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State of the Union

Interview with Senator McCain; Interview with Governor Hickenlooper

Aired December 15, 2013 - 09:00   ET

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

CANDY CROWLEY, CNN ANCHOR: Doppelganger political moments. An unusual bipartisan budget deal on Capitol Hill and the dangerously escalating tensions and hot spots around the world. (BEGIN VIDEOTAPE)

CROWLEY (voice-over): Today --

UNIDENTIFIED MALE: I'm proud of the people of Ukraine and their steadfast efforts for democracy for their country.

CROWLEY: Hundreds of thousands protest in the streets of Kiev in a face-off with cold war overtones. The uncle of North Korean dictator, Kim Jong-Un is executed, leaving experts to wonder if Kim is consolidating power or losing it. Senator John McCain joins us from Ukraine.

Then --

UNIDENTIFIED MALE: Good evening.

CROWLEY: Who (INAUDIBLE).

UNIDENTIFIED MALE: I think disagreement is a clear improvement on the status quo.

UNIDENTIFIED FEMALE: We've broken through the partisanship and the gridlock.

CROWLEY: A Christmas miracle or just election season setting in? Former director of the Office of Management and Budget, Peter Orszag and Douglas Holtz-Eakin, former director of the Congressional Budget Office on the minimalist budget deal. Is the best Congress can do good enough for the economy?

And the tradition bound consensus driven speaker of the House busts loose.

REP. JOHN BOEHNER, R-OHIO, HOUSE SPEAKER: Are you kidding me?

CROWLEY: John Boehner and the Tea Party, the president and the promise, the governor and the bridge. Our political panel and their discussion.

This is STATE OF THE UNION. (END VIDEOTAPE)

CROWLEY (on-camera): Good morning from Washington. I'm Candy Crowley. A political tug of war brewing in the Ukraine, a country sandwiched between Russia and Europe. Ukrainian protesters are upset with their president for refusing to sign a trade deal with the European Union. It's a move that would align the former soviet blocked nation with the west.

Instead, the president is turning his financially strapped country toward Russia, which has offered economic assistance. Nick Paton Walsh is in Kiev as demonstrators gather for a mass rally today -- Nick.

NICK PATON WALSH, CNN SENIOR INTERNATIONAL CORRESPONDENT: In many ways, this country is split in two, Candy. The East Russian speaking near Russia on its boarder there and then in the west speaking Ukrainian wanting to turn their eyes towards the European Union. Many thought that choice had been made nine years ago with the orange revolution pushing here the country in the western direction.

They're back out on the streets again here because President Yanukovych didn't sign that deal with the European Union that would push them in a westerly direction. More people came out on the streets. The police reacted with some brutality. That brought even more people out on the streets, too, despite the freezing cold temperatures behind me.

But in the last few hours, we've heard a key development here. The president giving off signals suggesting that a new deal could still be signed. We've just heard from the E.U., they're not taking Ukraine seriously at all. They're not getting the commitment to the signals they need and they halting the talks on that.

Just after that, U.S. senator, John McCain, stood behind me, addressed this large crowd. U.S. embassy saying, perhaps, 200,000 people turning up and he said America is with you, and Ukraine, your future lies in your own hands but it lies with Europe. So, key U.S. big stepping into the fray here. It must have been weeks of standoffs in the streets, Candy.

CROWLEY: So, what comes next? More demonstrations in the streets? I mean, what can happen from here?

WALSH: There's two things to watch in the days ahead. Tuesday, Viktor Yanukovych, the president goes to Moscow. Now, that's where he may make signals about getting closer towards the customs union deal. The Russians want him to sign. That's going to really anger what crowds are left on the streets. The second thing, too, though, in the last few days, we've started seeing pro-government demonstrations cropping up around the capital.

Many of the protesters busted in from around the country to express their support for Viktor Yanukovych, the president. Obviously, many people in the east worry that if they lose friendship with Russia, that could damage the heavy industry out there, too. One major concern was one protest was about 200 meters down that way, extraordinarily close to the anti-government demonstrations, tense moments many feared.

Then, that protest has gone home. They've moved to other parts of the city, but still, rival protests in the heart of Kiev after weeks. The standoff still continuing and no real leader, that's the important point, Candy. No real leader for the opposition behind me standing forward and taking negotiations in hand. So, a concern perhaps. This could drift on for weeks or even get out of control as we've seen before, Candy.

CROWLEY: Nick Paton Walsh on the scene for us. Good to see you, Nick. No matter how far away you are. Appreciate it. Earlier, I spoke with Senator John McCain from Kiev where he and Senator Chris Murphy traveled to meet with Ukrainian officials and opposition leaders.

(BEGIN VIDEOTAPE)

CROWLEY: Joining me now, Senator John McCain, who I know, Senator, you have just addressed the crowd of protesters there yourself in Kiev. What is it you're trying to do here?

MCCAIN: Hopefully, what we're trying to do is bring about a peaceful transition here, that would stop the violence, would give the Ukrainian people what they unfortunately have not, with different revolutions sort of taking place, a real legitimate society. This is a grassroots revolution here. It's been peaceful, except for when the government tried to crack down on them, and the government hasn't done that since, but I am praising their ability and their desire to demonstrate peacefully for change that I think they deserve.

CROWLEY: There has been talk about the semi-Cold War undertones to this protest. What do you think Vladimir Putin is trying to accomplish here? What's been his role?

MCCAIN: Well, there's no doubt that Ukraine is of vital importance to Vladimir Putin. One of -- I think it was Kissinger, I'm not sure, said that Russian without Ukraine is an Eastern power; with Ukraine it's a Western power.

This is the beginning of Russia. It was right here in Kiev. So Putin views it as the most highly important, and he has put pressure on Ukrainians. The price of energy, different kinds of activities, and the word is very clear that he has made certain threats. Whether he would carry those through or not, I don't know.

CROWLEY: When you look at the totality of Putin's actions over, say, the last year, things he has done with and against the United States, what is the end game for him? Is this part of it?

MCCAIN: I've watched him become more and more assertive in his desire as an old KGB apparatchik to restore the near-abroad. He's put pressure on Moldova, Lithuania, Estonia, Latvia, all of the so-called near-abroad. And of course, Ukraine is the crown jewel. And his efforts here, including keeping his naval base in Sevastopol, has been part of it. So there's no doubt that he is very much interested in this sphere of influence.

As far as his other activities are concerned, you know, as we work with the Russians to remove the chemical weapons, there are flights of aircraft that are landing in Damascus as we speak, with conventional weapons that are slaughtering Syrians, which is something that I just find appalling.

So I think he is assertive. I think that he is now a player in the Middle East, which he has not been since 1973 when he was thrown out by -- when the Russians were thrown out by Saddat. And I think he's realizing, thanks to our weakness, some of his ambitions. CROWLEY: We should tell people the noise that they're hearing right now are the demonstrations that continue to go on.

Let me ask you this about the U.S. role. I know that you have wanted of the administration perhaps to consider sanctions, something to help boost the anti-government protesters. Question to you is, while we're trying to work on so many things with the Russians, for instance with Iran and in Syria, is this really a good time for the U.S. to be taking on Russia?

MCCAIN: Well, I don't think that we would be taking on Russia. And by the way, I am very pleased with Secretary Kerry's statement, our deputy secretary, Victoria Nuland, who was here. Look, these people love the United States of America, they love freedom, and I don't think you could view this as anything but our traditional support for people who want free and democratic society.

We're not talking about military action. We're not talking about blockades. We're talking about the possibility of sanctions if they continue to brutally repress their people. That would require some action on our part, just because that's what the United States of America is all about.

And by the way, there are estimates around 200,000 to 300,000 people are singing in the background that I hope you can hear.

CROWLEY: We can indeed. I want to turn you to Iran right now and the fate of Robert Levinson. Reported this week in several media outlets that he was, indeed, on a mission for the CIA in Iran. He's been missing for about seven years. Haven't heard anything since 2011 from him.

We're going to read you a part of the statement from the Levinson family, which said "the U.S. government has failed to make saving this good man's life the priority it should be." Is that true?

MCCAIN: I am confident that we are doing everything that we can, probably under very difficult circumstances. And by the way, this should and the other Americans who have -- in Iranian custody should affect our relations with them.

But, frankly, what disturbs me is apparently they did not tell the truth to the Congress. The CIA did not tell the truth to the American Congress about Mr. Levinson. If that's true, then you put this on top of things that our intelligence committees didn't know about other activities, which have been revealed by Snowden -- maybe it means that we should be examining the oversight role of Congress over our different intelligence agencies.

CROWLEY: Do you think the government of Iran knows the fate of Mr. Levinson?

MCCAIN: Oh, I'm sure they do. I don't think there's any doubt about that.

CROWLEY: And do you -- just your gut feeling, following this, knowing about this, do you feel Levinson is dead?

MCCAIN: I don't know, Candy. I know I saw that picture that everybody is seeing. The Iranians are known for their brutality. But we have to keep our hopes and efforts alive for the sake of him -- for his sake and that of his family.

CROWLEY: After the secretary of state came up to Capitol Hill this week to try to persuade you all not to vote for sanctions which would go against Iran that would take place in six months if there's no deal with Iran about its nuclear ambitions, you said that -- I mean, basically called the secretary of state a liar. You said it just doesn't jibe with the facts.

First, do you think that was purposeful, and second, do you think the Senate will pass that bill?

MCCAIN: I think that it's very likely that we could have a sanctions bill, which would take effect at the end of six months if there is no result in the negotiations, is I think what it would be.

As far as the information, it's just a disagreement. It's not that the secretary of state is not telling the truth. It's just his view of the facts are very different from mine.

For example, he thinks that the agreement states that basically the Iranians maintain the right to enrich. I don't think that that should be the case after their lying and cheating and concealing for all of these years. And there's many other aspects of it. The centrifuges keep spinning, the -- there can still be quote, construction around the facility at Arak. So we are now pausing when they are continuing -- we're easing sanctions while they're continuing a lot of their activities.

CROWLEY: Let me quickly turn you to a couple of other stories. North Korea, I guess, because it is so isolated and we seem to know so little about it, you have seen the stories that the uncle of Kim Jong- un has been executed, and this started off this whole debate on whether that means that Kim is consolidating his power, or if he's losing it. Because this was one of his closest advisers, his uncle. What do you make of that?

MCCAIN: I think it's very dangerous. I think this young man is dangerous. You know, we know that he had began work again on a nuclear reactor, the Yongbyon reactor. We know that he has closed down the facility that South Korea was using, a manufacturing facility, then reopened it. It's very aberrational behavior. This must be a huge embarrassment for China.

The uncle that he just executed was really the interlocutor with China, the one who maintained the relations and was a very powerful voice, I am told, for some maturity.

I think it's very obvious this young man is capable of some very aberrational behavior, and given the toys that he has, I think it's very dangerous. And you would think that the Chinese would understand that as well. They've got to rein this young man in, and they can. CROWLEY: And one of the things that we noticed this week, of course, was now that famous handshake at the memorial service for Nelson Mandela between President Obama and Raul Castro of Cuba. You likened this to the handshake between Neville Chamberlain and Adolf Hitler, that sort of pacifist imagery. Do you regret that statement?

MCCAIN: Oh, I think it was gross exaggeration. But have no doubt that that is of great propaganda value for the Cuban government, which is oppressive, repressive. Continues to jail dissidents and continues to be one of the -- probably easily the most repressive government in our hemisphere. I don't think you should shake hands with someone who continues to violate his own country's human rights. It happened. But it is what it is. And I'm sure that Mr. Castro appreciated it.

CROWLEY: But to liken the president to Neville Chamberlain, though, seems -- did you think in retrospect, it was over the top?

MCCAIN: I'm sure it was an exaggeration, Candy. If you want me to plead guilty here on CNN, guilty.

CROWLEY: OK.

And finally, are you going to vote for the compromised budget bill, and whether yes or no, do you ultimately think it will pass the Senate?

MCCAIN: I hope it will pass the Senate. I'll do anything, not anything, but we must not shut down the government again. We can't do that to the people of this country and my state.

Second of all, Carl Levin, chairman of the Senate Armed Services Committee, has pledged to us that we will review this provision concerning military retirement, and military leaders I have talked to have said because this gives them relief from the harsh effects of sequestration, that they are supportive of this legislation. I wish that provision wasn't in there. But to shut down the government again I think is an unacceptable act to inflict on the American people.

CROWLEY: So just to nail this down, assuming that this budget package stays the same, you will vote for it?

MCCAIN: Yes.

CROWLEY: OK. Senator John McCain, we did a tour around the globe. I really appreciate your being available to us out of Kiev, of all places. So good to see you. Come back home soon. MCCAIN: Thank you. And I'm glad you found me guilty.

CROWLEY: Thanks.

(END VIDEOTAPE)

CROWLEY: Ahead, the House passes a budget deal with bipartisan support. And John Boehner lashes out at conservative groups who criticize it.

(BEGIN VIDEO CLIP)

REP. JOHN BOEHNER, (R) HOUSE SPEAKER: They're using our members and they're using the American people for their own goals. This is ridiculous. Listen, if you're for more deficit reduction, you're for this agreement.

(END VIDEO CLIP)

CROWLEY: Is the deal the right way out of the fiscal mess? That's next.

(COMMERCIAL BREAK)

CROWLEY: Joining me now, Peter Orszag, former director of the Congressional Budget Office and director of the Office of Management and Budget under President Obama and Douglas Holtz-Eakin, former director of the CBO during the Bush administration. Gentlemen, welcome. So, we get this budget deal. Can we all sort of stipulate at the top that this was more driven by politics than policy? They needed to have a budget deal.

DOUGLAS HOLTZ-EAKIN, FORMER DIRECTOR, CONGRESSIONAL BUDGET OFFICE: So stipulated.

CROWLEY: So stipulated. OK.

(LAUGHTER)

CROWLEY: So, when you look at this budget, what is right with it?

PETER ORSZAG, FORMER DIRECTOR, CONGRESSIONAL BUDGET OFFICE: Well, I think what's right with it is it gets the basic construct of what we should be doing correct, which is we should do a little bit less deficit reduction today and a little bit more out over time. That's what this does. So, that's a good thing.

I think the most important part of this deal is it just for the first time in several years, signals that maybe Washington won't be so dysfunctional for a period of 12 to 14 months and will let the economy gain some momentum.

CROWLEY: Such an optimist.

HOLTZ-EAKIN: I think there are three things. Number one, I'm going to agree with Peter, this is addition by subtraction. You don't shut the government. You pay the penalty that comes to that. You don't scare my consumers and hurt the economy. That's a big and an important move. Second is, I don't care if you're a big defense or small defense person. It makes no sense to cut up by $19 billion in January then turn around for $23 billion back in over the next two years. That's pointless.

So, it fixes that. And then, the third is, it changes the focus, not in a dramatic way, but in a tiny way from the annual spending by Congress to the permanent programs that are really driving the spending and the budget problems. That's a step in the right direction.

CROWLEY: So, in other words, to deal with Medicare, to deal with Medicaid, to deal with Social Security which many people say that's what's really driving our long-term problems. They've now sort of put aside the short term problems which is what's the budget going to be for the next year and have room in their schedules to deal with the long-term problems.

HOLTZ-EAKIN: Absolutely. And among those long-term problems are pensions. They didn't take on Social Security. The largest and most important pension program, but they touched some of the others in little ways and it's a step in the right direction.

ORSZAG: Well, the big news and that the rest of that budget is Medicare costs have slowed down dramatically. In fact, the first two months of this fiscal year, Medicare costs were down even in nominal terms relative to the previous year. We have a revolution going on in the health sector that could, if it's continued, have massive consequences.

And everything you think you know about the long-term fiscal gap would be wrong if this were to continue.

CROWLEY: And that is the result of the lowering of Medicare costs.

HOLTZ-EAKIN: Multiple things.

ORSZAG: I think the biggest thing is the expectations that we're moving away from fee for service payment. And most hospital executives think we're moving quickly. The key is we need to realize those expectations or everything that people are doing in advance of that shift would be dropped.

CROWLEY: Unless, of course, it turns out --

(CROSSTALK)

HOLTZ-EAKIN: Peter said were if, if is the key here. We don't know yet. And we can't fully diagnose what's going on. It's happened and it's a cause for hope. No more.

CROWLEY: Let me get back to one of the things, I think, both of you did agree on and that is that this is a good signal for the business community. We are told prompts like hey, we've got a plan. You don't have to lay awake at night trying to figure out what the government is going to do to screw up your daily life.

We've got the plan. The idea being, I think, that businesses that have been sitting on huge amounts of money will not go OK -- let's hire people.

HOLTZ-EAKIN: Not yet. This is good. As I said, this doesn't get in the way. But there are some things out there that could finish this off and would make it much more powerful. Immigration reform is not yet complete. Speaker Boehner said he's going to take this up in the house. He's going to lead that effort. That would be a good thing to get done. That's a permanent reform that changes the landscape.

Tax reform is the same way. Permanent change, give stability, allows our corporations to compete around the world. We need to get those things done. That's what I'd look for presidential leadership on in 2014. If we get those, we'll have a big success.

ORSZAG: The other thing we need is to make sure that the debt limit coming up in the spring is a non-event and I hope it will be. But with that, I think we may be in for a decent, not a great, but a decent 2014, because the non-federal sectors of the economy are actually growing at north of three percent. If the federal government just kind of gets out of the way, 2014 will be better than 2013 was.

CROWLEY: So, you think that this will not necessarily say to businesses, we've got our act together a little bit, you can hire people?

HOLTZ-EAKIN: I don't think it's that big a signal yet. And I would hope that we get the kinds of permanent reforms we need. We get the tax reforms, the immigration reforms, the entitlement reforms. That's too much for 2014. But we need to go that direction because, right now, we're growing at about two percent. A little bit faster maybe.

CROWLEY: -- great.

(CROSSTALK)

HOLTZ-EAKIN: That's not fast enough. We still have to grow much faster, take all the workers who've given up, all the workers who've been long-term unemployed and get them back to work. That's the top priority.

CROWLEY: Will this budget deal, by itself, help the economy? Will this filter in to the suburbs somewhere in Pittsburgh?

ORSZAG: A teeny amount. I mean, the bigger thing here again is that I think it gives it a little bit of -- even without immigration reform and other things, a little bit of a sense of oh, we're not going to have yet more drama and debacles out of Washington. So, the biggest thing is not what's contained within the four corners. It's the symbolism. We have not shot ourselves in the foot. CROWLEY: Yey.

HOLTZ-EAKIN: Economic policy by symbolism is not a powerful thing.

(LAUGHTER)

HOLTZ-EAKIN: That's where we are.

CROWLEY: But we've got if. It's better than nothing.

(LAUGHTER)

CROWLEY: So, let me ask you about long-term unemployment benefits, which were part of the stimulus package. We still have a huge long-term unemployment problem. I think you would both agree. If it is not extended and has to be extended by the end of this month, those weeks of unemployment benefits will go away for a lot of people, millions of people.

What's going to be the net effect -- obviously, the net effect on those who won't get their unemployment benefits is one thing and it's hard. What about the net effect on the economy because people always argue oh, no, this is money that goes quickly into the economy, so it's good.

ORSZAG: And I think that, look, the Congressional Budget Office which we both had run found exactly that, that when the economy is weakened, when you need additional demand, which we're still in a situation where that holds, unemployment benefits are one of the most effective ways of getting money into the economy quickly. I think it's unfortunate that we're not extending that program.

HOLTZ-EAKIN: This is a big deal for those on the program. It's not that big a deal for the economy. The CBO reported about 300,000 jobs. That should be a month's worth of jobs. It's probably two months right now. I think what it should focus attention on is the fact that long-term unemployment insurance is now trying to be all things to everybody.

It's supposed to be unemployment insurance, something between jobs, a place to get income support during job training, and now, it's also --

(CROSSTALK)

HOLTZ-EAKIN: This is mission drift. We have a big problem with the training. We have a big problem with unemployment. We need programs that match those problems.

ORSZAG: Well, I agree with that, except that unemployment is still really elevated. And we've always --

(CROSSTALK)

ORSZAG: And the long-term unemployment is almost 2.5 -- I mean, the point is, we have always extended these benefits when unemployment is really elevated both to help the workers themselves and also, look, 300,000 jobs is not nothing. I take it.

CROWLEY: I want to show you all a poll that came out this week. It's an NBC/"Wall Street Journal" poll. The question was, which party does a better job with the economy? What's happened since February is that Democrats have fallen. Right now, only 26 percent responded Democrats do a better job. Thirty-six percent say no, no, it's the Republicans. Who's right for the other people going matter on all there? None of them seem very good at it.

(LAUGHTER)

(CROSSTALK)

ORSZAG: That's the highest share.

CROWLEY: But the fact is, look at that drop. I mean, my question to you is, is that correct? Are Republicans better at dealing with the economy?

HOLTZ-EAKIN: Look, the party in power gets credit or blame for what goes on. This is a terrible recovery. The Democrats are paying for it. They haven't tried anything new in quite a while. So, the message is old and stale. Republicans have tried something new. They made a budget deal and not shutting the government.

CROWLEY: You don't agree, I know.

(LAUGHTER)

ORSZAG: The fact of the matter, again, I come back 2014 I think is likely for the first time in several years to be materially not as strong as we'd like but better than 2013. I think a lot of those numbers are going to change as the reality goes.

CROWLEY: And they do kind of change with the economy as we see. Thank you both so much, Peter Orszag and Doug Holtz-Eakin. We appreciate it.

ORSZAG: Thanks for having us.

CROWLEY: When we return, another tragic school shooting in Colorado even as the families of the Sandy Hook massacre mark the first anniversary of that tragedy. Colorado governor, John Hickenlooper, joins me next.

(COMMERCIAL BREAK)

CROWLEY: Joining me now from outside Arapahoe High School is Colorado governor John Hickenlooper. Governor, thank you for joining us. You had this situation Friday in a school where young gunman entered a high school, shot and critically wounded a young female student and went on to shoot himself. And all in a very short period of time. Can you first start with anything you know about the condition of the high schooler? GOV. JOHN HICKENLOOPER, COLORADO: Well, Claire Davis was a wonderful, wonderful young woman. I went to the hospital, I visited her parents. They're obviously very distraught. She's in critical condition. You know, it's unspeakable.

CROWLEY: It is, governor. And too often you and I have spoken about things like this. Watching this unfold and the information that we've gotten, there are a couple questions that arise. First is, this is a young man who walked into a high school, got into a high school with a machete, a pump shotgun, the ammo strapped to a band across him as well as some Molotov cocktails. He was visibly armed we are told. So correct me if I'm wrong. How does that happen? It seems to me that at the entrances of schools, someone that is visibly armed should not be able to get in.

HICKENLOOPER: Well, this is a large high school. Like many of the large high schools, there are kids coming in and out all the time. They did have a deputy sheriff on the premise. I mean, the moment there was trouble, he was running to the scene. But you know there's a balance. And school administrators and school boards are trying to make a school not be a fortress. They want to be a place for education. I'm sure that's one of the decisions that we're going to be looking at again going down the road with another shooting like this.

CROWLEY: Looking at all the doors, perhaps locking them, obviously more expensive to have people at them all the time. But you're right, many of these big high schools have multiple doors that folks can get into. Let me ask you what more you might know about the motivation of this young man.

HICKENLOOPER: Well, we don't know. There have been reports that maybe he was bullied. I mean, this is really kind of inexplicable that he would for seems like not that big a deal, would come after with the intent to kill the teacher that had demoted, the librarian. I can't even fathom it. But, you know, after last year at our legislative session, we put in place over $20 million just to dramatically spend mental health, 24 hours, seven day a week call-in centers and mobile crisis centers to train people like they do in CPR (INAUDIBLE) how to recognize mental illness when you see it. Get to it quickly. But this kid, by all accounts, wasn't -- didn't exhibit the warning signs of mental illness. Obviously, it's hard to fathom why he would have done this without being somewhat crazy. But bullying does seem to be -- a number of these kids were bullied at some point. We have programs now throughout the state, anti-bullying, trying to get kids to deal with that in a more constructive way.

CROWLEY: And let me ask you finally, governor. Any thought that this took place because or in some way was motivated by the one-year anniversary of the shootings in Connecticut?

HICKENLOOPER: Well, you know, our sheriff here, Grayson Robinson, who ironically announced he was going to retire the end of January, had a career of almost 42 years. He's pretty convinced that there's no relationship to it. Again, they've got to do an investigation. They've got to really look into it. But we don't see any connection at this point.

CROWLEY: OK. Governor John Hickenlooper in Colorado, let's meet again in happier times. I appreciate your time.

HICKENLOOPER: Thanks, Candy.

CROWLEY: When we return, John Boehner burns bridges, Chris Christie makes crossing them even harder.

(COMMERCIAL BREAK)

CROWLEY: With me around the table, Dana Milbank, columnist for "The Washington Post," Amy Walter, national editor for "The Cook Political Report," and Ramesh Ponnuru, senior editor for "The National Review." Thank you all.

Let's start with John Boehner. Just because the most interesting part of the budget being passed on the House side is John Boehner coming up and really taking on what we believed to be Tea Party groups and conservatives. Here's part of what he said Thursday.

(BEGIN VIDEO CLIP)

REP. JOHN BOEHNER (R), HOUSE SPEAKER: Just comes to a point when some people step over the line. You know, when you criticize something and you have no idea what you're criticizing it undermines your credibility.

(END VIDEO CLIP)

CROWLEY: Let's just add that John Boehner has been a frequent target of Tea Party groups, conservative talk radio, et cetera. He does seem fed up. We all believe he's been fed up for months. Why now and can he afford for this to be permanent? Like, OK, these people out I don't know want to deal with them.

AMY WALTER, NATIONAL EDITOR, "COOK POLITICAL REPORT": I don't think it is permanent. I think it was a skirmish in a broader war. So I think you can chalk this up to Boehner 1, the others zero. But we have a long way to go and a lot of other issues that are coming forward they're going to be much more controversial. And I think immigration being one of those things. But it's clear that on this issue, Republicans saw that it was a losing fight to go down the pathway of shutting the government down. On immigration, is it going to be easier or harder? I'm going to say it's harder to get Republicans on board because you're not saving the Republican Party in this sense, you're probably helping the Democratic Party at least in the short term by switching in a midterm --

CROWLEY: In a midterm election to switch to the issue of immigration.

DANA MILBANK, COLUMNIST, "THE WASHINGTON POST": Well I've written several obituaries for the Tea Party over the years. They generally turn out to be wrong. But I do think that something has fundamentally changed here. There's no coincidence that there was a poll out this week saying 22 percent of people are -- say they're supportive of what the Tea Party is doing now. And I think John Boehner finally feels there's an opening here. Only 62 Republicans, only a quarter of the House caucus went against him. So these scary groups like Heritage Action and Club for Growth that sort of channel the Tea Party, I think they're beginning to think maybe we can take on these guys. They still have a stranglehold in the primaries, but maybe they can begin to take them on.

CROWLEY: But Ramesh, I mean they can't really afford to lose that enthusiasm and the numbers that -- of people in the Republican Party, a great number in the nation at large when a midterm comes. You need that enthusiasm. So you can't just cut the cord.

RAMESH PONNURU, SENIOR EDITOR, "NATIONAL REVIEW": You need people who are knocking on doors and licking envelopes and all of that. I think what the Republican establishment which has had growing resentment about some of these organizations is going to try to do is say, look, I'm not talking about the Tea Party in general, I'm not talking about conservatives in general, I'm talking about specific groups like the Senate Conservatives Fund, like Freedom Works, like Heritage Action and try to isolate them in that manner.

CROWLEY: Let me move you on because this was another thing that came to the (INAUDIBLE) that happened in September but has become a big deal now. Chris Christie who everyone believes will run for president currently re-elected as the governor of New Jersey turns out in September, suddenly three lanes which led to the George Washington Bridge from New Jersey in a town where the mayor had not endorsed Chris Christie for his reelection, those lanes were suddenly shut for four days, no one seemed to know what happened except for it is true that a high school friend of Christie's was appointed to the board. So the question is, is this a political fight and you know, the national Democrats have jumped all over this because it fits into a storyline.

MILBANK: Well it's a delicious story. And I think the Democrats have been -- we've built -- reporters built Christie up so high, it's time to take him down a couple notches. Now by New Jersey's scandals, traffic on the George Washington Bridge is not actually baring someone on the meadowlands but it does fit quite well with Christie as bully. And, you don't like what I'm doing, I'll fix you, I'm going to shut you down. You're not going to New York today.

WALTER: Well it's a double-edged sword of being in the New York media market. Look Chris Christie gets a lot of benefit by being the governor of New Jersey. If he were the governor of Nebraska, we wouldn't hear much about Chris Christie even with an outsized personality like he has. The fact that he's in New York, which is the backyard of every major media organization definitely helps him in times when he gets to look big and strong, and he's standing up for the victims of Sandy, but also try to get the -

(CROSSTALK)

CROWLEY: Exactly. (INAUDIBLE) to say -- just have legs, as we say, you think in 2016 we'll be talking about a traffic jam?

PONNURU: In a word, no. So it's a headache for him but it's nothing more than that, I think.

CROWLEY: Stick with me. We're going to be right back. Politifact has unveiled the lie of the year, what is it, and who told it? Next.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

BARACK OBAMA, PRESIDENT OF THE UNITED STATES: If you like your health care plan, you can keep your health care plan. There is no doubt that the way I put that forward unequivocally, ended up not being accurate.

(END VIDEO CLIP)

CROWLEY: Things you probably don't want to have happen as you head into, as your party at least heads into an election year as being, you know, the speaker of the lie of the year as PolitiFact describes it. Let me add to this launching in midterm election year a couple of other statistics, something like 70 percent of people believe that the economy will either get worse or stay the same next year.

I want to show you some demographics, the question was which party will do a better job of improving the economy. Republicans ten- point edge but look at women. Women pretty much even between the two parties. Urbanites, (INAUDIBLE) even between the two parties, Hispanics, what is that eight-point -- 12-point lead, right? Yes, 12- point lead. These are all demographics that Republicans have had a hard time attracting. Add all this up for me and tell me about the outcome -- how will the 2014 elections come out?

PONNURU: Look, it doesn't, I think, necessarily mean that Hispanics and urbanites and women are going to go Republican in the next election but it could mean that the Democratic base going into the midterm election is demoralized, doesn't show up to vote and that would contribute if that's what happens to a wave election for Republicans.

WALTER: The thing about the health care issue though is that also in the NBC/Wall Street Journal Poll the question was asked, what is the lens by which you viewed the president thus far and it's health care overwhelmingly? So what voters are doing is they're looking at the disastrous rollout of the health care bill and that's also coloring their views of everything. The president's credibility has taken a big hit, that hasn't come back yet. And I think that's also impacting the way that they see the president and his party as their ability to actually do something positive for the economy. So if you're the Republican Party right now, of course, you want to be able to talk about the economy, and how you're going to make things better but at the same time, by focusing on the problems with Obamacare you're reinforcing the concerns of Americans that is Democratic controlled -- or the White House it can't handle anything.

CROWLEY: And Dana, we saw this week the White House pushback a couple more deadlines for the Affordable Care Act. That's not reassuring.

MILBANK: No not at all. Now if you were to read the numbers in October of next year we could safely say this is going to be a disaster for the Democrats. But you know, it was just a month or two ago when we were predicting a disaster for Republicans because of the shutdown (INAUDIBLE). These things can swing back and forth. This is a low point, we don't know if it's the lowest but it is a very low point in the Obama administration. It doesn't help to have neutral groups calling you, the liar of the year. Although Ted Cruz says he doesn't believe those fact checkers so I guess the president has good company.

CROWLEY: Has an ally.

WALTER: But the problem for the president is it's not likely that this is going to go away. And that's the issue. It's not just the website. It's his credibility that's taken a hit. And every time there's someone who loses access to their doctor who currently has health care, loses access to the doctor that they loved, loses the free benefits that they were getting from their current health care, right? Now they have to pay more, they have to do something else it's going to bring that PolitiFact lie thing right back again. It's going to be in every single ad that you will see in 2014 linked to every single Democrat who voted for it and quite frankly for those who weren't even there when it was voted on...

PONNURU: And even in previous low points the president benefited from high personal favorability rating, he's taken a hit to honesty, trustworthiness. That's hard to come back (INAUDIBLE).

(CROSSTALK)

CROWLEY: Would you agree, Dana, as a final question that this election has this framework, for Democrats it's, Republicans obstruct everything, they get in our way, they shut down the government, they don't care about you. For Democrats it's, you want big government, let's take a look at health care.

MILBANK: That's going to be how they're pitching it but that's all background noise compared to how people out there are feeling about their jobs next November. The numbers are getting better, clearly from what you've indicated there (ph), people don't feel it yet but they've got, you know, 10, 11 months to start -- to start feeling that. So that's what will drive it.

CROWLEY: Dana, Amy, Ramesh, thank you for joining us. And thank you all for watching STATE OF THE UNION. I'm Candy Crowley in Washington. If you missed any part of today's show, you can find us on iTunes.

Fareed Zakaria, GPS, is next.