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State of the Union

Interview with David Axelrod; Interview with Rudy Giuliani; Governor Brian Schweitzer Gets "The Last Word"; "Going Rogue"

Aired November 15, 2009 - 20:00   ET


JOHN KING, HOST: I'm John King and this is STATE OF THE UNION.


KING (voice-over): Pressing global and national security challenges for President Obama as he travels across Asia.

DAVID AXELROD, WHITE HOUSE SENIOR ADVISER: He is determined to get Afghanistan right.

KING: The president's top adviser, David Axelrod, joins me from Singapore.

A firestorm over the decision to try suspected 9/11 terrorists in federal court in New York City. We'll get perspective from the man defined by those attacks, former Mayor Rudy Giuliani.

And crunching the numbers on the economy and health care. Perspectives from two of the Senate's top deficit hawks, Democrat Kent Conrad of North Dakota and Republican Judd Gregg of New Hampshire.

And our "American Dispatch" from Wasilla, Alaska. It's Sarah Palin's hometown. Her new book, "Going Rogue," is reigniting an old political divide.

As he compares Republicans to the belly of a snake. He says Democrats better learn some fast lessons, too. Montana's colorful governor and head of the Democratic Governors' Association, Brian Schweitzer, gets "The Last Word."

This is the STATE OF THE UNION report for Sunday, November 15th.


KING: We begin this Sunday with a president whose passport is getting almost as crowded with stamps as his inbox is crowded with controversial policy decisions. Barack Obama is shattering the record for first-year presidential travel. At the moment, he is in Asia, attending the annual Asian-Pacific Economic Summit.

By the time he's done with his trip to Japan, Singapore, China, and South Korea, Mr. Obama will have visited 19 countries in his first 10 months in office, plus the Holy See to call on Pope Benedict.

One instant lesson, the big debates back home follow presidents around the world, and one of the biggest at the moment, a decision to try five top 9/11 terror suspects in federal court, not the military justice system, is where we begin our conversation with the president's closest adviser, David Axelrod.


KING: Let's begin with the controversial decision to try Khalid Sheikh Mohammed and four other 9/11 alleged conspirators in the federal courts in New York City, just a short walk from the site of the twin towers collapsing. Many Republicans are criticizing this, but it's not just Republicans.

This is Jim Webb, Democratic senator from Virginia, who says, "They do not belong in our country, they do not belong in our courts, and they do not belong in our prisons."

Why, David Axelrod, did the administration decide to take this step?

AXELROD: Well, I think for the same reason that Mayor Bloomberg and others felt strongly that we should.

We believe that these folks should be tried in New York City, as you say, near where their heinous acts were conducted, in full view in our court system, which we believe in.

We've had, you know, since 2001, have had 195 terrorism cases in the courts, and we've been successful 91 percent of the time. We're very confident about these cases, and we believe that this is the appropriate thing to do.

This is a judgment the attorney general made in concert with the secretary of defense. As you know, there were five other cases that were sent to military commissions, but we feel strongly that justice will be done here.

And frankly it's been a long time in coming. A lot of these cases have been delayed for many, many years. And now, the people who suffered so much in that attack will get the justice they deserve.

KING: We will have later in the program the former New York City Mayor Rudy Giuliani, who of course was the mayor when the horrible tragedy of 9/11 took place. And he is among those who say, to him, this reflects returning to a pre-9/11 mentality of treating terrorism as a crime, not an act of war. How would you answer that?

AXELROD: You know, it's odd, because when the 20th 9/11 bomber was tried in Virginia, in a civilian court, and convicted, Mayor Giuliani testified in that case and he heralded the outcome. So he may have changed his view, but we haven't changed ours.

KING: You mentioned this was the attorney general's decision. How involved was the president of the United States?

AXELROD: Well, the president was informed of the attorney general's decision and his reasoning for the decision. This was a decision for the attorney general to make, in concert with the secretary of defense. KING: It is a reminder bringing these terrorists to New York City for trial, alleged terrorists, a reminder of the controversy about Guantanamo Bay, Cuba. And we are just now two months and one week away from this promise from the president of the United States.


BARACK OBAMA, PRESIDENT OF THE UNITED STATES: Guantanamo will be closed no later than one year from now.


KING: If you talk, David Axelrod, to top officials at the Pentagon, top officials at the building you work at, in the White House, they say now it is a near impossibility that that deadline will be kept. When will Gitmo be closed?

AXELROD: We believe we are going to substantially meet the deadline. We may not hit it on the date, but we will close Guantanamo. And we are making good progress toward doing it.

KING: Any idea? Two months, four months, six months more?

AXELROD: I'm not going to put a deadline on it, John. But we are going to get it done. We are moving toward getting it done in all the different dimensions that are necessary to get it done. The president believes it's important to get it done and to end this chapter in our history. And we are going to get it done.

KING: Part of this chapter in our history is the 9/11 attacks, which of course were hatched in Afghanistan. And the president is closer to making this big decision he has to make about how many troops. When he makes that decision, will he lay out for the American people not only the rationale for the decision he has made, but an exit strategy for Afghanistan?

If you travel the country, as I do all the time, people keep saying, eight years later, how long is it going to take? How much is it going to cost? How many lives will be lost? Will the president give us an exit strategy?

AXELROD: Well, I think that's -- that is a concern. And it's obviously one of the factors the president is thinking through. We've been there for eight years; it's a long, long time. And we have to keep focused on what our purpose was in the first place.

Our purpose was to disrupt and dismantle and destroy al Qaeda. That remains our purpose. But obviously we can't make an open-ended commitment. And we want to do this in a way that maximizes our efforts against al Qaeda, but within the framework of bringing our troops home at some point.

And the president has made that clear in all these discussions. There has to be a framework to this decision. And -- but we are getting close. It's been a good process. KING: As you know, conservatives have been critical of the president's policy review, saying, why is it taking so long? The former Massachusetts governor and Republican presidential candidate, Mitt Romney, gave a speech this weekend in which he said, not only why is it taking so long for the president to decide, but he also said, why is David Axelrod, his top political adviser, involved in these deliberations? Let's listen.


MIT ROMNEY (R), FMR. PRESIDENTIAL CANDIDATE: I find it incomprehensible and inexcusable that this president invites David Axelrod into national security meetings. Polls and politics have no place at that table. He is the commander in chief. What has he been doing?

Do you realize he carried out more than 30 campaign visits in this last season, for various Democrats? While he can't make up his mind on Afghanistan, or have enough time to meet with generals, he is out there campaigning.


KING: Well, let's take them in order. Why does David Axelrod deserve a seat at that table? And why is it taking so long?

AXELROD: Well, first of all, let's be clear. David Axelrod doesn't have a seat at that table. I have observed these discussions because, as I am today, I have to help communicate the message of the administration. And so it's helpful for me to hear. I have not said a word in any of those meetings.

Now let's take the second part. Governor Romney has to choose one argument or another. Either he has to say he's not paying attention or he has to say he is taking too long because he has been involved in a rigorous review.

The president has had hours and hours and hours of meetings with his military commanders, with his national security team, to run through every aspect of this, in order to get it right.

And we've seen in the past what happens when we don't do that; when we don't do the necessary preparations. And he is determined to get Afghanistan right. It's something that Secretary Gates supports. It's something that the chairman of the Joint Chiefs of Staff supports. General McChrystal has been supportive of this process.

And, you know, I know that Governor Romney has never had responsibility for any decision akin to this, and so he just may not be familiar with all that it entails. But I think the American people are being well served by a process that is assiduous and in which every aspect of this is considered.

Because, after all, lives of American servicemen are involved here. An enormous investment on the part of the American people. We ought to get it right. (END VIDEOTAPE)

KING: A quick break. When we come back, we'll continue our conversation with senior presidential adviser, David Axelrod, about how the abortion debate is complicating the politics of health care, and whether he and the president will buy a copy of Sarah Palin's new book.


KING: Let's get right back now to my conversation with senior presidential adviser David Axelrod.


KING: Let's close with a few questions on domestic issues, health care first. As you know, there's a big controversy within the Democratic Party. Abortion opponents put language in the House legislation -- they believe that will stay in the Senate legislation -- that denies any federal funding, not only in the public option, but in this insurance exchange, no federal subsidies could go to pay for insurance coverage.

And abortion rights Democrats are furious at this, and they want the president's help. Was the president comfortable signing a health care legislation that has the Stupak amendment in it?

AXELROD: Well, the president has said repeatedly, and he said in his speech to Congress that he doesn't believe that this bill should change the status quo as it relates to the issue of abortion. This shouldn't be a debate about abortion. And he's going to work with the Senate and the House to try and insure that at the end of the day, the status quo is not changed.

KING: Does the Stupak amendment change the status quo?

AXELROD: Well, I think it's fair to say that the bill Congress passed does change the status quo. And -- but I believe that there are discussions ongoing to how to adjust it accordingly.

KING: The president has said he wants the public option, but he wouldn't hold up the health care debate for the public option. That he would like it in there, but if the bill came to him without one that met his other criteria, that would be OK with him.

How about on this one? If the Stupak language is in the bill and you think it changes the status quo, would the president veto it and send it back, or would he reluctantly sign it?

AXELROD: John, I would have to take issue with your premise. I don't think the president has said that one way or the other what his posture would be. He said that this is an aspect -- the public option debate is an aspect of a larger bill. This is an aspect of a larger bill.

He has been very careful not to draw these lines. But he believes both these issues can and will be worked through before it reaches his desk.

KING: Members of the Hispanic Caucus came to the White House. They're worried the Senate language would not only say that no federal money would go to have an illegal immigrant -- help an illegal immigrant get health care, but that the Senate language would prohibit an illegal immigrant from using his or her own money to purchase health insurance. Would the president support that?

AXELROD: Well, the issue has to do with the health insurance exchange that's being set up. And again, this is another issue that has to be worked through. Ultimately, the issue of undocumented workers is something that needs to be dealt with in a larger context.

You know, we're not going to settle all these issues in the context of a health care bill. And it would be tragic if these debates took us to a place where we missed the opportunity to do something that we've been talking about for 100 years and deal with the flaws in our health insurance system.

KING: You sure you'll get it done this year?

AXELROD: Well, that's our goal and that's our intention and we're going to push very hard to get it done. There has been a long, vigorous, thorough debate and it's time to get it done. And, you know, for all those people who have pre-existing conditions and can't get coverage today, for all the people who can't afford coverage because they don't get it through their employer, for all the people who have coverage and have seen their costs escalate exponentially, they can't wait for resolution. We ought to get this done.

KING: The secretary of homeland security, Janet Napolitano, says you will, early next year, come forward with a plan for comprehensive immigration reform that would have a plan in it, a path in it for an estimated 12 million illegal immigrants in this country to have a pathway to status -- to legal status.

Will you make the political commitment that no matter what the politics of January and February, the administration will go forward with this early next year?

AXELROD: John, what the president has said is, and he said it to both Republicans and Democratic members of Congress who have worked on this issue is, come to him, let's come together around something that both parties, or at least elements of both parties, say they can agree on, so we don't reach the same impasse we've reached before and then he'll be willing to go forward on it.

I think some good work is being done on both sides of the aisle to achieve that. And Secretary Napolitano is getting that done. But what we want is a system that holds everybody responsible and everyone accountable.

We have to have better security at our borders and we are developing that, thanks to Secretary Napolitano. We have to have better enforcement on employers who abuse the system by hiring undocumented workers in order to undercut the labor market. And we have to hold accountable and responsible the 12 million people who are here illegally. And they have to pay a fine and a penalty and have to meet certain requirements in order to get in the line to earn citizenship. And if they don't want to do that, they need to leave.

And that is the president's position. If we can get a group together to give it the momentum to pass in Congress, then we're going to push forward with it.

KING: Let me close with a question about a political debate back here in the States while you're in Asia. And that is Sarah Palin's book, "Going Rogue," is coming out on Tuesday. Your friend and partner from the campaign, David Plouffe, says he is very eager to buy one and give it a good read to see what she says about the campaign and about herself.

How about David Axelrod? It sounds like a perfect read for that long flight home from Asia.


AXELROD: Yes, you know, I think I'll borrow Plouffe's copy. I don't see why we both have to buy one. So I will -- once he's done with it, maybe he can summarize it for me or lend it to me and I'll give it a look. I'm more interested in seeing people buy his book. I think that's a great read.

KING: How about the president? Do you think he wants to read Sarah Palin's book?

AXELROD: I think the president's pretty busy right now. I don't know that that's on his immediate reading list. He is reading reams of papers related to the many issues that he has to confront. So I'm not sure that will be at the top of his list right now.

KING: David Axelrod, joining us from Singapore as part of a long trip across Asia, we appreciate your time.

AXELROD: Great to be with you, John. Thank you.


KING: Up next, the man who became a national icon for his response to the 9/11 attacks, former New York City Mayor Rudy Giuliani, who says the president's decision to bring the alleged architects of the terror plot to trial in New York is a dangerous call.


KING: The administration's decision about how to bring alleged 9/11 mastermind Khalid Sheikh Mohammed and four other alleged conspirators to justice is the subject of fierce legal and political debate.

Some see the decision for trials in federal court as the right call, a transparent process, not far from where the twin towers of the World Trade Center once stood. Others, though, are outraged, among them, the man who led New York City that fateful morning, Mayor Rudy Giuliani.

Mr. Mayor, thank you for joining us. You say this is...

GIULIANI: Thank you very much, John.

KING: You say this is the wrong call. The White House has gone back and said, wait a minute, he testified at the Moussaoui trial, and he said, among other things, quote, "I was in awe of our system. It does demonstrate that we can give people a fair trial that we are exactly as we say we are. We are a nation of law. I think he's going to be a symbol of American justice."

If it was right for Mr. Moussaoui, why it is wrong now?

GIULIANI: Well, the reality is, we can be an example to everyone. And a military tribunal is certainly fair. It's a great example to the rest of the world. The tradition for over 150 years has been to use those military tribunals. They were good enough for Abraham Lincoln, Franklin Roosevelt in many, many cases.

And in fact, the really strange thing about this decision is five of these terrorists are going to be tried in military tribunals anyway. So the reality is, this is an unnecessary -- first of all, it's an unnecessary advantage to give to the terrorists. I don't know why you want to give terrorists advantages.

And secondly, it's an unnecessary risk to the city of New York, which already has any number of risks. If it was necessary; if this were the only option, well, of course, I'd be in favor of it, and of course the city would do everything it could, as it will, to try and make it safe.

KING: Well, the administration says those five going to military tribunals committed acts overseas against U.S. interests, and these that are going to go to trial in New York committed -- planned an attack, of course, here in the United States.

I want to go back to something else you said because I'm trying to make the distinction of things you've said in the past to where we are now. In 1993, you said at the World Trade Center trials in New York, "It should show that our legal system is the most mature legal system in the history of the world, that it works well, that it is the place to seek vindication if you feel your rights have been violated."

The political question is, you know, what the White House is saying, well, Rudy Giuliani said, when Bill Clinton was president, a trial was OK. When George W. Bush was president, a trial was OK. But now that Barack Obama is president, it's not.

GIULIANI: Well, that's a -- that's an absolutely silly distinction that they're making. A trial is OK. A military trial is OK. In the case of the World Trade Center under Bill Clinton, I've already said, in retrospect, as many have, that that was a mistake.

To treat the 1993 bombing as if it were just a criminal act, just one of the 1,973 murders in the city of New York that year, was a big mistake.

So what -- basically, the Obama administration is repeating the mistake of history. Many, many people have regarded that as a mistake, that it was treated just as a civilian act. It should have been treated as an act of war.

And it's part of a bigger picture here, John. It's part of -- it's part of Barack Obama deciding that we're not at war with terrorism any longer. So this is now treated as if it was an act of war, which it should be treated like.

Remember, he's told us we can't use the term "war on terror." The only problem with that, John, is the terrorists haven't stopped going to war with us. Maybe the Obama administration doesn't think we're at war with them, but they are very clear on the fact that they are at war with us.

KING: I want to show you the front page, here -- I'm showing the "New York Post" today, the "Sunday Post." "Under Siege" is one of the headlines, "Massive New York City Lockdown for 9/11 Trial."

You were the mayor of the city on that fateful day. Your voice was one of comfort to the people of New York City in the days and weeks after the attack. Do you think holding this trial there puts the people of New York City at risk?

GIULIANI: Well, I think...


Yes, of course it does. I remember when the African bombers were brought to New York when I was mayor of New York City. I was briefed on all of the additional risk that that would create for New York City.

That's when I had to close areas around the federal courthouse and I had to close areas around city hall, for which I was severely criticized by the "New York Times" for making those closures, as if I wanted to keep people out of city hall.

I did it on the advice of the FBI and the New York City Police Department because of the additional risk to city hall that was going to be created by the -- by the terrorists that were going to be tried in New York City. This would be in the late 1990s, preceding September 11.

So anyone that tells you that this doesn't create additional security problems, of course, isn't telling you the truth.

KING: I want to show you the cover of "Newsweek" this week. This is Sarah Palin on the cover, "How do you solve a problem like Sarah? She's bad news for the GOP and for everybody else, too."

Does Rudy Giuliani, a moderate Republican on social issues, a tough- on-crime Republican on other issues -- do you think Sarah Palin is bad for the Republican Party? GIULIANI: No, I do not. I think Sarah Palin is great for the Republican Party. I think the fact that "Newsweek' has her on the cover and is criticizing her is a great indication of how good she is for the Republican Party.


And how much enthusiasm -- how much enthusiasm she's created. And I took her to the famous game at Yankee Stadium this summer where Letterman got in trouble, making those unfortunate remarks about her daughter, picking the wrong daughter. And she gets a tremendous reception, even here in Democratic New York.

I mean, this is a person who creates great enthusiasm for the party. We're very far away from a 2012 election. Right now, I like figures who are creating interest in the Republican Party.

Given the decisions that the Obama administration is making, particularly in this area of terrorism, which concerns me probably more than any other, we're going to need some pretty strong alternatives in 2012.

I don't know if it will be Sarah Palin or someone else, but right now it's developing interest in a Republican Party, and we need a two- party system and we need a healthy one.

KING: You say you don't know if it will be her. Might it be you? Some people say Rudy should run for president again. Other people say, please run for governor, Mr. Giuliani. What will you do?

GIULIANI: And other people say, please don't.


KING: And what's the answer?

GIULIANI: I don't know yet. I don't know what the answer is yet, John.

KING: When do you have to make that decision?

GIULIANI: Not today. Not this morning.

KING: Let me ask you lastly about -- you say you welcome Sarah Palin, you think she's good for the party. What about what happened in NY 23, where you had a candidate -- a moderate Republican candidate who had the endorsement of the party and then conservatives like Sarah Palin came in and said, no, not good enough, not good enough on taxes, not good enough on life, not good enough on these issues.

Is that a good precedent for the party?

GIULIANI: Nope. That's not a good precedent for the party. And that's the way you can allow Democrats to win, even if the public has turned against them on certain things. I think in that particular case, I know that district. That's a district that is very concerned about Obama's health care.

You can see the Democrat has voted against the Obama health care program. That's a district where we could elect a Republican if we get our act together and let's hope we don't repeat that too often because then we surely won't be a majority party.

KING: Mayor Rudy Giuliani, we appreciate your time today and I will say this since this is the first time I've had the opportunity, very hard for a Red Sox fan, congratulations to your Yankees. Keep us posted on your plans and we'll see you in the near future.

GIULIANI: Thank you very much.

KING: Take care, Mr. Mayor.

GIULIANI: Thank you.

KING: A trillion dollars over 10 years for health care changes, $1 million per soldier per year in Afghanistan. Big political controversies, and big ticket price tags for a federal budget already deep in deficit spending. Is there a way out?

Up next, we crunch the numbers with the Senate Budget Committee Chairman Kent Conrad and the panel's top Republican, Judd Gregg.


KING: Reversing a 10.2 percent unemployment rate that's heading higher, reforming health care, those are the two biggest domestic challenges facing the Obama White House and the Congress. But there's concern about how to pay for such an ambitious agenda when the administration itself projects the federal deficit will reach $1.5 trillion next year.

Joining us to crunch the numbers is the chairman of the Senate Budget Committee, Kent Conrad of North Dakota, and in his home state of New Hampshire, Senator Judd Gregg, the committee's top Republican.

Gentlemen, I want to get to dollars and cents in a moment. But first let's start with terrorism. The president wants to close Guantanamo Bay and one of the proposals when he does that is to move the terrorist detention center perhaps to his home state of Illinois.

Senator Conrad, to you first. Is that the right idea, Illinois or elsewhere in the United States, bring them here?

SEN. KENT CONRAD (D), CHAIRMAN, BUDGET COMMITTEE: You know, this is a very difficult issue, obviously, how you deal with these people. I would prefer to see them dealt with outside the country, but there are circumstances when being here, tried in a court of law, is the best option. So I think different cases are going to be -- have to be handled in a different way.

KING: The long-term imprisonment, would you want Khalid Sheikh Mohammed in a prison in North Dakota?

CONRAD: No, I would not.

KING: Senator Gregg, should they come to the United States?

CONRAD: Well, wait a minute, I don't think Khalid Sheikh Mohammed should be in prison. I think Khalid Sheikh Mohammed ought be put to death. And that's clearly what the administration is saying, the attorney general of the United States is saying he will go for the death penalty against Sheikh Mohammed.

KING: Senator Gregg, do we need -- if we're going to close Guantanamo Bay and we need a place to keep these terror suspects until they are brought to trial, should it be in the States?

SEN. JUDD GREGG (R), BUDGET COMMITTEE: No. And we shouldn't close Guantanamo for the purposes of these type of terrorists. Basically, we're dealing here with people who have committed acts of war against us. They shouldn't be tried in our criminal justice system. They should be tried in our military justice system.

And it's absolutely inexcusable we're not using the military justice system to try these people. That's why we have such a system. And when you're at war with someone, you use that system. And these people are evil people. They represent a cause which wants to destroy this nation.

If they have the opportunity and were to get free, they would try to destroy this country. There's no reason we should have them in the critical justice system.

KING: You two disagree on many issues, but you agree on some as well. And you have been, Senator Conrad and Senator Gregg, among those screaming the loudest for some fiscal discipline in Washington.

I want to ask how we get to that. Because the administration says, beginning with the State of the Union Address, they will put a lot of emphasis on bringing down the deficit. On the front page of "The New York Times" today though, the short-term challenge, "High Costs Weigh on Troop Debate for Afghan War." $1 million per soldier per year in Afghanistan.

Senator Conrad, can you balance the budget or get anywhere close to balancing the budget if we're going to send 35,000 more troops to Afghanistan?

CONRAD: You know, security is not cheap and the first judgment has to be, what assures the security of the nation? But in the case of Afghanistan, the cost is $40 to $50 billion a year if we're going to put in an additional 35,000 to 40,000 troops.

And we have top military leaders saying that's not the direction that's going to keep us more safe. I think you have General Eikenberry, now Ambassador Eikenberry, writing now, we know, a cable to the president, saying don't send in more troops. And General Eikenberry is a four-star general who is the commander of our troops in Afghanistan before he became a diplomat.

So he's ending a signal that it's the wrong course for America to increase troop levels in Afghanistan.

KING: But Senator Gregg, the general in charge now, Stanley McChrystal, says he needs those troops. So you have the administration's top commander on the ground and top diplomat on the ground in apparent disagreement.

Where are we heading here?

GREGG: I don't know what we're heading. The president's going to make a decision, I hope sooner rather than later. But the point here that I think is at the essence of your question is, can we afford to fight the war on terror? We can't afford not to fight the war on terror.

KING: There's a new report out. The authors of the bill and the Congressional Budget Office say this will reduce the deficit over time. But there's a new report out by a government agency that oversees Medicare that says that House bill would cause significant benefit cuts in the Medicare program the way it is now drawn up, that seniors would have their benefits cut or that hospitals might say, forget about this, I'm not taking Medicare patients anymore. Is that going to happen?

CONRAD: Well, first of all, I think we've got to be very careful about our language. There are no cuts in any of these bills. There are reductions in the increases that they're scheduled to receive.

And in the bills, the reductions are not aimed at Medicare beneficiaries. The savings come from Medicare providers, hospitals, nursing homes and the rest.

In the bill that came out of the Finance Committee, those were negotiated savings from those providers. Why would they agree to those savings? They agreed to them because they know, with 30 million people more covered, they're going to get more business. So most of these savings, at least in the Finance Committee bill, were negotiated.

KING: As the debate goes on, gentlemen, we'll invite you both back again. We like having you in. Senator Judd Gregg from New Hampshire, Kent Conrad with me right here. Gentlemen, thank you both.

Up next, he's often outspoken, feisty, funny and confident. But what's he have to say now that he's party lost two key governor's races in Virginia and New Jersey. The chairman of the Democratic Governors Association, Montana's Brian Schweitzer gets "The Last Word" next.


KING: Sixteen newsmakers, analysts and reporters were out on the Sunday morning talk shows but only one, just one, gets "The Last Word." That honor today goes to Montana Governor Brian Schweitzer. He's the chairman of the Democratic Governors Association and I caught up with him earlier this week at the state capitol in Helena.


KING: Let me start by asking you a question about the elections that just passed. You're the head of the Democratic Governors Association. It was not a good year. What happened?

GOV. BRIAN SCHWEITZER (D), MONTANA, CHAIRMAN, DEMOCRATIC GOVERNORS ASSOCIATION: Well, I think that history played out again. Both New Jersey and Virginia have been electing people from the opposite party of the president.

Governor's races aren't like congressional races. When you elect your congressional member, you're thinking about what laws they might pass and are they part of the administration's plan for health care or the war or taxation or whatever it might be?

But when you elect a governor, it's singular. You're looking for your chief executive. So they're not really tied to a national party in the way that a member of Congress would be.

KING: You don't see any national message in the voting, particularly maybe the defection of independents from the Democrats to the Republicans? If not a message, do you see a cause of concern for your party?

SCHWEITZER: No, I don't think -- I don't think that you can say that this is a dot or any kind of a continuum. These are two races. They ran on their own dynamics. Those were individuals who are running for governor and it just so happened that the two candidates that were Democrats lots and the two candidates that were Republicans won.

I don't think it means a dang thing for next year.

KING: This is something you said before the election. You did have Virginia, right? You said that's a flip of the coin. I don't know which way that one ends. But you did tell "Politico," I bet whatever money is in my pocket he's going to win, referring to Corzine.

SCHWEITZER: Dang good thing I only had $2 in my pocket that day.


KING: What do you see? As you look at these results, you say they're picking governors. But they picked two Republican governors in two states, in New Jersey, they hadn't elected a Republican statewide since 1997. Democrats had won five of the last seven elections for governor in the state of Virginia. So the voters did something.

SCHWEITZER: Yeah, they voted for a couple of fellows who were -- just happened to be Republican. They looked the other direction, but I don't think that it's a trend. Again, this was a tough cycle for incumbents, and in the case of Virginia while there wasn't an incumbent, they were looking at the other party because the last two governors had been Democrats and so they were looking to the other side.

So I think if anything, it's been a tough cycle for incumbents and I expect maybe even the next cycle to be tough for incumbents.

KING: For incumbents or for Democrats? Because history would suggest especially the president's first midterm is usually very tough for his party.

SCHWEITZER: Yes, but this is a competitive business. When you're hiking in grizzly bear country like Montana, it isn't that you have to be particularly fast, you just have to be faster than somebody you're hiking with. And the Republican Party, they poll a little lower in the belly of the snake right now.

So, you know, Democrats have got to do a better job getting their message out. But right now the population doesn't really like the Republican message.

KING: If they don't like the Republican message, what would your advice be to Democrats going into this climate next year? What are they doing wrong that they need to do a better job of getting their message out?

SCHWEITZER: I'm not going to say they're doing anything wrong. But I can tell you what people care about most and that's jobs. If there is a concern about three or four issues that are at the top and that's health care and climate change and the war, they all are second place to jobs.

If you look at 10 percent unemployment, that seems high. But if you're one of the families that are unemployed, that's a depression.

KING: Do you worry about maybe a sense of disconnect? We travel every week. And this is 45 states that we have visited. And you cannot find anybody, whether they're upper middle class or whether they're at the bottom of the rung, who hasn't had to do something because of this recession.

Cancel a vacation, deal with personal finances, refinance if they can, maybe face foreclosure. Just about everybody has had some sort of impact from this recession. Do they look at Washington and see their government doing the same thing?

SCHWEITZER: No. In fact, I think that those members of Congress are going to be surprised when they come home. I suppose since Harry Truman, members of Congress, both Democrats and Republican, they come home to get re-elected and they tell people and they remind people of all the water projects and sewer projects and all the roofs they put on buildings and all the highways they built, effectively bribing people with their own money.

They're going to find out the mood of the folks back home is such that people have said, look, whoa, I put money in my own bed, under my own bed. I have increased my savings account. I'm not spending like I used to. And I want you to do the same.

It wouldn't be a bad idea for government to understand that people believe that saving money is more important than spending money right now. KING: Well let me ask your opinion about the health care debate. There's a $1.1 trillion over 10-year plan that moved through the House of Representatives, the Senate plan is $880 or $890 billion over 10 years. Is that what we need right now?

SCHWEITZER: I don't think either one of those plans as written is going to pass. I think that we will get health care reform and I think that we need health care reform. We pay twice as much as virtually every other country in the world and our result is not as good as some 35 or 36 other countries.

What Congress really ought to be working on is price controls. I'll bet you six months ago, you could have walked into a room of 500 people anywhere in America and said, who loves their health insurance company? Raise your hand. Not a dang handed would go up.

But after all this discussion and scaring people, people are saying, I wouldn't want to lose my private health insurance company. But yet just six months ago, nobody liked them.

KING: What's your sense of the politics of this? The public option is a policy question, whether you should have tort reform is a policy question, how much flexibility give the states is a policy question.

There are those in the White House who say the president said this was his number one priority and he said he wants it this year and therefore, we have to do it this year and they're pressuring the Democrats in Congress to try to get it done this year.

Is that the most important thing from a political standpoint? Is there a credibility test?

SCHWEITZER: Well, I don't have a vote in Congress, but I'll go back to what my premise was. The most important thing for the American people right now is jobs. If we get people back working, they've got money in their pocket and then they'll be concerned about health care next, then they'll be concerned about education next and on down the line.

But as long as you don't have a job, you're not going to be happy until you're working again.

KING: Does that mean they should put health care aside until they figure out the economy and they have more money in Washington or...

SCHWEITZER: No. I mean, there's 535 members of Congress. They ought to be able to keep one or two balls in the air at the same time. If they're telling me now that they can only keep one ball at a time, then we've got the wrong people in the Congress.

KING: You've been a chief executive for some time. The president is 10 months in, heading into 11 months into his first term. What -- from a chief executive perspective, what is he doing right and what might he do better?

SCHWEITZER: Well, I'm not going to give advice to the president of the United States, but I will say this. That in Montana, our legislature meets for just 90 days every other year and the citizens are safe the rest of the days while the legislature is not in session.

I think that a strong chief executive sets your priorities, reaches out and finds those people that will support your priorities, work a deal with the people that aren't currently supporting it, find the common ground with other people, and then you pass legislation.

Now I think that that's what the president's attempting to do, but he's got a lot of strong personalities in Congress, both Democrats and Republicans.

KING: What do you make when you look at his poling as someone who's been through the highs and lows and the roller coaster of public opinion in the sense that he stays very popular personally, but if you go issue by issue he's dropped and in some cases substantially.

SCHWEITZER: Well, first, I think the polls say that the people of the United States like him and trust him. On these issues, it's easy to get people confused because you hear one side, then you hear the other side. But if they like their leader and they trust their leader, they'll follow their leader because they believe in him.

KING: It's a bit early for this question, but what happens to the term limited governor of Montana when he's done?

SCHWEITZER: Well, first off I've got one of the smartest, best looking dogs in America and I might say that I'm one of the best trout fisherman, at least in my own mind. And so I think we'll spend a little time together fishing on the ranch.

KING: No other plans at the moment.


KING: Governor, thanks for your time.

SCHWEITZER: It's my pleasure, thank you.

KING: Thank you.


KING: Jag is the governor's dog, and he's a great and a fun dog. Up next, we go to Wasilla, Alaska. In Sarah Palin's hometown, "Going Rogue," her new book, is ginning up business for book stores and reigniting the debate over whether she's ready for the highest office in the land.


KING: One of the big events in the week to come is the release of "Going Rogue," Sarah Palin's new book. The states in red are where she's already scheduled book stops along the way as she tries to promote the book and reintroduce herself to the American people. Here are just several of the stops already scheduled, ranging from Grand Rapids, Michigan, Birmingham, Alabama, Albuquerque, New Mexico. She'll be traveling the country. But we also wanted to get a sense of what people in her home state think about it because you'll remember Sarah Palin, many love her from the campaign in part for moments like this at the Republican Convention.


SARAH PALIN (R), FORMER VICE PRESIDENTIAL CANDIDATE: I've had the privilege of living most of my life in a small town. I was just your average hockey mom and signed up for the PTA. I love those hockey moms.


KING: That one of the moments that endeared her to the American people and certainly to the Republican base. This a source of some controversy.


PALIN: Well, let's see, there's -- of course, in the great history of America, there have been rulings that there's never going to be absolutely consensus by every American.


KING: Controversial in the country. Let's take a quick look here. Favorable opinion, 42 percent. Qualified to be president, only 29 percent of Americans think the former governor of Alaska and vice presidential nominee is qualified to be president.

In our "American Dispatch," this week we wanted to go to Sarah Palin's hometown, Wasilla, Alaska. If you go there, you get proof, the locals are, no matter what they think of her qualifications, very, very interested in this new chapter.


KING (voice-over): Wasilla's famous resident lives across this shimmering lake. Her image, still a smiling life-sized calling card at the local Chamber of Commerce. It's mostly back to normal a year after the big election, but to visit Pandemonium Booksellers is to be reminded that Wasilla, like the rest of America, is preparing for the next installment of the Sarah Palin debate.

SHANNON CULLIP, OWNER, PANDEMONIUM BOOKSELLERS & CAFE: I think it will stir it up a little bit.

KING: Owner Shannon Cullip says pre-sales of Palin's "Going Rogue" are shattering store records and reigniting the Palin political divide.

CULLIP: It's either one extreme or the other I would say. People either completely, completely have her on a pedestal or don't like her. It's not too much in the middle. You will have just some people just oh, she's just such an amazing woman, I can't believe what she has accomplished, and that sort of thing, and...

KING (on camera): And the flip side, those who...

CULLIP: The flip side, oh, I can't stand her.

KING (voice-over): Palin's fast political rise has been good for business here. Books on her tenure as governor are in the Alaska section and other political titles sell more now, too.

CULLIP: I have a little bit of everything. You know, I have "The Audacity of Hope." We have -- and during the election you would find that people bought both. You know, they were comparing.

KING: Palin calendars are a big seller at the moment. And post- election political sales tend to reflect Wasilla's more conservative leanings.

(On camera): So Glenn Beck outsells President Obama at the moment?

CULLIP: Oh, yes.


KING: Oh, yes?

CULLIP: Big time.

GOV. SEAN PARNELL (R), ALASKA: The governor's office is down that end of the hall.

KING (voice-over): This was Governor Palin's Anchorage office until she abruptly resigned in July. As new Governor Sean Parnell tries to make his own mark, he, like everyone else in Alaska, is waiting for the next Palin chapter.

PARNELL: I can really say nothing except that I wish her the best because she treated me and her fellow Alaskans so well, and looked out for us well.

KING (on camera): Do you as governor pick up the phone at all and say, you know, hmm, this is a tough one, let me seek her advice or have you both sort of moved on?

PARNELL: I mean, we keep in touch just on a personal basis. I haven't -- we haven't had the policy consults or anything, but we do keep in touch.

KING: Are you going to read the book?

PARNELL: Of course, I'm going to read the book.


SEN. MARK BEGICH (D), ALASKA: And when I come back here, like, I can...

KING (voice-over): Not everyone here is a Palin fan, of course. Democratic Senator Mark Begich among those who choose their words carefully.

BEGICH: I don't know what her future is going to be. I'll let the public make that decision.

KING (on camera): Are you going to read the book?

BEGICH: I don't know. You know?


I have got so many other -- I've got a health care bill to read.

KING (voice-over): Fireside Books is in Palmer, a short drive from Wasilla. It will be open three hours early on Tuesday.

DAVID CHEEZEM, OWNER, FIRESIDE BOOKS: I expect people will be lining up and knocking on the door. Sarah Palin fans are not the most patient people in the world. They want it now.

KING: Owner David Cheezem is a Democrat and thought he had a chance at winning a race for the statehouse last year.

CHEEZEM: The thought was, well, you know the Republicans aren't that excited about John McCain, I might be able to get some -- some votes here where otherwise I wouldn't. And then she came in and ran for vice president and at that point there's just no way, and I lost dramatically.

KING (on camera): You don't seem to hold it against her too much.

CHEEZEM: No, no, not if she sells a bunch of books here.

KING (voice-over): Proof that all politics is local, even as the debate about Sarah Palin's national ambitions opens its next chapter.


KING: As you know, one of our goals is to get out of Washington as often as we can. We've made it our pledge on STATE OF THE UNION to travel to all 50 states in our first year. So far, not so bad. Forty-four states in 44 weeks, including Montana, Tennessee, and Michigan.

Check out where you can see what we've learned, and it has been a lot, when we've traveled to your state.

We'll be here again next Sunday and every Sunday at 9 a.m. Eastern for the first and last word in Sunday talk. Until then, I'm John King in Washington. Take care.