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State of the Union

Interview with Ron Paul; Interview with Michele Bachmann, Mitch Daniels; Interview with Michael Hayden, Edward Walker; Interview with Howard Schultz

Aired February 19, 2012 - 09:00   ET


CANDY CROWLEY, HOST: We begin with graphic proof of the primary season's roller coaster ride -- national poll numbers from early August to now. And given today's gap between the top and the bottom, the new question is, whether the ride

Today, Ron Paul on his White House bid and his rivals.

Then, social issues still front burner.



RICK SANTORUM, REPUBLICAN PRESIDENTIAL CANDIDATE: The dignity and sanctity of every human life is foundational America.

MITT ROMNEY, REPUBLICAN PRESIDENTIAL CANDIDATE: The creator had endowed us with our rights.


CROWLEY: Is this any way to win in November? Congresswoman Michele Bachmann and Indiana governor Mitch Daniels.

Plus, bloodshed in Syria, nuclear advancements in Iran, the threat to U.S. security with former CIA director Michael Hayden and former U.S. ambassador to Israel Edward Walker.

Then, job creation from a man with the plan: Starbucks' CEO, Howard Schultz.


HOWARD SCHULTZ, STARBUCKS CEO: I don't want to wait for Washington any longer.


CROWLEY: I'm Candy Crowley and this is State of the Union.

Ron Paul almost has a total package: a strong consistent message, enough money, and an energetic, motivated, surprisingly young support system. What he doesn't have after nine contests is a single win. Paul's delegate estimate is the lowest of the four major contenders according to CNN estimates. And looking ahead to Arizona and Michigan, polls show Paul in third or fourth place

Joining me now from Missouri is a man in need of a breakthrough, our presidential candidate Ron Paul. Congressman, thank you so much for joining us. And I think it's fair to ask at this point, you get great crowds, you have -- you do those money bombs, you get all that money, and yet you don't have a win and it seems almost impossible to envision a presidential nominee that can't win in a state somewhere.

Look ahead for me and tell me where you can win.

REP. RON PAUL (R), TEXAS: Well, it all depends on how you measure winning. If you measure whether or not we're winning the maximum number of delegates in states, we actually have had wins even though the -- you know, the final tally is not win, but that's what really counts.

So some of these straw votes are straw votes and sometimes they get very confused in counting votes.

You know, take Iowa, for instance, we think we're going to have the most delegates out of Iowa. And the same thing probably about Maine. And they are still very confused up there on what is going on with the popular vote. But I know there's a lot of political benefit to that. But the bottom line is who is going to get the delegates and we think we're doing pretty good.

And it seems like our momentum is picking up. I'm actually shocked at the tremendous turnouts that we've had. We've been out on the road and we've had eight functions here in the last three days. We've had 14,000 people have turned out. And the enthusiasm seems to be growing.

I know it's missing the national TV, but if anybody travels with us, they know that something special is going on in the frustration level. So those others who are at the top now, doesn't mean they're going to stay there, not the way this campaign has been going.

CROWLEY: The question, though, is -- and yes, you certainly prove that you can get those enthusiastic crowds. I've seen them. You see them all the time, obviously. But the question is, does Ron Paul have a ceiling because you're line in the polls pretty much steady from September, around 15 percent. It's just hard how you can put together enough delegates to win the nomination. You could perhaps influence the nomination, but in your heart of hearts, do you have a place where you think, if i can't do it here, I'm going to have to rethink this?

PAUL: You don't know until the end. I use the track analogy. I used to run very hard and I wasn't decide any of mine who is going to win and who is going to be in first or second place. I just ran real hard. So that's to be decided later on. But I just think there's every reason to believe that this momentum will continue because it is -- you know, it is relatively early. I know in a week or so there's going to be a big difference. But, no, there's every reason that we're going to believe that we're going to be in a very good position. And we have to be optimistic. We know exactly what the odds are. But, you know, nobody actually knows the future. You know that. CROWLEY: I absolutely know it. Certainly I don't.

Do you foresee yourself taking this all the way into August even if you get to a point where you think, OK, the mathematics don't add up to a nomination for me? Do you foresee yourself taking the delegates you do have and going to the convention in August?

PAUL: Well, yeah, because right now we don't know when the end is, whether it's going to be May, June, July, or August. So I have to assume that it's going to go into August because we're not going to lock it up in May, obviously. So we just have to, you know, wait and see. So that in my mind I anticipate it's going to go on for a while. And that's certainly what the supporters want me to do.

CROWLEY: Let me read something that you told your crowd yesterday. I believe you were in Kansas City last night, where you said we -- meaning the United States -- we're slipping into a fascist system where it's a combination of government and big business and authoritarian rule and the suppression of the individual rights of each and every American citizen.

Thematically, I have heard this before from you. A fascist system is one of those things that's going to catch attention. Do you really think that the U.S. now has a fascist system? And point to me some examples of that.

PAUL: No. well, no, I don't think we do, but I worry about it a lot because we have a system of economics. We don't have socialism. What we have is interventionism. And when interventionists exists, it serves the interests of the power of the special interests. And guess who they are they are the big banks and the very wealthy corporations and they get these benefits.

So interventionism starts off with a combination of partnership between big business and government. And just look at the bailouts. Who got the bailouts? The middle class didn't get it. And you know, did you see that statistic, I think it was CNN. I do my best with the middle class because I understand this.

But no there's a coalition of big business and big government. And why I'm getting more nervous is because fascism is an authoritarian ruthless rule of government, you know and they think of Mussolini and Hitler, but just think of this change in civil liberties that nobody wants to talk about, the arrest of American citizens by the military and held indefinitely without a trial and people aren't concerned about it?

So, yes, if we have economic chaos in something like, was it in Greece or much worse, yes, they could clamp down on us. So, this is why I do worry about it. We don't have this now. And I even mentioned last night in the speech, I said, we're not there. At least we can come and visit and meet and we can have meetings like this and we can change the course because we actually change that bill on online piracy acts. So people can still act out.

So We're not there, but there's reasons why we should not be complacent.

CROWLEY: Let me ask you about a couple of your rivals. Rick Santorum has had quite a ride in the polls. Do you believe from what you see today that Rick Santorum can beat President Obama in November?

PAUL: Well, i don't see how that's possible. And this whole idea about that talking about the social issues and who is going to pay for birth control pills, I'm worried about undermining our civil liberties, the constant wars going on, the debt of $16 trillion and they are worried about birth control pills and here he wants to, you know, control people's social lives. At the same time he voted for Planned Parenthood.

I mean, I don't see how anybody can get away with that inconsistency pretending he's a conservative? And his voting record is, I think from my viewpoint, an atrocious voting record, how liberal he's been in all the things he's voted for over the many years he was in the Senate and in the House.

CROWLEY: Do you -- are you uncomfortable -- certainly Rick Santorum is the one who has been in the forefront of some of this talk on social issues, put there have been others in the race. Are you uncomfortable with this talk about social issues? Do you consider it a winning area for Republicans in November?

PAUL: No. I think it's a losing position. I mean, I talk about it because I have a precise understanding of how difficult problems are to be solved. And they're not to be at the national level. We're not supposed to nationalize these problems. The founders were very clear that problems like this, if there needs to be legislation of sorts, the state has the right to write the legislation that they so choose. And that solves a lot of our problems.

I mean, the whole idea that it's a national issue of who has to pay for birth control pills, but of course that comes from the fact that it's a national mandate that the government controls insurance programs. Insurance -- to have true insurance, you have to have that done in the marketplace. You can't have that done by government.

CROWLEY: And quickly if I could ask you, there's been a lot of talk that you and Mitt Romney seem to have a sort of a mutual truce going on. Can we take that as you believing that Mitt Romney would be, if it's not yourself, is a good Republican nominee for the party?

PAUL: Well, there's not much, you know, on issues that we agree on, whether it's foreign policy or, you know, the personal liberties issue, or the -- probably on taxes we might have agreement.

But, no, I think they are all the same, in the same group. But the only thing that I mention when people sort of press me on that is management style. I think he certainly would have a more, you know, acceptable management style when you consider what I have seen and experienced from the other two candidates, I don't think they would qualify there.

But as far as issues goes, I'm uncomfortable with all three of them. I think they are the status quo and they are not change -- they don't want to really change anything. That's what I'm offering.

CROWLEY: That probably means my guess is we will be talking to you again. Thank you so much, Congressman Ron Paul. Presidential candidate Ron Paul, we appreciate it. See you down the road.

By all appearances, the Republicans are fighting for the heart and soul of their own party. Two people whose votes are up for grabs, Indiana Governor Mitch Daniels and Minnesota Congresswoman Michele Bachmann, they are here next.


CROWLEY: We just heard from Ron Paul, but what's the buzz on the rest of the presidential field? Joining me now to discuss what 2012 holds for the GOP, from Minneapolis, former Republican presidential candidate Congresswoman Michele Bachmann; and from Indianapolis, Republican Indiana Governor Mitch Daniels, who served both presidents Reagan and George W. Bush.

To you both, thank you so much for both being here this morning. I want to start out asking you about this past week where social issues have -- really have come to the forefront. And let me start with you, Governor Daniels, because I know that you said some time ago, before this race got heated up, the Republicans need to put social issues on the back burner and talk about the economy. Are you uncomfortable with the turn of this week?

DANIELS: Well, I never used the term "back Burner," but I do think as a matter of emphasis we ought to stress the largest single danger, really, non-military danger America has ever faced. And that's the debt that's piled up and is scheduled to be. And in this last week the president again went totally AWOL on this largest of subjects.

He gives a State of the Union speech, manages to talk 75 minutes, and never mention it. It would be like FDR giving his in 1942 and Japan never coming up. And then he issues a budget that is destined to be discarded, just as his last one does, because it says, in essence, come on, everybody, let's go broke.

So this is the -- I think, the most defining among many important issues. It's the one that I think a big majority of Americans could be rallied on, the economy, and the debt, and I just think that should have priority.

CROWLEY: Congresswoman, I want to ask you the same question, but I first want to play just a montage of some of your Democratic colleagues in the House and the Senate who, when a birth control panel came up to talk about health care and birth control, it was all male. And here's some of what they had to say.


REP. CAROLYN MALONEY (R), NEW YORK: Where are the women? When I look at this panel, I don't see one single woman representing the tens of millions of women across the country.

REP. NANCY PELOSI (D-CA), MINORITY LEADER: Imagine having a panel on women's health and they don't have any women on the panel. Duh.

SEN. JEANNE SHAHEEN (D), NEW HAMPSHIRE: Time and time again women have been silenced in this discussion.

SEN. PATTY MURRAY (D), WASHINGTON: The Democratic women are here to say, enough. We are standing up today and every day to fight for women and their right to make their own basic health care decisions.


CROWLEY: Now, I play that montage, Congresswoman, because to show you that this always fits into the political dynamic of both the Democratic Party and the Republican Party. This is -- and we're going to see Emily's List go up with three ads in three different states talking about an anti-women move and it's directed at Republicans. Does this sort of thing harm you all in the fall?

BACHMANN: Well, there is no anti-women move whatsoever. The Republican Party is extremely pro-women. What we saw was President Obama's signature piece of legislation, which is "Obama-care," demonstrated 3-D.

And the 3-D full court demonstration is that now "Obama-care" means that one individual, the president of the United States, has unprecedented breathtaking authority to make a decision about whatever health care service, whatever health care product, if he wants it offered or not offered, will it be free? He'll set the prices.

This is unprecedented. That's why President Obama's Achilles heel is "Obama-care." Governor Daniels mentioned during the State of the Union speech, the president failed to talk about debt. The president also failed to talk about "Obama-care."

Why? It's wildly unpopular. And I think that's what President Obama doesn't want to talk about, his signature piece of legislation and why it has to be repealed. It's killing us from debt, and it's also breathtaking in the level of power it puts in one man, the president of the United States.

CROWLEY: Governor, would you take as an issue that while that's how Republicans feel, it's not how it's coming across? We've seen poll after poll showing that people believe that contraception should be provided to all women and that you all are on -- meaning Republicans are on kind of the wrong side of this issue in terms of PR, in terms of how it looks for the party? DANIELS: I really don't know, but I think Michele just absolutely nailed the question. This isn't about birth control or contraception or morning after abortion, this is about the trampling the freedom in this country. It's just the most recent of a long string in which this administration says, you'll do what we tell you, and you'll pay for it, by the way, whether you like it or not, whether it offends your conscience or not.

That's the question. You know, before this it was, we'll tell you what light bulb to buy. Last week some government employee told a grandmother she couldn't send a turkey sandwich to school with her child.

You know, these are the questions that I think Republicans can unite on. They do have to be framed, as they really are, as the defense of individual freedom against the right now limitless power of the state.

CROWLEY: Governor, Congresswoman, I'm going to ask you to stand by. We will have more with Congresswoman Bachmann and Governor Daniels in a moment. Does an improving economy mean four more years for President Obama? We'll ask them.

And then later, why did the chicken cross the road? We are told he was heading to a Newt Gingrich rally. That and more bizarre antics when we look at the campaign trail.


CROWLEY: We are back with Mitch Daniels and Michele Bachmann.

I wanted to ask the two of you some quick questions about the status of the race right now. Every time I ask someone if a long race is going to hurt the Republicans, the stock answer is no, of course not, it makes us stronger. We'll be much stronger in September if they have to fight for it, but I want to show you a couple of polls here. And the first one is -- the question is, to Republicans only, are you satisfied with the field of presidential candidates? In October, 66 percent of Republicans said yes they are satisfied. Now 55 percent say. So an 11-point drop in Republicans satisfied with this field.

We also see the president gaining in head-to-heads against everyone. He beats all of them, and I think just slightly Mitt Romney.

So is that not proof that over the course of this time Republicans have hurt themselves? Congresswoman Bachmann?

BACHMANN: No, not at all. Because what you're seeing is candidates that are showing out the flaws in each other. And of course you're going to see a reduction in the numbers that these candidates will show, but President Obama also hasn't necessarily been the focus of this race. That will all change. That dynamic will change very quickly. We have an excellent field of candidates. And I think it's important that we recognize that these are highly qualified individuals who will do a eminently, far superior job to President Obama. They are right on how to handle the economy. President Obama has been a disaster. And they understand foreign policy. Probably President Obama's worst act as president has been on foreign policy. That hasn't even begun to have the level of scrutiny that it needs to have.

CROWLEY: Well, I imagine that he would point to the killing of Osama bin Laden and the ending of two wars, but let me -- before I get into foreign policy...

BACHMANN: Well, of course, that's a tactical success, but his strategic blunder is putting distance between the United States and Israel that has a far incalculable level of detriment to the United States and our safety.

CROWLEY: Before I veer off someplace I actually don't want to go, governor, can you concede that with each passing primary the hole that whoever becomes the nominee has to dig out of becomes deeper because they are losing public support -- generically Republicans are.

DANIELS: No, I don't. I think Michele said it well. Ultimately this will be a binary choice between a failed presidency and policies which could hardly have been more detrimental to job growth and investment and risk taking. They've been designed to be that way. It would be a choice between that and a future of certain decline and indebtedness and the Republican alternative.

And what we have to do as a party is...

CROWLEY: Governor, I just want to interrupt you there because I want to ask you about the economy. Because if the economy shows that it's getting better and there are signs now that it is, there is some consumer confidence that it is at least growing, what else is in the Republican arsenal?

DANIELS: Well, first, that will be in the Republican arsenal. Let me say I hope earnestly for a much stronger economy. It's the prerequisite to everything else we want in terms of national success. But let's not kid ourselves. This is the worst recovery ever from a serious recession. And history says the deeper the down the sharper the up. It should have been a very vigorous one. It hasn't been.

The percentage of people actually working in America today, Candy, is the lowest since the days of the stay-at-home mom. And so let's hope for better times, but this is a really pathetically weak economy with storm clouds in Europe, storm clouds in oil prices and I consider it very unlikely that President Obama will have anything but a big negative in terms of the biggest issues of all when the fall gets here.

CROWLEY: Congresswoman, because we're down to less than a minute here, I want to ask you a final question. Do you believe that this race in the Republican Party is now down to Rick Santorum and Mitt Romney?

BACHMANN: Well, the candidates are going up and down, but we will have an eminently better nominee than President Barack Obama will be. And I think we saw evidence of that on Thursday at the House budget committee with Chairman Paul Ryan taking on Treasury Secretary Tim Geithner. We saw clearly by the government's own numbers that within 15 years this economy will effectively stop and all President Obama can offer is $1.3 trillion of deficit in this next budget.

There is no future. There is no hope with President Obama having a second term. He cannot have a second term, because he will not only fail to bring our economy back to revival, we will see people's lives worsened as a result of it. And I believe whoever our nominee will be, I will stand with him, our party will unite, we will have a strong nominee and we will go on to win in 2012, because the American people need it, and they deserve, a strong pro-growth president.

CROWLEY: Congresswoman Michele Bachmann, Indiana Governor Mitch Daniels, thank you both so much for joining us.

Tens and thousands of protesters packed the streets in Damascus. And Bashar al Assad's security forces meet them with gunfire and tear gas. What are the options and consequences for the United States and the world? That's straight ahead.



CROWLEY: The Arab Spring has turned into a bitter winter, nowhere more so than in Syria. Ground zero for the violence in the town called Homs, shelled by the forces of Syrian President Bashar al- Assad for two weeks, killing hundreds, emptying the streets.

ARWA DAMON, CNN CORRESPONDENT: This, again, is another position where we can't actually move out into the road because once again you're exposed to sniper positions that are just around the corner on the other side of those buildings.

CROWLEY (voice over): Elsewhere in Syria, small villages full of the brave and the defiant declare their independence from a government slaughtering its own people.

IVAN WATSON, CNN CORRESPONDENT: The countryside here in northern Syria is in open revolt, and this is a rebellion of farmers, of carpenters, of high school teachers.

CROWLEY (on camera): Also in the Middle East this week, Syria's main ally, Iran, flaunted a forward step in nuclear capability and threatened to close a major route for oil shipments, high tension on the high sees.

FRED PLEITGEN, CNN CORRESPONDENT: The USS Abraham Lincoln made it through the Strait of Hormuz without incident. However, along the way, the vessel was shadowed by Iranian ships.


CROWLEY: Up next, former director of the CIA and the NSA Michael Hayden and Ed Walker, former U.S. ambassador to Israel, Egypt and the United Arab Emirates.


CROWLEY: Joining me now, retired General Michael Hayden, who served as CIA director in the George W. Bush administration, and Edward Walker, former U.S. ambassador to Israel and Egypt.

Gentlemen, thank you both. I want to start out with some news that CNN just has, which is that state-run TV in Iran says, OK, no more crude oil to France or Britain. Translate that for me. HAYDEN: Well, first of all, Candy, I wouldn't take that announcement to the bank that that's actually going to be a fact. There's an awful lot of competing factions, statements made by the Iranian government. They're under great pressure. They're saying a lot of things. Let's see what happens.

CROWLEY: Great pressure from the sanctions? Is that -- is that the pressure that's on them, world pressure?

WALKER: Certainly there is an isolation that they must be feeling and sanctions are having some impact, and it's beginning to bite. They have to look down the road and see that it's going to get tighter, not looser. So...

CROWLEY: So does this cutting off the oil threat or, you know, just wild statement -- does it fall along the same lines as the pictures we saw this week of Ahmadinejad showing us whatever he was showing us, but, you know, nuclear fuel missile rods, same kind of thing? Is this a propaganda war?

WALKER: It's not just a propaganda war but it's in their interests to make us all think twice about doing any kind of attack or anything like that. And they want to appear to be stronger than they are. There's a bit of hollowness in the way they're going about. It's very difficult to estimate, you know, what's going through their mind because they've got a lot of controversy in their own society at this point. Ahmadinejad and Khamenei are not necessarily on the same page.

CROWLEY: So -- but do we ignore them at our own risk?

Because it just seems to me that the chatter has gotten so loud. We hear, you know, there's a column that Leon Panetta -- you know, sort of, into Leon Panetta's mind, that Israel is going to attack by April and there's, you know, all this going on in the Strait of Hormuz.

I mean, what is -- what is happening here? Is there any reason for this ratcheted-up tension?

HAYDEN: Oh, there's good reason for the tension and we -- I don't think the ambassador or I are saying we should ignore them, which is a lot of puffery and posturing going on on the part of the Iranians who do feel under great stress.

Now, the danger here is that someone within this very badly fractured decision-making process is going to make a bad decision and do something in the Gulf, in the Straits or elsewhere that frankly will not make sense internationally, but they'll do it because it gives them some sort of domestic political advantage.

CROWLEY: Because if they're feeling the heat economically inside the country, you try to find something that will rally their folks around their flag?

WALKER: Yeah, but they can't -- they do too much rallying and the next thing you know, they've got the Israelis and the Americans on their back, and they can't possibly want that. They've got to know that ultimately they can't win in any kind of a military confrontation.

CROWLEY: So what does all the -- what do you make of all this chatter about Israel's going to bomb? What's that about?

WALKER: Look, first of all, the Israelis will bomb if they have to. They're not going to allow Iran to become a nuclear power in the region. Neither can we afford to allow it to become a -- now, how you go about coordinating your activity so that you have the greatest impact and hold off as long as possible, that's what -- that's what Donilon is over there talking about.

CROWLEY: Let me turn you to Syria just because -- it's just the -- the pictures coming out are just -- YouTube pleas from these people in Homs and elsewhere. I had Senator Lieberman on the show last week, who said, listen, we need to first give these rebels training. Then we have to -- medicine first, training second, communications equipment, and then we ought to arm them.

HAYDEN: It's really a bad situation. In fact, it's hard to imagine how it could be worse. It's, kind of, stasis at a high level of violence, Candy. You've got a government who's got no political process whatsoever, an opposition that won't go away, and a president, Bashar al-Assad, who actually still believes he can kill his way out of this dilemma. This is -- this is really quite bad.

CROWLEY: It is a bad situation because we see it, and we feel for those people. But there are people dying at the hands of their own government across the world, and the U.S. doesn't get involved. And the U.S. is not involved in this, and they keep saying no military and all of that. What -- can you just describe the U.S. stakes in what is going on in what looks like a civil war in Syria? What's our stake?

WALKER: Well, our stake is that Syria is critical to the whole region and the whole stability in the region. It has a lot to do with whether the Israelis feel comfortable about doing things on the West Bank or not. It has a lot to do with Iran's posture in the region. Syria is Iran's only ally, really, in the Middle East. It has a lot to do with the stability in Lebanon. I mean, this is a critical point of confrontation. CROWLEY: So do you consider what's going on in Syria a threat to U.S. strategic interests? Is it a threat to us in any way?

HAYDEN: It is a threat, and just in the terms that the ambassador just laid out. It's also a bit of an opportunity. Because if you have effective regime change in Syria, you take Iran's only ally in the Arab world away from them.

Now, the real dark scenario, though, Candy, is that you stay in this stasis. What we're seeing now bleeding into Syria, particularly from Iraq, is Al Qaida and Islamic fundamentalism. And as long as this stays frozen, you'll see the opposition, I fear, take on more of this characteristic, and that can't be good.

CROWLEY: Well, stasis as he puts it, or status quo, whatever you want to call it, it doesn't sound like Assad's going anywhere. It sounds like this is going to continue. The U.N. -- frankly, what good is the U.N. at this point because it never -- you know, what do we do?

WALKER: Well, the U.N. can't do anything at this point, or never could in this situation.

WALKER: But the trouble is that you don't really have a leader of Syria. You have got a lot of different components of the leadership in Syria.

Bashar al-Assad is a relatively weak guy. He has got a lot of very strong people around him which are calling the shots and have been ever since he came into power. But those people realize that if they give up, they are dead. That's not a very good incentive for getting something going that takes us out of this mess.

CROWLEY: So translate that for me. We need to give -- I don't know, carte blanche to people and say we won't kill you?

HAYDEN: There are really no good ideas and success is far from guaranteed. But I can understand why Senator Lieberman would come and begin to suggest these kinds of movements, again, to kind of break the stalemate.

Another idea that has been surfaced, probably not quite ready for primetime, is a safe haven in northern Syria, created perhaps under the Turks, but with broad international sanction in order to, one, protect the civilian population, two, give a geographic and almost philosophical area for the opposition to coalesce and become more unified. Again...

CROWLEY: So split Syria like Korea or something?

HAYDEN: Well, no, no, no. We're talking about a safe haven, not dividing the country.

WALKER: It has been done before in some of the Africa countries, and it worked, even worked in Rwanda for the French, established a safe haven and they saved thousands of lives. Whether we could do that in Syria, I don't know. There is also a question of whether you put a corridor for humanitarian aid into Syria. There are no really good answers at this point, but the answer is not Bashar.

CROWLEY: Ambassador Walker, General Hayden, thank you for joining us.

HAYDEN: Thank you.

WALKER: Thank you. CROWLEY: Fareed Zakaria will continue this discussion at the top of the hour when he talks to Joint Chiefs Chairman General Martin Dempsey.

But first, Starbucks posted $3.4 billion in revenue last year, but their CEO is here to give a blunt assessment of the U.S. economy.


HOWARD SCHULTZ, CHMN. & CEO, STARBUCKS: We're facing, in my view, a collision course with time in terms of these fiscal problems.



CROWLEY: Starbucks CEO Howard Schultz is kind of a rock star in the business world, a success story who grew up in public housing in Brooklyn. Those roots may be showing in his latest project to create jobs, stepping in where he thinks Washington has failed.

It's a program to help finance loans to American entrepreneurs in poor areas of the country. Take a look.


ON-SCREEN TEXT: And we have an idea that can help. Donate $5 to the Create Jobs for USA Fund at a Starbucks beginning November.


CROWLEY: To his role as businessman, add philanthropist and one more thing, Schultz says he's a concerned American who, despite his many millions, maybe feels a little like you do, a little fed up with Washington, and a lot worried about the economy.


CROWLEY: I wanted to get your take -- you're so often in the Beltway, you can ask a politician how they think the economy is going, and this will surprise you, these often get a political answer. So I want to know from a CEO point of view what your feel is for the economy today.

SCHULTZ: Sure. I think that as we look at the economy today, we are looking at a bifurcated situation. At the high end, the people who are making money and have disposable income and live a life that, for the most part, is insulated from the drama of being unemployed and the mortgage crisis, those people are fine.

However, there's so many people in America who are suffering and such a lack of hope and understanding about the situation in Washington.

CROWLEY: I guess the question is, do you sense it's any better? And here are the figures I would point out to you. The Dow Jones at this point is pushing into the 13,000 level, which is the highest we've seen it in years. The unemployment rate is 8.3. Not great, but it's not the 10 percent it used to be. And consumer confidence has been up for the last four weeks.

And you know and I know that when consumers are feeling confident, it tends to help to drive the economy. So do you sense -- this to me is the same kind of picture that you painted four, five, six months ago. Do you sense that nothing has changed?

SCHULTZ: I really believe that you cannot use the stock market as a proxy for the economy. And consumer confidence, although it is a good metric, also should not be the primary issue. I really believe that the economy perhaps on the margin has been improved.

But at the same time, you have the majority of states in America who are facing insolvency, cutting social services and the safety net of the people who need it most, and the unemployment level is at a level that we should not be celebrating the fact that we're down from 9.1 to 8.3.

We still have a disastrous situation in America where people feel as if they have no hope and no opportunity for jobs. And as a result of that, their self-esteem, it's almost a fracturing of the morality of America when we're celebrating these kinds of statistics when we still have so many people in the country who can't find a job.

CROWLEY: And so who do you blame for that?

SCHULTZ: Well, I'm not here to point blame but I do feel very concerned...

CROWLEY: Well, somebody is not stepping up to the plate.

SCHULTZ: Well, you know, I'm profoundly disappointed that the fact that we have leaders in Washington who I do not believe are representing the interest of America. There should be a singular focus on job creation and the economy in America. There should be a singular focus on getting banks to lend to small businesses.

The fact is that the businesses in America that had access to credit 10 years ago, seven years ago, do not have that access to credit today. And that is why we have decided to get involved in this job creation and raise money through the Opportunity Finance Network, and get CDFIs involved in almost creating micro-loans for small businesses in... CROWLEY: OK. I wanted to just sort give our viewers an idea of what you're talking about, for those who don't go to Starbucks, you have a Create Jobs for USA program whereby visitors to Starbucks or your Web site or whatever can contribute...


CROWLEY: ... to a fund that backs up loans, particularly in underserviced communities, for small businesses to help create jobs. So I just wanted to make that -- what you were talking about clear. SCHULTZ: Thank you. Yeah...

CROWLEY: And tell me at this point how many jobs this has actually created. But I think, more to the point, I have to tell you my first reaction, when I walked into Starbucks and saw this thing that says you can buy a little rubber wrist bracelet and help create jobs, my first thing was, whoa, you know, isn't this -- isn't the government's job to create an atmospheric so that jobs are already created?

What does it say about this country and where we are right now that U.S. citizens have to give money to a fund like a -- you know, like a cancer -- fight cancer fund, in order to create jobs?

SCHULTZ: Sure. Well, I think your question and the approach to that question is exactly right, but my view of this is I don't want to wait for Washington any longer. I want to encourage businesses and business leaders to step up and recognize that we, too, have an opportunity and a responsibility to the people in the communities we serve.

I do believe, and I hate to say this as a proud American, that Washington and the leadership in Washington has let the country down. It's not a Republican or a Democratic problem. It's a problem in the fact that we are not gaining access to the leadership and the results that we need.

And I think, if you talk to most Americans, we feel as if, for some reason, that Washington has lost touch with the pulse of the country. And the fact that we're arguing constantly, day in and day out, about ideology, about partisanship, and everyone in Washington is more concerned about re-election than the core issues of the country, there's something significantly wrong.

And what I'm saying is I'm tired of the blame. I'm just -- forget them. I'm just going to do whatever I can to use our scale for good and encourage other businesses to join with us and try and make a difference.

CROWLEY: You know, Mr. Schultz, I think you're an idealist here, but let me...


SCHULTZ: No, I'm not an idealist. I'm a proud American that is disappointed with the direction of the country. CROWLEY: You ever plan on running for office? Because you sound -- sound like you might be gearing up.

SCHULTZ: No, I have no...


No. I have no interest in public office. I have only one interest, and that is I want the country to be -- be on the right track.

I just feel that, for some reason, over the last few years, there's been a fracturing of understanding and sensibility about the responsibility that the leadership in Washington must have to the people who are being left behind. And I'm significantly disappointed about the ideology, the partisanshipness, and obviously the way in which everyone in Washington is focused on one thing right now, which is re-election.

CROWLEY: Howard Schultz, CEO of Starbucks. Thank you for joining us.

SCHULTZ: Thank you.

CROWLEY: So what's Howard Schultz's favorite coffee? Get the answer on our website when you get to know the Starbucks CEO at

A check of today's top stories is next, and then "Animal House" comes to the campaign trail, the fraternal antics of the men who could be president.


CROWLEY: Time for a check of today's top stories. At least 15 people were killed, 21 others injured in a suicide bombing outside of a police academy in Baghdad. Today's attack comes as Iraq struggles with a political crisis raising fears about a return to the level of violence that nearly tore the country apart in 2005 and 2006.

Finance ministers for the European Union appear set to approve a bailout package for Greece. The deal is expected to be finalized tomorrow after more negotiations. The agreement would make paying down Greece's crippling debt the number one priority.

Parts of the southern U.S. are bracing for severe weather, rain and possible tornadoes expected in southern Georgia and northern Florida. Portions of Appalachia could get snow.

This week, a look at the slap-stick side of the campaign trail. It is not new, but it's the first sighting of this election, grown men in chicken suits wandering through a Gingrich event. It is Gingrich's way of pecking at his rivals for backing out of the debate.

And there is this official Santorum campaign ad featuring a Mitt Romney lookalike, though it struck some of us as looking more like a mix of Pat Buchanan and Richard Nixon. Whatever, he roamed a warehouse with a mudslinging machine gun in an ad aptly titled "Rombo."

But the king of campaign goofiness is Mitt Romney. Last year, while in Chicago, he sent half-eaten pizzas to the Obama campaign headquarters as a, quote, "nice gesture." This week he told voters he once painted the word "Help" on the shoes of a groom. And then there's the "Three Stooges" side of him.




Oh, my goodness.

(UNKNOWN): That was her.






ANN ROMNEY, WIFE OF REPUBLICAN PRESIDENTIAL CANDIDATE MITT ROMNEY: I'm thrilled to let people also know the other side of Mitt which you might not all get to see, and that's...


Oh, dear.


CROWLEY: Apparently a funny bone runs in the family. Son Matt called dad a day before the 2008 Michigan primary posing as then- California governor Arnold Schwarzenegger.


MATT ROMNEY, SON OF REPUBLICAN PRESIDENTIAL CANDIDATE MITT ROMNEY: I'm going to ask you a bunch of questions and I want to have them answered immediately.

MITT ROMNEY: Go right ahead and shoot.

MATT ROMNEY: Who is your daddy and what does he do?


CROWLEY: Don't laugh. Maybe that's why Schwarzenegger endorsed McCain in 2008.

Thank you so much for watching "State of the Union." I'm Candy Crowley in Washington. You can find today's interviews, as well as analysis, web exclusives and much more at our website,