice. And this -- I don't mean to give advice to the president, because he knows this, is you've got to not listen to that noise. But as, you know, Winston Churchill says, when you're going through hell, keep going, don't let stop, don't look around, don't let anything slow you down.

KING: So what is the risk for a Cory Booker or a Barack Obama in being such an enthusiastic disciple of hope when there are problems and some of them are going to take quite a long time to solve and you might actually get it wrong a few times before you get it right? What's the risk in that?

BOOKER: That I have made a lot of mistakes. Look, I believe we -- as a nation, we often damn ourselves with low expectations. And I had people say that about me and I heard people saying it about Barack Obama.

Why? Well, God forbid he raises people's expectations. Well, when we had great presidents stand up and say, we're going to the moon in a matter of years, that was raising expectations. Americans are at their best when they lift their vision to a higher plane.

So what's the risk of hoping too much? You know, what was the risk of a slave who never saw freedom but still hoped for one day being free? I would rather be a person that does everything I can to make change and not win than be a person that sits out the big fight and loses a part of myself.

Can't have great victories if you don't take on great battles.


KING: Cory Booker there. We want to say goodbye to our international audience for this hour. But up next for our viewers here in the United States, the world loses a giant in journalism. In our "RELIABLE SOURCES" hour, Howard Kurtz reflects on the life and legacy of Walter Cronkite.


KING: I'm John King and this is our STATE OF THE UNION report for this Sunday, July 19th. The world is look back and remembering the man who told us "the way it is" from the days of the Cold War to the election of Jimmy Carter.

Straight ahead, Bernie Shaw, Connie Chung, and Bob Schieffer, among those who look back at the life and career of the legendary anchor Walter Cronkite, who passed away Friday at the age 92.

On Tuesday the Senate Judiciary Committee will consider the nomination of Judge Sonia Sotomayor to the Supreme Court. What did we really learn from the four days of intense questioning last week? And did it get the coverage it deserved? Howie will put those questions to a panel of reporters.

And at the top of the hour, the "Sound of Sunday." As we do every week, we'll bring you the best from all of the morning Sunday shows. CNN contributors Bill Bennett and Donna Brazile will help me analyze the sound that will become Monday's headlines, all that ahead on STATE OF THE UNION.

Time now, as we do at this time every Sunday, to turn the thing over to Howard Kurtz and his "RELIABLE SOURCES."

And, Howie, I know you're going to spend a lot of time on the life and legacy of this man. This is a TIME cover from back in the day, Walter Cronkite.

HOWARD KURTZ, HOST, "RELIABLE SOURCES": And, John, before I let you go, what was it that Cronkite told you, the former A.P. guy, about your chances of success in television?

KING: I didn't know Walter well, but I met him on a couple of occasions. One was at a CNN town hall where we actually had a little bit of a disagreement about something. And he came over to ask me about my background and he was a former United Press guy, I'm a former A.P. guy, and he said, because of that wire service training that I would probably, probably, he said, do OK in this business.

KURTZ: An example of his good judgment. Thanks very much, John King.