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State of the Union
Interview With Harry Reid; Interview With Dick Gephardt, Steve Forbes
Aired March 11, 2012 - 09:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
CANDY CROWLEY, HOST: A messy Republican primary season and a better looking economy have improved Democrats' spirits. Once facing long odds, they now talk confidently of maintaining control of the Senate.
Today, policy and politics.
(BEGIN VIDEO CLIP)
SEN. HARRY REID, (D) NEVADA: Not everything around here should be a knock down, drag out fight.
(END VIDEO CLIP)
CROWLEY: With Senate Democratic leader Harry Reid.
(BEGIN VIDEO CLIP)
DICK GEPHARDT, FRM. DEM. PRESIDENTIAL CANDIDATE: There's an old saying, "campaigns don't end, they run out of money.
STEVE FORBES, FRM. REPUBLICAN PRESIDENTIAL CANDIDATE: It's not going to come together.
(END VIDEO CLIP)
CROWLEY: Calling it quits when you've been all in with two-time presidential candidates Dick Gephardt and Steve Forbes.
(BEGIN VIDEO CLIP)
BARACK OBAMA, PRESIDENT OF THE UNITED STATES: The economy is getting stronger.
(END VIDEO CLIP)
CROWLEY: He may be right, but we have passed this way before. Sorting it out with Alice Rivlin, former director of the Office and Management and Budget, Steven Moore of the "Wall Street Journal," and Dan Balz of the Washington Post. I'm Candy Crowley and this is State of the Union.
Presidential campaign and Democratic sources confirm members of the president's re-election team told top congressional leaders this week, no re-elect money will go to House or Senate Democratic election coffers, at least until after the election. Although the president and top officials will help in other ways. Sounds like every man for himself.
Joining us this morning, one of the lawmakers who spoke to the president's campaign team, Senate Democratic leader Harry Reid. Thank you so much, senator, for being with us.
REID: My pleasure.
CROWLEY: I want to start out, though, in an entirely different place in the world, and that is in Afghanistan, where this morning we are learning that an American soldier went off base and opened fire on civilians, young, old. We're not sure at this point of how many -- CNN's reporting is that 14 people were shot. We don't know yet how many of them fatally. He is now -- he turned himself in, apparently, after this.
I know that you have supported the president's plan for withdrawal. I want to first get your reaction to this soldier going rogue, which is what it appears to be. And then ask you whether over time you have rethought whether we ought to speed up that withdrawal time.
REID: Well, of course, our hearts go out to these innocent people. One of our soldiers went into a couple of homes and just killed people at random. Very, very sad, especially following that incident dealing with the Korans, just not a good situation.
Our troops are under such tremendous pressure in Afghanistan. It's a war like no other war we've been involved in. But no one can condone or make any suggestion that what he did was right because it was absolutely wrong.
I think that we're on the right track to get out of Afghanistan just as soon as we can. There's a way we have stabilized some of the provinces there. There's conversations going on with Karzai now. We've turned over the big prison to them, in the next six months, we'll turn that over to them.
So I think -- I think our timetable is pretty good. We're moving out, as the president said. I think that's the right thing to do.
CROWLEY: Have you watched? There was -- or there were those riots in the street, Kandahar in particular was hit hard after the burning or the accidental burning of the Koran by American personnel.
Watching that, we don't know what will happen in the wake of this. Hopefully the commanders over there can calm things. But, nonetheless, have you ever thought, we need to do this more quickly? REID: Well, I think we're moving pretty quickly right now. And I think some of the things that are going on we didn't expect would happen this quickly. There's peace talks starting in Qatar. The Taliban have set up offices there. There's conversations going on. So, I think we're going to find out that hopefully we can get out of there as scheduled and things will be stabilized when we do that.
CROWLEY: Let me move you back to this country and domestic things, particularly domestic politics. You did have a meeting with some re-elect people for the president. I wonder what your takeaway was from that meeting. What did they tell you?
REID: Well, I had a meeting with Jim Messina, who is a wonderful friend, a Senate guy, spent a lot of time with him. David Plouffe, who is the brains of the campaign operation for the president. And we had a group...
CROWLEY: Did they tell you no money? REID: Well, there are many ways they're helping us. Everyone should know that. I'm pretty proud of my campaign organization I have in Nevada. I think people would recognize that the reason I was re- elected is because of the campaign operation I had on the ground.
Obama has that same campaign operation on the ground. That's important. And I don't know why anyone's concerned about the conversations that we had. It's the same conversation I've had with presidents over the years. They have to guard their money. I didn't expect them to bring their checkbook with them.
CROWLEY: Right. And I guess the reason this sort of becomes an issue is because if you talk to some of your Democratic colleagues on the Senate side, they will at times voice some displeasure thinking -- saying, listen, the White House, the president, just even on routine things, isn't in regular contact, sometimes isn't in semi-contact. This feeling that there's a detachment between Senate Democrats and the White House. Do you feel that same detachment?
REID: Well, I really don't. I've worked with a number of presidents. I've been fortunate to do that. Of course, my relationship with -- because of my being the leader of the Senate has made it a little closer than some of the other presidents. But I can place a phone call any time. It's returned immediately. He's got staff around him that I care about a great deal. Pete Rouse, his new chief of staff, is a wonderful man. Rob Nabors who works with him. We meet every week for at least an hour.
I feel very good about my relationship with the White House and the Senate's relationship.
CROWLEY: Let me -- I want to put up some numbers for our audience, the question, you've seen the polls, how is congress handling its job? The approval rating for congress right now is 10 percent. The disapproval rating is 82 percent. I wonder if you believe at this moment that you will hold on to the majority in the U.S. Senate on the day after the elections. REID: First of all, if they could poll me, I would have been with the majority here. I think -- I think congress looks bad. I think the obstructionism we've had over the last two congresses, but especially this one, has turned the American people. What the Republicans have done, stopping us from doing the most simple things...
CROWLEY: Is it all their fault?
REID: As I indicated, what you had when you introduced your show, why does everything have to be a fight? There shouldn't be a fight. We should be able to get things done that are routine. And we haven't been able to do that.
But we feel really good. We've had some tremendous -- we've had some good fortune in North Dakota, in Massachusetts, in Nevada, in Arizona. We have good candidates all over. And I feel very comfortable about where we're going to wind up in November. CROWLEY: You think you'll wind up with the majority?
REID: I sure do. And most of the pundits are saying so now, especially in light of the fact Snowe has stepped down. We have my friend Bob Kerry has been -- is going to run in Nebraska. So we have some good things going on around the country.
CROWLEY: Your friend Bob Kerry has dropped some pretty broad hints that you sort of put some sweeteners in this to get him to decide again that he would come into this race. What did you tell him you might be able to do for him if he would run for the Senate?
REID: Anyone that knows Bob Kerry knows you don't need to make a deal with Bob Kerry. He's running because he wants to run. He loved the Senate. He's coming back. Bob Kerry and I had conversations not over a few days, but over many, many months. And the things we talked about were between the two of us. But Bob Kerry was promised nothing.
CROWLEY; So, you didn't say I'll give you seniority, I'll put you on a committee, none of that was promised?
REID: No. And not only that, it's determined after the election when our steering committee meets. You know, I can make recommendations. But I've learned a long time ago -- for example, when Arlen Specter switched parties, he's writing in his book Reid didn't deliver what he thought he would do. I told Arlen I'm going to try to do something that helped you. But, hey, as things worked out, more senior members of the Senate didn't want to give him seniority.
So I learned my lesson then. Don't make any promises.
CROWLEY: Let me -- I want to get back, just backtrack a little to something you said. And that is that you do blame Republicans for the low rating of congress. Is there nothing that the Democrats are doing to add to this?
REID: Well, you know, there's a lot of things that...
CROWLEY: By this I mean the stalemate.
REID: Oh, sure.
We really tried. I mean, I'm there. I try. I try -- you know, why should we have right now more than 20 judges held up, many of them from the last year, reported out unanimously. These are things that have never been doing before.
So we've had - we have had on the most mundane, simple, routine matters, they've stopped us. And as I said, if I were being polled, how do you feel about congress, I would -- I would be with the 80% saying not very good.
CROWLEY: Let me ask you, 11 of your Democrats defected and went over and voted for building the Keystone pipeline. What is the message to the White House from the Democrats as a result of that vote? REID: The message is pretty simple. The pipeline, half of it's being constructed as we speak. The owners of that pipeline have filed new applications to get rid of some of the contention that's in the original application. I think it's very clear that the amendment that we have, we'll vote on this coming week, says that if -- if they want to build it here, they have to sell the product here.
And so I think -- and many exaggerations about tens of thousands of jobs. Half of it's being built right now. So this is something that the Republicans have raised as an issue, to lower the price of oil. It won't lower the price of oil. It won't be -- construction won't be complete for a long, long time. And under the way it's constructed now, all the oil would be sold elsewhere. We can't have that.
CROWLEY: Let me ask you...
REID: When I say elsewhere, I mean to some other country.
CROWLEY: Right. Let me ask you something about -- something the attorney general said recently. He was giving a speech to Northwestern University Law School. And he was suggesting -- he said, you know, people are arguing that for some reason the president needs to get permission from a federal court before taking action against a U.S. citizen overseas who's an operational leader in al Qaeda.
He says that's just not accurate. That due process and judicial process are not one and the same. Do you have -- and this is creating quite a stir. Do you have any problem with that? Do you understand what that means exactly?
REID: No, I don't. But I do know this. The non -- the American citizens who have been killed overseas who are terrorists, and, frankly, if anyone in the world deserved to be killed, those three did deserve to be killed.
CROWLEY: And these were the three that were killed in Yemen. And I understand that. But just -- are you slightly uncomfortable with the idea that the United States president, whoever it may be, can decide that this or that U.S. citizen living abroad is a threat to national security and kill them?
REID: Well, I don't know what the attorney general meant by saying that. I'd have to study it a little bit. I've never heard that term before. But I think the process is in play. I think it's one that I think we can live with. And I think with the international war on terror that's going on now, we're going to have to make sure that we have the tools to get some of these people who are very bad and comply with American law.
CROWLEY: And you think that the president should be able to make that decision in conjunction with the folks in the administration without going to a court, without going to you all, anything?
REID: There is a war going on. There's no question about that. He's the commander-in-chief. And there has been guidelines set. And if he follows those, I think he should be able to do it.
CROWLEY: Senator Harry Reid, majority leader in the U.S. Senate, come back and see us again. Thank you so much.
REID: You're sure welcome, Candy.
CROWLEY: How do you know when it's time to quit, when you've poured your heart and soul into running for president? Former House Majority Leader Dick Gephardt and CEO Steve Forbes have been there twice, and they're next.
CROWLEY: Everyone who gets in starts at the same place.
(BEGIN VIDEO CLIP)
RICK SANTORUM (R), PRESIDENTIAL CANDIDATE: I believe we're going to win this.
NEWT GINGRICH (R), PRESIDENTIAL CANDIDATE: I will go all the way to the convention. I expect to win the nomination.
REP. MICHELE BACHMANN (R-MN), FORMER PRESIDENTIAL CANDIDATE: I intend to be the nominee that defeats Barack Obama.
(END VIDEO CLIP)
CROWLEY: But after that first heady "I'm in it to win it" moment comes everything else, under the broad heading of reality.
(BEGIN VIDEO CLIP)
BACHMANN: Last night, the people of Iowa spoke with a very clear voice. And so I have decided to stand aside.
HERMAN CAIN (R), FORMER PRESIDENTIAL CANDIDATE: With a lot of prayer and soul searching, I am suspending my presidential campaign.
GOV. RICK PERRY (R-TX), FORMER PRESIDENTIAL CANDIDATE: Today, I am suspending my campaign.
TIM PAWLENTY (R), FORMER PRESIDENTIAL CANDIDATE: I'm going to be ending my campaign for president.
(END VIDEO CLIP)
CROWLEY: Camp Romney has spent the week trying to convince anyone who's counting that none of Mitt Romney's rivals can win the delegates need to get the Republican nomination. So far, no sale.
(BEGIN VIDEO CLIP)
SANTORUM: We feel great. That's all I can say is we feel great. We're in this race. And we're in it to stay.
GINGRICH: There are lots of bunny rabbits that run through. I'm the tortoise. I just take one step at a time.
(END VIDEO CLIP) CROWLEY: Knowing when to hold them and when to fold them is not just a poker skill. It's a skill every politician needs at one time or another. Steve Forbes and Dick Gephardt faced that decision twice in their political careers. Despite early signs of success, both ended the same way.
(BEGIN VIDEO CLIP)
STEVE FORBES (R), CHMN. & EDITOR-IN-CHIEF, FORBES MEDIA, FORMER PRESIDENTIAL CANDIDATE: In a democracy, the candidate who wins the most votes wins. It's that simple.
We were nosed out by a landslide.
DICK GEPHARDT (D), FORMER PRESIDENTIAL CANDIDATE: I accept the results with the knowledge that I gave this campaign everything that I had in me. Today, my pursuit of the presidency has reached its end.
(END VIDEO CLIP)
CROWLEY: CEO Steve Forbes and former House Majority Leader Dick Gephardt are up next.
CROWLEY: Joining me now, two former presidential candidates very familiar with the campaign trail. Former House Majority Leader Dick Gephardt, and Steve Forbes, chairman and editor-in-chief of Forbes Media.
Thank you both so much for trying to sort of shine some light on where we are now, at least it appears, in the Republican primary race. We're hearing a lot of chatter about whether Newt Gingrich ought to get out, that it's impossible for actually either he or Santorum to win this nomination.
Walk me through, first to you, Congressman Gephardt, what that process is like when you've kind of thrown your whole life into the campaign trail and when you wake up one morning and go, uh-oh, I've got to get out.
GEPHARDT: Well, you know, in the past it's a little different than it is today. Because in the past we didn't have the super PACs which could...
CROWLEY: Ran out of money.
GEPHARDT: So, there's an old saying "campaigns don't end, they run out of money." And so when you ran out of money, you couldn't buy an airplane ticket to go to the next stop. So that's when people usually got out. So that's what happened to me in my races. We just -- we weren't winning. And when you're not winning, you're not raising money and you can't keep going.
But that may be a little changed today.
Steve, like the congressman, you ran twice. And both times pulled out after you couldn't put it together. How -- what goes through your mind when you're making that decision? Was it a monetary decision? Because you could have self-funded probably all the way through November if you'd wanted to.
FORBES: Yeah. You get the perception very quickly whether you're going to have a chance to be one of the two front-runners. In 2000, it was clear after a couple of early setbacks, even though we did well in Iowa, that it was not going to come together. And in 1996 Bob Dole was clearly going to get the majority of delegates, so there's no point in carrying on.
Even with the Super PACs today, there does come a point where you lose credibility. For Newt Gingrich, for example, next week Alabama, Mississippi, two southern states right near Georgia. And if he doesn't do well or carry both of those, he's just not going to have the credibility. He can carry on, but he's not going to be taken seriously as a possible winner.
CROWLEY: And who makes -- at least take me into your decision making process. Who makes that decision? Does someone come to you and say, you know what, congressman this is over. Or do you wake up -- because you've got people around you that want to continue. I'm assuming that both of you all wanted to continue. So how does that come about?
GEPHARDT: When you have a large group of people that you're paying to help you do this, and when you can't make payroll, it's obvious that you need to get out, because you don't want to hurt these people. And you can't really ask them to be volunteers for month after month when you can't pay payroll. So your campaign manager, you know, you're talking every day, every minute of every day. So you pretty easily come to the decision that's right.
CROWLEY: It becomes organic after a while, right?
GEPHARDT: Exactly. CROWLEY: Steve, let me ask you this looking at the race where it is now, and you think maybe Tuesday might be a marker, at least, for Newt Gingrich. In general, do you buy into the current theme in the Republican race that this really is beginning to hurt Republican chances in the fall because it's been so contentious, clearly they're draining money from Romney and money he could be collecting for a general election if this were all settled at this point?
FORBES: Well, I think you've got the change of roles this year, Candy, where a lot of delegates are being back ended. Oftentimes in the past it was front ended. And so the thing would end because somebody was near the majority of delegates. The process itself in terms of hurting the Republican Party, yes, it has. A brawl like that never makes the fighters look good. But I think at the end of the day, if Romney does emerge as the nominee, it'll make him stronger. He's done things on the tax side that the base wanted him to do from the beginning but which he refused to do until a couple of weeks ago.
He's going to have to do the same thing on health care and perhaps one other issue to reassure the base that he can carry the banner in November. And then once the process is over, even though it reminds one of Bismarck's phrase, you shouldn't see two things being made, one is sausages, the other one is laws, perhaps if he was around he would add presidential contests.
But this thing will be over in June. And then the public will start to focus in later summer. And what happened earlier this year is going to be largely forgotten. The key thing is what kind of program, principles the nominee puts out. And I think it's going to be pretty much of a fresh contest. I wouldn't take the brawling now as something that's going to kill the Republicans in November.
CROWLEY: Have you picked a horse? I know you were an early supporter of Rick Perry. Who do you like now in this race?
FORBES: Rick Perry backed the flat tax, so I liked him for that. But I haven't backed anyone. I'm still looking over the field. I like certain parts of each candidate's platform, less enthusiastic about other parts. So I'm waiting to see how the thing goes out.
I thought for a moment if you had a different result in Ohio and Michigan you might have seen another candidate yet emerge. But if Romney wins in Illinois the following week, that's going to make it less and less likely even though probably Rick Santorum will stay in for a long time and Ron Paul is going to stay in to the end no matter what happens.
CROWLEY: Gentlemen, I need you to stand by. We're going to talk about the state of the race and the state of the economy. The last time Steve Forbes was on the show, he wasn't that impressed by the pace of recovery.
(BEGIN VIDEO CLIP) FORBES: That's why this recovery we're like an automobile going 25 miles an hour when at this stage we should be on an open highway, be going 70, 75 miles an hour.
(END VIDEO CLIP)
CROWLEY: Welcome back. Here with two former presidential candidates, Dick Gephardt and Steve Forbes, who have gone on and found that there is life outside politics. I think Steve Forbes already knew that, but it's a new life for you, I know.
I wanted to ask you about the president's poll ratings in a particular group where you showed great strength both when you were running for president and when you were in the House of Representatives for so long. Blue-collar workers and white voters without college degrees. In general, the president ranges in the 34, 35, kind of mid-30 percentiles with those. What does he do to bring them onboard?
GEPHARDT: I think he's really doing it by helping to help pull together an economy that really is moving in the right direction finally for the middle class, for all of the American people. The job numbers that recently came out are positive, manufacturing jobs have come back for the first time...
CROWLEY: Overall 200,000-plus added to the economy this month.
GEPHARDT: Plus manufacturing jobs which are the people you're really talking about. For the first time since 1997 have started to increase month by month. So that's very good news for the president's hopes of getting those votes back.
GEPHARDT: I think the economy will be the big determinant of this election. I've thought that for a long time. If the economy keeps going forward, if jobs keep getting created, I think the president has a great chance to be reelected. If, on the other hand, it goes in a different direction between now and November, then it could spell trouble.
CROWLEY: Steve, would you -- I assume you would agree that the economy, barring some horrible international thing happening, is going to be what folks vote about. The last time we had you on late last summer, you said this was a -- you know, a terrible recovery. And that it really, you know, could be going at 70 miles an hour, instead was going at about 25. Is it still a terrible recovery? Or is this a real recovery and you trust it?
FORBES: Well, the recovery of 25 miles an hour may be last summer. And I think we've got it up now to about 40 miles an hour, still below what it should be. That's why that unemployment rate's going to remain stubborn, because a lot of people if they see hope are going to come back into the workforce. We're still about 6 million jobs behind from when this crisis hit us.
And there's another issue, though, obviously related to the economy that I think will emerge, I think. And that is health care. There is still a lot of opposition, a lot of real worry about what health care's going to mean to having people have freedom for control in their lives. And I think that's going to be a big issue certainly on the senate and congressional level and probably on the presidential level. And that's why it's very important for Republicans whoever emerges as the nominee to have a very Reagan-esque program on tax reform, stabilizing the dollar, reforming health care and the like so people know this is not just an election about hoping the economy is good or bad, but will really help get this country back on track and not have these fragile recoveries. Which is still the case today, still fragile.
CROWLEY: Let me pull you both back into the race itself in the fall. Do you think, congressman, and put on your kind of analyst hat instead of your Democratic hat. Do you think Rick Santorum is electable in your state of Missouri which right now sort of shows the president running about even, maybe a little under 50 percent?
GEPHARDT: I think Rick can make a presentation in a fall campaign that would be able to win in a state like Missouri. CROWLEY: How about overall?
GEPHARDT: Overall, I -- I don't think so. And again, I take it back to the economy. If the economy is still going forward, even at 40 miles an hour, 50 miles an hour, I think most people will stick with President Obama. I think people look at politics like they hire a plumber. I hire you to fix the bad pipe. If you fix it, I'll rehire you. If you don't fix it, I'm not going to rehire you.
CROWLEY: Joe the plumber should get you as his campaign manager.
Steve, let me ask you, do you think Rick Santorum can beat President Obama in the fall, assuming the economy stays roughly on the path it's not right now?
FORBES: He could. And I hope if he emerges as the nominee, I'm not sure -- in fact, I don't think he will. But if he emerges as the nominee, I hope he's learned lessons from his mishaps in the last few weeks. And this is where you get your mishaps and get your muscling up done rather than in the fall.
And to focus on the issue of a health care, the idea of being able to control your life, focusing on tax reform and the like. If he does that, he has a shot on it. But he's raised a lot of questions in people's minds about where his priorities are. And he's going to have a lot of explaining to do if he's not careful about issues like contraception, which is sort of a side show. I mean, you go anywhere, you can buy the things. They're not that expensive. But he's got to be careful not to let the Democrats set the agenda. He's got to learn to set the agenda the way Ronald Reagan did in 1980.
CROWLEY: Let me quickly -- you said that you didn't think he would be the nominee. Can I assume that you believe the nominee will be Mitt Romney?
FORBES: I think, yes. He's likely to be the nominee. But he's going to -- at the rate he's going, he's going to limp over the finish line. Santorum I think is going to have a good week on Tuesday. And I think he's beginning to get his footings in terms of national campaign, painful though it's been. And so I don't think it's going to be a knock-out blow any time soon.
So I see this going right into June.
CROWLEY: Oh, my goodness. Pack our bags.
Congressman Gephardt, a wrap-up question for you. If Rick Santorum, who seems somewhat likely to emerge as the challenger to -- we don't want to -- we don't want to preclude what's going to go on in the election, but right now at this moment that's how it looks. Could Republicans take control of the U.S. senate with Rick Santorum at the top of the ticket?
GEPHARDT: I think it makes it less likely. I think the senate with Olympia Snowe stepping out makes the senate tougher for the Republicans. There are a lot of tough races. Democrats have more seats up than the Republicans. So before she stepped out and Bob Kerrey came back in in Nebraska, it looked like Republicans would have a good chance.
But I think if they don't have a really dominant presidential candidate, it doesn't look like they'll have that, this will be a close presidential race. I think the senate probably stays in the Democratic hands.
CROWLEY: Comparatively, is it better to have -- for Republicans to have Mitt Romney at the head of the ticket or Rick Santorum at the head of the ticket insofar as the senate is concerned or the House?
GEPHARDT: I think to do well in the presidential campaign, they've got to have a strong economic message. And to the extent that Rick Santorum has been talking more about social issues and less emphasis on the economic issues and maybe that Romney could fulfill that role better.
But, again, reality, what's happening in the country will, I think, determine this election.
CROWLEY: Dick Gephardt, Steve Forbes, thank you both so much for joining us. We appreciate it.
FORBES: Thank you.
GEPHARDT: Thank you.
CROWLEY: Job market shows sign of growth, but the Republicans may have another Achilles Heel for President Obama in gas prices.
CROWLEY: We may be seeing some signs of recovery. But facts are funny things. 227,000 new jobs were added to the economy in February, the third month in a row with job growth over 200,000. Still, it was not enough to sway the unemployment rate, which stands at 8.3 percent.
But the president was bullish during a tour of a jet engine plant in the swing state of Virginia.
(BEGIN VIDEO CLIP)
BARACK OBAMA, PRESIDENT OF THE UNITED STATES: More companies are choosing to bring jobs back and invest in America. Manufacturing is adding jobs for the first time since the 1990s. And we're building more things to sell to the rest of the world. Stamped with three proud words, "Made in America."
(END VIDEO CLIP)
CROWLEY: On the campaign trail, the Republican prism is different.
(BEGIN VIDEO CLIP)
SANTORUM: This president has done everything humanly possible to slow this economy down, to stop it, to create headwinds, to put a yoke on the businessmen and -women of this country.
MITT ROMNEY (R), PRESIDENTIAL CANDIDATE: This president, how many months ago was it, 37 months ago told us that if he could borrow $787 billion, almost a trillion dollars, he would keep unemployment below 8 percent. It has not been below 8 percent since.
GINGRICH: The only reason it's down to 8.3 percent is people have quit looking for work and dropped out of the workforce.
(END VIDEO CLIP)
CROWLEY: If you are wondering whether the economy is half empty or half full, you raise the question that may decide this year's election. Up next, The Wall Street Journal's Stephen Moore, The Washington Post's Dan Balz, and former Office of Management and Budget Director Alice Rivlin.
CROWLEY: Joining me now, Dan Balz of The Washington Post; Alice Rivlin, the former director of the Office of Management and Budget; and Stephen Moore, an editorial board member at The Wall Street Journal.
Let's start with the unemployment figures which sound really good. And I want to break them down just a little and show our audience who gained the most jobs. It really was the professional and business services, 82,000 jobs gained. Down the line, manufacturing, construction, even construction where we've got so many empty buildings and houses that need to be sold. But 13,000 new jobs added. What do the inside of the numbers tell you, Alice Rivlin?
ALICE RIVLIN, FORMER DIRECTOR, OFFICE OF MANAGEMENT & BUDGET: Well, it was a solid jobs report. More than 200,000 jobs added for the third month in a row. That's significant. And some upward revisions in the prior month. So it looks quite solid. And even the fact that the unemployment rate didn't come down is, in a sense, good news. The reason it didn't was that there was some increase in the labor force. People came back into looking for work.
CROWLEY: Discouraged people thought, oh, there might be a job out there for me now?
RIVLIN: That's right. And that's good. And we'll see more of that if the economy continues to -- to pick up.
Manufacturing actually went up, which is unusual. It has been trending down for a long time. It's now being one of the good news stories. And I think the other important thing about these jobs is that they're private sector.
We're still seeing a downturn in the public sector employment because state and local governments are still in trouble and are still laying off people. So this is pretty solid.
Now, it doesn't mean it's going to continue forever. We had solid numbers a year ago that didn't continue. But I think for where we are, it's very good news.
CROWLEY: You Know, Dan, I'm thinking, if I'm the re-elect team for President Obama, I would really like to move these numbers and put them into July, August, September.
DAN BALZ, THE WASHINGTON POST: Yes. That's exactly right. But you want them any time you can get them. Certainly they would like them, I would say, May, June, July, August would be the ideal period. But if this does continue at this pace, it will be very helpful to the president and his re-election.
As Alice says, we don't know that. I mean, this recovery has been kind of in fits and starts. And there are external events that can happen whether it's Europe or gas prices or whatever.
And so I think if you're the president's re-election team, you feel better about things today, but you don't feel comfortable.
CROWLEY: Isn't the economy kind of the ball game, Dan? I mean, you know, nobody I talk to says anything about -- now, we know something could happen on the world stage at any moment. But in general when I say to people, what do you think about the fall election, they say, ask me about the economy in September.
BALZ: Every night that we've gotten an exit poll from these primaries the economy has been overwhelmingly the dominant issue. Every survey that's taken, every time you talk to a voter on the trail, it is the economy above everything else, in a way that we haven't seen in quite a while.
So, yes, I think that in one way or another the economy will be the frame of this election and I think both sides are kind of readjusting how they are trying to talk about it now in light of what we're seeing in the recovery.
CROWLEY: Right. And I do mean, I think, that this, maybe, is the economy half full or half empty kind of fall. You know, sort of arguing around -- you know, the argument isn't whether it's improving. The argument is whether it could have improved more under a different administration.
But let me ask you, Stephen, when you look at this, what's the fear? I mean, these are great numbers.
STEPHEN MOORE, THE WALL STREET JOURNAL: Yes. It's a good news/bad news story, I think. First of all, Alice is exactly right. I mean, if you just look at the underlying numbers, very positive. And Alice is right. We've now had three really strong months of employment growth.
In fact, you know, the Labor Department does two survey. One of establishment and one of households. The Household Survey looked even better with about 1 million jobs over the last three months. So there's no question in my mind that the economy is doing well right now.
The point that Republicans are going to be making over and over again, Candy, is the one that you just made. It could have been much better. And in fact, it is true this is still by far, by far the weakest recovery we've had out of a recession.
Don't forget, it has been four years now that we've been in this kind of recession, recovery. A lot of people don't think it's a recovery at all. The question really, when it ties into what Dan was talking about, about how this is going to affect the election, is whether this is a durable expansion, whether the economy can continue to create jobs in August, September, October.
That's where I have a question. Because I do think there are some things that are going to hit the economy later this year that are going to be very not good. And the big one, the big one that I keep talking about is what I call the tax time bomb that's going to go off on January 1st, 2013.
Biggest tax increase in 50 years in this country with higher capital gains, dividend taxes, payroll taxes, business taxes. I think that could cause real problems for the president as investors and businesses look into that coming tidal wave of taxes.
CROWLEY: Let me play -- just give our listeners a little burst from the campaign trail and ask you something about it on the other side.
(BEGIN VIDEO CLIP)
GINGRICH: When Obama was sworn in, the day he was sworn in, gasoline was $1.89.
ROMNEY: Since this president has been president, the cost of gasoline has doubled.
SANTORUM: And then he goes and blames everybody else the gas prices are high.
(END VIDEO CLIP)
CROWLEY: Let's call this for the moment plan B. How big a problem are gas prices right now? And when -- every economist I ever talk to said $4 is about when people start to really draw back, when businesses cease hiring. How big a problem is this?
MOORE: It's a problem. It's interesting. I talked to people, CEOs at places like Wal-Mart and other stores. People who run restaurants. And they tell me they can really see -- when they see a higher gas price, they see in the weeks that follow a decline in their store sales. Because people are living paycheck to paycheck.
Candy, if they have to pay $10 more to fill up the tank, that's $10 less they pay for buying diapers or clothes at Wal-Mart or going out for dinner. So, yes, this has a negative effect on the economy. Higher gas taxes are like a -- gas prices are like a tax on the American consumer, so it's a negative.
CROWLEY: Would you agree that it's -- when does it hit the economy to the extent that we see growth going down or it taking an effect on employment?
RIVLIN: Oh, I don't think you're likely to see growth going down. It's a question of whether the growth will be slower than it would otherwise have been.
CROWLEY: Right. Sorry.
RIVLIN: And we're actually not going to know that.
And the other question is, do people really think presidents control gas prices?
CROWLEY: I think people think presidents control everything, actually, but, you know. And they control very little.
RIVLIN: And that is the whole question here. We had a very deep recession, much deeper than usual. Do people think the president could have done something to turn that around faster?
And for heaven sakes, presidents don't control gas prices. Does anybody think they do? And the answer is probably yes.
CROWLEY: I mean, Dan, it's one of those issues that people get. It's like not having a job or having your home foreclosed. Gas prices totally hit home. Isn't this something that people tend to blame on a president, or can he work his way out of this? BALZ: Well, people do tend to blame it on an administration and power and on a president. And I think this White House has been very sensitive to the political impact of higher gas prices, even if there isn't much that they can do about it.
I mean, when we've seen spikes in gasoline prices in the past during this administration, the White House team has been very, very fixated on that, worried about it in a sense to the exclusion of some of the other elements of the economy, because, you know look, people fill up their tanks all the time and their very sensitive to exactly what the price is. You can go into a gas station and it's in big numbers, it's not like going into a grocery store or you're not quite sure what the price of milk may be.
MOORE: There's a good reason for that. I mean, Jimmy Carter lost the election in 1980 because of high inflation, right, and that was reflected in food prices and gas prices and so on.
I'll disagree a little bit with Alice on this. I do think presidents do have an impact on energy costs. I this think president is very vulnerable on the energy issue. I think Republicans are really going to go after President Obama where he is spending billions and billions of dollars on companies like Solyndra that have failed. We have -- you know, I just got back from North Dakota -- we have an oil and gas and coal revolution going on in this country, and the president has been very opposed to drilling, and I think that is something that Republicans really hit him hard on. This is a home grown energy revolution. He is not allowing the permitting. He is not allowing the drilling that could make America less vulnerable to what's happening in places like the Middle East.
CROWLEY: Obviously, I know the Democrats have a different view on why this is all happening and why we are, in fact, so vulnerable, but I have to close it off here, but I hope you guys have come back. Alice Rivlin, Dan Balz, Steven Moore, thank you all so much. Appreciate it.
Up next, deja vu on the campaign trail. Have we heard this one before?
(BEGIN VIDEO CLIP)
GINGRICH: I know the gasoline prices are high, but I have a word for you -- algae.
(END VIDEO CLIP)
CROWLEY: Returning to the breaking news this morning. You are looking at the first video from the scene where a U.S. soldier opened fire on civilians in Afghanistan's Kandahar province. The Afghan government says the soldier shot and killed at least 16 people. A NATO spokesman expressed deep regret and called the incident appalling. The spokesman said the shootings were not a part of any military operation and an investigation is underway. The soldier is in custody.
The U.S. special envoy to Syria Kofi Annan held a second round of talks today with Syria's president about a deadly crackdown on anti- government protesters. Annan met with Bashir al Assad yesterday to lay out plans for a cease-fire. At least 15 protesters have been killed in Syria today. And another win for presidential -- Republican presidential candidate Rick Santorum. The former Pennsylvania senator won the Kansas caucuses, racking up twice as many votes as Mitt Romney who won caucuses in Guam and Northern Mariana Islands.
The next contests are Tuesday when Alabama and Mississippi hold primaries while Hawaii and American Samoa have caucuses.
We've experienced the exact same thing before.
CROWLEY: On the campaign trail they call that the stump speech. There are no stumps anymore, but there is repetition. There is repetition. There is repetition.
GINGRICH: A man came up to us after the rally and he said I want you to tell Herman Cain that I know what the president's 999 plan is.
And I said, all right. What do you think Obama's 999 plan is?
He said President Obama's strategy is $9.99 a gallon.
$9.99 a gallon.
$9.99 a gallon.
CROWLEY: Also, a staple in the Gingrich repertoire, one of President Obama's recent suggestions for an alternative energy source.
GINGRICH: Does anybody here know what his solution was? Algae.
This is a Saturday Night Live skit waiting to happen.
I'm amazed that Saturday Night Live hasn't taken that speech and turned it into a skit. I mean, you can't make this stuff up.
CROWLEY: To see and hear the former governor of Massachusetts over and over again means leaving behind his foray into elective office and paying attention to his real world, real economy, real experience and don't you forget it.
ROMNEY: What I know is the economy. That's in my wheelhouse. I understand how the economy works.
The economy is what I do.
CROWLEY: Businessman Romney says his fix will require some sacrifice, including the one brought to you by the letters P-B-and S.
ROMNEY: I like PBS, I like Big Bird and Burt and Ernie for my grandkids to watch. We're not going to kill Big Bird, but Big Bird is going to have advertisements, all right?
Big Bird is going to have to get used to Corn Flakes.
CROWLEY: From Corn Flakes to the Constitution, Ron Paul has what we like to call message consistency. He is a deja vu machine.
PAUL: Make sure that they know what the message is and that is for liberty.
The principles of liberty.
Personal liberty, civil liberties.
The cause of liberty is on a roll, let me tell you that.
CROWLEY: And finally, the only candidate of the Republican quartet who consistently preempts your deja vu.
SANTORUM: It's one of the things I say all the time.
I talk about this in every speech.
I have said it almost every stump speech I have given.
That's the fifth time I have mentioned the speech.
CROWLEY: So speaking of deja vu, thank you for watching State of the Union. I'm Candy Crowley in Washington. Look for today's interviews, some analysis, and web exclusives at CNN.com/SOTU. For our viewers here in the United States, Fareed Zakaria GPS starts right now.