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State of the Union

Interview with David Dreier; Interview With Richard Blumenthal; Interview with Ed Gillespie; Interview with Romney Campaign Adviser Carlos Gutierrez, Congressman Luis Gutierrez

Aired June 24, 2012 - 12:00   ET

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.

CANDY CROWLEY, HOST: The hope of last year's Arab Spring turns this year to an uncertain Arab summer. You are looking at live pictures in Tahrir Square in Cairo where thousands are celebrating the election of Mohamed Morsi.

I'm Candy Crowley in Washington. We want to welcome viewers from CNN International to State of the Union. The announcement of Morsi's victory came just about 90 minutes ago. Morsi defeating the pro- military candidate Ahmed Shafik.

I want to bring in CNN's chief international correspondent Christiane Amanpour. She's also the global affairs anchor for ABC News. Also with us, senior international correspondent Ben Wedeman.

Let's go back to the moment this was announced by effectively the elections commission there in Cairo. Tell me, Ben, just was it the reaction immediate and joyous?

BEN WEDEMAN, CNN INTERNATIONAL CORRESPONDENT: It was incredible. I mean, we really heard a huge roar coming up from the crowd. And the only time I've ever heard a louder roar of course was 6:00 p.m. on the 11th of February last year when Hosni Mubarak's resignation was announced.

And what we saw -- it's a very hot, bright day in Cairo. And I'd say Tahrir Square was about a third full. And within about 20 minutes, it just filled up and people continue to fill up in the square coming from all the parts of Cairo. And as the temperatures become to become a little more mild, I think we're going to hear more fireworks, more car sirens and see more and more people coming out here because this is truly a historic day for Egypt where Egyptians finally see those who were on the other side of the political equation coming into power. Candy?

CROWLEY: But Christiane, there's so much work to be done now. This is almost -- it may not be step one, but certainly not the last step. What is the next question now in Egypt that has to be dealt with?

CHRISTIANE AMANPOUR, CNN INTERNATIONAL CORRESPONDENT: Candy, you're absolutely right. This is a transformative moment. It is the first ever Islamist head of state in the Arab world. And as Egypt goes, the rest of the Arab world goes so it's said. So really what is going to happen we don't know because the military is in control of this country still and the elected president has very limited powers at the moment. We're not sure what's going to happen when they get down to the nitty-gritty of organizing how to actually write a constitution. You've had a presidential election with no constitution. You have very ill-defined powers for the elected president. And very definite powers for the unelected ruling military authorities that still maintain power including legislative power since they have dissolved before this run-off the parliament here, which was the first free and fair election that Muslim Brotherhood in fact dominated along with other Islamists.

The other thing we don't know is how Islamic is this Islamist regime going to be? Many people both here in Egypt and in the United States, and around the world are concerned about what does it mean to have an Islamist in power? The Muslim Brotherhood, six decades at odds with the military rulers here in Egypt and at odds all around this part of the world, because people want to know what does this mean for our life?

So to be very frank, these questions have not all been answered by any stretch of the imagination. And as you know, 48 percent of the Egyptian people actually voted for Shafik who represented the old regime, Candy.

CROWLEY: Let me ask you both, first to Ben Morsi was educated in the U.S. And while he obviously is a member of the Muslim Brotherhood, and he was a candidate of the Muslim Brotherhood, does that bode well do you think for U.S.-Egyptian relationships Ben?

WEDEMAN: Well, certainly what we've seen over the last six or seven years is the United States, through its embassy here in Cairo, has reached out to the Muslim Brotherhood. In 2005, the Muslim Brotherhood won 20 percent of the seats in parliament, its highest every until till that point of representation.

And beginning back then, the U.S. was sending out feelers and there has been a dialogue. And certainly since the overthrow of Hosni Mubarak, almost every single visiting American delegation -- congressional, from the government, has met with representatives of the Muslim Brotherhood with Mohamed Morsi and others. So -- and there has been an attempt by the Muslim Brotherhood to reassure the United States that it's not about to dump the Camp David peace accords with Israel, that it wants to work with the United States and it's not going to sort of take Egypt on some sort of bold, new, hard line Islamist course.

They do want to do business with the United States.

AMANPOUR: And on that very important point, Candy, I interviewed Mohamed Morsi about the U.S. and Israel. And he was categoric about how they wanted relations based on mutual interest, but how they would respect the Camp David accords. And of course that is a concern to Israel next door of course.

CROWLEY: Christiane Amanpour, Ben Wedeman, thank you so much for your expertise this morning.

Joining us on the phone here in the U.S. from New York is California Republican Congressman David Dreier. He was just in Egypt monitoring the presidential election. Here on the set, CNN Foreign Affairs Correspondent Jill Dougherty.

David -- congressman, first to you, let me ask the same question which is what can we now expect? What's the next step in the U.S. in this?

REP. DAVID DREIER, (R) CALIFORNIA: Candy, let me first say that I think it is worth noting that the last presidential election in Egypt saw Hosni Mubarak get 90 percent of the vote. Dr. Morsi received 52 percent. So what it means is for the first time in 7,000 years the people of Egypt have actually been able to play a role in determining their future.

Now what it means for the future, I hope very much that Ben's statement there about this notion of building a coalition that is not going to be anti-west. And as Christian said, recognition of the Camp David peace accords will proceed.

There are a number of things that need to happen now. We need to see the constituent assembly proceed with a constitution. Obviously many of us believe a constitution should have been in place before all these elections were being held. But they need to do that. And they're going to have to hold parliamentary elections again because of the decision that was made a week and a half ago, to dissolve the parliament.

And so I think that also from the meetings I have -- and Ben is right -- I've met with Mr. Al-Shader (ph) who was going to be the Muslim Brotherhood candidate for the Freedom and Justice Party. And he has actually indicated to me recognition of the Camp David peace accords, a desire to ensure minority rights including women's rights.

And so these things have been said. And obviously we need to make sure that we encourage that as much as possible and I look forward to doing that. But they need to focus on the economy, too. That's the other thing, Candy, that's very important. I've introduced a U.S.-Egypt free trade agreement. And they've lost 2 million jobs since February 11 of last year. And by virtue of that, they really, really, really need to get the economy growing and get people back to work.

CROWLEY: Let me get to Jill, because this brings me to my next question. We've been basically giving the Egyptian military, because they've been in charge, about a billion a year while they kind...

JILL DOUGHERTY, CNN CORRESPONDENT: 1.3.

CROWLEY: ...they've done this power grab. How does the U.S. walk this line? They want to kind of nurture democracy but they don't want to encourage the military? It still remains pretty much in charge. DOUGHERTY: Exactly.

So what they have to do, what they are doing is they will look at the next steps towards the Democratic process. If the Egyptian leaders, and now we know who is going to be in charge, at least from the president, still remains the military. Will they move forward on these Democratic steps? If they do, then the U.S. continues that money. And as the congressman said, the critical thing is the economy because right now those people on the square need jobs. If they don't get them from Morsi or the military leaders, then we could be back to the same situation. It is critical to get that economy moving again.

CROWLEY: Our CNN foreign affairs correspondent Jill Dougherty, Congressman David Dreier on the phone. Thank you for your expertise.

Obviously CNN continuing to keep up on the developments in Egypt.

But up next, Mitt Romney gets all tangled up in issues except the one he really wants to talk about, the economy. Romney campaign senior adviser Ed Gillespie is here next.

(COMMERCIAL BREAK)

CROWLEY: Joining me right now is Ed Gillespie. He is one of Mitt Romney's senior advisers.

Ed, thanks for letting us squeeze you in here as we sort of -- the world never waits for us no matter what.

ED GILLESPIE, ROMNEY SENIOR ADVISER: Thank you for squeezing me in. Good to be with you.

CROWLEY: I want to first get your response to a Washington Post story that said while your candidate was at Bain Capital, a firm he started, that Bain invested in several firms that specialized in exporting American jobs to low-salary countries, India, China, it's an old story.

As I understand it, it is the folks that you get that aren't in the United States that answer customer service questions, et cetera. How does that sell in the heartland that has been hit by the loss of manufacturing jobs and, you know, lots of blue collar jobs?

GILLESPIE: Candy, this was incredibly shoddy journalism. The fact is this was a breathless headline over a baseless story. I would encourage you to have the reporter on your show, I hope he goes on a lot of shows, and ask him to demonstrate one of the companies cited in that article that moved American jobs overseas while Mitt Romney was at Bain Capital -- that Bain Capital that invested in.

And I don't believe you will find that he can cite any. So it is just factually inaccurate...

CROWLEY: So he did not invest while -- Bain did not invest in any company that shipped jobs overseas? GILLESPIE: When any of these companies in this article -- which is what we highlighted and went back and reviewed, and could not find any. And I would encourage you, again, have the reporter on. He has injected himself into the campaign, obviously, and I think that he should be subject to the kind of fact-checking that campaign assertions are subject to.

And I would welcome CNN, encourage CNN to ask him to produce evidence of a single job of a company cited in that story that Mitt Romney was, you know, with Bain at the time that moved an American job overseas, and I don't believe you will find one.

CROWLEY: Since I don't have him here, but I do have you here, what I am getting at is that while he was head of Bain, let's forget the story, while he was head of Bain, did Bain invest in and advise companies that did ship American jobs overseas? You are saying no company at Bain did that while he was there?

GILLESPIE: Well, I am not aware of that. But I think what happened in the story, as near we can tell, is that the reporter confused the notion of outsourcing. Now a lot of American companies outsource, they outsource domestically though, as well.

For example, the Obama for America campaign outsources from its own campaign telemarketing services...

CROWLEY: To Omaha or wherever it is.

GILLESPIE: Yes, exactly.

CROWLEY: Right. I understand that.

GILLESPIE: And CNN may outsource some video...

CROWLEY: But we're talking about foreign jobs here, right.

GILLESPIE: ... editing projects, so I think the reporter confused the notion of outsourcing, which happens all of the time when you don't do all of your services in-house, you go outside, to moving jobs offshore.

And, yes, there were companies that Bain invested in that did engage in outsourcing, a lot of companies do, obviously. That's an economic model that makes sense.

CROWLEY: But your statement today is that those companies, while he was head of Bain, did not outsource jobs.

GILLESPIE: In The Washington Post, which is what we went back and looked at.

CROWLEY: So those specific companies.

GILLESPIE: Yes.

CROWLEY: But there may be other companies. You are saying those specific companies cited didn't...

GILLESPIE: Candy, those are the -- those are the ones we checked because that was the story. And, again, I would encourage you to have The Washington Post reporter on, see if they can, you know, demonstrate to you or to American voters the validity of the headline that was on that story, because like I say, it was a breathless headline, but a baseless story.

CROWLEY: Let me ask you about another story, in The New York Times, I'm sure you saw it, which said because of the contracts that Bain put out there and got signed from various companies that they invested in, that even when these companies went down, workers were laid off, they lost their pensions, et cetera, et cetera, Bain always made a hefty profit.

Again, there is nothing illegal about that. You know, Bain was there to make a profit for its investors. But it is such a hard sell to what right now is the core of Romney's support, isn't it? Which is that -- you know, the working class voter who has seen so many of those jobs go away?

GILLESPIE: Well, let me just say, you know, in terms of the Bain, I think Bain put out a statement that said that in that story, they confused fees for profits, and that they didn't make a profit in those instances. But I will refer that to Bain.

But the fact is that when Mitt Romney was involved with Bain Capital, it was very successful in generating jobs. You look at companies like Staples and others...

CROWLEY: But you don't know that because -- there is no records, you know, we are always kind of arguing in the vacuum here.

GILLESPIE: Look at Staples, Candy, go look at a Staples, there are a lot of jobs when you walk into a Staples.

CROWLEY: Sure. And Staples was. But a larger picture we don't have because we don't have the records for that company or no.

GILLESPIE: Well, we do actually -- let me tell you the larger picture that we have that since President Obama took office, over 500,000 Americans -- 500,000 fewer Americans are working today.

There are 23 million Americans who are either out of work entirely, are underemployed, not working full time, but part time instead of full time, who have left the workforce entirely as a result of his policies.

The fact is we just saw last month that we have had the lowest postings of new job openings available by American companies in five months. We have had more than -- well, we've had 40 months of 8 percent unemployment or higher. And we have seen a decline of family income by $4,300.

That is the big picture, Candy, and that is what Americans are focused on going into November. CROWLEY: Let me ask you a couple of things. When I had David Plouffe on last week, and I asked him several times, what is your plan for the second half of an Obama administration, should he get re- elected? It seems to me that Mitt Romney is also open to this question, because when it comes to immigration reform, here's what we know.

CROWLEY: We know he wants to do it in a civil, bipartisan way and have immigration to include something like what the president did by executive directive.

GILLESPIE: What we don't know is, A, will he keep the directive in place while he works out immigration reform in a more holistic manner?

GILLESPIE: Well, a couple of things, Candy, we saw what the president did this week was to take a short-term --

CROWLEY: Since time is short, I need to know about -- I need to know about Romney.

GILLESPIE: Every executive action that President Obama has taken will be subject to review. In the case of this case, it would be subject to review as to whether or not it is legal. There is legitimate questions about the legality of it, and everyone that he'll take from here on forward will be subject to review and subject to repeal.

CROWLEY: Sure. We know its review, but isn't it important not just for these kids that are involved or these young 20-somethings that are involved, who now say, oh, wow, if I meet certain criteria, I can get my working papers.

GILLESPIE: Come January 20th or 21st, whenever the inauguration is, if Mitt Romney is the president, they could lose that. Shouldn't there be some certainty whether it's immigration or what he wants to cut in order to sustain tax cuts that he wants, there are no specifics here that we can look at, that voters can look at and say, oh, OK, here is what he wants to do, I support that.

And immigration is one of those. It is such a simple question, would he keep that in place --

(CROSSTALK)

GILLESPIE: Well, let me --

CROWLEY: -- until he gets a broader reform?

GILLESPIE: Yes, two parts to the question. Let me give you the first part first of all.

Governor Romney's plan to grow jobs and to bring America has been something we have been trying to lay out for weeks now. In fact, we have had a series of ads called "Day One," that would say if Governor Romney's elected president, what would it look like? We'd approve the Keystone pipeline or repeal ObamaCare, get tough with China and stop them from manipulating currency. So we are --

CROWLEY: Well, we don't know (inaudible) in place. GILLESPIE: -- laying out specifics. Well, we are laying out specifics. Now you're -- now let me go back to the other question --

(CROSSTALK)

GILLESPIE: -- like I said, immigration. So now between now and November, it is clear that the Oval Office is an extension of the Chicago campaign headquarters, and they will make a lot of political moves and there are a lot of other target demographics that the president will try to appeal to with executive actions.

We will review all of these. The president --

CROWLEY: But you can't tell me today --

GILLESPIE: -- if President Romney is elected, he will.

CROWLEY: I got to run, but you can't tell me today whether he would leave that in place?

GILLESPIE: What I'm telling you is it was -- all of these are subject to review and repeal.

CROWLEY: Which we know. All right, great. And I am sorry it's so short --

GILLESPIE: That's OK, I understand. Thank you --

CROWLEY: As you know the world is going crazy.

GILLESPIE: I understand completely.

CROWLEY: Thanks so much. An update on Egypt's presidential election when we come back.

(COMMERCIAL BREAK)

CROWLEY: Back now to our lead story. Muslim Brotherhood candidate Mohamed Morsi has been declared the winner of Egypt's presidential election. The announcement was met with massive cheers by thousands of his supporters, who gathered in Cairo's Tahrir Square. Morsi defeated pro-military candidate Ahmed Shafik in the runoff race.

The Turkish foreign minister says Syria gave no warning before shooting down a Turkish military jet that strayed into Syrian territory. Turkey is accusing Syria of spreading disinformation about the Friday incident and says the plane was unarmed and not sending hostile signals. Turkish boats and helicopters are searching for the plane's two-man crew inside Syrian waters.

Tropical Storm Debbie is on a path toward the U.S. Gulf Coast. The storm is packing winds of 60 miles per hour. Louisiana's Plaquemines Parish is preparing for a state of emergency and tropical storm warnings are in effect along the state's coast.

Just days after being sworn in to fill Gabrielle Giffords' seat, Arizona Democratic Congressman Ron Barber held a Congress on Your Corner event in Tucson. It was the same type of gathering at which Barber, Giffords and 17 others were shot in January last year. Six people died in the massacre. Hundreds of people attended yesterday's event.

Next up, immigration reform and fighting for the Latino vote.

(BEGIN VIDEO CLIP)

SEN. MARCO RUBIO, R-FLA: As long as this issue of immigration is a political ping-pong that each side uses to win elections and influence votes, I'm telling you it won't get solved.

(END VIDEO CLIP)

(COMMERCIAL BREAK)

CROWLEY: Joining me now from beautiful downtown Chicago is Congressman Luis Gutierrez, a Democrat from Illinois, and here in Washington with me, Carlos Gutierrez. He's currently an adviser with the Romney campaign, but he served as Commerce secretary during President George W. Bush's second term.

Thank you, gentlemen, both, for joining us.

First to you, Mr. Secretary, is it sustainable for the Romney campaign to continue to say we are not going to tell you whether or not we would undo the president's directive dealing with allowing young immigrants who came here under the age of 16 to stay?

CARLOS GUTIERREZ, CHAIRMAN, ROMNEY 2012 HISPANIC STEERING COMMITTEE: Well, what the governor has said is that he wants, and this is a commitment he is making, he wants to do something permanent, long-term, and not a patchwork...

CROWLEY: But so does the president.

C. GUTIERREZ: But he has not been able to.

CROWLEY: Exactly.

C. GUTIERREZ: And he has not done that.

CROWLEY: But the question is about these kids.

C. GUTIERREZ: But to tell, congress, don't worry about it, we are going to just continue it is just another way of saying, you don't have to act. You can continue to avoid facing up to this issue the way that you have avoided it for the last ten years.

CROWLEY: Congressman Gutierrez, let me bring you in on this particular discussion, and ask you obviously the Democrats are going after the Mitt Romney for not saying what he would do about this particular group of paperless immigrants who have come in here. Do you think that is going to hurt Mitt Romney simply because Mitt Romney at this point is polling in the 24, 25 percent among the Latino voters?

REP. LUIS GUTIERREZ, (D) ILLINOIS: Well, let me just first of all say that reason Mitt Romney is in the position he is in with Latino voters is that during the primary campaign, Mitt Romney had a lot to say. And he was very specific about what he felt about immigration.

First of all, he hired the architect of the discriminatory Arizona law to advise him on immigration. So he said self-deport. He said he would veto the DREAM Act if he were president of the United States, moreover he talked about self-deportation, but he had a very extreme position when it came to immigration. And Candy, quite honestly, he just -- the Latino community just isn't going to suffer from amnesia and forget about the positions, he was clear and articulate in the primary.

CROWLEY: But congressman, let me point out that this president said that he would get comprehensive reform in the first year, that he would propose it, and he hasn't delivered. I think you have heard Mitt Romney down at the organization for Latino elected and appointed officials here in the U.S., and Mitt Romney pointed out that Latino unemployment is much higher than the overall average. He pointed out the number of Latinos that have dropped into poverty since this president became president, so what is the appeal here given those circumstances? What is the appeal of the Latino community?

L. GUTIERREZ: Sure.

I think going back to Mr. Gillespie, a senior adviser who was just on your program, he said that Romney were president of the United States, he'd have to review and repeal and reconsider, and even repeal. So we simply ask...

CROWLEY: I'm not sure he said repeal, but review.

L. GUTIERREZ: Well, he did. I was listening very, very carefully, Candy. And he said that those actions would be under review and repeal.

So given that, we should have an answer on the basic question that we have before us. We have over 1 million young people in the United States of America since the president made the announcement, two-thirds of the American public have said it is a great idea. Latinos are cheering throughout the country that finally there are positive steps being taken to defend the immigrant community, the undocumented immigrant community and we are starting with the children.

At least Mr. Romney Could say, look, I will not deport those young people if i am elected the president of the United States, it is a fair question and it's one that should be answered before the election.

CROWLEY: Mr. Secretary, let me ask you -- given those statistics that Mitt Romney rattled off at this convention, is it fair to say that Latinos or Latino voters are repelled by what the congressman just referred to, that kind of harsh tone of the Republican Party that seems unwelcoming to Latino voters, those who are here with papers and that are American citizens, and those who are not?

C. GUTIERREZ: Well, there's no doubt that there have been members of the party who have mentioned things, stated things that were insulting to Hispanics. I don't think President Obama wants to have a contest as to who said what, because what he promised the Latino community, he promised everything: immigration reform in the first 100 days, jobs, education. We have 2 million more Hispanics in poverty since he took office. Unemployment went from 8 percent to 11 percent. Hispanic schools, the schools they go to have not come up...

CROWLEY: I think unemployment actually just dropped in the Latino community from 13 percent to 11 percent.

C. GUTIERREZ: That's what I said, 8 to 11 -- well, but it is higher, but it's a lot higher than the national average.

CROWLEY: Yes.

C. GUTIERREZ: It's a lot -- he has not delivered. They have been playing with Latinos, and it hurts me to see it. This patchwork of the DREAM Act, why didn't they do this two years ago? And how many people have been deported since?

CROWLEY: Let me put that question actually to the congressman. Because congressman I did have that down for you, can you explain to me why the DREAM Act which dealt with these young illegal immigrants went down a year and a half ago. Why did it take the president until five months before the election to make this move?

L. GUTIERREZ: First of all, Candy, it was November of 2010. The Congress of the United States, I was there leading that fight -- 216- 208, 208 against the DREAM act.

CROWLEY: He lost it...

L. GUTIERREZ: If i could. We passed the DREAM Act in the House of Representatives. We went to the Senate, Candy, and there were 55 senators willing to overcome the ability to move forward with the action there on cloture -- 51 Democrats, 4 Republicans. There were ever Republicans who were working with then Secretary of Commerce Gutierrez when he came to the congress under the Bush administration who wouldn't vote for it. That is the simple fact, they obstructed the process to getting the DREAM Act done.

Last year in August of last year, the president issued an executive order to look at how it was to use prosecutorial discretion. We demanded and asked that he do more and he did that. Look, Candy, I cannot ask and demand of a president that he do more and then when he does it not congratulate him and stand by him.

C. GUTIERREZ: My dear friend Luis Gutierrez, who I admire and I know you have done a lot for this cause, November 2010, that is exactly what the pattern has been. Before an election, let's promise something to Hispanics, that bill was -- had things in there that couldn't get bipartisan support, and Republicans said don't ram that bill now. We are in the middle of an election. You did it anyway knowing that it wouldn't pass, but it didn't matter, you made the promise, you got the Hispanic vote, and that has been the pattern.

This administration has played with Hispanics.

CROWLEY: Let me -- I am afraid that I have to stop you both there, congressman, because sort of other things going down, I'm going to have to cut you off here. I hope you will both come back. Congressman Luis Gutierrez and former Secretary Carlos Gutierrez. They are not related and they don't agree as you can see. Thank you both so much.

Victory for the Muslim Brotherhood in Egypt when we come back.

(COMMERCIAL BREAK)

(END VIDEO CLIP)

UNIDENTIFIED MALE: Everyone here is beeping their horns. There's victory signs. Even this guy who hasn't got a flag is pretending he's waving one in his delight at this result. And I would think the celebrations will go on long, long into the night here.

The question is will this then turn to a completely different atmosphere as Ahmed Shafik supporters also have come out to commiserate. At the moment, there's no sign of that. It is one of unbridled triumph and jubilation.

(END VIDEO CLIP)

CROWLEY: That now is a live shot of Tahrir Square.

We earlier heard from our Correspondent Dan Rivers out in the very happy streets of Cairo where Muslim Brotherhood supporters are celebrating the election of their candidate Mohamed Morsi as the country's next president. Our international correspondent Dan Rivers joins us from Cairo.

Dan, tell us what you can about the atmosphere.

DAN RIVERS, CNN INTERNATIONAL CORREPSONDENT: The pictures speak a thousand words. Sir, you're here, you speak English. How do you feel?

UNIDENTIFIED MALE: We are all very happy because all people want is to remove this regime. And this regime now isn't here. We are very happy because lots of people been at that place and we are very happy...

RIVERS: To show you where we are, we're actually on a bridge in the middle of the River Nile here. And you can see it hopefully, blocked with traffic -- kids, parents. I'm difficult to walk along so I don't know how my cameraman is doing. I think this gives you a pretty good indication of what it's like. CROWLEY: So essentially we actually don't even need Dan Rivers to tell us about the reaction on the street as you can see. As he once called it, unbridled celebration there at the election of a new president, lots of high hope but also lots and lots of work to be done.

Joining us on the phone is former U.S. Ambassador to Egypt, Edward Walker. Mr. ambassador, thanks for joining us.

It's hard -- you can't rain on that parade today, that's for sure. But what comes next? What's the most important thing that happens next?

EDWARD WALKER, FRM. U.S. AMBASSADOR TO EGYPT: One thing he's got to do, Morsi's got to do is he's got to establish his credentials with the people that he lost to, that he lost in the election. This was a very close election. And It doesn't show a unified country. It shows a country that's basically divided in two. He might be able to accomplish that, but he'll have to do it with the oversight of the military who still retains the overall authority and power.

Now this result was great for the military. You've got to compliment them on their ability to make things turn out well for them. Just imagine what it would have been like if Shafik had won. There would be rioting in the streets. There'd be teargas out there. There would be tanks in the square. They didn't want that. They found a way to emasculate the Brotherhood before it ever took over.

So I think they're still very much in command. And I think they will support the -- continue to support the treaty with Israel. I think they will continue to try to resolve the outstanding issues with the United States.

It's not at all as bad perspective from their point of view. And it may not be so bad for us either.

CROWLEY: Mr. Ambassador, can you tell us what you know about Morsi insofar as U.S. relations. We know he was educated here. Would you call him U.S. friendly, U.S. skeptical, how would you describe that?

WALKER: For one thing, two of his children are U.S. citizens. So he's certainly got some ties.

I don't think he's a great supporter, fan of the United States. He came out of the background really in this when the primary Brotherhood candidate was disallowed. He's not very charismatic. He is, however, a true believer in the Brotherhood's program. And if you go to the program, you can see it has some good points and some bad points.

Some of the bad points is it's a top-down autocratic leadership. Once a decision is made, everyone is supposed to salute and pay attention to it. So, it has some anti-0democratic components to it. We haven't seen the last of this particular power play. CROWLEY: Ambassador Edward Walker, thank you so much for your insights. And we'll have more of this on the Egyptian election results when we come back.

(COMMERCIAL BREAK)

CROWLEY: You're looking at a couple of live pictures here. Top left, that is Tahrir Square from the ground. Bottom right, that is Tahrir Square with a more aerial view: absolutely crowded, absolutely jubilant.

We want to join -- go on the phone now, because joining us Connecticut Democratic Senator Richard Blumenthal. He was recently in Egypt. And back here onset, CNN foreign affairs correspondent Jill Dougherty.

Senator Blumenthal, what does the U.S. do now? I am -- there's been this giant power grab that we've been talking about by the Egyptian military. And yet we're still giving them north of a billion dollars every year. Is that money safe?

SEN. RICHARD BLUMENTHAL, (D) CONNECTICUT: Keeping it in context, let's remember that this election marks progress on the path toward Democracy, and in the midst of the polarization which hopefully will ease and the confusion which you can see on your screen, what we really need to do is pay attention to what this new president as well as the military council, what they do, not only what they say in three critical areas.

Number one, are they going to undertake real economic reform and restore the economy which is really on the brink of collapse.

Number two, are they going to honor their peace agreements particularly with Israel, the Camp David accord?

Number three, will the Brotherhood reach out and continue to rebuild partnerships with the more secular advocates of democracy?

So let's not jump to conclusions either as to cutting of or doing something else as to the aid. Let's watch what they do, whether they continue to be stable and solid partners in keeping peace in the Middle East.

CROWLEY: Well, were there not that long ago. Did you get the sense that the military will easily give up its power which has only been consolidated over the past months?

BLUMENTHAL: By no means easily if at all will the military relent or relinquish its power. Remember, its power is not only a military arms power, but also an economic power. They virtually control the economy, the instruments and tools of manufacturing, such as it is, and all aspects of the economic lifeblood.

So not easily at all, which is why the United States can continue to be a constructive force. The Obama administration, through Secretary Clinton, has sought to do that ably and, I think, will continue to do, despite really excruciatingly difficult challenges that we face.

CROWLEY: Senator Richard Blumenthal, Democrat from Connecticut, thank you so much for your insights this morning.

BLUMENTHAL: Thank you.

CROWLEY: Jill, let me turn to you here. It sounds like the senator is saying we need to wait and see how this plays out before making any huge steps one way or the other in terms of policy.

DOUGHERTY: Absolutely. I mean, I think the administration breathes a sigh of relief. There are no riots on the streets. People are happy. They feel that democracy is moving forward. But in terms of what the U.S. does concretely with the money, the $1.3 billion it gives the military, in terms of anything else, that it goes step by step, encouraging, but also saying we want to see what your next concrete move will be.

Because, after all, the military still controls things.

CROWLEY: But this was the best they could hope for out of today, correct? This was what the U.S. wanted?

DOUGHERTY: Yeah, I think that's definitely true. I mean, if it had been former Prime Minister Shafik, it would have been very much back in the -- in the military controlling everything, including the presidency. That would have been a very bad scene and it could have left -- led to some chaos on the streets.

So right now, you do have a symbol of democracy. I mean, the people have spoken. He is there. But, as has been pointed out, it's a very divided country with an economic basket case. Right now, they have to get the economy back on track and make sure that those -- the political reforms continue or at least get off the ground.

CROWLEY: Is there leverage that the U.S. has here?

There is that $1 billion. But -- or are we waiting and seeing? Is that the mode, diplomacy and everything else is in right now?

DOUGHERTY: You know, the U.S. works very closely with the military, has for a long time. The money is an issue. But essentially, you know, in so many of these countries, the Arab Spring countries, the United States ends up not having ultimately a lot of influence. It can hope; it can encourage; it can cajole; it can sometimes scold, but ultimately it's not going to define what's going on on the streets.

CROWLEY: No, that superpower thing has its limitations.

DOUGHERTY: Um-hm.

CROWLEY: Thank you so much, Jill Dougherty, for all your help this morning. I really appreciate it. Up next, when politics is all in the family.

(COMMERCIAL BREAK)

CROWLEY: And, finally, they are brought in by their parents, often given no choice in the matter. They arrive in a world where the nuanced language is foreign and if they make a mistake, people are ready to pounce. We are talking, of course, about the children of presidential candidates.

(BEGIN VIDEOTAPE)

MATT ROMNEY, SON OF REPUBLICAN PRESIDENTIAL CANDIDATE MITT ROMNEY: I didn't want him to do it. I tried to convince him not to. I think there are a few of -- few of us that tried that.

CROWLEY (voice over): Yet, there they were, reluctant but game, Matt with brothers Tagg, Craig, Ben and Josh, aka the Romney boys.

J. ROMNEY: We prefer "brothers," but, you know, some people call us "boys," so whatever.

CROWLEY: The Romney ensemble was lighthearted and devoid of policy and controversy or, as any campaign would describe that, "just perfect."

Ditto the Huntsman ladies, Abby, Liddy and Mary Anne, the progeny of one-time presidential hopeful Jon Huntsman. In this YouTube entry, they satirized the now infamous smoking video put together by a Herman Cain adviser.

(UNKNOWN): We strongly believe that our dad has the experience and proven track record to revive America's economy and create jobs. Even if we didn't believe that, we'd still have to be here.

CROWLEY: That may be more truth than satire. Some kids don't take to the limelight. When was the last time you saw Amy Carter?

And when Chelsea Clinton showed up on her mother's campaign, the word went out she is not available to reporters. Chelsea is now, of course, a reporter.

Some offspring thrive in the arena, though. John McCain's daughter Meghan was out there and talkative during the '08 election cycle, and she still is.

MEGHAN MCCAIN, DAUGHTER OF SEN. JOHN MCCAIN, R-ARIZ.: I just visited him in D.C., and he was like, we don't need to get dinner because I went grocery shopping. And in his fridge was a bucket of fried chicken, Wonder bread and pudding pops. And I was like, this is not a meal.

(LAUGHTER)

JAY LENO, HOST, "THE TONIGHT SHOW": I like the pudding pops.

MCCAIN: I know. He's like a five-year-old.

CROWLEY: The Obama girls, and they are girls, are too young for solo campaigning or late-night TV, but there has been no public misbehavin', much less misspeakin'.

SASHA OBAMA, DAUGHTER OF PRESIDENT BARACK OBAMA (?): Vote for Daddy!

(APPLAUSE)

CROWLEY: Of course, they were bribed.

PRESIDENT BARACK OBAMA: Sasha and Malia...

(APPLAUSE)

... I love you both more than you can imagine, and you have earned the new puppy that's coming with us to the White House.

(APPLAUSE)

CROWLEY: We are not sure what Mitt Romney has promised his boys if they behave and he wins, but all the Romney men are married with children, so a puppy may not be the best idea.

Thank you for watching "State of the Union." I'm Candy Crowley in Washington. Head to cnn.com/sotu for analysis and extras. And if you missed any part of today's show, you can buy it on iTunes.