CQ Transcriptswire

SPEAKERS: JOHN KING, HOST

SEN. RICHARD G. LUGAR, R-IND.

SEN. JACK REED, D-R.I.

PATRICK BYRNE, CHAIRMAN & CEO, OVERSTOCK.COM

TONY BLAIR, QUARTET REPRESENTATIVE

HOWARD KURTZ, CNN ANCHOR

BILL PRESS, RADIO TALK SHOW HOST

JIM GERAGHTY, NATIONAL REVIEW

CHRYSTIA FREELAND, FINANCIAL TIMES

CHARLIE GASPARINO, CNBC

DONNA BRAZILE, CNN CONTRIBUTOR

ED ROLLINS, CNN CONTRIBUTOR

REP. DAVID R. OBEY, D-WIS.

[*] KING: I’m John King and this is STATE OF THE UNION.

(BEGIN VIDEOTAPE)

KING (voice-over): President Obama prepares to announce his new strategy for Afghanistan.

PRESIDENT BARACK OBAMA: It is my intention to finish the job.

KING: Two influential senators weigh in on troop levels, the timetable, and the cost of war: Democrat Jack Reed of Rhode Island and Republican Richard Lugar of Indiana.

BENJAMIN NETANYAHU, ISRAELI PRIME MINISTER: Now is the time to move forward towards peace.

KING: A rare hint of movement in the search for Middle East peace. We’ll check in with special envoy Tony Blair live from the region.

And in our “American Dispatch,” we travel to Seattle to see how, despite scarce resources, one program tries to get homeless teens off the streets and on to a better path.

This is the STATE OF THE UNION report for Sunday, November 29th.

(END VIDEOTAPE)

KING: Good morning. Hope you all had a great Thanksgiving.

President Obama this week will unveil his long-awaited new strategy for Afghanistan. Administration sources suggest it includes a significant boost in U.S. troop levels. The official announcement is planned in prime-time Tuesday night at the West Point Military Academy before an audience of Army cadets and military officials.

The bigger audience, of course, is a skeptical American public, which is divided on the question of whether sending more troops is a good idea. And the toughest sell for the president is within his own Democratic Party. Here to discuss the president’s Afghanistan dilemma are two leading voices on foreign and military affairs. Senator Richard Lugar of Indiana is the top Republican on the Senate Foreign Relations Committee. And in Wilmington, Delaware, Democratic Senator Jack Reed , a member of the Senate Armed Services Committee and himself a West Point graduate.

Senators, thanks for being with us. Let me start just with the basics. And “The Washington Post” lays out some of it today in this story: “Newly Deployed Marines to Target Taliban Bastion,” 30,000 to 35,000 new troops is what we expect, about 9,000 Marines will go first into the Helmand province, where -- has had the heaviest fighting right there.

Senator Lugar, let me start with you, does the president have it right here, 30,000 to 35,000 troops over the next year to 18 months?

LUGAR: Well, the president needs to start by outlining the war we are in. Now by that, I mean, the war not against the Taliban, Al Qaida, but what is, at least, the objective of continuing in Afghanistan or in any place?

That is basic because this has to be a confident speech in which the president recognizes we’re at war. the American public recognizes that. Our friends and foes around the world see the resolution. Having said that, then the president has to outline why Afghanistan is important. Why -- now, many Americans say, well, of course it’s important, this is where the Al Qaida did their encampment, protected by the Taliban, can’t go through that again.

But next door in Pakistan there are also Taliban battle going on there. The president has to mention Pakistan. What is the implication of that war there, and Pakistan itself? Or General Petraeus’s survey of the 20 parts of the Central Command, the 20 nations in which there may be other people from Al Qaida, how do we deal with all of that?

In other words, Afghanistan is crucial and we’ve been concentrating on the number of troops and so forth. Now the president will need to outline that and he’s wanting to do so with confidence that this is not a few troops here, a few troops there, a reevaluation each time through. Likewise, he’ll have to talk about, can the Afghans to 134,000 people on their own to protect what they are doing? Will the allies from NATO come in? How confident we are of that, all of that in a comprehensive speech has to be a part of this picture.

KING: Well, Senator Reed, I want to get to some of the specifics. Senator Lugar teed some of them up right there. But on the basics, are you ready to support 30,000 to 35,000 more troops over the next 12 to 18 months and maybe even more a year from now if General McChrystal comes back and says, Mr. President, things are going well, but I need a little more?

REED: Well, as Senator Lugar said, the president has to speak to the American people, remind them why we’re there, and also lay out a strategy, not just the reflexive response to a recommendation, but a strategy that involves protecting the homeland from Al Qaida.

And that involves a presence in Afghanistan. It involves being influential in Pakistan. It involves having a combination of intelligence, counterterrorism, and counterinsurgency operations, all of these things.

I think the president has taken appropriately the time to study this carefully. I think his recommendation will be sound. But I think, more importantly, the president will say, not only there’s an increase in troops, but lay it out in the context of how this will allow us to shift the burden to the Afghani forces, to build them up as we go forward.

And the key element here is not just more troops, the key element is shifting the operations to the Afghanis. And if that can be done, then I would support the president.

KING: Well, we’ll talk about in a second. First, I want you to both assess the difficult politics for the president. I want to show some polling numbers. If you ask the American people, what should the president do? They’re pretty divided. Begin to withdraw, 39 percent. Increase by about 40,000 troops, 37 percent. Increase by less than 40,000 troops, 10 percent. Keep it the same, 9 percent.

But here’s the most telling poll numbers. If you look at the recent “USA Today”/Gallup poll, how is the president handling Afghanistan? A 20-point drop in his approval rating between July and now, and a 20 percent increase in the disapproval rate.

So, Senator Lugar, to you first, he took a little more than three months from General McChrystal’s recommendation to the speech he will give Tuesday night. Some have said that’s deliberative, thoughtful process. Others, some of your conservative friends, have said it is dithering.

Has the president paid a price, a political price, for waiting?

LUGAR: Perhaps. but at this point, that’s beside the point. The president is in a moment in which he really has to regain the approval of the American people, as well as people around the world, that we are on the right course. This is why this speech and the plan is so important.

So I’ll give the president credit for taking time. I think the dilemma for the president, beyond those we’ve already talked about, is that the war is costly. Additional troops will cost a great deal more, by all estimates. We have a...

KING: Some say $1 million per troop per year.

LUGAR: Precisely. And we’ve really not heard good calculations of how much cost the Afghan troops will be for us. In other words, are we as American taxpayers going to pay for this increase to 134,000, even if the Afghans were able to do that in one year, as opposed to four, which used to be the old plan? We’re going to have to have a serious talk about budget and about the $1 trillion deficit we are in now and will continue to be in. And if we were talking about several years of time, how many more years beyond that? What is the capacity of our country to finance this particular type of situation as opposed to other ways of fighting Al Qaida and the war against terror?

KING: Senator Reed, does the president have to say, I need your trust, citizens, I need your support financially, and here’s the end game? Does he need to draw a date on a calendar out there and say, this is when we get out of Afghanistan? And can he do that right now?

REED: I think he has to make a speech that shows that all of our efforts are pointed to our reduced presence in Afghanistan. But I think he has to also indicate again and again how critical this is to our national security.

The elements, the Al Qaida elements that attacked us on 9/11 are still on the Afghan/Pakistan border. We still have to keep up the pressure. But I think he has to make it very clear that this is not an unending responsibility of the United States without limit.

Senator Lugar pointed out the issue of cost. You know, we have over eight years in Iraq and Afghanistan under the Bush administration not paid for any of those military operations. Now that is coming home to reckon in terms of a huge deficit. We have to move forward and support this operation responsibly.

But the president -- I think the key to the president’s response is laying down a strategy, informing the American public of what’s at stake, and I think that when they listen and when they hear, they will be supportive, but it will be a support that has to be continually developed and strengthened going forward.

KING: You’ve both mentioned the cost. Let me ask you, we’re going to talk to Chairman David Obey of the House Appropriations Committee later in the program. He wants a special war surtax, He wants it laid out transparently so the American people know every time they get their tax bill, here’s what goes to the government normally, and here’s the part that’s going to pay for Iraq and Afghanistan. Senator Levin in the Senate has talked about something similar.

Senator Reed, to you first, do you support that? Do you think it should be broken out separately so the American people get a separate bill for the wars in Iraq and Afghanistan, so they fully understand the price tag?

REED: We have to begin to pay for everything we do. We’re engaged in a huge debate on health care and central to that debate is paying for it. And if we’re paying for the health and welfare of the American people, we certainly have to pay for our operations overseas. Whether it’s broken out specifically or not, that is a detail.

I think the important point is that we have to commit not to indefinitely, through deficits, fund these operations, but do it in a reasonable, pragmatic way. KING: Do you support a separate accounting, a separate war surtax?

LUGAR: I believe there will be a separate accounting, but in any event, I think we will have to pay for it. I would just make this suggestion, that in the three weeks of debate we still have ahead of us, we really ought to concentrate in the Congress on the war, on the overall strategy of our country and the cost of it. And we ought to be on the budget. Passing appropriations bills in a proper way.

LUGAR: Now in the course of that, we may wish to break out that. We may wish to discuss higher taxes to pay for it. But we’re not going to do that debating health care and the Senate for three weeks through all sorts of strategies and so forth.

The war is terribly important. Jobs and our economy are terribly important. So this may be an audacious suggestion, but I would suggest we put aside the health care debate until next year, the same way we put cap and trade and climate change and talk now about the essentials, the war and money.

KING: Is your Republican friend making sense, Senator Reed? Should health care be set off to next year?

REED: Absolutely not. I think we’re in the midst of probably the most significant debate and conclusion with legislation that we’ve ever had. And the health care debate is essential to our economic future. There are businesses and individuals each year pay more and more for health care. It has become unaffordable. We have to go ahead and conclude this debate.

To stop now would be stopping on the edge of, I think, significant reform, which is so important for the country. And frankly, it’s ironic, there has -- now under the Bush administration, there was no serious debate about Afghanistan. that was relegated to the sidelines. There was no attempt to pay for it. And suddenly, now, that becomes a critical need that we put aside health care. I don’t think so.

I think we have to push forward. I think the president’s speech will be appropriate. I think the strategy we’ll analyze in the committees and I think we can go forward on both fronts and we have to.

KING: A quick break. The two senators will be back in just a moment. We’ll put to them the question, as the president prepares to send thousands of more U.S. troops to Afghanistan, can his partner in Afghanistan, President Karzai, be trusted? And a reminder that CNN’s coverage of the president’s speech begins Tuesday at 7:00 p.m. Eastern. Please stay with us.

(COMMERCIAL BREAK)

KING: Back with two top senators. Republican Richard Lugar and Democrat Jack Reed . Let’s stay on Afghanistan. You mentioned before the break, Senator Lugar, the goal is to train 134,000 Afghan security forces by next October. That would require 5,000 a month. And yet, just this past month, the Afghani government failed its target by more than 2,000.

Some would say that this is Iraq deja vu. That the United States government keeps saying, we’re going to train them, we’re going to train them, we’re going to train them, and because of problems with the Afghan government, in this case, corruption, people leaving once they get the training, it won’t get done. Do you trust the other side of the equation? Do we have a reliable partner in the Afghan government?

LUGAR: For the moment, we don’t have a reliable partner. And that is a question, clearly, of the building process. If the training occurs, will the government really take hold? We don’t know, frankly. And we know right now, as you say, that the attrition of the forces that are trained as such and the number of people we have to send over to do the training is limited. So that’s a phased-in process, while this acceleration is predicted.

KING: So explain, Senator Reed, to a skeptical American out there who says, if we don’t think we can trust the government, and we need to see, time will tell, to use the cliche, why would you send 30,000 more troops into Afghanistan unless and until you know that President Karzai has his act together this time?

REED: Well, we have to, I believe, increase our forces, first, our trainers, which is consensus to do that. But also some of our brigade combat teams to give us the time and also to seize the initiative from the Taliban so that the Karzai administration can begin to carry through some of its commitments. They made commitments left and right. Now they have to carry those commitments through.

The military forces there, according to our troops, are actually very good fighters. But we need more of those units, more of those small unites. It will take some time. But the effort here really is to stabilize the situation and insist that the government of Afghanistan begin to perform. And I think the other effort is begin to, at the local level, have effective governance.

And that means good governors. That means governors that won’t be interfered with and disrupted from the center. That is something we’re going to have to insist upon. And part of our commitment and part of the president’s speech will be to communicate the fact that we have these understandings and that they’re enforceable.

KING: The enforceable part is what I want to follow up on. Will the Congress insist -- as a senator, Barack Obama was for benchmarks in Iraq. As president, executives often think a little differently. Will the Congress want enforceable benchmarks that the Afghan government must meet or else? Will there be an “or else” in terms of cutting off the funding and bring home the troops?

To you, Senator Lugar, first. LUGAR: Well, if we have that kind of a speech, then we have a lack of confidence to begin with. Because there is not a great deal of confidence in the ability of the Afghan government to perform. Now we’re going to have to get this straight. We are in Afghanistan and President Karzai said this again this week, for our own interests.

Now we said, listen, Mr. Karzai, you know, for yours too. not necessarily. Karzai and others may think Afghanistan has done very well without foreigners for a long while. If we have contingency plans, all sorts of benchmarks, at which point the president says, all right, it’s all over because they didn’t perform and so forth, we’re off to a very jagged situation.

KING: Well, I want you to actually listen, Senator, before you jump in. I want you to listen, President Karzai did an interview with Margaret Warner of “The Newshour” a couple weeks ago. And I want you to listen Senator Lugar’s point about why is the United States there and does he trust the United States?

(BEGIN VIDEO CLIP FROM “THE NEWSHOUR”)

MARGARET WARNER, PBS ANCHOR: Do you have any doubts about the U.S. commitment to Afghanistan?

HAMID KARZAI, AFGHANI PRESIDENT: Well, Afghanistan was abandoned after the war with the Soviet Union. Not only abandoned, but left to the mercy of the neighbors in a very cruel way. We keep hearing assurances from the United States, but we are like, once bitten, twice shy. We have to watch and be careful while we trust.

(END VIDEO CLIP)

KING: Senator Reed, you listen to that, and how -- we’ll watch and see whether or not we trust the United States. If you pick up “The Washington Post” tomorrow, there are Marine officers quoted on the record saying they’re not sure President Karzai will crack down on the opium trade because they believe some of his buddies are involved in it.

Again, to a skeptical American out there, if President Karzai is saying things like that about once bitten, twice -- don’t trust the United States, should we send more troops?

REED: Well, John, first of all, it’s in his self-interest and his interests of survival that there be a coherent effort, not just by the United States, and NATO.

REED: Again, we sometimes forget this is not just an American operation. General McChrystal is a NATO commander also.

But it’s in his self-interest and the interests of his country that there be collaboration. One of the things I heard -- and I was in Afghanistan on the ground in September -- is that the people of Afghanistan are offended about the corruption; they’re offended about the drug trade. It’s his people, not just the people in the United States.

He has to begin to understand that; then, in his own self- interest, not doing us a favor, has to operate for an effective government.

I think that point should be made time and time again with President Karzai and I hope he recognizes that. It’s not just in our interest. In fact, fundamentally, it’s in his interest. If we cannot maintain a suitable presence in Afghanistan, then the prospect for successful government by the Afghani people will be diminished substantially.

KING: We talked about the benchmarks for the Afghan government. They must end corruption. They must do more about the drug trade. They must improve their own security forces.

Senator Lugar, what is your benchmark for the counterinsurgency strategy?

How will you know this is succeeding or failing? What’s the test?

LUGAR: Well, many press accounts have said, in Helmand province, the first attempt will be made by several thousand additional troops coming in there -- and the capital, we’ve not been able to have success. So there would be at least some initial idea whether Helmand itself works out better, and furthermore, whether, after we chase the Taliban out of there, whether people are willing to take hold or whether they’re, over their shoulder, saying, you know, “You Americans will be gone and they’ll be back, and therefore, we’re going to be very tentative about this.”

KING: All right. Senator Reed, your test for General McChrystal’s strategy, not the Afghan government?

REED: Well, a test for the McChrystal strategy is if they can essentially stabilize, particularly the capitals in Helmand province and in Kandahar, and also if they can begin to see a defection from the Taliban ranks of those nonideological fighters.

And the ultimate test is that there are villages able to protect themselves, with the help of the Afghani national army and, to a degree, the United States and NATO forces, and that you’re beginning to see a revival of civic activity, economic activity.

That’s the final test, a return to what would be, sort of, normalcy. And that -- that will take a while, but it will be at the local village level.

KING: There’s a new report from Democrats on the committee on which you are the ranking Republican member, the Foreign Relations Committee, and it looks back at time at Tora Bora and the early days of the war in Afghanistan under the Bush administration.

There have been long rumors that Osama bin Laden was allowed to escape or that he was there and he was not grasped. Here’s what the Democratic report from the Foreign Relations Committee staff says. “The decisions that opened the door for his escape to Pakistan allowed bin Laden to emerge as a potent symbolic figure who continues to attract a steady flow of money and inspire fanatics worldwide. The failure to finish the job represents a lost opportunity that forever altered the course of the conflict in Afghanistan and the future of international terrorism.”

This report, Senator Lugar, prepared by the Democratic staff for the Democratic chairman of your committee -- is it just looking back to learn a history lesson, or is it relevant at the moment?

LUGAR: Well, perhaps both. But at the same time, it does serve as a convenient way for, perhaps, Democrats to say once again, there’s another failing of the past administration; all the problems have accumulated.

I think we have to accept that there were many failings. But the problem right now is, what do we do presently? What will the president’s plan be? How much confidence do we have in this president and this plan?

KING: Is that the way to look at it, Senator Reed, that, yes, there were many mistakes under the Bush administration, but at the moment, now and certainly after the speech Tuesday night, this is President Obama’s war?

REED: Well, the president is confronting the culmination of decisions that were made eight years and -- or more before. That’s made the situation much more difficult for him.

The escape of bin Laden is -- is an interesting comment, but the real strategic misjudgment, I think, was shifting our focus away from Afghanistan and Pakistan and underresourcing it for seven years while the Bush administration pursued a policy in Iraq.

Now we’re living with the consequences of that, in terms of the population of Afghanistan that is much more wary of us because we didn’t deliver the promises they thought were forthcoming in 2002 and 2003. You’ve got a renewed Taliban. You have a situation where Al Qaida has reconstituted itself. You have Pakistan, which is even more unstable today than it was in the past.

All these things have developed over the last several years. But Senator Lugar is right. The question now is what to do about it. Be informed by the past, make judgments based upon the experience of the past, but we have to look forward and we have to -- and the president has to propose a strategy that will carry us forward and that will ensure the security and safety of the United States.

KING: Well, Senator Lugar, then look forward. In a best-case scenario, what should the American people be prepared for? How long -- five more years, 10 more years, 20 years more in Afghanistan?

LUGAR: The American people will not sustain a war in Afghanistan for five years or 10 years, in my judgment. Below that, we do have troops in many countries still sustaining efforts, so we’re not in a full-scale war, but I -- this is why I get back to the budget.

We’re going to have to take a look at what our own resources are, what our own troop levels are, whether we can continue to recruit enough people and what other things are occurring in the world at the same time. These may not be the only wars America has to face. And that’s an important factor, to have at least some reserve situation.

KING: So Senator Reed, five years, 10 years? Do you have a sense?

Will, 10 years down the road, there be 30,000 U.S. troops still in Iraq and 25,000 or 30,000 still in Afghanistan?

REED: What we have to have is a continually decreasing military presence in Afghanistan. I don’t think there’s going to be an overnight withdrawal of American forces, but unless we’re on a trajectory in which our troop levels come down, the ability of the American public to support it and financially to support it is questionable.

But I think that has to be and will be inherent in the president’s speech on Tuesday evening at West Point.

KING: Senator Jack Reed , Democrat of Rhode Island, Senator Richard Lugar, Republican of Indiana, gentlemen, thank you both for your time today, very thoughtful discussion.

Up next, we’ll turn to the Middle East, where some see a possible -- possible sign of movement in the effort to revive the Israeli- Palestinian peace talks. The former British prime minister Tony Blair, now a special envoy to the region, takes us inside this delicate diplomacy. Please stay with us.

(COMMERCIAL BREAK)

KING: I’m John King and this is STATE OF THE UNION. Here are stories breaking this Sunday morning. President Obama is preparing to unveil a new strategy for Afghanistan that’s expected to include a substantial boost in troop levels. The president will announce the plan during his speech Tuesday night at the West Point Military Academy. A defense official tells CNN the Pentagon is preparing for an increase of 34,000 troops. CNN, of course, will carry that speech live.

Investigators in Russia are calling a deadly train derailment an act of terror. At least 26 people were killed and another 100 injured when an explosion caused several cars to jump the tracks Friday night. Several passengers are still unaccounted for. Investigators say they found elements of an explosive device, including a crater under the tracks where the train derailed.

Investigators in Florida are hoping to interview Tiger Woods and his wife today about the golfing great’s mysterious car accident. Two previous attempts to meet with them have failed. Woods was treated for minor injuries when he crashed his SUV into a fire hydrant and then a tree outside his Orlando area home early Friday morning.

Those are your top stories here on STATE OF THE UNION. Up next, we’ll go live to Jerusalem where special Mideast envoy Tony Blair is standing by.

(COMMERCIAL BREAK)

KING: After months of stalemate, perhaps a bit of movement in the Israeli/Palestinian dispute. Israeli Prime Minister Benjamin Netanyahu has announced a 10-month freeze of Jewish settlements in the West Bank. But Palestinian officials say the moratorium doesn’t go far enough, because it doesn’t include a halt in construction in East Jerusalem.

So is there an opening for progress or just more finger-pointing and frustration? Our next guest has unique insight. Tony Blair is the former British prime minister and now special envoy to the Middle East for the United States, Russia, the European Union, and the United Nations.

Mr. Prime Minister, thank you for joining us. Let’s start with the basic question, will the Israelis and the Palestinians sit down or will they continue just to talk about sitting down? BLAIR: Well, I hope they sit down because it’s absolutely essential that we get a political negotiation under way and get it under way as quickly as possible. Because there are things, positive things happening on the ground right at the moment on the West Bank.

The Palestinian economy is growing. There are check points being opened or removed. There’s a lot of bustle and activity on the West Bank. In Gaza, let us hope we get the release of the kidnapped Israeli soldier and then start to get some opening up of Gaza to the outside world.

So there are positive things that are happening, but it needs an overarching political negotiation in order to succeed.

KING: Some positive things, as you know, but what is missing, and you know this all too well, is trust. Prime Minister Netanyahu is not trusted by the Palestinians, and even after this concession on his part, which caused him a bit of grief in his own political support, but Prime Minister Netanyahu has made this concession, but the Palestinian prime minister, Mr. Fayyad, says it’s not enough.

He says, what has changed to make something that was not acceptable a week or 10 days ago acceptable now? The exclusion of Jerusalem is a very serious problem for us.

Should the Palestinians, in your view, sit down, even though it’s not perfect? Is it time to sit down and just say, look, you’re not going to get everything you want entering negotiations? Just sit down and negotiate?

BLAIR: Well, I’ve just spent some time with the Israeli prime minister, Mr. Netanyahu, and I think he is genuine and serious in wanting the negotiation to start. I think from the Palestinian point of view, they need to know that this negotiation is going to be credible. In other words, it’s not just going to be sitting down and talking, but it is genuinely going to lead us towards the two-state solution that everyone wants to see.

So the debate at the moment is, how do we create the context in which people think this negotiation is serious, that it will lead to a viable Palestinian state, one that is a secure neighbor for Israel, but also a Palestinian state in which the Palestinians have the freedom to run their own territory?

KING: Assess the politics of the moment. Some would look at these two governments and say Prime Minister Netanyahu cannot afford to give up much or he’ll lose his coalition. President Abbas has said, enough, I’m frustrated with this, I’m not going to stay in power much longer.

So you see two weak governments, some would say, there is no way they could get anything done, and others would say, that’s the perfect opportunity. How do you see it?

BLAIR: Because I’m more naturally optimistic, I see it as an opportunity. I also think both of them have got one great source of strength that’s not to be underestimated here. I mean, I spend a lot of time in Israel and in the Palestinian territory. There is no doubt in my mind at all that a majority of people, both Israelis and Palestinians, want to see a two-state solution.

Their doubt over the past years has been whether it’s possible to have it, but their commitment in principle to getting it has not diminished. So our task, if you like, is to set the context in which they think this can be done. Now I’ve spent time talking to the leadership of both sides.

Whatever doubts they have about each other’s good faith from time to time, I mean, I don’t doubt the good faith of either. I think they genuinely want to find a way through, but they come at it from completely opposite sides. Israel wants to know that its security is going to be protected, while on the West Bank the Palestinian Authority have made real strides forward in security.

I mean, I can go to cities on the West Bank now, Jenin and Nablus and Hebron and Qalqilya and Jericho, places that two years ago would have had quite a different security setting, now with security greatly improved. So there are things that the Palestinians are doing, actually, to help meet that Israeli concern.

On the other side, for the Palestinians, what they need to know is that if they sit down and talk so the Israelis, it will lead, genuinely, to an independent Palestinian state. And what is it that they want to know? They want to know that the weight of occupation will be lifted.

But there again, actually, there have been some things that have happened on the West Bank: check points opened, some of the restrictions lifted, Israeli-Arabs coming into the Palestinian territory, an increase in economic growth. As a result, the West Bank economy is probably growing maybe in double digits, actually, at the moment.

BLAIR: So there is real potential and hope, but the next month, I think, will be completely critical, fundamental to this, because if we can’t get negotiations going that are credible, then the vacuum that is created will suit no one but the extremists.

KING: Let me follow up on that point. You mentioned the next month is critical. One of the questions being asked back here in the United States is where is the U.S. leadership? I want to read you a bit from a “New York Times” editorial this Saturday. “Nine months later, the president’s promising peace initiative has unraveled. The Israelis have refused to stop all. The Palestinians say that they won’t talk to the Israelis until they do. President Mahmoud Abbas is so despondent, he has threatened to quit. Arab states are refusing to do anything. Mr. Obama’s own credibility is so diminished, his own approval rating in Israel is 4 percent, that serious negotiations may be farther off than ever. Peacemaking takes strategic skill, but we see no sign that President Obama and Mr. Mitchell were thinking more than one move down the board.”

That’s a pretty sober, pretty negative assessment of the American diplomatic involvement. Do you share it?

BLAIR: I don’t, actually. I mean, it won’t surprise you to know. I think that, first of all, let me tell you that I worked with Senator George Mitchell of the Northern Ireland peace negotiations. We work together very closely. He is, in my view, one of the most skilled and strategic negotiators I’ve ever come across.

Secondly, I think President Obama, Secretary Clinton are completely committed to doing this. But third and perhaps most important of all, I went through situations in times in the Northern Ireland process where people were convinced the thing was going to fail. Where even at times, I found it difficult to see a way through. But you know, the thing is, there is a way through here because in fact, both parties want to achieve a two-state solution.

Actually, the Palestinians have made significant progress on security. In fact, the Israelis are prepared, in my view, to change significantly their posture on the West Bank. And if we can get Corporal Shalit released, then a major change in the way that we view Gaza. It’s not without hope.

And here’s the thing, John. There is no alternative but to keep trying. The alternative to a two-state solution is a one-state solution and that will be, I assure you, be a hell of a fight. So I think when we look at the various strands of negativity there are around at the moment and there always are in these negotiations, there are, nonetheless, positives.

We’ve got to seize on them, work on them, and make sure that we bring about a situation in which the central strategic objective of President Obama, which is right at the outset of his administration, to make this process count and work is achieved. And I do emphasize that as well. The president said this at this beginning. This is, to my mind, the big difference of what has come before.

At the very beginning of this administration, he set that as a core strategic objective. I have absolutely no doubt he holds to that and whatever the difficulties and the obstacles, we have to find a way through. And personally, although as I say I am optimist by nature, I believe we will.

KING: Let me shift subjects. I want to get your thoughts about an inquiry back in your home country. There’s an inquiry into the run-off, the political decisions, the military decisions in the run-up to the Iraq war. And your name, and your credibility have been called into question, your good name has been called into question in this inquiry.

Lord Goldsmith, who was your attorney general back in those days, says that he warned you that this was a breach of international law, but that he was bullied into being quiet and convinced not to resign from the government. Is that an accurate portrayal?

BLAIR: No, it’s not, but I think the best thing with this inquiry is actually to let us all give our evidence to the inquiry. And you know, I’ve been through these issues many, many times over the past few years and I’m very happy to go through them again. But I think probably the appropriate place to do that is in front of the inquiry.

KING: Well, let me try one more on you. This is your former ambassador to the United States, Christopher Meyer, talking about your meeting with President Bush in Crawford, Texas, a meeting I covered some years ago. He says, “I know what the cabinet office says were the results of the meeting, but to this day, I’m not entirely clear what degree of convergence was if you like signed in blood at the Crawford ranch in Texas.”

Your former ambassador saying essentially you came to visit President Bush and you came back and then within days were talking about the need for regime change in Iraq. Again, this is your reputation, your credibility being called into question. Is that an accurate portrayal?

BLAIR: John, it’s been called into question many times over these past years about exactly these issues, all of which, as I say, have been gone over many times before.

But I feel, because I’ll be giving evidence in the new year in front of the inquiry that it really is best rather that I respond to each and every news report or allegation, the best thing is to go in front of the inquiry, answer their questions, and I’m very, very happy to do so. I’ve always been happy to do so. You know, this is a situation where over the years, I’ve answered questions time and time again on it. And I’m happy to do so again. It’s an important decision. It was a very momentous decision in terms of your country and in terms of mine. But I think the appropriate place to look at all these issues is the inquiry itself.

KING: Well let me then try and lastly this way. I’ll leave the specifics for when you testify to the inquiry, but if you pick up media accounts in your country, friends of yours are saying that you feel betrayed, that you feel your reputation is being damaged by men you bestowed high offices to in the government. Do you feel betrayed? Are you angry at how this is being done?

BLAIR: Absolutely not. One of the things you learn as a leader in a country is you have the responsibility to take decisions. Some of those decisions are difficult decisions and some of them are very controversial. And what happens, your time in leadership goes on, and I spent 10 years as UK prime minister, is that these controversies, sometimes they can be very bitter, very difficult.

That’s part of being a leader. And I think it was one of your presidents that once said if you can’t stand the heat, don’t come into the kitchen. And that’s my view of politics. So I take decisions, I stand by them, and as I say, these are all questions I’ve answered many times before. I’m happy to go through it again.

KING: The former British Prime Minister Tony Blair, now special envoy to the Middle East. Mr. Prime Minister, thanks so much for your time today.

BLAIR: Thanks, John.

KING: And up next, we head west to Seattle, Washington, a painful recession here in the United States is causing a spike in teenage homelessness and testing the resolve of organizations determined to give these struggling youths a hot meal, some shelter, and perhaps some hope.

(COMMERCIAL BREAK)

KING: We’ve seen, time and time again, in our travels, the troubled economy is affecting just about everyone. One of the groups hit hardest are the homeless in our cities. And if you take a look, you might be shocked at the young faces scouting in allies and abandoned buildings for shelter.

Let’s take a closer look at the problem. Twenty-seven percent- plus unemployment rate for teenagers, 16 to 19 years old. Children make up 27 percent of the homeless population, and they are the fastest-growing segment of that population.

The Orion Center in Seattle has seen a 50 percent increase in demand for services just over the past year. So, in our “American Dispatch” this week, we visited the streets of Seattle, Washington and a remarkable place that many homeless teens seek out first for a hot meal and then for something more.

(BEGIN VIDEOTAPE)

KING (voice over): Life on the street has its own rhythm and rules. There is safety in numbers, and a numbing sadness in the search for shelter in Seattle’s cold, raw rain. Living here leaves an indelible mark.

(UNKNOWN): I’ve been cold. I’ve been hungry. I’ve been soaked to the skin and tired and sick and injured, and you definitely learn quite a bit about yourself from that.

KING: At Seattle’s Orion Center, Michael first found smiles and support, then skills in an eight-week computer diagnostics class.

(UNKNOWN): If I hadn’t found this place, I’d probably be squatting either in a park or in an abandoned building.

(UNKNOWN): What you do is you press this, and you start pulling the shot into a shot glass.

KING: Down the hall, Orion’s barista training program...

(UNKNOWN): Cash handling; you learn interview kills.

KING: ... where Kayla Wyatt developed new skills and the confidence to move back with her mother after two years off and on on the street. (UNKNOWN): You think it’s easy at first, and then it gets harder and harder, especially during the winter because it’s so cold here.

KING: For just about everyone, the first Orion Center visit is for what the street kids call “the feed,” free meals. Some linger longer to enjoy a break from the elements, a hot shower, maybe warmer clothes for the next night.

Twelve thousand meals a year, 10,000 showers, and believe it or not, 10,000 pair of socks to keep young people’s feet warm.

Melinda Giovengo is executive director of YouthCare, and Orion Center is its flagship program, needed more than ever in this punishing recession.

MELINDA GIOVENGO, EXECUTIVE DIRECTOR, YOUTHCARE: We’re seeing 180 new faces a month. We’ve had young people come in and say, I’m here; I’m 18 years old; my family can’t afford me anymore. It’s not just affecting, you know, underprivileged kids. It’s affecting the entire strata of America.

KING: A 50 percent spike in demand but fewer resources because a bad economy dries up funding.

GIOVENGO: We’ve had family foundations who have been supportive of us for 20 years are saying, “We can’t this year.” All the government fundings have been jeopardized, restricted or reduced over the last few years, so we’re just hanging on, trying to do more with less.

KING: The bad economy also takes a toll in other ways. Michael took a position in a bowling alley because technology jobs are so scarce now. Delaun was a classmate in the computer program. He now works as an Orion Center intern because a tough job market is even tougher for someone with no experience and a history on the street.

(UNKNOWN): It’s terribly hard, I mean, especially in certain situations, where you’ve got youth who are being faced with various other challenges that society may bring, as far as trouble with the law and other things that they can get very easily caught up in. I came here, kind of, lost, and I found myself a whole lot more than I intended to here.

KING: They took different paths to the street. Delaun had problems at home he prefers not to discuss. Michael left home in Ohio to join a young Seattle man he met on the Internet.

(UNKNOWN): Partly to get away from my family because I was just, you know, coming out as queer, and I wanted some time on my own to actually get things sorted out for myself and work up the courage to actually tell them.

KING: Some here have or developed drug problems. Others make life-changing choices in the name of survival.

GIOVENGO: Trading sex for places to live and money to get food with and ending up being seduced into a lifestyle of chronic adult or being seduced into the, kind of, sexual exploitation industry that’s out there.

So it’s more and more dangerous and there’s fewer and fewer of us and fewer, fewer resources to go out and capture them early so that they don’t get absorbed into that very, very dark world.

KING: Here at Orion, there is an escape, a hot meal and, if nothing else, the company and support of others who understand.

(END VIDEOTAPE)

KING: A remarkable place. We thank everyone at Orion for sharing their time and their stories with us. And as you know, one of our goals is to get out of Washington as often as we can. We’ve made it our pledge here on “State of the Union” to travel to all 50 states in our first year. So far, 45 and counting, including Montana, Michigan, North Carolina and Washington state. Check out CNN.com/stateoftheunion, where you can see what we’ve learned when we visited your state.

We want to say goodbye to our international audience for this hour. But up next, for our viewers here in the United States, Howard Kurtz and his “Reliable Sources” look at how media coverage of President Obama has changed dramatically during his first year in office.

(COMMERCIAL BREAK)

KING: I’m John King, and this is “State of the Union.”

(voice over): High unemployment, an unpopular war in Afghanistan and slipping job approval numbers. Is a string of bad news turning the media against President Obama?

And with the economy struggling to recover, are journalists partly to blame for the nation’s financial meltdown?

In this hour of “State of the Union,” Howard Kurtz, as always, breaks it down with his reliable sources.

KURTZ: I’ve been trying to put my finger on what changed for President Obama this week, why the media coverage turned sharply negative.

KURTZ: High unemployment has been around for awhile. The Afghanistan dilemma has been building for months. And the health care bill remains a cliffhanger even after the Democrats mustered 60 votes to send it to the Senate floor.

Could it maybe, just possibly, be a Gallup poll that had Obama dropping to 49 percent for the first time? Whatever it is this Thanksgiving week, the media are suddenly treating the Obama presidency like a turkey.

(BEGIN VIDEO CLIP)

KATIE COURIC, CBS NEWS: Tonight, the president under pressure. His job approval ratings slide as he wrestles with everything from job creation to the future of Afghanistan.

CHIP REID, CBS NEWS CHIEF WHITE HOUSE CORRESPONDENT: The president is getting battered on every from health care to the economy, to foreign policy. Some polls show Americans are increasingly questioning his credibility.

SAVANNAH GUTHRIE, NBC NEWS: With the president’s approval rating dipping below 50 percent in some polls, it’s clear the health care debate is taking a toll.

CHARLES GIBSON, ABC NEWS: When you look at this, he faces the Afghanistan problem, the health care problem, the deficit problem. And yet none of those actually get at or help him in his central problem, which is still creating jobs.

(END VIDEO CLIP) KURTZ: So, why do so many journalists seem to be souring on Obama, and are these verdicts on his tenure premature?

Joining us now in New York, Chrystia Freeland, U.S. managing editor of the “Financial Times.” In Philadelphia, Jim Geraghty, contributing editor at “National Review.” And here in Washington, Bill Press, host of “The Bill Press Show” on Sirius Satellite Radio.

Chrystia Freeland, unemployment, as I mentioned, has been rising all year, broke 10 percent weeks ago. Why are we suddenly seeing this spate of reports saying that President Obama is blowing it on the economy?

FREELAND: Well, Howard, I think that your analysis is right and I think that Gallup poll was a tipping point. There was a number of factors that were building up -- the very, very long time spent deciding about Afghanistan, the very, very long health care debate and its big cloud of the economy -- and I think when that poll came out, that was a moment for people to say, you know what? Now it’s time to do the big story.

But I do think that it’s premature to say, this is the end of Obama. If he gets that health care reform through -- and I think he probably will -- that is a historic achievement.

KURTZ: I’m going to agree with you. It’s premature to say this is the end of Obama, 10 months into his term.

Bill Press, but the president did talk about jobs this week, so the topic is certainly fair and game. But the coverage, I think, is really headed south.

PRESS: By the way, we haven’t even gotten to the second term yet. You know what I mean?

I do think the coverage is a little exaggerated in terms of how much trouble Obama is in, but I think, Howie, what’s happening is people see that he is no longer -- doesn’t really walk on water. He’s got polls that look like -- they’re better than Bush’s polls, but still, they ain’t great.

KURTZ: Doesn’t walk on water the way the press made him look during the campaign?

PRESS: Exactly, right.

KURTZ: OK.

PRESS: And the other thing is I think that at some point, you know, the reservoir of good will runs out and reality sets in and you get down to delivery. And I have to tell you, 11 months in, what has the Obama presidency delivered, as opposed to talk about? Not much yet. I think it’s fair game.

KURTZ: Well, government and bureaucracy moves slowly.

Jim Geraghty, in fairness, Obama did inherit a lousy economy from George Bush. But did the press give him an easy pass up until now and maybe now are charging him for going down this road?

GERAGHTY: Yes, yes, yes.

(CROSSTALK)

GERAGHTY: I did like that question, Howard. Kudos to you on that one, for picking up on that obscure, ancient mystery.

I would note that the Gallup poll indicator probably was a key psychological barrier. He won with more than 50 percent of the vote, a pretty healthy six percent margin, very big sweep in the Electoral College. And he started with, you know, really high approval ratings up in the 70s. Some polls even had it up to 80 percent. Everybody went in, or many people came in to his presidency wanting to like the guy, wanting to give him the benefit of the doubt.

We’re now nine months since the stimulus passed. It’s been about a year and change since he got elected. You know, 10, 11 months on the job. People are starting to realize, this is not where we thought we would be at this point when we went in and entered with such great fanfare and hope and change and la-di-da.

PRESS: I think largely because the expectations were really unrealistic.

KURTZ: And who inflated the expectations, Bill Press?

PRESS: We did.

KURTZ: OK, I just wanted to plead guilty on that.

FREELAND: Well, so did Obama. Obama also inflated the expectations.

KURTZ: Of course.

FREELAND: And if I could borrow an idea from Tom Friedman, part of what I think is going on here is actually, surprisingly, Obama failing to frame the debate. It’s a failure of oratory, in part, and I think during the campaign, he was great at giving everyone a storyline. And I think since taking office, he has really failed to put all this stuff together to tell us why health care is connected to the economy.

KURTZ: OK, but let’s look at another possible failure, Chrystia. Is it possible that with the 10,000 stories that have been written in broadcast about health care, the public option, the trigger, opting in, opting out, all that, that the press missed the boat on the story that most Americans really care about, and that’s jobs?

FREELAND: Well, I work for “The Financial Times,” so we write about jobs and the economy constantly.

KURTZ: Right. But look at the broad media landscape.

FREELAND: I think the press has really focused on jobs, and I think, actually, it would be a mistake for us to be short-termist in how we look at the health care debate.

Now, as I was saying, if the health care debate -- if health care reform actually happens, that is huge. What I do think the White House has failed to do is say to someone who feels their job is at risk right now, why health care reform is central to that. And it is. You could make the sale.

You could say, look, if we had universal health care, then losing your job wouldn’t be quite so traumatic. But they’re not really saying that.

KURTZ: Right.

Let me come back to the commentary, Bill Press.

Arianna Huffington, on her liberal Web site, had a headline, a story, “Unemployment: Is It Obama’s New Katrina?” Maureen Dowd the other day in the “New York Times” said, “Obama’s a cold shower, whereas Bill Clinton was a warm bath.”

There’s a new twist here that the left wing pundits are coming at Obama very critically from that side of the spectrum.

PRESS: On several -- yes -- and on several issues. Health care, that the president has not been decisive enough or shown enough leadership or given enough direction to the Congress. He’s sort of laid back and letting Congress decide. Like, he’s just about stopped talking about the public plan option. That’s one issue.

On global warming...

KURTZ: But you don’t give me the substance of it. I want to know why.

PRESS: Got it.

KURTZ: Are they out of patience? Are they disappointed? Are they disillusioned? Why?

And this is supposed to be their guy, right?

PRESS: Right. They are frustrated on what they perceive as a lack of leadership on Obama’s part on the key issues. And now you add health care and some others, and you add on top of that Afghanistan, and he’s really got trouble. He’s really got trouble on the left.

KURTZ: Jim Geraghty, is it more newsworthy when liberals criticize President Obama, such as similar to the rare events when conservative pundits revolted against Bush?

GERAGHTY: I don’t think it’s quite so rare. And I just want to preface by saying that Bill Clinton was a warm bath in a Jacuzzi compared to this presidency.

It is a bit rare. I think to a certain extent, it isn’t just a matter of Barack Obama failing to meet liberal expectations. It’s a matter of reality not comporting to the way liberals thought it would.

We talk about the jobs issue. This administration basically thought the jobs issue was going to be solved by the stimulus, that that was a checkmark on their to-do list.

KURTZ: And did -- I want to come back to the coverage here. Did the press buy into that? Did the press over promote that $787 billion bill?

GERAGHTY: Oh, absolutely. Somehow we’re in this bizarre situation in which we spent $787 billion but no one has any money. PRESS: I think the media lost track of the jobs issue, which is the number one issue. So did the administration. And now they’re trying to get back on track.

KURTZ: In fairness, all the stimulus money hasn’t been spent, but unemployment is much higher than the White House had projected.

I want to turn to the subject of leaks, and this fits in with the situation in Afghanistan, which the president is going to address on national television on Tuesday night.

During the Asia trip, he gave an interview to CBS’s Chip Reid, and he expressed his frustration about how much was leaking out of the administration as the president conducted this long review with all of these national security meetings about whether to send more troops to Kabul.

Let’s take a look at that interview.

(BEGIN VIDEO CLIP)

REID: Are you that angry about these leaks? And do you think it does make you look uncertain?

OBAMA: I think I’m probably angrier than Bob Gates about it, partly because we have these deliberations in the Situation Room for a reason, because we are making decisions that are life and death, that affect how our troops are going to be able to operate in a theater of war. For people to be releasing information during the course of deliberations where we haven’t made final decisions yet, I think is not appropriate.

REID: Is it a firing offense?

OBAMA: Absolutely.

(END VIDEO CLIP)

KURTZ: Well, Chrystia Freeland, I don’t think anyone is going to get fired, because they’re not going to know who does the leaking. But this week, before the president has made his announcement, we had reports on CNN and the other networks about 34,000 troops most likely to be sent to Afghanistan.

This situation with leaks seems to drive every president crazy. And, of course, journalists love to get the unauthorized disclosures.

FREELAND: But presidents also love to leak. I mean, I think as you pointed out in your column about this, I think this is a combination of hypocrisy and fantasy on the part of the White House.

The hypocrisy is they don’t consider it a leak when they’re behind it. That is called, I think, media management, or something like that. And the fantasy is there are always factions, there are always different points of view in government, in politics. And a great way to fight your fight can be in the court of the media, and we’re always going to be eager recipients. So, I don’t think the president is going to win this one and I don’t think he really wants to.

KURTZ: You’re certainly right that every administration does leak and people are pushing their agendas. Sometimes if they lost out in a policy debate, somehow that information turns up in the newspaper the next morning.

You know, a few weeks ago on this program, I talked about why I thought that CNN and MSNBC and other news outlets should have devoted more attention to something that Democratic Congressman Alan Grayson said. He called a lobbyist a “K Street whore.”

FOX News went wild on this story. I thought it was underplayed elsewhere.

Now we have Glenn Beck using a similar term on FOX News. Let me play that for you and we’ll come back on the other side.

(BEGIN VIDEO CLIP)

GLENN BECK, FOX NEWS: Well, I’m sorry. So we know you’re hooking, but you’re just not cheap. It’s $300 million...

(END VIDEO CLIP)

KURTZ: OK. He’s talking there about Louisiana Senator Mary Landrieu, who did get a provision in order to get her support for breaking the filibuster on the health care bill, $300 million for Louisiana.

He said she was hooking. He basically called her a prostitute.

Let’s go back a couple of weeks to what Sean Hannity and Michelle Malkin were saying on FOX News when the Alan Grayson “whore” comment was made.

(BEGIN VIDEO CLIP)

SEAN HANNITY, FOX NEWS: What would be the reaction if it was a Republican?

MICHELLE MALKIN, FOX NEWS CONTRIBUTOR: Well, you know, we would be strung up by our toes. Imagine if you had said something like this, Sean, about a lobbyist on Capitol Hill or any other Democratic public figure.

(END VIDEO CLIP)

KURTZ: Bill Press, I didn’t hear anyone else on FOX criticizing Glenn Beck for essentially calling Mary Landrieu a prostitute.

PRESS: Neither did I. I have to tell you, look, I’m a talk show host, I am totally for talk show hosts almost getting away with almost anything they say, on the radio particularly. But I’m amazed at how much FOX lets Glenn Beck get away with. I think he is a ticking time bomb, and one day he’s going to explode in the face of Roger Ailes, and they’re going to be sorry they gave him that television show.

KURTZ: Jim Geraghty, did Beck go too far in his language?

GERAGHTY: Well, it was a little bit crass, but nobody elected Glenn Beck to Congress -- yet.

KURTZ: All right, so you’re saying there should be no standards for what people say on television?

GERAGHTY: I’m saying I think it’s not unnatural to expect more from a member of Congress or elected official...

(CROSSTALK)

KURTZ: Oh, I see. So you’re saying it’s OK -- I mean, Grayson should be held accountable because he’s an elected official, and Glenn Beck is in the (INAUDIBLE) business like many of us on television.

GERAGHTY: I think I expect more out of a member of Congress than the 5:00 p.m. hour of FOX News.

KURTZ: Before we go, Chrystia Freeland, I have been amazed at how much attention the Obama’s first State Dinner got this week. I mean, it was everywhere, as if no president ever held a state dinner before.

Let’s roll some tape from that. We see some of the media celebrities coming in. There’s Katie Couric, Sanjay Gupta from CNN, Brian Williams and his wife Jane. Robin Roberts from ABC was there as well.

Why was this treated like some sort of political Super Bowl?

FREELAND: Well, maybe because of the whole celebrity air around the Obama presidency, or what used to be this celebrity mood until everyone decided this week that he was a loser.

But to tell you the truth, Howie, I was also really surprised at the focus and the sort of gamesmanship focus. It seemed to me that maybe more attention was paid to it than the politics around the (INAUDIBLE), and since “FT” is a deeply, geeky newspaper, we think that’s more important.

KURTZ: So you think there’s a little bit too attention to who is invited, who wasn’t invited, where they were sitting. A lot of...

FREELAND: What they were wearing.

KURTZ: What they were wearing. Yes, I’ve never seen that before. A lot of media stars there.

PRESS: It’s a State Dinner. It’s Obama’s first State Dinner. I mean, I don’t think it was over done at all. People are interested in that.

KURTZ: Maybe you’ll get to go to the next one with comments like that.

KURTZ: I hope so.

(LAUGHTER)

KURTZ: All right.

Bill Press, Jim Geraghty, Chrystia Freeland, thanks very much for joining us.

When we come back, bashing the banks. CNBC’s Charlie Gasparino on the financial meltdown and whether journalists bear some of the blame for letting Wall Street run wild.

(COMMERCIAL BREAK)

KURTZ: “Charlie Gasparino Takes No Prisoners.” That’s the headline on a “Financial Times” profile of the hard-charging CNBC correspondent who comes up with his share of scoops, but also manages to tick off folks on Wall Street and sometimes his own colleagues, as we see in this exchange with Dennis Kneale over the Citigroup CEO, Vikram Pandit.

(BEGIN VIDEO CLIP)

DENNIS KNEALE, CNBC CORRESPONDENT: It’s kind of interesting that you would be defending him, especially since I read a story on CNBC.com by Charlie Gasparino on Tuesday that said Pandit’s in trouble.

CHARLES GASPARINO, CNBC CORRESPONDENT: Right. That doesn’t mean I think he should go. That means, Dennis, I’m doing what maybe you should do, be a reporter.

KNEALE: You know what? It’s really bad...

GASPARINO: All I’m doing is talking to people that are telling me this, Dennis.

(CROSSTALK)

(END VIDEO CLIP)

KURTZ: As the economy struggles to recover, does the press bear a share of the blame for the financial meltdown? And what, if anything, have journalists learned from that brush with depression?

Who better to ask than the author of “The Sellout: How Three Decades of Wall Street Greed and Government Mismanagement Destroyed the Global Financial System”?

Charlie Gasparino joins us from New York.

Welcome.

GASPARINO: Thanks for dredging that out of the dumpster.

KURTZ: There’s a lot of clips where you’re fighting with people on CNBC. What’s up with that?

GASPARINO: Well, I think there is a degree of -- you know, listen, it’s live TV, and sometimes you butt heads, and sometimes you have strong opinions both ways. And, you know, listen, I was an ex- fighter, so it comes easy to me. But one of the interesting things on CNBC, at least in my experience, after you do something like that, after you strongly disagree on the air, you kind of shake hands. It’s like when I was boxing as a kid, it was almost the same thing. And I think people respond to that and like that.

I really think for all the chatter that CNBC and cable news is just too much controversy, too much yelling, I really do think that people want to see strong opinions. And I’m here to provide one end of the strong opinions.

KURTZ: We’ll test your boxing skills in this segment.

Now, in your book, you blame Wall Street executives, mortgage lenders, government bureaucrats for the near collapse of the economy. What about journalists? Shouldn’t the press have done a better job giving us warnings of this impending meltdown?

GASPARINO: You know, that’s another old story of yours. Come on here.

KURTZ: It’s relevant today.

GASPARINO: Well, do you remember the quote I gave you about a year ago?

KURTZ: You said, “We all failed.”

GASPARINO: We all failed. Now, that is true. But remember the context I gave you.

And here’s the problem. Here’s my problem with blaming the press. Now, you know, if you look at a bubble, there’s a degree of mass hysteria going on. And if you look at what was going on -- and this is the last 10, 20 years -- you know, there weren’t very many people on the inside that thought something was wrong.

You know, think about major scandals, Watergate, for instance, right? There was somebody on the inside that saw something wrong.

What’s interesting about this, this bubble, is that a lot of people on the inside didn’t think anything was wrong.

KURTZ: But Charlie, there were all those risky loans, all those subprime loans. Those signals were there.

GASPARINO: But Howie, be precise in what you’re asking me. Should we have known about the housing bubble blowing up, or should we have known about the banking crisis? What are you asking?

KURTZ: What I’m asking is, isn’t it quite apparent, in retrospect -- and some people did the stories and they often ran on inside pages of the newspapers -- that journalists were not vigilant enough in looking at the degree of risk that was pumped into the economy by these Wall Street geniuses who you now properly, I think, blame for nearly blowing up the U.S. economy? GASPARINO: Right. Well, I blame the government, too. And you see, you have to look at it -- I think that’s too simplistic of a question.

The problem is that all those bonds that blew up, they were AAA. OK? They were rated -- many of them were rated AAA. So, if you look at what was on the bank’s balance sheets, the banks themselves believed because they were insured, because they were hedged, because of all the derivatives, they believed that those bonds were money good.

GASPARINO: Now, you have to ask yourself, why weren’t there more whistleblowers on the inside telling people like me that, hey, Citigroup has got billions of dollars of bad debt on the balance sheet? And I can tell you, Howie, my opinion is the reason why is because they believe that they were money good.

And you have to ask yourself this -- there’s going to be a lot of cases out there, right? There’s a lot of investigations for essentially fraud, why Wall Street didn’t disclose the problems earlier to investors. And I bet you there’s not going to be many prosecutions, like the two Bear Stearns guys that just got off.

And the reason why is because there’s a difference between intent and making a bad investment. And I’ll tell you, what you’re going to see here is that a lot of these guys, Dick Fuld...

KURTZ: OK, Charlie. You’ve got to let me interrupt you because I’m the host.

Do you think that CNBC itself was unfairly blaming you? Remember, of course, when Jon Stewart went after Jim Cramer?

(BEGIN VIDEO CLIP)

JON STEWART, HOST, “THE DAILY SHOW”: Listen, you knew what the banks were doing and, yet, were touting it for months and months. The entire network was. And so, now to pretend that this was some sort of crazy, once-in-a-lifetime tsunami that nobody could have seen coming is disingenuous at best and criminal at worst.

(END VIDEO CLIP)

KURTZ: Was that an unfair attack on CNBC’s role in this?

GASPARINO: You know, I do, and I’ll tell you why. I mean, if you listen to me, right, if you listen to my coverage of Bear Stearns, of Citigroup, I was warning about those two firms -- well, Citigroup in 2006 and Bear Stearns in early 2007.

I mean, if you’re going to look at CNBC, look at the whole product and look at the people that were very critical on Wall Street. And there was a lot of criticism. It was from people like me warning very early on. By the way, warning very early on and then going to bars where some of these Wall Street guys hang out and being harassed. I mean, there’s a reason why I go to bars and people yell at me from Bear Stearns, from Lehman Brothers, from all these places, because they really feel that I was too critical about these firms.

KURTZ: Well, that’s the thing. If you get out there before everyone else and you say there are problems, that the stock may be too high, that the ratings agencies may be in over their head, you take heat. But since you mentioned Bear Stearns, your book begins with your getting a phone call from Jimmy Coyne (sic), the CEO of Bear Stearns.

GASPARINO: Right, Jimmy Cayne.

KURTZ: Jimmy Cayne, excuse me. And he takes you to dinner and says this company is in trouble. Well, it turned out to be in a lot of trouble and obviously later collapsed.

You told the “Financial Times” that when it became harder to get access to Jimmy, you wrote -- you said that “Jimmy made himself easy to write about because he stopped talking to me. So what do I care?”

So, does that suggest that you reward sources who cooperate?

GASPARINO: No. It suggests the truism in journalism.

If you -- listen, right now, Goldman Sachs, there’s a book being written about Goldman Sachs, right? The author is Bill Cohen. He wrote a book about Bear Stearns.

Goldman Sachs, from what I understand, is cooperating with him because they want to get their side of the story out. And this is true of any journalist.

If you basically deal with that journalist, you’re going to get your side of the story. And I think that was the problem with Bear Stearns. They wouldn’t deal with me, so it was essentially me reporting about them without their side fully played out.

KURTZ: So it’s not that you were going easier on a company whose CEO is going out to dinner with you, but at least you’re saying you’re hearing the other side of the story.

GASPARINO: Yes. I mean, listen, I can only ask, right? Please talk to me, give me your side of the story. And if you do that, I will give you your side of the story.

Listen, what was it -- I can’t remember -- I think it was Robert Novak -- “I have sources and I have targets,” right? I mean, there’s a degree of that, there’s a reality to that.

If you don’t talk to a journalist, your side will not get out there. That’s why Goldman Sachs, which in the past has been one of the most tightly -- tight firms in the world with dealing with reporters, is now going out on a...

(CROSSTALK)

KURTZ: But the suggestion there is that if you don’t talk to me, you’re going to pay a price. GASPARINO: No, no. But it’s not pay a price. It’s you’re not getting your side of the story out. And by doing that, you pay a price.

KURTZ: I want to get your side of the story on this. Andrew Ross Sorkin, the “New York Times” business columnist, quoted the CEO of Goldman Sachs, Lloyd Blankfein, as saying that he turned off the TV because you, Charlie Gasparino, were rumor mongering.

You were not happy with that report.

GASPARINO: Yes. And have you read the subsequent press reports on that?

KURTZ: Well, go -- I’m giving you the floor.

GASPARINO: I don’t know if he said it. I don’t know if he said it. There was a couple of stories out there that suggested that he did not make those comments.

Listen, I could only tell you this -- you guys -- you know people criticize CNBC for not being aggressive. I was very aggressive. And if you’re going to say I was a rumormonger, tell me what rumor.

KURTZ: OK.

GASPARINO: Was it that they had exposure to AIG? Was it that their stock was going from $170 to $50, that people that were giving them money, the people in their prime brokerage accounts, they were pulling them out?

I mean, these are sort of things that are true. And, you know, he didn’t like it, but I’m not sure if he actually said that quote. I think there’s a debate about the quote.

KURTZ: OK. Hold on, Charlie. We need aggressive coverage now, I think, more than ever with Wall Street making big money again, big bonuses and all that.

But I want to close by playing a clip of you calling into your network. Let’s roll that.

(BEGIN VIDEO CLIP)

GASPARINO: By the way, I have a massive hangover. I was out at -- what is that Frankie Sapp’s (ph) place? It’s called Gaetano’s (ph).

That’s the best Italian restaurant in the city. They make great martinis. I drank about eight of them.

(END VIDEO CLIP)

KURTZ: Is that full disclosure? You just let it all hang out there.

GASPARINO: I’m an honest guy. I mean, listen, you know me for how long?

KURTZ: A long time.

GASPARINO: I don’t mince words. I’m honest. I don’t rumor monger, but I’m tough with these guys. They don’t like it when I’m tough, and I shoot from the hip. And they asked me how I was felling, and I told them.

KURTZ: All right.

Charlie Gasparino, hope you’re feeling good today. Thanks very much for joining us.

GASPARINO: I am. Thank you, Howie.

KURTZ: Coming up in the second half of RELIABLE SOURCES, the throwback. Harold Evans on running British newspapers in the heyday of ink-stained wretches (ph) and why he thinks so little of television news.

Plus, “Times” trouble. A management shake-up at “The Washington Times” leads to charges of a staffer being forced to attend a mass wedding conducted by the Reverend Sun Myung Moon. Former editorial page editor Rich Miniter on why he’s suing his former paper.

(COMMERCIAL BREAK)

KING: I’m John King and this is STATE OF THE UNION. Here are stories breaking this Sunday morning.

Lawmakers are already weighing in on President Obama’s new plan for Afghanistan which he’ll announce Tuesday night. Speaking on this program a bit earlier this morning, Republican Senator Richard Lugar said the president needs to clearly outline the U.S. objective in Afghanistan. Democratic Senator Jack Reed says the president must also include a strategy to show the American people troops will eventually be brought home.

Investigators in Florida are hoping to interview Tiger Woods and his wife today about the golfer’s mysterious car accident. Two previous attempts to meet with them have failed. Woods was treated for minor injuries when he crashed his SUV into a fire hydrant and then a tree outside his Orlando-area home early Friday morning.

KING: And a relatively solid start to the holiday shopping season. Retailers raked in about $10.66 billion on Black Friday. That’s according to ShopperTrak, which keeps an eye on sales. That’s about a half-percent increase over last year’s shopping.

Those are your top stories here on STATE OF THE UNION.

KURTZ: Harold Evans has had one of the storied careers in journalism. He rose from the hardscrabble British city of Manchester to become editor of “The Sunday Times,” and, under Rupert Murdoch, “The Times of London.”

On this side of the Atlantic, he was the founding editor of “Conde Nast Traveler” and has worked with “The Atlantic,” “US News” and “The Week” magazine. Evans is something of a throwback to the rough and tumble days of newspapering, an era he recounts in a new memoir, “My Paper Chase: True Stories of Vanished Times.”

(BEGIN VIDEOTAPE)

KURTZ: Harold Evans, welcome.

EVANS: Thank you. Thank you.

KURTZ: This is a tough time for the newspaper business. I don’t have to tell you that. I have the impression that British papers are feistier and maybe more competitive than their American counterparts.

EVANS: Well, first of all, there’s not so many monopoly positions. There’s I think 12 or 13 dailies in Britain.

KURTZ: And they’re all fighting for an audience.

EVANS: Yes. And there’s provincial papers too. So the competition is intense. And, of course, I have to say this -- the writing and the design in the British press, though sometimes put to nefarious uses, is extremely good.

So they’re getting by. The circulations have shrunk. Revenues have shrunk, as it has around the world.

KURTZ: Of course.

EVANS: But there isn’t the constant beating of the doomsday drum in London that you get in the United States.

KURTZ: Right. You write in this book about the era of hot tie ben (ph), newsrooms filled with colorful characters.

EVANS: Yes.

KURTZ: You know, who like to keep some booze in their drawer.

Do you miss those days? We’re in a totally different era now.

EVANS: Well, I was kind of a puritan myself. I didn’t sort of go -- booze. I had a family.

When I got the big (INAUDIBLE) at “The Sunday Times,” it was 1.5 million circulation with foreign correspondents from around the world. I’m the bit of a sober side, actually. And I really -- what I really miss -- I don’t miss the hot metal (ph) very much, although I write about. They’re a lot of fun.

What I really miss is the capacity to ask a question -- a very complicated question -- and have it answered by the best journalist I’ve ever come across. When I say, “Why did Philby get away with spying on...”

KURTZ: Kim Philby?

EVANS: ... on -- Kim Philby get away with spying all these years? We didn’t even know that he was a spy when I asked the question. Why did Kim Philby defect and go to Moscow? We didn’t know the greatest spy of this century -- of last century.

KURTZ: But there is a sense that journalists -- and I’m all in favor of journalists being well compensated for their talents -- but that they’ve become, you know, wine-sipping members of the upper middle class elite and out of touch with -- you know, reporters used to be kind of lovable rogues. They’d go down to the corner bar.

Haven’t you seen that cultural shift in the newspaper business?

EVANS: Well it’s true. And I mean, many of the public, particularly in the United States, where newspapers, by comparison with Britain, were much over-staffed. I think the drinking level was higher in Britain. I think the America drinking level is lower, surprisingly. But the number of people drawing big salaries has been much higher in America than Britain.

You know, this quite -- I quite like the lovable rogue picture. “Lunch time o’booze,” we called it. Lunch -- you know? A private eye has the best question. When it’s expenses (ph) of a question, he said, “Surely there’s some mistake.” You know, kind of drunken answer.

(LAUGHTER)

EVANS: But actually, I must say my guys -- I mean, I lost three correspondents, killed in action. They would work all hours to get to the bottom of a story, like when we did the thalidomide campaign. How is it that the world’s biggest drug disaster -- a most appalling situation with children being born without arms and legs -- how did it happen?

KURTZ: Well, you were at the Sunday -- you were editing “The Sunday Times of London,” and you went on a crusade on that. I don’t...

EVANS: Yes.

KURTZ: ... see newspapers mounting crusades today. Maybe it’s not considered the in thing to do.

But let me ask you this. I came to this one page in your book, and I just stopped. And you wrote that you were, “... troubled by the media intruding into the private lives of people without the slightest justification.”

You’re a member of the British press. And look what you folks have done to the royal family.

EVANS: Oh, I know. Listen, here’s...

(CROSSTALK)

KURTZ: Is rooting into the private lives -- does that really bother you?

EVANS: The British press is divided into good guys and sort of not so good guys. And the not so good guys would put on a doctor’s uniform and go into a hospital to photograph a sick footballer. I mean, totally appalling.

And the number of speeches I made against that kind of thing -- but you have occasionally to intrude on what’s called “privacy” when a financial embezzler is swindling millions and millions. He says, “You can’t ask those questions. That’s my private life.”

No, it’s not. You’re actually stealing. And I had to ask those questions when I was trying to find out why one of my correspondents was murdered in Cairo, assassinated -- terrorists maybe. But to find out what happened, you had to go into his private life too.

KURTZ: What about all the private gossip that is constantly being regurgitated by Fleet Street about Princess Di when she was alive, and Prince Harry, and Prince Charles, and who’s fooling around with who? I mean, that seems to be a staple of British journalism.

EVANS: Well it is. It has been. Not only has that been a staple of British journalism, but also there’s been a great amount of what I call “political fabrication,” where very vivid imaginations work on presenting a picture of the opposition which they happen to be -- dislike, rather than the truth.

But bear in mind, that isn’t the best -- that isn’t the most -- that isn’t the serious press. And also, some of that is harmless froth. And bear this in mind -- the public seems to love it. Why do they keep on buying this stuff? I mean, look at television. Your own business is -- runs away from news now. If it can get somebody on whose made a faux pas, or failed to answer a question of Larry King -- beautiful woman that she was -- that becomes more important than a whole week in Afghanistan. That’s television for you.

KURTZ: Yes. Yes. The power of dealing with a former beauty queen, or...

EVANS: Yes.

KURTZ: ... the balloon boy that turned out to be...

EVANS: Look, the balloon boy was absolutely ridiculous. How many nights did the balloon boy lead the news? A total nonsense story worth that much.

KURTZ: Or a “non-balloon boy,” as I call it.

When you were editor of “The Times of London,” Rupert Murdoch had bought the paper. He made all kinds of promises of independence to you. And now you say in this book that he told you to “fix the news,” by which you mean.?

EVANS: Fix the...

KURTZ: Fix the news?

EVANS: Well...

KURTZ: Fiddle with it?

(CROSSTALK)

EVANS: Well his managing director, an absolutely brilliant man, but misguided, thought that the purpose of the paper was to support Margaret Thatcher, come what may. We supported her a lot, but we couldn’t support her come what may.

So, occasionally, we would say, for instance, that when the government would say the recession has ended, it hasn’t. Although pointing this out was regarded as laissez majeste and difficulties. But I don’t want to spend too much time talking about...

KURTZ: No. But the reason I bring up Murdoch, of course, just for viewers who don’t know, that within the year you were out of there -- you were fired...

EVANS: Yes.

KURTZ: ... despite those guarantees of independence.

EVANS: That’s right.

KURTZ: Murdoch -- there was a great debate in America when Murdoch bought “The Wall Street Journal.” Was he going to tart it up? Was he going to ruin it? Was he going to make it politically biased?

I haven’t seen that happen. What do you think?

EVANS: I think not. I think, in fact, “The Wall Street Journal,” under Murdoch and Robert Thomson, and Les Hinton -- those three characters -- it’s a vastly improved newspaper. There’s more space than news.

I see no bias in it. I have...

KURTZ: Are you surprised that...

(CROSSTALK)

EVANS: No, I’m not actually.

KURTZ: ... the mogul who couldn’t tolerate Harry Evans at “The Times of London,” has actually improved, in your view, “The Wall Street Journal?”

EVANS: Yes. Well don’t forget, he had a debt to Margaret Thatcher because she enabled him to avoid monopolist legislation and get control of the paper.

I understand that. But the point about Murdoch is that he’s not easy. He’s too easy to portray as a caricature.

What he did in Britain after I’d been fired to tackle the print unions which were sabotaging the entire production of “The Sunday Times” -- in fact, killed “The Sunday Times” -- he sorted them out. And without Murdoch, there would be no variety in the British press today, because until he came along, our computers were shrouded under linen on the third floor, there for nearly 10 years that we couldn’t use them.

So I have a -- I think that what he did there, as he himself put it, “It was a carnivore liberating the herbivores.”

KURTZ: At the height of your career in London, you met and later married, after your divorce, Tina Brown. In addition to the impact on your personal life, has she changed her thinking about journalism?

EVANS: Well she has, actually, because she started off as a brilliant columnist. And she’s come up with some phrases which are very perceptive, I think.

Too long to be important has not made attractive enough in the reading. She’s a first class editor of “The New Yorker” magazine. And the way she presented some of those longer stories made me think again about some of the things we did.

And secondly, of course, what I learned from her most of all was, when I founded “Conde Nast Traveler” magazine, I was kind of a child in this world of the glosses.

KURTZ: Sure. EVANS: And she taught me, as she’d been taught by the great Alexander Liberman, the importance of glory spreads in color magazines.

And the third thing which I really fell in love with her about originally, she has a fantastic sense of humor. And that’s good, because if you’re an editor, as I was when I met her, you certainly need a sense of humor somewhere...

KURTZ: Absolutely, to survive the ups and downs of the business.

I’ve got about half a minute.

You were knighted by the queen?

EVANS: Yes.

KURTZ: Is that an uncommon honor for a journalist?

EVANS: Actually I’m sorry to tell you, it’s not all that uncommon for an editor at the top of the profession. And unfortunately, it was too often rewarded for the politically motivated. In my case, of course, it was rewarded for valiant service to the public.

(LAUGHTER)

KURTZ: And does it change you? Do you have to get a better tailor? Or what is it? I mean, I should call you “Sir Harold.”

EVANS: Yes. I wish -- you can just call me “Sir Harry,” or call me “Harry.” I don’t care.

You know why I accepted that? Because it reflected on what my colleagues had done, and the great things that they did when I was editor of “The Sunday Times.” I just was the nominal recipient of the honor.

KURTZ: All right, Sir. Thank you very much for stopping by. We enjoyed it.

EVANS: Thank you.

(END VIDEOTAPE)

KURTZ: After the break, firing fallout. Rich Miniter is out as “The Washington Times” opinion editor after just six months, and he’s charging the company and its Unification Church owners with religious discrimination.

We’ll talk with him next.

(COMMERCIAL BREAK)

KURTZ: When “The Washington Times” named Richard Miniter as its editorial page editor last March, the paper called the conservative commentator’s appointment the latest in a series of dramatic moves to boost the newspaper’s global impact. But things soon fell apart at the paper founded by follows of the Reverend Sun Myung Moon.

Miniter says he was fired last month and has filed both a lawsuit and a discrimination complaint against the Times. The paper, meanwhile, is reeling from a management shakeup that included the resignation of its executive editor.

Rich Miniter joins us now to talk about just what is going on at “The Washington Times.”

Welcome.

MINITER: Thanks, Howie. KURTZ: The Unification Church officials who control the company have replaced the publisher. John Solomon who was the editor who came over from “The Washington Post,” has resigned without a public word of explanation.

A lot of fine journalists who work there, but is the place imploding?

MINITER: Well, a lot of fine journalists do work there, and they’re in the middle of a tragedy not of their own making. This is a fight within the Unification Church. And the three top executives who were fired were themselves Unification Church members to be replaced by other church members.

This also appears to be a fight between Preston Moon, one of the 13 children of Reverend Sun Myung Moon, and his other siblings over control of the North American empire.

KURTZ: And the paper has always lost money and has been subsidized by the church officials.

MINITER: Well, that’s right. I mean, the fact that the paper has lost money for more than 27 straight years, and losing about $40 million a year. And the church actually doles the money out in weekly amounts in order to keep complete control over the paper.

KURTZ: Now, you say that after you were first hired, that you were coerced into attending a Unification Church weekend in New York. What happened during that weekend?

MINITER: Well, I was told that it would be very -- “very good for me to go” to this, what I was originally told was a peace festival, and it would be a business expense, a trip. Perhaps I had to cover it -- I wasn’t quite sure of this assignment -- by Thomas McDevitt, who was the president and publisher at the time. And he was the guy who was largely going to decide whether or not I was made editorial page editor.

So, a lot of pressure was on me. I took it to mean that if I did not go, that my chances of being employed by “The Washington Times” would be roughly zero.

KURTZ: So you felt you didn’t really have a choice?

MINITER: I felt I had no choice at all. And...

(CROSSTALK)

KURTZ: What happened during that weekend?

MINITER: Well, to my surprise at the New Yorker hotel in New York, that Reverend Moon appeared, that it was a largely religious service that lasted several hours, and that my boss’ boss, Preston Moon, appeared on the stage alongside his father, was wearing a long flowing robe and kind of crown. And it -- clearly, for a lot of other Times employees who were in the room with me who were true believers, it was an ecstatic moment. They were very excited that “father” was coming, as they called him, to celebrate their 90th -- for his 90th birthday -- with them.

KURTZ: How did the whole thing make you feel?

MINITER: You know, I thought it was kind of creepy. I mean, why was I on a weekend, as a “business expense,” forced to participate in someone else’s religious service? I wasn’t there covering it as a journalist. I wasn’t there as an observer. But they were using my position at the paper...

KURTZ: Right.

MINITER: ... or the position I wanted to force me to be there and be an actor in their drama.

KURTZ: Right.

MINITER: Something far beyond my job description.

KURTZ: Now, “The Washington Times” declined our invitation to send a representative to this program, but I want to read a statement by the paper’s acting president, Jonathon Slevin, if we can put that up on the screen.

“’The Washington Times’ does not discriminate and does not tolerate discrimination. We operate within the law and require the same of employees. I am confident that once the charges raised by Mr. Miniter are investigated, the company will be fully vindicated.”

You were...

(CROSSTALK)

MINITER: How many lawyers it took to write that?

KURTZ: A few months ago, you were asked to stay home -- to work from home -- while a personnel investigation was conducted. Clearly, your staff had some complaints about your management style.

MINITER: Well, not that I was aware of. None of those complaints were presented to me.

I asked for the reason. There were two compelling causes.

One is that I had made a joke about Reverend Moon to a co-worker, which was then subsequently passed on to the president and publisher himself, who was a believer in Reverend Moon. That didn’t play well.

You know, newsrooms are often jokey places. And you know, that’s the nature of us journalists. We make jokes about things.

But the idea that would lead to me going home -- in addition, I refused to sign a form saying that the vice president of human resources, that her son lived at my home. She wanted to send him to an elementary school in my state, not her home state of...

KURTZ: Using your address, which you wouldn’t go along with.

MINITER: Right.

KURTZ: Now you...

MINITER: Well, that’s an illegal and illicit request, Howie.

KURTZ: I’m not trying to minimize it.

MINITER: And who the heck does that?

KURTZ: You previously led a group of authors in a suit against Regnery Publishing.

MINITER: Sure.

KURTZ: A contract dispute. The suit was ultimately thrown out. So some people are saying, is this part of a pattern with you?

MINITER: Well, two things don’t make a pattern, Howard, one. Two, you know, again, in both of these cases, I was forced into the courts, made numerous efforts to settle with Regnery. In fact, Regnery has just sent us a settlement offer. And we made -- and I spent from July up and through November trying to come up with some settlement with “The Washington Times.”

KURTZ: You also say that you were asked -- you, the editorial page editor, the vice present of opinion, were asked to help attract advertisers to “The Washington Times.” What were you supposed to do?

MINITER: Well, you tell me. I mean, they...

KURTZ: Meet with them?

MINITER: They wanted to -- they wanted me to recruit advertisers to use contacts and connections found in the course of newsgathering, and turn that over to -- you know, to the advertising department to work more closely with...

KURTZ: And your reaction to that request?

MINITER: Well, I think that’s ridiculous.

KURTZ: Why? Explain why?

MINITER: Well, I mean, that’s just not what I do. I mean, I’ve won awards as a journalist, as an investigative reporter. That’s not what I do.

I mean, there are -- these are two different professions. You don’t take the heart surgeon and have him argue your case in a court of law.

KURTZ: I’ve got about half a minute. I mean, now that this has gone into the courts, and the charges are flying, what do you want to happen? What do you want to see as the ultimate outcome here?

MINITER: Well, I’d like to see some resolution of the contractual -- the breaches of contract. They need to pay me the money that they owe me.

KURTZ: For the last couple months?

MINITER: For the last few months and under the contract.

But secondly, I think, you know, there needs to be some change in ownership of “The Washington Times.” If this paper is going to survive, and the worthy journalists who work there are going to have a future, a real shot at a future, it needs to be outside of the confines of the Unification Church.

KURTZ: So you want the church to sell the paper to someone else?

MINITER: Why not?

KURTZ: All right.

Rich Miniter, thanks very much for joining us.

(END VIDEOTAPE)

KURTZ: Up next, Lou Dobbs busy talking about his post-CNN life. And he seems to have ambitions that go beyond television.

(COMMERCIAL BREAK)

KURTZ: When Lou Dobbs abruptly quit CNN, he was kind of cagey about what he’d do next. But this week he floated the possibility of taking another job, a pretty big job, in fact -- president of the United States.

(BEGIN AUDIO CLIP)

UNIDENTIFIED MALE: As crazy as it may sound, there is talk of Lou Dobbs for president in 2012.

Is that crazy talk?

LOU DOBBS, FMR. HOST, “LOU DOBBS TONIGHT”: What’s so crazy about that?

UNIDENTIFIED MALE: Well, that’s what I’m asking you.

(LAUGHTER)

DOBBS: Well, golly. I mean...

UNIDENTIFIED MALE: Well, is it crazy talk or is it real?

DOBBS: Well, I’ll tell you this much -- it’s one of the discussions that we’re having...

UNIDENTIFIED MALE: Really?

DOBBS: ... about politics. And, you know, I’ve got to -- for the first time, I’m actually listening to some people about politics.

(END AUDIO CLIP)

KURTZ: So, is it crazy? Mike Huckabee hosts a weekend show for Fox News, and he’s ahead in some of the Republican polls for 2012.

Fred Thompson had a radio show before running for president last year, albeit badly.

Al Franken was an Air America radio personality before winning a Minnesota Senate seat after that endless recount.

And there was one other guy who used to co-host a talk show, run for president, and go back to the show. What was his name? Oh, right, Pat Buchanan on “CROSSFIRE.”

Of course, it’s possible that Dobbs is merely encouraging the White House speculation because, well, it gets everyone talking about him and boosts his stature.

I’ll tell you this -- if Lou does run, I’m signing up to cover his campaign.

Still to come, the mayor of San Francisco walks out of a TV interview and takes an off-the-record shot at the reporter. Should that have been broadcast?

(COMMERCIAL BREAK)

KURTZ: San Francisco Mayor Gavin Newsom had kind of disappeared after dropping out of the California governor’s race a month ago. When he finally resurfaced, he sat down with Hank Plante, political editor at CBS affiliate KPIX, and the mayor got increasingly defensive and testy during the questioning.

Keep an eye on what Newsom does when the interview is over.

(BEGIN VIDEO CLIP)

HANK PLANTE, KPIX: You know the criticism, that you have been dodging not just the press, but also the public, that you have been sulking after dropping out of the governor’s race, that you’re having a temper tantrum.

MAYOR GAVIN NEWSOM (D), SAN FRANCISCO: I don’t read the press. It is comical, some of the things that have been written. I don’t know where you come up with this. And it sort of misleads people and creates a sense of something that really doesn’t exist.

Off the record, I’m amazingly disappointed. Amazingly. I just am personally. You know?

(END VIDEO CLIP)

KURTZ: So, should the station have aired that off-the-record swipe? CNBC didn’t use off-the-record footage of President Obama calling Kanye West a jackass, even though that quickly leaked out on Twitter.

I probably would have cut the mayor’s parting shot. But here’s the thing -- when a newsmaker wants something off the record, the journalist first has to agree. Newsom muttered that so quickly as he walked out of there, that there was no chance for the reporter to respond. And besides, the cameras were rolling. Every politician should see that as a flashing danger sign.

Well, that does it for this edition of RELIABLE SOURCES.

We’ll see you back here next Sunday, 10:00 a.m. Eastern.

Now let’s turn things back over to John King for more “State of the Union.”

KING: Thanks, Howie. Have a great Sunday.

(voice over): I’m John King and this is “State of the Union.”

It’s 11 a.m. Eastern, time for “State of the Union’s” “Sound of Sunday.”

Seventeen government officials, politicians and analysts have had their say. Key senators from both sides of the aisle and philanthropists Bill and Melinda Gates. We’ve watched the Sunday shows, so you don’t have to.

We’ll break it all down with Donna Brazile and Ed Rollins, the best political team on television. “State of the Union’s” “Sound of Sunday” for November 29th.

(on camera): As President Obama prepares to announce his new Afghanistan strategy, key members of his own Democratic Party warn he must strike a difficult balance, persuading the American people that sending more troops now is the key to getting out of Afghanistan as soon as possible.

(BEGIN VIDEO CLIP)

REED: I think he has to make a speech that shows that all of our efforts are pointed to our reduced presence in Afghanistan, but I think he has to also indicate again and again how critical this is to our national security.

(END VIDEO CLIP)

KING: But a key Republican senator says one thing the commander in chief must not demonstrate is a weakening of U.S. resolve.

(BEGIN VIDEO CLIP)

SEN. JON KYL, R-ARIZ.: You cannot signal that they are going to be doing their part, but then, as soon as it’s inconvenient for us to stay, we begin to leave. Because that’s exactly what we’ve done in the past. That’s exactly what they fear.

I talked to a bunch of tribal leaders out in Kandahar. That’s what they feared. They want us to make sure that the job is done before we leave. And that’s why I think all of this talk about an exit strategy is really dangerous. It tells the Taliban just to lay low until we leave, and it does not encourage the Europeans, for example, or other NATO allies that this is a cause worth sending their troops to support.

(END VIDEO CLIP)

KING: Another leading Republican says the president would be smart to set aside the health care debate and focus on what he sees as the two more urgent priorities, the war and the economy.

(BEGIN VIDEO CLIP)

LUGAR: But we’re not going to do that debating health care in the Senate for three weeks, through all sorts of strategies and so forth. The war is terribly important. Jobs and our economy are terribly important. So this may be an audacious suggestion, but I would suggest we put aside the health care debate until next year, the same way we put cap-and-trade and climate change, and talk now about the essentials, the war and money.

(END VIDEO CLIP)

KING: As you can see, we’ve been watching all the other Sunday shows so maybe you don’t have to.

Let’s bring in the best political team on television, as we do every Sunday at this hour, and break down the key issues.

In our New York bureau this morning, Republican strategist and CNN political contributor Ed Rollins. Here in Washington, senior correspondent Joe Johns, senior White House correspondent Ed Henry, senior political correspondent Candy Crowley and Democratic strategist and CNN political contributor Donna Brazile.

Let’s start with the debate you heard in the opening of the program.

And Ed, you’re out of the room. I’ll go to you first. What is the single biggest challenge for the president of the United States when he speaks to the nation Tuesday night, Ed Rollins?

ROLLINS: There has to be real clarity. Why are we there? How long are we going to be there?

And equally as important, what is the mission and how is the mission different now than it was two years ago or four years ago?

You know, Democrats have to be convinced. The president’s party is certainly very divided on this issue. I think he’ll have the Republican support he needs, but at the end of day, if this is not a bipartisan effort, long-term, they won’t get the resources and the funding to make it work.

KING: Donna Brazile, to Ed Rollins’s point, the biggest, toughest sales job is to the left, the anti-war left of the Democratic Party.

How does the president convince them either to support him or at least keep quiet their criticism? BRAZILE: Well, John, after eight years, public support for this war has diminished across the board, not just with the left, but across the country and even across the world, where we depend on troops from other countries to help us in Afghanistan.

The president gave a very thorough speech back in March, laying out our objectives. He said it was to dismantle, disrupt and destroy Al Qaida. He also talked about the Afghan government.

I think the president needs to update us on what has occurred since March that requires to send more troops, more civilians, and how will this be different than, say, what it was two years ago or even in the near future?

So I think this is a very important speech to not just convince the left but to convince the country that this is an important use of our resources.

KING: Well, Candy, jump on in, but first let’s listen to one of the independents in the United States Senate, Bernie Sanders of Vermont, who obviously votes with the Democrats most of the time, but he is making clear even before the president speaks he thinks sending 30,000 more troops is a bad idea.

(BEGIN VIDEO CLIP)

SEN. BERNARD SANDERS, I-VT.: I’ve got a real problem about expanding this war, where the rest of the world is sitting around and saying, isn’t it a nice thing that the taxpayers of the United States and the U.S. military are doing the work that the rest of the world should be doing?

So what I want to see is some real international cooperation, not just from Europe but from Russia and from China.

(END VIDEO CLIP)

KING: Not happening in the Russia and China department.

(LAUGHTER)

How much -- how complicated does it make it? This is an enormous challenge anyway, but when you have people out there saying, you know, look, why are we doing this; why is it all our men and women, all our money?

CROWLEY: Well, and what’s interesting is that, when the president campaigned and when he was the nominee for the Democratic Party, he said the reason we can’t get their cooperation is because we’re go-it-alone; we’re always, you know, off -- we don’t consult them.

And so now he’s had a year where he’s become the most traveled freshman president of any president. So is France going to step up to the plate? Is Germany going to step up to the plate? Is NATO going to step up to the plate? Maybe they will, and then he can say, you see, it worked. Maybe they won’t. Because they have been -- they may send troops there. The question is, are they going to send combat troops? Because I think what people object to is that the U.S. is always the combat brigade.

KING: And so you’re the senior White House correspondent. How much do they view that, the NATO credibility test -- never mind the sales job at home, but will they have specific commitments of real troops, not 20 guys to be there for six months or 50 guys to train guys for six weeks. Will they have real combat troops?

HENRY: They believe that they’re going to get up to 10,000 of those combat troops from NATO. We’ll see whether it -- it follows through.

And that is key and critical because the president is probably only going to send, we hear, about 30,000 to 34,000 U.S. troops. So to get to the 40,000 that General McChrystal wants, you need those NATO troops to make the difference.

That will be big. And the other key will be what the president kept saying when I interviewed him in China a couple of weeks ago, was end game, end game, that we’ve got to have the Afghan army stand up; they’ve got to take responsibility.

And Candy and I were speaking a few moments ago about how this sounds like President Bush, 2005, 2006, “As the Iraqis stand up, we’ll stand down.”

Well, you know what? Here we are, almost into 2010, and while it looks like Iraq is going to finally take over, maybe by the end of 2010, there’s some real uncertainty about, when the U.S. finally leaves, can they really stand up, several years later.

So the same may hold true for Afghanistan. How do we really know whether they can stand up?

KING: I want you to listen, before you jump in. Evan Bayh -- this is a guy from a conservative state. He’s a relatively moderate to conservative Democrat. Of all of the Democrats you’d think would be with the president, you’d think guys from Indiana like Evan Bayh would be. And it’s clear that he wants to be, but even he understands the dicey politics here. He says send more troops, Mr. President, but don’t -- maybe not give the generals everything they want.

(BEGIN VIDEO CLIP)

SEN. EVAN BAYH, D-IND.: I think the president and the secretary of defense have to show some deference to the generals’ recommendations. But these are just recommendations. They’re not the 10 commandments, after all, Chris.

You’ll remember General Westmoreland, in Vietnam, wanted more troops, even at the end. I think -- wasn’t it General MacArthur, in Korea, wanted to drop nuclear weapons on China. You don’t always go with the recommendations of the battlefield commander. You take them into account and then make the appropriate decisions.

(END VIDEO CLIP)

KING: I’m guessing, Joe, the White House just sent “Memo to Senator Bayh: Say whatever you want, but please don’t add Vietnam in the back half of your quote.”

(LAUGHTER)

JOHNS: That’s absolutely right. And the -- the other thing that’s really funny about this is Obama is the guy the left voted for. And Obama said, on the campaign trail, that Afghanistan was the problem.

Now he’s, sort of, moving into that realm and actually owning it. And the fact of the matter is he’s probably never going to get a certain portion of the left on his side, either in the Congress or out in the country.

All he can really do, right now, is make a justification based on reasonableness about what you’ve got to do at this point, going forward, in the hopes that you at least explain your position to the middle and realize that the certain segment is just not going to go for war, period.

KING: And, Ed Rollins, some conservatives have used the word “dithering.” We’ve been waiting now more than 90 days since General McChrystal’s recommendation arrived to when the president will make his decision.

Now Republicans are saying, Mr. President, we will support you as you send more troops. But listen to Senator Lindsey Graham -- essentially, the Republicans now laying down a new threshold, saying, “You better sound tough.”

(BEGIN VIDEO CLIP)

SEN. LINDSEY GRAHAM, R-S.C.: We’ll be evaluated by some pretty tough characters in the world as to how we handle Afghanistan. This is not just any place on the planet. This is the place where the Taliban took control after the Russians left, aligned themselves with Al Qaida and attacked this nation and killed 3,000 Americans.

And I hope the president will tell the world, our troops and anybody listening Tuesday, that will never happen again with this new surge of forces.

(END VIDEO CLIP)

KING: So, Ed Rollins, how do you do it, as a president with a divided country, say, I’m sending in 30,000, maybe 35,000 more troops, but the reason I’m doing that is because it means we can get home sooner?

ROLLINS: Well, we can get home sooner. The critical thing here, and unlike Iraq, there is no real army in Afghanistan. I mean, there’s 50,000, 60,000 troops that wouldn’t be put into real battle at this point in time.

We’ve got to train 5,000 a month for at least a year to get to the 134,000 mark, which is now updated from -- we were going to do that four years ago.

We’ve got to build an army there to 250,000, 300,000, 400,000, some people think, that they’ve never had before. Iraq had an army that we dismantled foolishly, but you can at least go get soldiers and bring them back.

ROLLINS: Here, you have an uneducated population. You’ve got the competition with the Taliban offering the same kind of money and basically saying every day, who do you think long-term is going to be here? Us or them? Do you want to be part of the Afghan army or do you want to be part of our group that has been here and we will be here. That’s a long, hard battle and I think to a certain extent, that’s what the president has to say is that we’re going to get in there. We’re going to hold them accountable. We’re going to make sure they build their own army because if they don’t build their own army, there is not going to be any success here. We’re not going to stay there indefinitely.

KING: Quick break. Our group will stay with us. We’re going to take a quick break here. When we come back, we’ll talk more about the dicey politics as the president prepares to make that big speech to the nation Tuesday night about sending tens of thousands more U.S. troops to Afghanistan. Stay with us.

(COMMERCIAL BREAK)

KING: Back to our Afghanistan discussion in a moment, but first this breaking news just in to CNN. The Iranian state news agency is reporting that the Iranian government has authorized the construction of 10 new industrial-scale uranium enrichment facilities, a dramatic expansion of its nuclear program and a dramatic defiance of the United Nations Nuclear Agency which has called on Iran to suspend that program. The Iranian news agency saying the decision comes only days after the U.N. nuclear watchdog agency censured Iran over its program. It says it now has approved the construction of five uranium- enrichment sites that have already been studied and proposes five additional sites for construction. The decision, the state agency saying, made during a cabinet meeting today, headed by President Mahmoud Ahmadinejad.

Donna Brazile, this is, shall we say, not the way the Obama administration and the world were hoping Iran would go.

BRAZILE: Well, just 24 hours ago, everyone was applauding the fact that the IAEA had rebuked the Iranians for the developments in Qom. Now this will give the administration perhaps and others the ammunition, I hate to use that word, but hopefully the impetus to go to the United Nations and to finally propose those tough sanctions. But we have to keep China and Russia onboard. That’s the key to having any successful strategy before we look at the other options involved in trying to halt their nuclear program. KING: In an odd way, Candy, does it help the president? Russia and China have been saying give them time, give them time, give them time. When they do something like this does it give the president of the United States say --

CROWLEY: Well sure, it gives him saying, look, they haven’t responded, I’ve been the one out there, I’ve opened my hand saying if you’ll just come into the family of nations. And I think all along what this administration is calculated is, if they do these things with places likes Iran or North Korea and say you can come into the family of nations and here’s how, and if they don’t do that that they can then go back to some of these nations.

And really, it’s not just Russia and China. It’s France and people that do business in Iran that have been reluctant to impose the sanctions. They can go back and say we tried it. We went out there, we extended our hand. We gave them a pathway and they haven’t done it and now you’ve got to come with us and do these sanctions. I think this is the stick to the carrots that they’ve been holding out there.

KING: And Ed, how do they assess the Iranians in the Obama White House. When North Korea does things like this, eight times out of 10 times whether it’s the Bush administration, even back to the Clinton administration, now the Obama administration that they’re just trying to get attention, that they’re just sort of show boating on the world stage. Is it the White House calculation that Iran is different? That they are dead set serious on expanding this program?

HENRY: They believe so. And that’s why the president in recent days has been saying look, when he was inaugurated as president there was no consensus about how to deal with Iran. And as Candy is saying, they believe this shows that maybe they are, you know, bent on making sure that they can continue this nuclear program.

That is going give fuel for the White House to continue to say, look, we’ve reached out. We’ve extended the hand. The president of the United States wrote letters to the government, to the religious leaders, trying to reach out and they have consistently pushed back. And so this gives them more fuel to say it’s time to get tough before the U.N. and that is the key as you said with China and Russia. They supported this IAEA resolution. Will they support sanctions before the U.N.? These kinds of moves might suggest China and Russia finally will.

JOHNS: All of the choices are bad here. On the one hand, you have China and Russia actually who have a lot of business interests in Iran and on the other hand, kind of like the idea of a country sticking its finger in the eye of the super power United States. They got off to a wrong start.

There are a lot of people who say the United States should have gone the route of trying to destabilize this regime at the very beginning rather than finding itself in this position because all of your choices are bad. The thought of going in and bombing nuclear facilities is just terrible. The thought of trying to create some type of a dialogue with a country that’s been playing sort of push me/pull you, it’s all really tough for this administration. And somehow or another, they’re going to have to unravel it in a peaceful way where the rest of the world looks at the United States and says, OK, I’m satisfied with that. Tough choices.

KING: And Ed Rollins, a test of the president’s toughness. Is it not? His critics say he bows to the emperor of Japan. He wants to negotiate with North Korea and he wants to negotiation with Iran. Now he’s sending more troops into Afghanistan, which is even some conservative critics will say good for you, Mr. President, maybe you took longer to get there than we wanted you to. Now he might have a stronger showdown with Iran.

ROLLINS: We drew a line in the sand and they walked up to the line and kicked the sand into our face. They’re not afraid of us. They watch CNN International and other entities. They know we’re in two wars. They know we’re bogged down. We know that the choices are very difficult. But at the end of the day, they’re not afraid of us. They’re not afraid of their own people and they basically have subjected them to cruelty and lack of governance. And I think to a certain extent, unless we can push the most severe sanctions on them and we take some other action, we’re going to have to basically live with them having nuclear weapons and I don’t think that’s good for their neighborhood and I don’t think our ally Israel is going to basically tolerate that very long.

KING: Our assessment there, that news just into us, Iran building new uranium enrichment facilities. We’ll continue to track that story. Right now, we’re gong to take a quick break here on STATE OF THE UNION. When we come back, we’ll get back to Afghanistan and the president’s big decision next Tuesday night, his big announcement, sending upwards of 30,000 more troops to Afghanistan and the challenge of trying to sell that to a very skeptical American public. Stay with us.

(COMMERCIAL BREAK)

KING: Let’s get back to the big political challenge facing the president as he makes a major policy announcement about Afghanistan. Joining us in New York is Ed Rollins, our CNN political contributor and Republican strategist. Here with me in Washington, Joe Johns, Ed Henry, Candy Crowley, and Donna Brazile.

Let’s look at the polling to underscore the president’s very tough challenge. “USA Today”/Gallup poll asked the American people, how is President Obama handling Afghanistan? And look at these stunning numbers. Approval rating, 35 percent, down 21 points from July when it was 56 percent. Disapproval of how the president is handling Iraq now at 55 percent, up nearly 20 points from 37 percent in July.

Ed Henry, they knew at the White House they were facing all of this criticism, conservatives saying you’re dithering, Mr. President. the general has given you his recommendations. They believed they needed a long, well-thought-out deliberative process. But do they now see these numbers and say, we think our process was right, but we may have paid a political price?

HENRY: Sure, absolutely. Because it appeared that, you know, violence was increasing while the White House was weighing all of the different options. And what is also interesting is at the beginning of this process, we knew that the options essentially were, you know, 20,000 on the low end, 30,000 in the middle, 40,000 if you did the full McChrystal.

After this long process they winded up with the middle approach, which is at the beginning a lot of people expected they probably would do, try to split the difference. I think the other difficult issue -- and there’s another “USA Today”/Gallup poll that basically asked the American people, what should President Obama do? Thirty-nine percent say, begin to withdraw, 37 percent say, increase by 40,000. A split.

And these are the tough decisions that you’re elected president to make. The American people, frankly, don’t know what to do next. You’re paid the big bucks to come up with the tough decision and, frankly, deal with the consequences because they’re not certain this is going to work.

KING: Well, on that point, let’s listen to some of the American people. I was out in Montana for this week’s diner segment. This was a question I asked -- I’ve been in 45 states. It’s a question I ask just about every one of them. Essentially, who is the enemy in Afghanistan? Should the U.S. -- should we send more troops? Should we bring troops home? This is Steve’s Cafe, Helena, Montana.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: I think we need to bring our boys home, actually.

GEORGE JENSEN, OWNS LANDSCAPING COMPANY: I would like to see them come home too. The thing is, is that we’re not going to win either one of the wars by force. It’s going to have to be winning the hearts and the minds of the people. Now how do we get from point A to point B because it has been -- totally the ball has been dropped seriously ever since the start of these things.

STEVE VINCELLI, OWNER, STEVE’S CAFE: How do you back a government without a fair -- that can’t even do a fair election? How do you continue to put your money into that debacle like that when you don’t even know -- if you would lead well, will it ever last? It seems like everything goes corrupt.

(END VIDEO CLIP)

KING: So, Donna Brazile, how does the president -- pretty fair- minded people there, all of them said, look, he inherited this, the problems in both Iraq and Afghanistan started under President Bush, but he’s the boss now. And they see the corruption in the election, they see the opium trade, they see eight years and billions of dollars and they say, you know what, bring the troops home.

How does the president convince them to sign back up?

BRAZILE: Well, I think the most important thing is the president once again defined the objective. What is the objective? The war should have an objective. When we focused the last two-and-a-half months on the troop level. Once we know what the admission is and the objectives, then the troops should help define the cause of the campaign.

I think we’ve spent so much time focusing on the wrong thing and trying to win over the situation in Afghanistan, and it is important that we focus simply on training the Afghan army, trying to hold those provinces, and those areas where we believe the Taliban is putting their minions in, and then bring our troops home. But I don’t think the president can announce an endgame, because I think would undermine our campaign there. So it’s a tough call.

CROWLEY: He needs to come out and draw that line from Afghanistan to the United States of America and say, you know why we’re here? Do you remember 9/11? Do you remember al Qaeda? Our mission, as he described early spring, is to seek and destroy and get rid of al Qaeda, to a certain extent, the Taliban when there’s overlap there, which there is a lot of it.

So he needs to remind people that this isn’t about propping up Karzai. This is not about the Afghan government. I mean, that’s obviously an element you’ve got to strengthen, but it’s not about that, it’s about us. And if he can’t make that connection, then he has got a problem.

HENRY: And by the way, if this still continues to spiral downward, next door you have Pakistan where they have nuclear weapons. So...

BRAZILE: And bin Laden.

(CROSSTALK)

KING: And to that point, Joe, have the American people -- do our presidents, do our members of Congress, do us in our business, do we spend enough time constantly reminding people? Because even if things go perfectly in Afghanistan, most of al Qaeda is on the Pakistan side.

So essentially U.S. forces in Afghanistan are the fire department that if Pakistan does its job, al Qaeda can’t come across the border seeking refuge.

JOHNS: Absolutely. We don’t necessarily do that good a job, and here’s what I mean. So much of this has been about process and the words that have been used. I’ve seen all of these articles about whether this president has a foreign policy based in realism. There has been all of this talk about counter-insurgency, which might be the better idea, versus counter-terrorism, which sounds like the better idea.

So it’s very difficult to sort of put this in a person’s kitchen where they live and explain to them the stakes for you, the American public. This is the challenge also for the president to try to lay in it on the line, as we’ve already said here, and say, this is what’s in it for you, more safety, more security at home, trying to stabilize this region and getting out in a reasonable period of time. It’s the words they use, in part.

KING: So, Ed Rollins, how much more difficult is this challenge because the world is a more fragmented, fractured, less predictable place than when you were sitting at Ronald Reagan’s side in the early -- at the end of the Cold War?

ROLLINS: Well, the lesson I learned from Ronald Reagan is you can’t do it in one speech. No matter how brilliant this speech is on Tuesday night, you have got to go out continuously and convince the American public of why you’re there, particularly when you need the support of the Congress.

The biggest problem this president has today is he has got so much on his plate. He has a -- he speaks Tuesday. He has a job summit on Thursday. He’s going off the following week to do Copenhagen, get up the Nobel Peace prize. Then we’re into Christmas parties and all the rest of it. And there’s nothing sustained. And then you have the health care being battled on the congressional front.

So I think the bottom line here is that he has got to basically realize he can’t do it in one speech, it has to be a sustained effort. It’s an educational process. And the educational processes is, we are going to build them an army and once they have an army they can defend themes and defend the region, then we can back away.

That is what we did in Iraq, that’s what we want to do there. That’s going to take a couple of years and the moment we basically start waving the white flag, though, we’ll lose that battle very quickly.

KING: And even as the president tries to sell this policy and rally support, one of the big questions will be, how do we pay for it? And we’re going to talk to David Obey, the House Appropriations Committee chairman, later in the program. He says, let’s have a special tax so that everybody knows that’s the war tax. That’s what it has cost.

Carl Levin is the chairman of the Senate Armed Services Committee, he doesn’t go that far, but he does think -- he does think we need to raise revenues to pay for war.

(BEGIN VIDEO CLIP FROM “FACE THE NATION”)

SEN. CARL LEVIN, D-MICH.: We’re in the middle of a recession, we’re probably not going to be able to increase taxes to pay for it. In the middle of this recession, I don’t think you’re going to be able to successfully or fairly to add a tax burden to middle-income people.

(END VIDEO CLIP)

KING: Not to middle-income people, but he says maybe a surtax or higher on upper-income people to pay for the war.

KING: Do we want to get into a taxist debate, paying for the war debate in the middle of the policy debate?

HENRY: In the middle of a debate about how to raise taxes to pay for health care, it gets very complicated. But I had sources in early October who were in the room when the president brought Congress in to talk about his deliberations on Afghanistan. They’re going to be coming back this Tuesday, including David Obey, Carl Levin , some of these key players. And back in the meeting in early October, I am told that David Obey stood up and said, Mr. President, if you escalate this war further, you’re going to make it likely that we can be up into Afghanistan for up to 20 years and it could cost $1 trillion over the next 10 years.

David Obey is the chairman of the House Spending Committee. He knows how much this costs. And to get to Ed Rollins point, I’m not sure that the American people understand the stakes, not just the human cost, but how this is breaking the budget. And as you made the point earlier, this was inherited by this president and clearly, President Bush did not find ways to pay for the wars in Afghanistan, Iraq, et cetera, but now this president needs to find a way to pay for it because when you add it up with health care, the stimulus, et cetera, we’re going broke.

CROWLEY: I find it very hard -- what $30 billion a year, I saw somewhere -- to send those additional troops. This Congress is not going say to this president, no, we’re not going to give you money. It’s not going to happen. There are enough Republicans and enough moderate Democrats and left Democrats who think we ought to go ahead and put those troops in. He’s going get this money.

The question is, like, do they want to tax the rich as they do want to tax the rich for health care reform as well. It’s an OK battle to have right now because there really is a populist strain going on in the country that goes, yeah, tax the rich. You’ll hear the Republicans fighting it, but it’s not an up popular idea. I don’t think the White House seems that crazy about the idea in this instance.

BRAZILE: They have not weighed in on this discussion, but leading Democrats and I think others will raise the question, John, simply because we need to put it on the table. Look, we’ve spent almost $1 trillion so far in these two wars. We know that the Afghanistan war has not been properly resourced but at the same time what it will cost as in terms of the lives of our brave soldiers and what it’s costing the American people in terms of our tax dollars. So we have to have this debate and I hope we can have it in an honest way so that the American people know exactly what the cost is.

JOHNS: The thing I wonder about is how in the world are you going to sell something like that on Capitol Hill? You think of these two words, war tax. On the left, people are going to hate the war part. On the right, the people are going to hate the tax part. And what do you have? You have the middle, but that creates what I’ve always called the Halloween coalition where the wings just hate it. The people in the middle vote for it and it’s shot down.

BRAZILE: Security is not cheap.

KING: The Halloween coalition. Write that down. We’re going take a quick break. When we come back, we’re going to shift gears to politics, including there’s a committee to draft Dick Cheney , the former vice president, for president next time around. No kidding. Stay with us.

(COMMERCIAL BREAK)

KING: I’m John King and this is STATE OF THE UNION. Here are stories breaking this Sunday morning.

Struggling homeowners will find out tomorrow morning what additional steps the Obama administration is planning to take to help them avoid foreclosure. Administration officials are expected to announce a new initiative to get long-term help for borrowers who are trying to modify their loans. The Treasury Department says the plan will provide more resources for homeowners and demand more accountability and transparency from banks.

Investigators in Russia are calling a deadly train derailment an act of terror. At least 26 people were killed and another 100 injured when an explosion caused several cars to jump the tracks Friday night. Several passengers were still unaccounted for. Investigators say they found elements of an explosive device including a crater under the tracks where that train derailed.

Investigators in Florida are hoping to interview Tiger Woods and his wife today about the golfer’s mysterious car accident. Two previous attempts to meet with them have failed. Woods was treated for minor injuries when he crashed his SUV into a fire hydrant and then a tree outside his Orlando-area home early Friday morning. Those are your top stories here on STATE OF THE UNION.

Back with our panel. Ed Rollins is in New York. Joe Johns, Ed Henry, Candy Crowley and Donna Brazile here in Washington. Let’s shift to some politics. There’s a proposed resolution at the Republican National Committee, after the primaries this year and a little bit of strife within the party especially in a New York congressional race, there’s a proposed resolution that some call the purity test for Republicans. And what it would do, it would set these standards to be a Republican candidate and to get party money.

We support smaller government, smaller national debt, lower deficits and lower taxes by opposing bills like Obama’s stimulus bill. We support market-based health care reform and oppose Obama-style government-run health care. We support market-based energy reforms by opposing cap and trade legislation. We support victory in Iraq and Afghanistan by supporting military recommended troop surges and we support protecting the lives of vulnerable persons by opposing health care rationing and denial of health care and government funding of abortion.

I don’t think it takes much to get the picture. If President Obama is for it, you have to be against it under the terms of the resolution on those big issues to get any funding. Ed Rollins, you’re the Republican strategist in the group. A good idea?

ROLLINS: Well, it would be a much better idea if members after they got elected lived up to those issues. Any time the party --

BRAZILE: Say it, brother!

ROLLINS: Any time the party sets a platform, candidates run on their own record and should have the freedom to go do what it is that they think is the best interest of their constituents depending where the district may be. Those are nice principles. They’ve been principles of the Republican Party for a long time, but the party basically ought to realize its role is not setting policy. Its role is raising money, getting good candidates, helping them be trained, getting good campaign managers. And once someone gets elected trying to hold their feet to the fire on some those of principles. But at this point in time, setting a litmus trust prior to them running I think is just kind of foolish.

KING: And Candy, the Republicans have the wind at their back right now. The country is concerned about the spending, history says they’ll do well in an off year anyway. Is this the kind of thing they want to be debating?

CROWLEY: No. You know that there is a center inside the Republican Party that does not like all of the attention to Palin at which probably won’t like the attention to Dick Cheney as a potential presidential guy.

CROWLEY: They also are not going to like this, sort of, you have to be this. But it’s the debate within the party, and we keep seeing it over and over again.

It’s purity versus that, kind of, big tent, you know, do we bring in people, and if they have an “R” after their name and they’ll vote for speaker, and the speaker they vote for is a Republican, we’re with them, or do you go for purity?

And the -- the ongoing feeling of the moderates inside the party is, if you go for this sort of purity, you’re not going have a party, certainly not one that can win.

HENRY: And at a time when the -- one of the president’s problems is that independent voters seem to be moving away from him, it doesn’t seem like a sound political strategy to try to push independents out and say we’re going to go further to the right.

JOHNS: There’s a lot of scoffing out there, especially among Democrats, about this, you know, how ridiculous; why would they do that?

And I have to tell you, though, I mean, we were all around when they rolled out the Contract with America, which sounds a lot like some of these things.

(LAUGHTER)

And I know it’s a different time. It’s a different era, different president and so on, but you have to keep in mind that there’s a segment of the population out there that will pay attention to this and respond to it in a -- in a fairly positive way. So I don’t think...

CROWLEY: Contract with America had Newt Gingrich.

(LAUGHTER)

You have to have a person behind something to push this, and this is, sort of, an amorphous party thing, and that’s not -- you’ve got to have a person.

KING: You’ve had debates within your party about these kind of things before, litmus tests and purity and the like. Do they help or hurt? BRAZILE: Well, John, I know what it’s like to be in the wilderness, but I also know what it’s like to have a flashlight and some leaders who are willing to put forth those ideas, whether it was Bill Clinton and Al Gore in the 1990s or Barack Obama , who just won last year.

I think it’s important the Republican Party begin to harness a new generation of leaders to come up with ideas that will help ignite a new breed of leaders with the country. But to come up with these old tried ideas that have produced the kind of pain that we are now seeing, I don’t think it’s going to get them anywhere.

KING: You mentioned new generation of leaders. I don’t think anyone, even Dick Cheney , would call -- cast himself as a new generation of leadership of the Republican Party.

(LAUGHTER)

But here it is on the cover of Newsweek, up here, Cheney in 2012!” That’s an exclamation point. That’s not a question mark, up here in the top (inaudible).

And there is a committee -- we got the release this past week -- the Draft Dick Cheney for President in 2012 Committee.

And here’s what the organizer says, “The 2012 race for Republican nomination for president will be about much more than who will be the party’s standard bearer against Barack Obama . The race is about the heart and soul of the GOP. There’s only one person in our party with the experience, political courage and unwavering commitment to the values that made our party strong, and that person is Dick Cheney .”

Now, his daughter Liz says she wants him to run, but he’s not listening. On a scale of one to ten...

(LAUGHTER)

He didn’t run when he was vice president and could have had the deck stacked in his favor. On a scale of one to ten, we think the likelihood of that is?

Not real likely, but, I mean, there are people out there who are going to say, “Look, he already ran the country for eight years,” you know...

(LAUGHTER)

KING: Ouch.

HENRY: There’s a term limit.

JOHNS: Exactly.

(LAUGHTER)

HENRY: What did you say before, a Halloween (ph) poll (ph)... JOHNS: Right, right.

HENRY: ... you know, because people used to call him Darth Vader, and I think there’s almost like a Darth Vader vacuum right now. The reason why he’s even being talked about is there’s a vacuum in the Republican Party, in terms of who is going to seize the mantle of leadership.

The only other person out there getting as much attention, perhaps, is Sarah Palin . And, frankly, there are a lot of Republicans who publicly might say, boy, she energizes the party, but privately believe she doesn’t have the experience. Who’s got the experience? Dick Cheney .

(LAUGHTER)

CROWLEY: Well, in the immortal words of Dick Cheney several weeks ago when this subject came up, “Not a chance.”

So on a scale of one to 10, zero.

BRAZILE: It’s time for a new generation of Republicans to take their seats at the table. I endorse that concept.

(LAUGHTER)

KING: Ed Rollins, to the vacuum point, do -- do things like this, which I assume you think is a little silly -- do they come up because we’re, you know, a year into Obama; we’re heading into the midterms; 2012 can seem very far off, but, boy, we do need things to talk about sometimes, don’t we?

ROLLINS: Well, at this point in time, there was no Obama, four years ago. He was -- he as ranked number 99 in the United States Senate.

We will have a candidate. We will -- and obviously, re-elections are about the incumbent. And if this president falters and continues to falter, then I think you’ll find a young governor or even an older governor who is going to come forth.

I think our next nominee will be one of our governors, a new one or an old one. And I think, at the end of the day, we do need a new voice. There’s no -- there’s no leadership in Washington that’s going to step forward and be a presidential candidate.

I remind people who want to draft Dick Cheney -- and I’ve known Dick for a long, long time -- I ran a re-election campaign for Ronald Reagan against a very popular Walter Mondale, and we won 59 percent of the vote. You don’t want to re-run the Bush campaign all over again, of 2000, 2004, 2008. We need to run the campaign against Barack Obama in 2012 with a new candidate.

KING: When I’ve spoken to him, he says he’s enjoying his life. I would agree that the chances -- I would say negative five, maybe, on that one. (LAUGHTER)

All right, we’re going to take a quick break. When we come back, our lightning round, how to crash a state dinner. Stay with us.

(COMMERCIAL BREAK)

KING: We’re back for our lightning round. And unless you are hiding in a cave somewhere, you do know that a couple from Virginia somehow managed to crash a state dinner for the prime minister of India this past week.

Tareq -- there you see them, Tareq and Michaele Salahi, walking in -- that’s out -- that’s into the White House, there. They also not only got to pose with the vice president but the president of the United States.

They were not on the invitation list -- there you see them with President Obama -- and they went right through the security. Now, they did go through the magnetometers. The Secret Service says the president was not at risk, but certainly they were uninvited guests.

Ed Rollins, to you first, you’ve worked in the White House. The Secret Service says it is embarrassed. How did this happen?

ROLLINS: Well, certainly, was there a breakdown on the part of the Secret Service, and I assume it happened at the uniformed level. And they’re first-rate people, but there was a breakdown.

And I think the bottom line is the way you stop this breakdown -- I wrote an article on CNN.com today -- you prosecute them. They basically trespassed. They had no right to be there. The Secret Service has a tough enough task without having people dress up and pretend they’re important. These people want a reality TV show, give them one. It’s called “Dealing with the federal prosecution system of the District of Columbia.”

(LAUGHTER)

KING: Ed Rollins, a tough-on-crime mayor, there, from New York.

(LAUGHTER)

Now, Donna, you’ve been in the White House many, many times. Normally, for these events, there’s somebody from the staff who is standing there with a clipboard, and it says “Donna Brazile,” they check you, and then you show your photo ID, and then the Secret Service looks in your purse and runs everything through the magnetometer.

BRAZILE: Absolutely.

KING: How?

BRAZILE: I don’t -- I don’t know how it happened. I mean, John, this is going to require the White House social office, as well as the Secret Service, to go through everything that happened at that gate to find out, how did they slip by?

I’ve been to the White House on countless occasions, both in this administration and previous administrations, and I tell you, they check everything. So I was surprised.

But maybe -- I don’t have a red dress. Maybe it’s the red dress.

CROWLEY: You know, there are so many things, I mean, one of the things that I totally agree, where was the social office there? Why weren’t they checking off names? Because then it’s a dual job for the Secret Service. The Secret Service should be there screening these people, putting them through the magnetometer, looking in their purses. That’s what they do, not checking them off the social list. So they had dual jobs there.

Plus, the fact they’re dealing with important people and they don’t want to, you know, do something that they shouldn’t do. But it also brings to mind sometimes the simplest things don’t get done. Checking the name, Hinckley was in a press pen without a press pass. There was a time and you may remember this. I think it was George Bush the dad when a band came in and there were 14 members of the band but 15 walked in. They found this guy sort of wandering around the White House counting noses. So it’s always the simplest -- in fact, that first line, the simplest thing.

KING: We had a guy get on the international press charter once on a presidential trip that didn’t belong on the trip. It wasn’t the president’s plane, but it was our plane and somebody said, who’s that?

HENRY: And how did -- they got past the first checkpoint, but there are many other checkpoints when you go through the White House. And why someone didn’t spot them, didn’t double check where they were. That’s why Tiger Woods’ wife was so mad. He didn’t take her to the state dinner. Everybody can get in now.

JOHNS: It’s the first state dinner, too. All right, so you can say mistakes happen. But the bottom line I think here is that, while we all laugh about it and everybody’s talking about it, there is a serious problem when a person can walk in and get within arm’s length of the president of the United States because next time it might not be so, you know, no big deal, so funny.

HENRY: And the prime minister of India as well.

JOHNS: Right. It’s a bit scary.

KING: All right, a time-out here. Ed Rollins in New York, thank you. Joe Johns, Ed Henry, Candy Crowley, Donna Brazile. Up next, we get out of Washington as we do every week to get a good meal. We head to Steve’s Cafe in Helena, Montana, for a great meal and a wonderful discussion about issues that matter to you. Please stay with us.

(COMMERCIAL BREAK) KING: One of the big issues I bet many of you discussed around the Thanksgiving dinner table this past week was the struggling economy and whether you might have a little more or maybe a lot less to spend this holiday season. That was on our mind, the economy, whether people have money this holiday season as we visited the great state of Montana. One of the things we did was a sit-down with the governor who says first and foremost the American people care about jobs.

(BEGIN VIDEO CLIP)

GOV. BRIAN SCHWEITZER (D), MONTANA: I can tell you what people care about most and that’s jobs. If there’s a concern about three or four issues that are at the top and that’s health care and climate change and the war, they all are second place to jobs.

(END VIDEO CLIP)

KING: Second place to jobs. Let’s take a closer look at the state of Montana, 6.4 percent unemployment, that’s better than the national average which of course is in the double digits. Nearly 16 percent of Montana’s residents lack health insurance. It has the highest military volunteer rate in the country. Steve’s Cafe was our diner stop. It’s in the heart of Helena. And our topics included the economy and the president’s big decision about more troops to Afghanistan.

(BEGIN VIDEOTAPE)

KING: As we get toward the holiday season, a lot of people are asking, has the economy hit bottom? Is it coming back? Will we see people spending and head into the New Year with more optimism? We’re five months into a new business. What do you see?

STEVE VINCELLI, OWNER, STEVE’S CAFE: I think the economy, I don’t think it’s completely bottomed out in my opinion yet. I don’t understand why the stock market is going up the way it does. It just seems to be responsive to news that is not really based on any facts sometimes.

KING: Not on the real world. You don’t see it on the ground. Main Street is not experiencing what Wall Street is.

VINCELLI: Right.

KING: Feel the same way?

ROBERTA KNAPP, SMALL BUSINESS OWNER: I do. And I think that the unemployment rate and that scene shows the real picture more than what the stock market is doing.

KING: Are you going to be a little more conservative this holiday season?

KNAPP: Somewhat. I probably won’t spend as much, but I have a grandson and I’ll spend on him all day long. KING: He’s recession-proof.

KNAPP: Right. And I’m almost done shopping. I shopped early.

KING: Wow.

KNAPP: Because I expected them not to have as much and I wanted to get the things that I wanted ahead of time.

GEORGE JENSEN, OWNS LANDSCAPING COMPANY: Our company has definitely seen a downturn in business. I don’t see the bottom yet. I think it’s probably going to be even tighter next year. Our own family, we’re going to cut back on spending considerably for Christmas other than the kids.

KING: People in my town look at this and they say, what do people think about health care? What do people think about the economy? What do people think about the Democrats and the Republicans? A broader way to look at it is to ask a bigger question, which is, is the country on the right track? Is America on the right track right now?

VINCELLI: We just seem to be spending too much money on entitlements and earmarks and instead of taking care of the core of the country and the people in the country.

KNAPP: Look at the bailouts and the people didn’t cut their top- level salaries and bonuses. I think that had a lot -- a real impact on the average person, the everyday person.

KING: Is that the Democrats’ fault? Is it the Republicans’ fault?

JENSEN: It’s both.

KNAPP: It’s both.

JENSEN: The other half of this equation is we’ve got to stop being a consumer nation and start manufacturing. Because when we’re buying all of our goods from overseas, we’re going to go backwards until we correct this.

KING: So at this time of year when we sit around the table with our families and we reflect on what we’re thankful for, are you less thankful because of all of these difficult issues? Are you more concerned?

JENSEN: Concern is the right word. Thankful, I’m thankful that I’m working, thankful that I still have a roof over my head that we’re making payments on and that we’re going forward. We’re hanging on. And that’s the bottom line.

VINCELLI: We had an unemployment rate about a point and a half a couple of years ago. Now it’s over six again. So I mean, it’s kind of relative. And when we were at 1.5, really there’s no one there that you want to employ. We were down to we couldn’t find good people. Now you can find good people again.

KNAPP: And many people with college degrees who you think would be working for corporations or big companies are working in lower level jobs.

KING: The photo on the front page here of a member of your National Guard here. And if all goes as currently on the books, they’ll be shipping out to Afghanistan.

KNAPP: Hope not.

KING: In the new year.

KING: You’re shaking your head. You say hope not. It’s been eight years. Do we need more troops there?

KNAPP: Sending more troops is not the answer to me.

VINCELLI: I agree. I do agree.

KING: Don’t send more.

VINCELLI: No. I think we need to bring our boys home, actually.

JENSEN: I’d like to see them come home, too.

KING: We’re a year after history. We elected our first African- American president. The Democrats picked up more seats in the House and the Senate.

KING: And there was this talk and the overriding promise of the presidential campaign was he was going to change Washington. Has he changed Washington?

UNIDENTIFIED MALE: No.

UNIDENTIFIED FEMALE: No.

UNIDENTIFIED MALE: I don’t think so.

(END VIDEOTAPE)

KING: A little skepticism about changing Washington. A fascinating conversation. We thank everyone at Steve’s Cafe in Helena.

We’d like to welcome back our international viewers. I’m John King and this is STATE OF THE UNION.

KING (voice-over): President Obama prepares to announce his new strategy for Afghanistan.

OBAMA: It is my intention to finish the job.

KING: Two influential senators weigh in on troop levels, the timetable, and the cost of war: Democrat Jack Reed of Rhode Island and Republican Richard Lugar of Indiana.

NETANYAHU: Now is the time to move forward towards peace.

KING: A rare hint of movement in the search for Middle East peace. We’ll check in with special envoy Tony Blair live from the region.

He wants to turn a spotlight on the prize tag of overseas military deployments. Should Americans pay a special tax to cover a troop increase in Afghanistan? Congressman David Obey gets “The Last Word.”

And in our “American Dispatch,” we travel to Seattle to see how, despite scarce resources, one program tries to get homeless teens off the streets and on to a better path.

This is the STATE OF THE UNION report for Sunday, November 29th.

(END VIDEOTAPE) KING: Good morning. Hope you all had a great Thanksgiving.

President Obama this week will unveil his long-awaited new strategy for Afghanistan. Administration sources suggest it includes a significant boost in U.S. troop levels. The official announcement is planned in prime-time Tuesday night at the West Point Military Academy before an audience of Army cadets and military officials.

The bigger audience, of course, is a skeptical American public, which is divided on the question of whether sending more troops is a good idea. And the toughest sell for the president is within his own Democratic Party.

Here to discuss the president’s Afghanistan dilemma are two leading voices on foreign and military affairs. Senator Richard Lugar of Indiana is the top Republican on the Senate Foreign Relations Committee. And in Wilmington, Delaware, Democratic Senator Jack Reed , a member of the Senate Armed Services Committee and himself a West Point graduate.

Senators, thanks for being with us. Let me start just with the basics. And “The Washington Post” lays out some of it today in this story: “Newly Deployed Marines to Target Taliban Bastion,” 30,000 to 35,000 new troops is what we expect, about 9,000 Marines will go first into the Helmand province, where -- has had the heaviest fighting right there.

Senator Lugar, let me start with you, does the president have it right here, 30,000 to 35,000 troops over the next year to 18 months?

LUGAR: Well, the president needs to start by outlining the war we are in. Now by that, I mean, the war not against the Taliban, al Qaeda, but what is, at least, the objective of continuing in Afghanistan or in any place?

That is basic because this has to be a confident speech in which the president recognizes we’re at war. The American public recognizes that. Our friends and foes around the world see the resolution.

Having said that, then the president has to outline why Afghanistan is important. Why -- now, many Americans say, well, of course it’s important, this is where the al Qaeda did their encampment, protected by the Taliban, can’t go through that again.

But next door in Pakistan there are also Taliban, battle going on there. The president has to mention Pakistan. What is the implication of that war there, and Pakistan itself? Or General Petraeus’s survey of the 20 parts of the Central Command, the 20 nations in which there may be other people from al Qaeda, how do we deal with all of that?

In other words, Afghanistan is crucial and we’ve been concentrating on the number of troops and so forth. Now the president will need to outline that and he’s wanting to do so with confidence that this is not a few troops here, a few troops there, a reevaluation each time through. Likewise, he’ll have to talk about, can the Afghans get to 134,000 people on their own to protect what they are doing? Will the allies from NATO come in? How confident we are of that, all of that in a comprehensive speech has to be a part of this picture.

KING: Well, Senator Reed, I want to get to some of the specifics. Senator Lugar teed some of them up right there. But on the basics, are you ready to support 30,000 to 35,000 more troops over the next 12 to 18 months and maybe even more a year from now if General McChrystal comes back and says, Mr. President, things are going well, but I need a little more?

REED: Well, as Senator Lugar said, the president has to speak to the American people, remind them why we’re there, and also lay out a strategy, not just the reflexive response to a recommendation, but a strategy that involves protecting the homeland from al Qaeda.

And that involves a presence in Afghanistan. It involves being influential in Pakistan. It involves having a combination of intelligence, counter-terrorism, and counter-insurgency operations, all of these things.

I think the president has taken appropriately the time to study this carefully. I think his recommendation will be sound. But I think, more importantly, the president will say, not only there’s an increase in troops, but lay it out in the context of how this will allow us to shift the burden to the Afghani forces, to build them up as we go forward.

And the key element here is not just more troops, the key element is shifting the operations to the Afghanis. And if that can be done, then I would support the president.

KING: Well, we’ll talk about in a second. First, I want you to both assess the difficult politics for the president. I want to show some polling numbers. If you ask the American people, what should the president do? They’re pretty divided. Begin to withdraw, 39 percent. Increase by about 40,000 troops, 37 percent. Increase by less than 40,000 troops, 10 percent. Keep it the same, 9 percent.

But here’s the most telling poll numbers. If you look at the recent “USA Today”/Gallup poll, how is the president handling Afghanistan? A 20-point drop in his approval rating between July and now, and a 20 percent increase in the disapproval rate.

So, Senator Lugar, to you first, he took a little more than three months from General McChrystal’s recommendation to the speech he will give Tuesday night. Some have said that’s a deliberative, thoughtful process. Others, some of your conservative friends, have said it is dithering.

Has the president paid a price, a political price, for waiting?

LUGAR: Perhaps. but at this point, that’s beside the point. The president is at a moment in which he really has to regain the approval of the American people, as well as people around the world, that we are on the right course. This is why this speech and the plan is so important.

So I’ll give the president credit for taking time. I think the dilemma for the president, beyond those we’ve already talked about, is that the war is costly. Additional troops will cost a great deal more, by all estimates. We have a...

KING: Some say $1 million per troop per year.

LUGAR: Precisely. And we’ve really not heard good calculations of how much cost the Afghan troops will be for us. In other words, are we as American taxpayers going to pay for this increase to 134,000, even if the Afghans were able to do that in one year, as opposed to four, which used to be the old plan?

We’re going to have to have a serious talk about budget and about the $1 trillion deficit we are in now and will continue to be in. And if we were talking about several years of time, how many more years beyond that? What is the capacity of our country to finance this particular type of situation as opposed to other ways of fighting al Qaeda and the war against terror?

KING: Senator Reed, does the president have to say, I need your trust, citizens, I need your support financially, and here’s the end game? Does he need to draw a date on a calendar out there and say, this is when we get out of Afghanistan? And can he do that right now?

REED: I think he has to make a speech that shows that all of our efforts are pointed to our reduced presence in Afghanistan. But I think he has to also indicate again and again how critical this is to our national security.

The elements -- the al Qaeda elements that attacked us on 9/11 are still on the Afghan/Pakistan border. We still have to keep up the pressure. But I think he has to make it very clear that this is not an unending responsibility of the United States without limit.

Senator Lugar pointed out the issue of cost. You know, we have over eight years in Iraq and Afghanistan under the Bush administration not paid for any of those military operations. Now that is coming home to reckon in terms of a huge deficit. We have to move forward and support this operation responsibly.

But the president’s -- I think the key to the president’s response is laying down a strategy, informing the American public of what is at stake, and I think that when they listen and when they hear, they will be supportive, but it will be a support that has to be continually developed and strengthened going forward.

KING: You’ve both mentioned the cost. Let me ask you, we’re going to talk to Chairman David Obey of the House Appropriations Committee later in the program. He wants a special war surtax. He wants it laid out transparently so the American people know every time they get their tax bill, here’s what goes to the government normally, and here’s the part that’s going to pay for Iraq and Afghanistan. Senator Levin in the Senate has talked about something similar. Senator Reed, to you first, do you support that? Do you think it should be broken out separately so the American people get a separate bill for the wars in Iraq and Afghanistan, so they fully understand the price tag?

REED: We have to begin to pay for everything we do. We’re engaged in a huge debate on health care and central to that debate is paying for it. And if we’re paying for the health and welfare of the American people, we certainly have to pay for our operations overseas. Whether it’s broken out specifically or not, that is a detail.

I think the important point is that we have to commit not to indefinitely, through deficits, fund these operations, but do it in a reasonable, pragmatic way.

KING: Do you support a separate accounting, a separate war surtax?

LUGAR: I believe there will be a separate accounting, but in any event, I think we will have to pay for it. I would just make this suggestion, that in the three weeks of debate we still have ahead of us, we really ought to concentrate in the Congress on the war, on the overall strategy of our country and the cost of it. And we ought to be on the budget. Passing appropriations bills in a proper way.

Now in the course of that, we may wish to break out that. We may wish to discuss higher taxes to pay for it. But we’re not going to do that debating health care and the Senate for three weeks through all sorts of strategies and so forth.

The war is terribly important. Jobs and our economy are terribly important. So this may be an audacious suggestion, but I would suggest we put aside the health care debate until next year, the same way we put cap and trade and climate change and talk now about the essentials, the war and money.

KING: Is your Republican friend making sense, Senator Reed? Should health care be set off to next year?

REED: Absolutely not. I think we’re in the midst of probably the most significant debate and conclusion with legislation that we’ve ever had. And the health care debate is essential to our economic future. There are businesses and individuals each year pay more and more for health care. It has become unaffordable. We have to go ahead and conclude this debate.

To stop now would be stopping on the edge of, I think, significant reform, which is so important for the country. And frankly, it’s ironic, there has -- now under the Bush administration, there was no serious debate about Afghanistan. that was relegated to the sidelines. There was no attempt to pay for it. And suddenly, now, that becomes a critical need that we put aside health care. I don’t think so.

I think we have to push forward. I think the president’s speech will be appropriate. I think the strategy we’ll analyze in the committees and I think we can go forward on both fronts and we have to.

KING: A quick break. The two senators will be back in just a moment. We’ll put to them the question, as the president prepares to send thousands of more U.S. troops to Afghanistan, can his partner in Afghanistan, President Karzai, be trusted? And a reminder that CNN’s coverage of the president’s speech begins Tuesday at 7:00 p.m. Eastern. Please stay with us.

(COMMERCIAL BREAK)

KING: Back with two top senators, Republican Richard Lugar and Democrat Jack Reed . Let’s stay on Afghanistan. You mentioned before the break, Senator Lugar, the goal is to train 134,000 Afghan security forces by next October. That would require 5,000 a month. And yet, just this past month, the Afghani government failed its target by more than 2,000.

Some would say that this is Iraq deja vu. That the United States government keeps saying, we’re going to train them, we’re going to train them, we’re going to train them, and because of problems with the Afghan government, in this case, corruption, people leaving once they get the training, it won’t get done. Do you trust the other side of the equation? Do we have a reliable partner in the Afghan government?

LUGAR: For the moment, we don’t have a reliable partner. And that is a question, clearly, of the building process. If the training occurs, will the government really take hold? We don’t know, frankly. And we know right now, as you say, that the attrition of the forces that are trained as such and the number of people we have to send over to do the training is limited. So that’s a phased-in process, while this acceleration is predicted.

KING: So explain, Senator Reed, to a skeptical American out there who says, if we don’t think we can trust the government, and we need to see, time will tell, to use the cliche, why would you send 30,000 more troops into Afghanistan unless and until you know that President Karzai has his act together this time?

REED: Well, we have to, I believe, increase our forces, first, our trainers, which is consensus to do that. But also some of our brigade combat teams to give us the time and also to seize the initiative from the Taliban so that the Karzai administration can begin to carry through some of its commitments. They made commitments left and right. Now they have to carry those commitments through.

The military forces there, according to our troops, are actually very good fighters. But we need more of those units, more of those small unites. It will take some time. But the effort here really is to stabilize the situation and insist that the government of Afghanistan begin to perform. And I think the other effort is begin to, at the local level, have effective governance.

And that means good governors. That means governors that won’t be interfered with and disrupted from the center. That is something we’re going to have to insist upon. And part of our commitment and part of the president’s speech will be to communicate the fact that we have these understandings and that they’re enforceable.

KING: All right. Senator Reed, your test for General McChrystal’s strategy, not the Afghan government?

REED: Well, a test for the McChrystal strategy is if they can essentially stabilize, particularly the capitals in Helmand province and in Kandahar, and also if they can begin to see a defection from the Taliban ranks of those nonideological fighters.

And the ultimate test is that there are villages able to protect themselves, with the help of the Afghani national army and, to a degree, the United States and NATO forces, and that you’re beginning to see a revival of civic activity, economic activity.

That’s the final test, a return to what would be, sort of, normalcy. And that -- that will take a while, but it will be at the local village level.

KING: There’s a new report from Democrats on the committee on which you are the ranking Republican member, the Foreign Relations Committee, and it looks back at time at Tora Bora and the early days of the war in Afghanistan under the Bush administration.

There have been long rumors that Osama bin Laden was allowed to escape or that he was there and he was not grasped. Here’s what the Democratic report from the Foreign Relations Committee staff says. “The decisions that opened the door for his escape to Pakistan allowed bin Laden to emerge as a potent symbolic figure who continues to attract a steady flow of money and inspire fanatics worldwide. The failure to finish the job represents a lost opportunity that forever altered the course of the conflict in Afghanistan and the future of international terrorism.”

This report, Senator Lugar, prepared by the Democratic staff for the Democratic chairman of your committee -- is it just looking back to learn a history lesson, or is it relevant at the moment?

LUGAR: Well, perhaps both. But at the same time, it does serve as a convenient way for, perhaps, Democrats to say once again, there’s another failing of the past administration; all the problems have accumulated.

I think we have to accept that there were many failings. But the problem right now is, what do we do presently? What will the president’s plan be? How much confidence do we have in this president and this plan?

KING: Is that the way to look at it, Senator Reed, that, yes, there were many mistakes under the Bush administration, but at the moment, now and certainly after the speech Tuesday night, this is President Obama’s war?

REED: Well, the president is confronting the culmination of decisions that were made eight years and -- or more before. That has made the situation much more difficult for him.

The escape of bin Laden is -- is an interesting comment, but the real strategic misjudgment, I think, was shifting our focus away from Afghanistan and Pakistan and under-resourcing it for seven years while the Bush administration pursued a policy in Iraq.

Now we’re living with the consequences of that, in terms of the population of Afghanistan that is much more wary of us because we didn’t deliver the promises they thought were forthcoming in 2002 and 2003. You’ve got a renewed Taliban. You have a situation where al Qaeda has reconstituted itself. You have Pakistan, which is even more unstable today than it was in the past.

All of these things have developed over the last several years. But Senator Lugar is right. The question now is what to do about it. Be informed by the past, make judgments based upon the experience of the past, but we have to look forward and we have to -- and the president has to propose a strategy that will carry us forward and that will ensure the security and safety of the United States.

KING: Well, Senator Lugar, then look forward. In a best-case scenario, what should the American people be prepared for? How long -- five more years, 10 more years, 20 years more in Afghanistan?

LUGAR: The American people will not sustain a war in Afghanistan for five years or 10 years, in my judgment. Below that, we do have troops in many countries still sustaining efforts, so we’re not in a full-scale war, but I -- this is why I get back to the budget.

We’re going to have to take a look at what our own resources are, what our own troop levels are, whether we can continue to recruit enough people and what other things are occurring in the world at the same time. These may not be the only wars America has to face. And that’s an important factor, to have at least some reserve situation.

KING: So, Senator Reed, five years, 10 years? Do you have a sense? Will, 10 years down the road, there be 30,000 U.S. troops still in Iraq and 25,000 or 30,000 still in Afghanistan? REED: What we have to have is a continually decreasing military presence in Afghanistan. I don’t think there’s going to be an overnight withdrawal of American forces, but unless we’re on a trajectory in which our troop levels come down, the ability of the American public to support it and financially to support it is questionable.

But I think that has to be and will be inherent in the president’s speech on Tuesday evening at West Point.

KING: Senator Jack Reed , Democrat of Rhode Island, Senator Richard Lugar, Republican of Indiana, gentlemen, thank you both for your time today, very thoughtful discussion.

REED: Thanks, John.

KING: Up next, we’ll turn to the Middle East, where some see a possible -- possible sign of movement in the effort to revive the Israeli-Palestinian peace talks. The former British prime minister, Tony Blair, now a special envoy to the region, takes us inside this delicate diplomacy. Please stay with us.

(COMMERCIAL BREAK)

KING: After months of stalemate, perhaps a bit of movement in the Israeli-Palestinian dispute. Israeli Prime Minister Benjamin Netanyahu has announced a 10-month freeze of Jewish settlements in the West Bank. But Palestinian officials say the moratorium doesn’t go far enough, because it doesn’t include a halt in construction in East Jerusalem.

So is there an opening for progress or just more finger-pointing and frustration? Our next guest has unique insight. Tony Blair is the former British prime minister and now special envoy to the Middle East for the United States, Russia, the European Union, and the United Nations.

Mr. Prime Minister, thank you for joining us. Let’s start with the basic question, will the Israelis and the Palestinians sit down or will they continue just to talk about sitting down?

BLAIR: Well, I hope they sit down because it’s absolutely essential that we get a political negotiation under way and get it under way as quickly as possible. Because there are things -- positive things happening on the ground right at the moment on the West Bank.

The Palestinian economy is growing. There are check points being opened or removed. There’s a lot of bustle and activity on the West Bank. In Gaza, let us hope we get the release of the kidnapped Israeli soldier and then start to get some opening up of Gaza to the outside world.

So there are positive things that are happening, but it needs an overarching political negotiation in order to succeed. KING: Should the Palestinians, in your view, sit down, even though it’s not perfect? Is it time to sit down and just say, look, you’re not going to get everything you want entering negotiations? Just sit down and negotiate?

BLAIR: Well, I’ve just spent some time with the Israeli prime minister, Mr. Netanyahu, and I think he is genuine and serious in wanting the negotiation to start. I think from the Palestinian point of view, they need to know that this negotiation is going to be credible. In other words, it’s not just going to be sitting down and talking, but it is genuinely going to lead us towards the two-state solution that everyone wants to see.

So the debate at the moment is, how do we create the context in which people think this negotiation is serious, that it will lead to a viable Palestinian state, one that is a secure neighbor for Israel, but also a Palestinian state in which the Palestinians have the freedom to run their own territory?

KING: Assess the politics of the moment. Some would look at these two governments and say Prime Minister Netanyahu cannot afford to give up much or he’ll lose his coalition. President Abbas has said, enough, I’m frustrated with this, I’m not going to stay in power much longer.

So you see two weak governments, some would say, there is no way they could get anything done, and others would say, that’s the perfect opportunity. How do you see it?

BLAIR: Because I’m more naturally optimistic, I see it as an opportunity. I also think both of them have got one great source of strength that’s not to be underestimated here. I mean, I spend a lot of time in Israel and in the Palestinian territory. There is no doubt in my mind at all that a majority of people, both Israelis and Palestinians, want to see a two-state solution.

Their doubt over the past years has been whether it’s possible to have it, but their commitment in principle to getting it has not diminished. So our task, if you like, is to set the context in which they think this can be done.

Now I’ve spent time talking to the leadership of both sides. Whatever doubts they have about each other’s good faith from time to time -- I mean, I don’t doubt the good faith of either. I think they genuinely want to find a way through, but they come at it from completely opposite sides.

Israel wants to know that its security is going to be protected, while on the West Bank the Palestinian Authority have made real strides forward in security.

BLAIR: I mean, I can go to cities on the West Bank now, Jenin and Nablus and Hebron and Qalqilya and Jericho, places that two years ago would have had quite a different security setting, now with security greatly improved. So there are things that the Palestinians are doing, actually, to help meet that Israeli concern.

On the other side, for the Palestinians, what they need to know is that if they sit down and talk so the Israelis, it will lead, genuinely, to an independent Palestinian state. And what is it that they want to know? They want to know that the weight of occupation will be lifted.

But there again, actually, there have been some things that have happened on the West Bank: check points opened, some of the restrictions lifted, Israeli-Arabs coming into the Palestinian territory, an increase in economic growth. As a result, the West Bank economy is probably growing maybe in double digits, actually, at the moment.

So there is real potential and hope, but the next month, I think, will be completely critical, fundamental to this, because if we can’t get negotiations going that are credible, then the vacuum that is created will suit no one but the extremists.

KING: Let me follow up on that point. You mentioned the next month is critical. One of the questions being asked back here in the United States is where is the U.S. leadership? I want to read you a bit from a “New York Times” editorial this Saturday. “Nine months later, the president’s promising peace initiative has unraveled. The Israelis have refused to stop all building. The Palestinians say that they won’t talk to the Israelis until they do and President Mahmoud Abbas is so despondent, he has threatened to quit. Arab states are refusing to do anything. Mr. Obama’s own credibility is so diminished, his own approval rating in Israel is 4 percent, that serious negotiations may be farther off than ever. Peacemaking takes strategic skill, but we see no sign that President Obama and Mr. Mitchell were thinking more than one move down the board.”

That’s a pretty sober, pretty negative assessment of the American diplomatic involvement. Do you share it?

BLAIR: I think when we look at the various strands of negativity there are around at the moment and there always are in these negotiations, there are, nonetheless, positives.

We’ve got to seize on them, work on them, and make sure that we bring about a situation in which the central strategic objective of President Obama, which is right at the outset of his administration, to make this process count and work is achieved. And I do emphasize that as well. The president said this at this beginning. This is, to my mind, the big difference of what has come before.

At the very beginning of this administration, he set that as a core strategic objective. I have absolutely no doubt he holds to that and whatever the difficulties and the obstacles, we have to find a way through. And personally, although as I say I am optimist by nature, I believe we will.

KING: Let me shift subjects. I want to get your thoughts about an inquiry back in your home country. There’s an inquiry into the run-off, the political decisions, the military decisions in the run-up to the Iraq war. And your name, and your credibility have been called into question, your good name has been called into question in this inquiry.

Lord Goldsmith, who was your attorney general back in those days, says that he warned you that this was a breach of international law, but that he was bullied into being quiet and convinced not to resign from the government. Is that an accurate portrayal?

BLAIR: No, it’s not, but I think the best thing with this inquiry is actually to let us all give our evidence to the inquiry. And you know, I’ve been through these issues many, many times over the past few years and I’m very happy to go through them again. But I think probably the appropriate place to do that is in front of the inquiry.

KING: I’ll leave the specifics for when you testify to the inquiry, but if you pick up media accounts in your country, friends of yours are saying that you feel betrayed, that you feel your reputation is being damaged by men you bestowed high offices to in the government. Do you feel betrayed? Are you angry at how this is being done?

BLAIR: Absolutely not. One of the things you learn as a leader in a country is you have the responsibility to take decisions. Some of those decisions are difficult decisions and some of them are very controversial. And what happens, your time in leadership goes on, and I spent 10 years as UK prime minister, is that these controversies, sometimes they can be very bitter, very difficult.

That’s part of being a leader. And I think it was one of your presidents that once said if you can’t stand the heat, don’t come into the kitchen. And that’s my view of politics. So I take decisions, I stand by them, and as I say, these are all questions I’ve answered many times before. I’m happy to go through it again.

KING: The former British Prime Minister Tony Blair, now special envoy to the Middle East. Mr. Prime Minister, thanks so much for your time today.

BLAIR: Thanks, John. KING: Up next, a quick check of today’s top headlines, then growing concerns over the cost of war in Afghanistan have led some lawmakers to propose new measures, including a controversial so- called war tax. An architect of such a proposal, Congressman David Obey, gets “The Last Word” next.

(COMMERCIAL BREAK)

KING: I’m John King and this is STATE OF THE UNION. Here are stories breaking this Sunday.

A show of defiance from Iran. Iran’s state news agency says the Iranian cabinets may authorize the construction of 10 new uranium enrichment plants. That’s a dramatic expansion of the country’s nuclear program and would be a direct rejection of the United Nations demand to freeze all uranium enrichment activities.

A solid start so far to the holiday shopping season. Retailers raked in about $10.66 billion on so-called Black Friday. That’s according to ShopperTrak, which keeps an eye on sales. That’s about a half percent increase over last year.

President Obama is preparing to unveil his new strategy for Afghanistan. It’s expected to include a substantial boost in troop levels. The president will announce that plan during a speech Tuesday night at the West Point military academy. The defense official tells CNN the Pentagon is preparing for an increase of 34,000 troops. CNN of course will carry the president’s speech live. Those are your top stories here on STATE OF THE UNION.

Up next, a strong supporter of a new tax to pay for the war in Afghanistan. House Appropriations Committee Chairman David Obey gets “The Last Word,” next.

(COMMERCIAL BREAK)

KING: Nineteen newsmakers, analysts and reporters were out on the Sunday morning talk shows, but only one gets the last word. That honor today goes to Democratic Congressman David Obey of Wisconsin. He’s the chairman of the House Appropriations Committee.

Mr. Chairman, welcome to “State of the Union.”

OBEY: Thank you for having me.

KING: I’m going to hold up the headline, here, of the Washington Times, “Obama Faces Hard Sell on Afghan War Decision.”

I want to get, in a moment, to your proposal to how to pay for this, if the president goes forward with this. But just on the merits, 30,000-plus more troops to Afghanistan: a good idea or a bad idea?

OBEY: The problem is that you can have the best policy in the world, but if you don’t have the tools to implement it, it isn’t worth a beanbag. And I don’t think we have the tools in the Pakistani government and I don’t think we have the tools in the Afghan government. And until we do, I think much of what we do is a fool’s errand.

KING: If you can see it so clearly, why can’t the president of the United States, if you’re right?

OBEY: Well, the president sits in a different position. I mean, he has inherited an absolute mess. No matter what he does, it’s a -- it’s a no-winner. And I -- you know, I have a great deal of respect for the way he’s gone about this process. But the Pentagon...

KING: But you think he’s wrong?

OBEY: Well, the Pentagon has only one job, and that’s to talk about this war and this war only. But he has, and I have jobs that require us to look at everything else that’s tied into it.

I have to look at the entire federal budget, as chairman of the committee, for instance. I have to see what $400 billion or $500 billion, $600 billion, $700 billion, over a decade, for this effort, will cost us on education, on our efforts to build the entire economy. And -- and when you look at it that way, I come to a different conclusion than he does. KING: And if he goes forward, and even if we stayed at the current level, you believe the American people need greater transparency, greater clarity about how much this is costing.

So you’ve proposed something, along with several of your colleagues, the Share the Sacrifice act of 2010.

I want to show some of the details of it. Couples earning up to $150,000 would see a 1 percent tax increase. Your proposal would exempt service men and women and their families who served in Iraq and Afghanistan since 2001, and it would exempt families who have lost an immediate relative in the war.

So if you make 150 grand or more, you would pay 1 percent, and then you would escalate up. If you made 250 grand, you’d pay more, and so on up the scale, correct?

OBEY: Yes. And my point and our point is simply that, in this war, we have not had any sense of shared sacrifice. The only people being asked to sacrifice are military families. They’ve had to go to the well again and again and again. And yet everybody else in society -- you know, they’re essentially told to go shopping by the previous president.

I just think that, if this war is important enough to engage in the long term, it’s important enough to pay for.

We’re told by people like General Petraeus that we need to be prepared to commit eight to 10 years. First of all, I don’t think that’s sustainable, but if you’re going to do that, at least you ought to pay for it so it doesn’t destroy every other effort that we need to make to rebuild our own economy.

KING: The chairman of the House Appropriations Committee can do a lot, but to pass that proposal, you need the support of the speaker. What does she say?

OBEY: I have no idea where anyone in the leadership will stand, except John Larson, who is a co-sponsor of this proposal. So is Jack Murtha, the Chairman of the Defense Appropriations Subcommittee. So are a number of other people -- Chairman Frank from the banking committee. And my impression is that Charlie Rangel, the -- or the Ways and Means Committee chair is also interested in the idea.

KING: Has anyone in the leadership or anyone at the White House asked you, “Mr. Chairman, we understand your point, but we don’t want to be talking about taxes heading into the midterm election campaign, where we’re already talking about taxes in the health care debate?”

OBEY: No, I think people understand where we’re coming from. And I think people understand that we’re doing this because we believe it’s the right thing to do on the merits.

I’m -- I’m very dubious about this whole effort in Afghanistan and Pakistan, but if we’re going to do it, we shouldn’t do it in a way which will destroy every other initiative that we have to rebuild our own economy.

KING: There was talk during the final years of the Bush administration, when Democrats came back into power, of trying to block him. Will you go so far with a Democratic president or are you more deferential because, of a Democrat in the White House, where you can say, “I oppose it; I think it’s a bad idea; I think we should do this to pay for it,” but would you try to get in front of the train?

OBEY: I owe it to any president to listen to what he has to say before I say what I’m going to do. The important thing is not what Dave Obey is going to do. The important thing is what the country is going to do, long term.

KING: I’m going to get up and go over to the map because I want to try to connect the dots, as you connect them, to talk to the American people.

This is a map, of course, of the Middle East region. And I’m going to pull out Afghanistan because I just want to highlight this point. We’ve discussed this a little bit and you know these numbers very well.

Over $223 billion have been allocated to Afghanistan since the beginning of the war back in 2001; $38 billion in U.S. aid for reconstruction; at the moment, 68,000 troops in Afghanistan, and the president, of course, prepared to go higher than that.

Now, I want to bring the debate back home by bringing us back around this way, and I want to show you these states here.

Here’s the United States here. Let’s zone in on unemployment. With these colors here, you see the states in red, 23 of them, unemployment went up last month. The states in green, the unemployment rate dropped a little bit last month. But you see all that red, double-digit unemployment across the country.

Mr. Chairman, the president will have a job summit on Thursday at the White House. If he could do one thing -- if you could ask him to do one thing to create jobs in those states that are red and in the rest of the United States, what would it be?

OBEY: I think the most important thing is to help state and local governments. We’ve been trying to fill over a $2 trillion hole in the economy with the budget stimulation package because of the collapse of the private economy in the previous administration.

We were be able to fill about 40 percent of the hole in those state budgets, but in the next year, our capacity is going to drop to fill only about 20 percent of that hole. That would mean that states would be raising taxes and cutting services at the very time we’re trying to expand the economy. That’s counterproductive. So I think that really is what has to be done.

KING: Are you worried about the political price of more deficit spending to do that?

The American people, increasingly, if you look at polls, are getting nervous about all the deficit spending.

OBEY: We’ll do what we think is right and worry about the polls later. But I want to make one other point.

We’ve been told for a year that we need to pay for every dollar that it’s going to cost us to reform our health care system. That’s about $900 billion over 10 years.

OBEY: If we wind up being committed in Afghanistan for eight to 10 years, that’s also going to approach $800 billion to $900 billion. And if we’re going to do that, it seems to me that if we’re being told we have to pay for health care, we certainly ought to pay for this effort as well.

KING: The chairman of the House Appropriations Committee, Congressman David Obey, sir, we hope you’ll come back as this debate continues in the weeks and months ahead.

We want to also update you on a breaking news story. Four sheriff’s deputies have been shot dead in Washington State, in Lakewood, that’s about 40 miles south of Seattle. Authorities say the deputies were ambushed in a coffee shop near Seattle. Again, about 40 miles south. No word on suspects. CNN will bring you much more information on this breaking story as it becomes available.

And up next, we head out to Seattle, Washington. A painful recession is causing a spike in teenage homelessness, and testing the resolve of organizations determined to give these struggling youths a hot meal, some shelter, and perhaps some hope.

(COMMERCIAL BREAK)

KING: You see it where you live and we’ve seen it time and time again in our travels, the troubled economy affecting just about everyone. One of the hardest groups hit are young Americans who we see increasingly are homeless. If you take a look, you see them in the allies, and you would be shocked at the faces.

We traveled out to Seattle, Washington, look at this stunning statistic, nearly 30 percent unemployment rate among those 16 to 19 years old. Here’s another stunning stat, 27 percent, children make up 27 percent of the homeless population, and are the fastest-growing segment of those out on the street.

We visited a place called the Orion Center. It has seen in the past year a 50 percent increase in demand for its services. In our “American Dispatch” this week, we wanted to get a close look at this. So we visited the streets of Seattle, Washington, and a remarkable place that for many homeless teens, first is a source of a hot meal and then something more.

(BEGIN VIDEOTAPE)

KING (voice-over): Life on the street has its own rhythm and rules. There is safety in numbers, and a numbing sadness in the search for shelter in Seattle’s cold, raw rain. Living here leaves an indelible mark.

MICHAL, FORMER HOMELESS TEEN: I’ve been cold. I’ve been hungry. I’ve been soaked to the skin and tired and sick and injured, and you definitely learn quite a bit about yourself from that.

KING: At Seattle’s Orion Center, Michal first found smiles and support, then skills in an eight-week computer diagnostics class. MICHAL: If I hadn’t found this place, I’d probably be squatting either in a park or in an abandoned building.

UNIDENTIFIED FEMALE: What you do is you press this, and you start pulling the shot into a shot glass.

KING: Down the hall, Orion’s barista training program...

UNIDENTIFIED FEMALE: Cash handling; you learn interview skills.

KING: ... where Kayla Wyatt (ph) developed new skills and the confidence to move back with her mother after two years off and on on the street.

UNIDENTIFIED FEMALE: You think it’s easy at first, and then it gets harder and harder, especially during the winter because it’s so cold here.

KING: For just about everyone, the first Orion Center visit is for what the street kids call “the feed,” free meals. Some linger longer to enjoy a break from the elements, a hot shower, maybe warmer clothes for the next night.

MELINDA GIOVENGO, EXECUTIVE DIRECTOR, YOUTHCARE: Twelve thousand meals a year, 10,000 showers, and believe it or not, 10,000 pair of socks to keep young people’s feet warm.

KING: Melinda Giovengo is executive director of YouthCare, and Orion Center is its flagship program, needed more than ever in this punishing recession.

GIOVENGO: We’re seeing 180 new faces a month. We’ve had young people come in and say, I’m here; I’m 18 years old; my family can’t afford me anymore. It’s not just affecting, you know, underprivileged kids. It’s affecting the entire strata of America.

KING: A 50 percent spike in demand but fewer resources because a bad economy dries up funding.

GIOVENGO: We’ve had family foundations who have been supportive of us for 20 years are saying, we can’t this year. All the government fundings have been jeopardized, restricted or reduced over the last few years, so we’re just hanging on, trying to do more with less.

KING: The bad economy also takes a toll in other ways. Michal took a position in a bowling alley because technology jobs are so scarce now. Delaun was a classmate in the computer program. He now works as an Orion Center intern because a tough job market is even tougher for someone with no experience and a history on the street.

DELAUN, FORMER HOMELESS TEEN: It’s terribly hard, I mean, especially in certain situations, where you’ve got youth who are being faced with various other challenges that society may bring, as far as trouble with the law and other things that they can get very easily caught up in. I came here kind of lost, and I found myself a whole lot more than I intended to here.

KING: They took different paths to the street. Delaun had problems at home he prefers not to discuss. Michal left home in Ohio to join a young Seattle man he met on the Internet.

MICHAL: Partly to get away from my family because I was just, you know, coming out as queer, and I wanted some time on my own to actually get things sorted out for myself and work up the courage to actually tell them.

KING: Some here have or developed drug problems. Others make life-changing choices in the name of survival.

GIOVENGO: Trading sex for places to live and money to get food with and ending up being seduced into a lifestyle of chronic adult homeless or being seduced into the, kind of, sexual exploitation industry that’s out there.

So it’s more and more dangerous and there’s fewer and fewer of us and fewer, fewer resources to go out and capture them early so that they don’t get absorbed into that very, very dark world.

KING: Here at Orion, there is an escape, a hot meal and, if nothing else, the company and support of others who understand.

(END VIDEOTAPE)

KING: Our thanks to everyone at Orion. And we certainly wish all of those young men and women the best and safety in this holiday season.

As you know, one of our goals is to get out of Washington as often as we can. We made it our pledge here on STATE OF THE UNION to visit all 50 states in our first year. So far, we’ve been to 45, including Washington, Montana, Michigan, and North Carolina. Go to cnn.com/stateoftheunion, and you can see what we’ve learned when we visited your community.

We’ll be here again next Sunday and every Sunday at 9:00 a.m. Eastern for the first and last word in Sunday talk. Until then, I’m John King in Washington, take care.

For our international viewers, “AFRICAN VOICES” is next. For everyone else, “FAREED ZAKARIA: GPS” starts right now.

END

.ETX

Nov 29, 2009 13:37 ET .EOF

CNN’S “STATE OF THE UNION”

NOVEMBER 29, 2009

SPEAKERS: JOHN KING, HOST

SEN. RICHARD G. LUGAR, R-IND.

SEN. JACK REED, D-R.I.

PATRICK BYRNE, CHAIRMAN & CEO, OVERSTOCK.COM

TONY BLAIR, QUARTET REPRESENTATIVE HOWARD KURTZ, CNN ANCHOR

BILL PRESS, RADIO TALK SHOW HOST

JIM GERAGHTY, NATIONAL REVIEW

CHRYSTIA FREELAND, FINANCIAL TIMES

CHARLIE GASPARINO, CNBC

DONNA BRAZILE, CNN CONTRIBUTOR

ED ROLLINS, CNN CONTRIBUTOR

REP. DAVID R. OBEY, D-WIS.

[*] KING: I’m John King and this is STATE OF THE UNION.

(BEGIN VIDEOTAPE)

KING (voice-over): President Obama prepares to announce his new strategy for Afghanistan.

PRESIDENT BARACK OBAMA: It is my intention to finish the job.

KING: Two influential senators weigh in on troop levels, the timetable, and the cost of war: Democrat Jack Reed of Rhode Island and Republican Richard Lugar of Indiana.

BENJAMIN NETANYAHU, ISRAELI PRIME MINISTER: Now is the time to move forward towards peace.

KING: A rare hint of movement in the search for Middle East peace. We’ll check in with special envoy Tony Blair live from the region.

And in our “American Dispatch,” we travel to Seattle to see how, despite scarce resources, one program tries to get homeless teens off the streets and on to a better path.

This is the STATE OF THE UNION report for Sunday, November 29th.

(END VIDEOTAPE)

KING: Good morning. Hope you all had a great Thanksgiving.

President Obama this week will unveil his long-awaited new strategy for Afghanistan. Administration sources suggest it includes a significant boost in U.S. troop levels. The official announcement is planned in prime-time Tuesday night at the West Point Military Academy before an audience of Army cadets and military officials.

The bigger audience, of course, is a skeptical American public, which is divided on the question of whether sending more troops is a good idea. And the toughest sell for the president is within his own Democratic Party. Here to discuss the president’s Afghanistan dilemma are two leading voices on foreign and military affairs. Senator Richard Lugar of Indiana is the top Republican on the Senate Foreign Relations Committee. And in Wilmington, Delaware, Democratic Senator Jack Reed , a member of the Senate Armed Services Committee and himself a West Point graduate.

Senators, thanks for being with us. Let me start just with the basics. And “The Washington Post” lays out some of it today in this story: “Newly Deployed Marines to Target Taliban Bastion,” 30,000 to 35,000 new troops is what we expect, about 9,000 Marines will go first into the Helmand province, where -- has had the heaviest fighting right there.

Senator Lugar, let me start with you, does the president have it right here, 30,000 to 35,000 troops over the next year to 18 months?

LUGAR: Well, the president needs to start by outlining the war we are in. Now by that, I mean, the war not against the Taliban, Al Qaida, but what is, at least, the objective of continuing in Afghanistan or in any place?

That is basic because this has to be a confident speech in which the president recognizes we’re at war. the American public recognizes that. Our friends and foes around the world see the resolution. Having said that, then the president has to outline why Afghanistan is important. Why -- now, many Americans say, well, of course it’s important, this is where the Al Qaida did their encampment, protected by the Taliban, can’t go through that again.

But next door in Pakistan there are also Taliban battle going on there. The president has to mention Pakistan. What is the implication of that war there, and Pakistan itself? Or General Petraeus’s survey of the 20 parts of the Central Command, the 20 nations in which there may be other people from Al Qaida, how do we deal with all of that?

In other words, Afghanistan is crucial and we’ve been concentrating on the number of troops and so forth. Now the president will need to outline that and he’s wanting to do so with confidence that this is not a few troops here, a few troops there, a reevaluation each time through. Likewise, he’ll have to talk about, can the Afghans to 134,000 people on their own to protect what they are doing? Will the allies from NATO come in? How confident we are of that, all of that in a comprehensive speech has to be a part of this picture.

KING: Well, Senator Reed, I want to get to some of the specifics. Senator Lugar teed some of them up right there. But on the basics, are you ready to support 30,000 to 35,000 more troops over the next 12 to 18 months and maybe even more a year from now if General McChrystal comes back and says, Mr. President, things are going well, but I need a little more?

REED: Well, as Senator Lugar said, the president has to speak to the American people, remind them why we’re there, and also lay out a strategy, not just the reflexive response to a recommendation, but a strategy that involves protecting the homeland from Al Qaida.

And that involves a presence in Afghanistan. It involves being influential in Pakistan. It involves having a combination of intelligence, counterterrorism, and counterinsurgency operations, all of these things.

I think the president has taken appropriately the time to study this carefully. I think his recommendation will be sound. But I think, more importantly, the president will say, not only there’s an increase in troops, but lay it out in the context of how this will allow us to shift the burden to the Afghani forces, to build them up as we go forward.

And the key element here is not just more troops, the key element is shifting the operations to the Afghanis. And if that can be done, then I would support the president.

KING: Well, we’ll talk about in a second. First, I want you to both assess the difficult politics for the president. I want to show some polling numbers. If you ask the American people, what should the president do? They’re pretty divided. Begin to withdraw, 39 percent. Increase by about 40,000 troops, 37 percent. Increase by less than 40,000 troops, 10 percent. Keep it the same, 9 percent.

But here’s the most telling poll numbers. If you look at the recent “USA Today”/Gallup poll, how is the president handling Afghanistan? A 20-point drop in his approval rating between July and now, and a 20 percent increase in the disapproval rate.

So, Senator Lugar, to you first, he took a little more than three months from General McChrystal’s recommendation to the speech he will give Tuesday night. Some have said that’s deliberative, thoughtful process. Others, some of your conservative friends, have said it is dithering.

Has the president paid a price, a political price, for waiting?

LUGAR: Perhaps. but at this point, that’s beside the point. The president is in a moment in which he really has to regain the approval of the American people, as well as people around the world, that we are on the right course. This is why this speech and the plan is so important.

So I’ll give the president credit for taking time. I think the dilemma for the president, beyond those we’ve already talked about, is that the war is costly. Additional troops will cost a great deal more, by all estimates. We have a...

KING: Some say $1 million per troop per year.

LUGAR: Precisely. And we’ve really not heard good calculations of how much cost the Afghan troops will be for us. In other words, are we as American taxpayers going to pay for this increase to 134,000, even if the Afghans were able to do that in one year, as opposed to four, which used to be the old plan? We’re going to have to have a serious talk about budget and about the $1 trillion deficit we are in now and will continue to be in. And if we were talking about several years of time, how many more years beyond that? What is the capacity of our country to finance this particular type of situation as opposed to other ways of fighting Al Qaida and the war against terror?

KING: Senator Reed, does the president have to say, I need your trust, citizens, I need your support financially, and here’s the end game? Does he need to draw a date on a calendar out there and say, this is when we get out of Afghanistan? And can he do that right now?

REED: I think he has to make a speech that shows that all of our efforts are pointed to our reduced presence in Afghanistan. But I think he has to also indicate again and again how critical this is to our national security.

The elements, the Al Qaida elements that attacked us on 9/11 are still on the Afghan/Pakistan border. We still have to keep up the pressure. But I think he has to make it very clear that this is not an unending responsibility of the United States without limit.

Senator Lugar pointed out the issue of cost. You know, we have over eight years in Iraq and Afghanistan under the Bush administration not paid for any of those military operations. Now that is coming home to reckon in terms of a huge deficit. We have to move forward and support this operation responsibly.

But the president -- I think the key to the president’s response is laying down a strategy, informing the American public of what’s at stake, and I think that when they listen and when they hear, they will be supportive, but it will be a support that has to be continually developed and strengthened going forward.

KING: You’ve both mentioned the cost. Let me ask you, we’re going to talk to Chairman David Obey of the House Appropriations Committee later in the program. He wants a special war surtax, He wants it laid out transparently so the American people know every time they get their tax bill, here’s what goes to the government normally, and here’s the part that’s going to pay for Iraq and Afghanistan. Senator Levin in the Senate has talked about something similar.

Senator Reed, to you first, do you support that? Do you think it should be broken out separately so the American people get a separate bill for the wars in Iraq and Afghanistan, so they fully understand the price tag?

REED: We have to begin to pay for everything we do. We’re engaged in a huge debate on health care and central to that debate is paying for it. And if we’re paying for the health and welfare of the American people, we certainly have to pay for our operations overseas. Whether it’s broken out specifically or not, that is a detail.

I think the important point is that we have to commit not to indefinitely, through deficits, fund these operations, but do it in a reasonable, pragmatic way. KING: Do you support a separate accounting, a separate war surtax?

LUGAR: I believe there will be a separate accounting, but in any event, I think we will have to pay for it. I would just make this suggestion, that in the three weeks of debate we still have ahead of us, we really ought to concentrate in the Congress on the war, on the overall strategy of our country and the cost of it. And we ought to be on the budget. Passing appropriations bills in a proper way.

LUGAR: Now in the course of that, we may wish to break out that. We may wish to discuss higher taxes to pay for it. But we’re not going to do that debating health care and the Senate for three weeks through all sorts of strategies and so forth.

The war is terribly important. Jobs and our economy are terribly important. So this may be an audacious suggestion, but I would suggest we put aside the health care debate until next year, the same way we put cap and trade and climate change and talk now about the essentials, the war and money.

KING: Is your Republican friend making sense, Senator Reed? Should health care be set off to next year?

REED: Absolutely not. I think we’re in the midst of probably the most significant debate and conclusion with legislation that we’ve ever had. And the health care debate is essential to our economic future. There are businesses and individuals each year pay more and more for health care. It has become unaffordable. We have to go ahead and conclude this debate.

To stop now would be stopping on the edge of, I think, significant reform, which is so important for the country. And frankly, it’s ironic, there has -- now under the Bush administration, there was no serious debate about Afghanistan. that was relegated to the sidelines. There was no attempt to pay for it. And suddenly, now, that becomes a critical need that we put aside health care. I don’t think so.

I think we have to push forward. I think the president’s speech will be appropriate. I think the strategy we’ll analyze in the committees and I think we can go forward on both fronts and we have to.

KING: A quick break. The two senators will be back in just a moment. We’ll put to them the question, as the president prepares to send thousands of more U.S. troops to Afghanistan, can his partner in Afghanistan, President Karzai, be trusted? And a reminder that CNN’s coverage of the president’s speech begins Tuesday at 7:00 p.m. Eastern. Please stay with us.

(COMMERCIAL BREAK)

KING: Back with two top senators. Republican Richard Lugar and Democrat Jack Reed . Let’s stay on Afghanistan. You mentioned before the break, Senator Lugar, the goal is to train 134,000 Afghan security forces by next October. That would require 5,000 a month. And yet, just this past month, the Afghani government failed its target by more than 2,000.

Some would say that this is Iraq deja vu. That the United States government keeps saying, we’re going to train them, we’re going to train them, we’re going to train them, and because of problems with the Afghan government, in this case, corruption, people leaving once they get the training, it won’t get done. Do you trust the other side of the equation? Do we have a reliable partner in the Afghan government?

LUGAR: For the moment, we don’t have a reliable partner. And that is a question, clearly, of the building process. If the training occurs, will the government really take hold? We don’t know, frankly. And we know right now, as you say, that the attrition of the forces that are trained as such and the number of people we have to send over to do the training is limited. So that’s a phased-in process, while this acceleration is predicted.

KING: So explain, Senator Reed, to a skeptical American out there who says, if we don’t think we can trust the government, and we need to see, time will tell, to use the cliche, why would you send 30,000 more troops into Afghanistan unless and until you know that President Karzai has his act together this time?

REED: Well, we have to, I believe, increase our forces, first, our trainers, which is consensus to do that. But also some of our brigade combat teams to give us the time and also to seize the initiative from the Taliban so that the Karzai administration can begin to carry through some of its commitments. They made commitments left and right. Now they have to carry those commitments through.

The military forces there, according to our troops, are actually very good fighters. But we need more of those units, more of those small unites. It will take some time. But the effort here really is to stabilize the situation and insist that the government of Afghanistan begin to perform. And I think the other effort is begin to, at the local level, have effective governance.

And that means good governors. That means governors that won’t be interfered with and disrupted from the center. That is something we’re going to have to insist upon. And part of our commitment and part of the president’s speech will be to communicate the fact that we have these understandings and that they’re enforceable.

KING: The enforceable part is what I want to follow up on. Will the Congress insist -- as a senator, Barack Obama was for benchmarks in Iraq. As president, executives often think a little differently. Will the Congress want enforceable benchmarks that the Afghan government must meet or else? Will there be an “or else” in terms of cutting off the funding and bring home the troops?

To you, Senator Lugar, first. LUGAR: Well, if we have that kind of a speech, then we have a lack of confidence to begin with. Because there is not a great deal of confidence in the ability of the Afghan government to perform. Now we’re going to have to get this straight. We are in Afghanistan and President Karzai said this again this week, for our own interests.

Now we said, listen, Mr. Karzai, you know, for yours too. not necessarily. Karzai and others may think Afghanistan has done very well without foreigners for a long while. If we have contingency plans, all sorts of benchmarks, at which point the president says, all right, it’s all over because they didn’t perform and so forth, we’re off to a very jagged situation.

KING: Well, I want you to actually listen, Senator, before you jump in. I want you to listen, President Karzai did an interview with Margaret Warner of “The Newshour” a couple weeks ago. And I want you to listen Senator Lugar’s point about why is the United States there and does he trust the United States?

(BEGIN VIDEO CLIP FROM “THE NEWSHOUR”)

MARGARET WARNER, PBS ANCHOR: Do you have any doubts about the U.S. commitment to Afghanistan?

HAMID KARZAI, AFGHANI PRESIDENT: Well, Afghanistan was abandoned after the war with the Soviet Union. Not only abandoned, but left to the mercy of the neighbors in a very cruel way. We keep hearing assurances from the United States, but we are like, once bitten, twice shy. We have to watch and be careful while we trust.

(END VIDEO CLIP)

KING: Senator Reed, you listen to that, and how -- we’ll watch and see whether or not we trust the United States. If you pick up “The Washington Post” tomorrow, there are Marine officers quoted on the record saying they’re not sure President Karzai will crack down on the opium trade because they believe some of his buddies are involved in it.

Again, to a skeptical American out there, if President Karzai is saying things like that about once bitten, twice -- don’t trust the United States, should we send more troops?

REED: Well, John, first of all, it’s in his self-interest and his interests of survival that there be a coherent effort, not just by the United States, and NATO.

REED: Again, we sometimes forget this is not just an American operation. General McChrystal is a NATO commander also.

But it’s in his self-interest and the interests of his country that there be collaboration. One of the things I heard -- and I was in Afghanistan on the ground in September -- is that the people of Afghanistan are offended about the corruption; they’re offended about the drug trade. It’s his people, not just the people in the United States.

He has to begin to understand that; then, in his own self- interest, not doing us a favor, has to operate for an effective government.

I think that point should be made time and time again with President Karzai and I hope he recognizes that. It’s not just in our interest. In fact, fundamentally, it’s in his interest. If we cannot maintain a suitable presence in Afghanistan, then the prospect for successful government by the Afghani people will be diminished substantially.

KING: We talked about the benchmarks for the Afghan government. They must end corruption. They must do more about the drug trade. They must improve their own security forces.

Senator Lugar, what is your benchmark for the counterinsurgency strategy?

How will you know this is succeeding or failing? What’s the test?

LUGAR: Well, many press accounts have said, in Helmand province, the first attempt will be made by several thousand additional troops coming in there -- and the capital, we’ve not been able to have success. So there would be at least some initial idea whether Helmand itself works out better, and furthermore, whether, after we chase the Taliban out of there, whether people are willing to take hold or whether they’re, over their shoulder, saying, you know, “You Americans will be gone and they’ll be back, and therefore, we’re going to be very tentative about this.”

KING: All right. Senator Reed, your test for General McChrystal’s strategy, not the Afghan government?

REED: Well, a test for the McChrystal strategy is if they can essentially stabilize, particularly the capitals in Helmand province and in Kandahar, and also if they can begin to see a defection from the Taliban ranks of those nonideological fighters.

And the ultimate test is that there are villages able to protect themselves, with the help of the Afghani national army and, to a degree, the United States and NATO forces, and that you’re beginning to see a revival of civic activity, economic activity.

That’s the final test, a return to what would be, sort of, normalcy. And that -- that will take a while, but it will be at the local village level.

KING: There’s a new report from Democrats on the committee on which you are the ranking Republican member, the Foreign Relations Committee, and it looks back at time at Tora Bora and the early days of the war in Afghanistan under the Bush administration.

There have been long rumors that Osama bin Laden was allowed to escape or that he was there and he was not grasped. Here’s what the Democratic report from the Foreign Relations Committee staff says. “The decisions that opened the door for his escape to Pakistan allowed bin Laden to emerge as a potent symbolic figure who continues to attract a steady flow of money and inspire fanatics worldwide. The failure to finish the job represents a lost opportunity that forever altered the course of the conflict in Afghanistan and the future of international terrorism.”

This report, Senator Lugar, prepared by the Democratic staff for the Democratic chairman of your committee -- is it just looking back to learn a history lesson, or is it relevant at the moment?

LUGAR: Well, perhaps both. But at the same time, it does serve as a convenient way for, perhaps, Democrats to say once again, there’s another failing of the past administration; all the problems have accumulated.

I think we have to accept that there were many failings. But the problem right now is, what do we do presently? What will the president’s plan be? How much confidence do we have in this president and this plan?

KING: Is that the way to look at it, Senator Reed, that, yes, there were many mistakes under the Bush administration, but at the moment, now and certainly after the speech Tuesday night, this is President Obama’s war?

REED: Well, the president is confronting the culmination of decisions that were made eight years and -- or more before. That’s made the situation much more difficult for him.

The escape of bin Laden is -- is an interesting comment, but the real strategic misjudgment, I think, was shifting our focus away from Afghanistan and Pakistan and underresourcing it for seven years while the Bush administration pursued a policy in Iraq.

Now we’re living with the consequences of that, in terms of the population of Afghanistan that is much more wary of us because we didn’t deliver the promises they thought were forthcoming in 2002 and 2003. You’ve got a renewed Taliban. You have a situation where Al Qaida has reconstituted itself. You have Pakistan, which is even more unstable today than it was in the past.

All these things have developed over the last several years. But Senator Lugar is right. The question now is what to do about it. Be informed by the past, make judgments based upon the experience of the past, but we have to look forward and we have to -- and the president has to propose a strategy that will carry us forward and that will ensure the security and safety of the United States.

KING: Well, Senator Lugar, then look forward. In a best-case scenario, what should the American people be prepared for? How long -- five more years, 10 more years, 20 years more in Afghanistan?

LUGAR: The American people will not sustain a war in Afghanistan for five years or 10 years, in my judgment. Below that, we do have troops in many countries still sustaining efforts, so we’re not in a full-scale war, but I -- this is why I get back to the budget.

We’re going to have to take a look at what our own resources are, what our own troop levels are, whether we can continue to recruit enough people and what other things are occurring in the world at the same time. These may not be the only wars America has to face. And that’s an important factor, to have at least some reserve situation.

KING: So Senator Reed, five years, 10 years? Do you have a sense?

Will, 10 years down the road, there be 30,000 U.S. troops still in Iraq and 25,000 or 30,000 still in Afghanistan?

REED: What we have to have is a continually decreasing military presence in Afghanistan. I don’t think there’s going to be an overnight withdrawal of American forces, but unless we’re on a trajectory in which our troop levels come down, the ability of the American public to support it and financially to support it is questionable.

But I think that has to be and will be inherent in the president’s speech on Tuesday evening at West Point.

KING: Senator Jack Reed , Democrat of Rhode Island, Senator Richard Lugar, Republican of Indiana, gentlemen, thank you both for your time today, very thoughtful discussion.

Up next, we’ll turn to the Middle East, where some see a possible -- possible sign of movement in the effort to revive the Israeli- Palestinian peace talks. The former British prime minister Tony Blair, now a special envoy to the region, takes us inside this delicate diplomacy. Please stay with us.

(COMMERCIAL BREAK)

KING: I’m John King and this is STATE OF THE UNION. Here are stories breaking this Sunday morning. President Obama is preparing to unveil a new strategy for Afghanistan that’s expected to include a substantial boost in troop levels. The president will announce the plan during his speech Tuesday night at the West Point Military Academy. A defense official tells CNN the Pentagon is preparing for an increase of 34,000 troops. CNN, of course, will carry that speech live.

Investigators in Russia are calling a deadly train derailment an act of terror. At least 26 people were killed and another 100 injured when an explosion caused several cars to jump the tracks Friday night. Several passengers are still unaccounted for. Investigators say they found elements of an explosive device, including a crater under the tracks where the train derailed.

Investigators in Florida are hoping to interview Tiger Woods and his wife today about the golfing great’s mysterious car accident. Two previous attempts to meet with them have failed. Woods was treated for minor injuries when he crashed his SUV into a fire hydrant and then a tree outside his Orlando area home early Friday morning.

Those are your top stories here on STATE OF THE UNION. Up next, we’ll go live to Jerusalem where special Mideast envoy Tony Blair is standing by.

(COMMERCIAL BREAK)

KING: After months of stalemate, perhaps a bit of movement in the Israeli/Palestinian dispute. Israeli Prime Minister Benjamin Netanyahu has announced a 10-month freeze of Jewish settlements in the West Bank. But Palestinian officials say the moratorium doesn’t go far enough, because it doesn’t include a halt in construction in East Jerusalem.

So is there an opening for progress or just more finger-pointing and frustration? Our next guest has unique insight. Tony Blair is the former British prime minister and now special envoy to the Middle East for the United States, Russia, the European Union, and the United Nations.

Mr. Prime Minister, thank you for joining us. Let’s start with the basic question, will the Israelis and the Palestinians sit down or will they continue just to talk about sitting down? BLAIR: Well, I hope they sit down because it’s absolutely essential that we get a political negotiation under way and get it under way as quickly as possible. Because there are things, positive things happening on the ground right at the moment on the West Bank.

The Palestinian economy is growing. There are check points being opened or removed. There’s a lot of bustle and activity on the West Bank. In Gaza, let us hope we get the release of the kidnapped Israeli soldier and then start to get some opening up of Gaza to the outside world.

So there are positive things that are happening, but it needs an overarching political negotiation in order to succeed.

KING: Some positive things, as you know, but what is missing, and you know this all too well, is trust. Prime Minister Netanyahu is not trusted by the Palestinians, and even after this concession on his part, which caused him a bit of grief in his own political support, but Prime Minister Netanyahu has made this concession, but the Palestinian prime minister, Mr. Fayyad, says it’s not enough.

He says, what has changed to make something that was not acceptable a week or 10 days ago acceptable now? The exclusion of Jerusalem is a very serious problem for us.

Should the Palestinians, in your view, sit down, even though it’s not perfect? Is it time to sit down and just say, look, you’re not going to get everything you want entering negotiations? Just sit down and negotiate?

BLAIR: Well, I’ve just spent some time with the Israeli prime minister, Mr. Netanyahu, and I think he is genuine and serious in wanting the negotiation to start. I think from the Palestinian point of view, they need to know that this negotiation is going to be credible. In other words, it’s not just going to be sitting down and talking, but it is genuinely going to lead us towards the two-state solution that everyone wants to see.

So the debate at the moment is, how do we create the context in which people think this negotiation is serious, that it will lead to a viable Palestinian state, one that is a secure neighbor for Israel, but also a Palestinian state in which the Palestinians have the freedom to run their own territory?

KING: Assess the politics of the moment. Some would look at these two governments and say Prime Minister Netanyahu cannot afford to give up much or he’ll lose his coalition. President Abbas has said, enough, I’m frustrated with this, I’m not going to stay in power much longer.

So you see two weak governments, some would say, there is no way they could get anything done, and others would say, that’s the perfect opportunity. How do you see it?

BLAIR: Because I’m more naturally optimistic, I see it as an opportunity. I also think both of them have got one great source of strength that’s not to be underestimated here. I mean, I spend a lot of time in Israel and in the Palestinian territory. There is no doubt in my mind at all that a majority of people, both Israelis and Palestinians, want to see a two-state solution.

Their doubt over the past years has been whether it’s possible to have it, but their commitment in principle to getting it has not diminished. So our task, if you like, is to set the context in which they think this can be done. Now I’ve spent time talking to the leadership of both sides.

Whatever doubts they have about each other’s good faith from time to time, I mean, I don’t doubt the good faith of either. I think they genuinely want to find a way through, but they come at it from completely opposite sides. Israel wants to know that its security is going to be protected, while on the West Bank the Palestinian Authority have made real strides forward in security.

I mean, I can go to cities on the West Bank now, Jenin and Nablus and Hebron and Qalqilya and Jericho, places that two years ago would have had quite a different security setting, now with security greatly improved. So there are things that the Palestinians are doing, actually, to help meet that Israeli concern.

On the other side, for the Palestinians, what they need to know is that if they sit down and talk so the Israelis, it will lead, genuinely, to an independent Palestinian state. And what is it that they want to know? They want to know that the weight of occupation will be lifted.

But there again, actually, there have been some things that have happened on the West Bank: check points opened, some of the restrictions lifted, Israeli-Arabs coming into the Palestinian territory, an increase in economic growth. As a result, the West Bank economy is probably growing maybe in double digits, actually, at the moment.

BLAIR: So there is real potential and hope, but the next month, I think, will be completely critical, fundamental to this, because if we can’t get negotiations going that are credible, then the vacuum that is created will suit no one but the extremists.

KING: Let me follow up on that point. You mentioned the next month is critical. One of the questions being asked back here in the United States is where is the U.S. leadership? I want to read you a bit from a “New York Times” editorial this Saturday. “Nine months later, the president’s promising peace initiative has unraveled. The Israelis have refused to stop all. The Palestinians say that they won’t talk to the Israelis until they do. President Mahmoud Abbas is so despondent, he has threatened to quit. Arab states are refusing to do anything. Mr. Obama’s own credibility is so diminished, his own approval rating in Israel is 4 percent, that serious negotiations may be farther off than ever. Peacemaking takes strategic skill, but we see no sign that President Obama and Mr. Mitchell were thinking more than one move down the board.”

That’s a pretty sober, pretty negative assessment of the American diplomatic involvement. Do you share it?

BLAIR: I don’t, actually. I mean, it won’t surprise you to know. I think that, first of all, let me tell you that I worked with Senator George Mitchell of the Northern Ireland peace negotiations. We work together very closely. He is, in my view, one of the most skilled and strategic negotiators I’ve ever come across.

Secondly, I think President Obama, Secretary Clinton are completely committed to doing this. But third and perhaps most important of all, I went through situations in times in the Northern Ireland process where people were convinced the thing was going to fail. Where even at times, I found it difficult to see a way through. But you know, the thing is, there is a way through here because in fact, both parties want to achieve a two-state solution.

Actually, the Palestinians have made significant progress on security. In fact, the Israelis are prepared, in my view, to change significantly their posture on the West Bank. And if we can get Corporal Shalit released, then a major change in the way that we view Gaza. It’s not without hope.

And here’s the thing, John. There is no alternative but to keep trying. The alternative to a two-state solution is a one-state solution and that will be, I assure you, be a hell of a fight. So I think when we look at the various strands of negativity there are around at the moment and there always are in these negotiations, there are, nonetheless, positives.

We’ve got to seize on them, work on them, and make sure that we bring about a situation in which the central strategic objective of President Obama, which is right at the outset of his administration, to make this process count and work is achieved. And I do emphasize that as well. The president said this at this beginning. This is, to my mind, the big difference of what has come before.

At the very beginning of this administration, he set that as a core strategic objective. I have absolutely no doubt he holds to that and whatever the difficulties and the obstacles, we have to find a way through. And personally, although as I say I am optimist by nature, I believe we will.

KING: Let me shift subjects. I want to get your thoughts about an inquiry back in your home country. There’s an inquiry into the run-off, the political decisions, the military decisions in the run-up to the Iraq war. And your name, and your credibility have been called into question, your good name has been called into question in this inquiry.

Lord Goldsmith, who was your attorney general back in those days, says that he warned you that this was a breach of international law, but that he was bullied into being quiet and convinced not to resign from the government. Is that an accurate portrayal?

BLAIR: No, it’s not, but I think the best thing with this inquiry is actually to let us all give our evidence to the inquiry. And you know, I’ve been through these issues many, many times over the past few years and I’m very happy to go through them again. But I think probably the appropriate place to do that is in front of the inquiry.

KING: Well, let me try one more on you. This is your former ambassador to the United States, Christopher Meyer, talking about your meeting with President Bush in Crawford, Texas, a meeting I covered some years ago. He says, “I know what the cabinet office says were the results of the meeting, but to this day, I’m not entirely clear what degree of convergence was if you like signed in blood at the Crawford ranch in Texas.”

Your former ambassador saying essentially you came to visit President Bush and you came back and then within days were talking about the need for regime change in Iraq. Again, this is your reputation, your credibility being called into question. Is that an accurate portrayal?

BLAIR: John, it’s been called into question many times over these past years about exactly these issues, all of which, as I say, have been gone over many times before.

But I feel, because I’ll be giving evidence in the new year in front of the inquiry that it really is best rather that I respond to each and every news report or allegation, the best thing is to go in front of the inquiry, answer their questions, and I’m very, very happy to do so. I’ve always been happy to do so. You know, this is a situation where over the years, I’ve answered questions time and time again on it. And I’m happy to do so again. It’s an important decision. It was a very momentous decision in terms of your country and in terms of mine. But I think the appropriate place to look at all these issues is the inquiry itself.

KING: Well let me then try and lastly this way. I’ll leave the specifics for when you testify to the inquiry, but if you pick up media accounts in your country, friends of yours are saying that you feel betrayed, that you feel your reputation is being damaged by men you bestowed high offices to in the government. Do you feel betrayed? Are you angry at how this is being done?

BLAIR: Absolutely not. One of the things you learn as a leader in a country is you have the responsibility to take decisions. Some of those decisions are difficult decisions and some of them are very controversial. And what happens, your time in leadership goes on, and I spent 10 years as UK prime minister, is that these controversies, sometimes they can be very bitter, very difficult.

That’s part of being a leader. And I think it was one of your presidents that once said if you can’t stand the heat, don’t come into the kitchen. And that’s my view of politics. So I take decisions, I stand by them, and as I say, these are all questions I’ve answered many times before. I’m happy to go through it again.

KING: The former British Prime Minister Tony Blair, now special envoy to the Middle East. Mr. Prime Minister, thanks so much for your time today.

BLAIR: Thanks, John.

KING: And up next, we head west to Seattle, Washington, a painful recession here in the United States is causing a spike in teenage homelessness and testing the resolve of organizations determined to give these struggling youths a hot meal, some shelter, and perhaps some hope.

(COMMERCIAL BREAK)

KING: We’ve seen, time and time again, in our travels, the troubled economy is affecting just about everyone. One of the groups hit hardest are the homeless in our cities. And if you take a look, you might be shocked at the young faces scouting in allies and abandoned buildings for shelter.

Let’s take a closer look at the problem. Twenty-seven percent- plus unemployment rate for teenagers, 16 to 19 years old. Children make up 27 percent of the homeless population, and they are the fastest-growing segment of that population.

The Orion Center in Seattle has seen a 50 percent increase in demand for services just over the past year. So, in our “American Dispatch” this week, we visited the streets of Seattle, Washington and a remarkable place that many homeless teens seek out first for a hot meal and then for something more.

(BEGIN VIDEOTAPE)

KING (voice over): Life on the street has its own rhythm and rules. There is safety in numbers, and a numbing sadness in the search for shelter in Seattle’s cold, raw rain. Living here leaves an indelible mark.

(UNKNOWN): I’ve been cold. I’ve been hungry. I’ve been soaked to the skin and tired and sick and injured, and you definitely learn quite a bit about yourself from that.

KING: At Seattle’s Orion Center, Michael first found smiles and support, then skills in an eight-week computer diagnostics class.

(UNKNOWN): If I hadn’t found this place, I’d probably be squatting either in a park or in an abandoned building.

(UNKNOWN): What you do is you press this, and you start pulling the shot into a shot glass.

KING: Down the hall, Orion’s barista training program...

(UNKNOWN): Cash handling; you learn interview kills.

KING: ... where Kayla Wyatt developed new skills and the confidence to move back with her mother after two years off and on on the street. (UNKNOWN): You think it’s easy at first, and then it gets harder and harder, especially during the winter because it’s so cold here.

KING: For just about everyone, the first Orion Center visit is for what the street kids call “the feed,” free meals. Some linger longer to enjoy a break from the elements, a hot shower, maybe warmer clothes for the next night.

Twelve thousand meals a year, 10,000 showers, and believe it or not, 10,000 pair of socks to keep young people’s feet warm.

Melinda Giovengo is executive director of YouthCare, and Orion Center is its flagship program, needed more than ever in this punishing recession.

MELINDA GIOVENGO, EXECUTIVE DIRECTOR, YOUTHCARE: We’re seeing 180 new faces a month. We’ve had young people come in and say, I’m here; I’m 18 years old; my family can’t afford me anymore. It’s not just affecting, you know, underprivileged kids. It’s affecting the entire strata of America.

KING: A 50 percent spike in demand but fewer resources because a bad economy dries up funding.

GIOVENGO: We’ve had family foundations who have been supportive of us for 20 years are saying, “We can’t this year.” All the government fundings have been jeopardized, restricted or reduced over the last few years, so we’re just hanging on, trying to do more with less.

KING: The bad economy also takes a toll in other ways. Michael took a position in a bowling alley because technology jobs are so scarce now. Delaun was a classmate in the computer program. He now works as an Orion Center intern because a tough job market is even tougher for someone with no experience and a history on the street.

(UNKNOWN): It’s terribly hard, I mean, especially in certain situations, where you’ve got youth who are being faced with various other challenges that society may bring, as far as trouble with the law and other things that they can get very easily caught up in. I came here, kind of, lost, and I found myself a whole lot more than I intended to here.

KING: They took different paths to the street. Delaun had problems at home he prefers not to discuss. Michael left home in Ohio to join a young Seattle man he met on the Internet.

(UNKNOWN): Partly to get away from my family because I was just, you know, coming out as queer, and I wanted some time on my own to actually get things sorted out for myself and work up the courage to actually tell them.

KING: Some here have or developed drug problems. Others make life-changing choices in the name of survival.

GIOVENGO: Trading sex for places to live and money to get food with and ending up being seduced into a lifestyle of chronic adult or being seduced into the, kind of, sexual exploitation industry that’s out there.

So it’s more and more dangerous and there’s fewer and fewer of us and fewer, fewer resources to go out and capture them early so that they don’t get absorbed into that very, very dark world.

KING: Here at Orion, there is an escape, a hot meal and, if nothing else, the company and support of others who understand.

(END VIDEOTAPE)

KING: A remarkable place. We thank everyone at Orion for sharing their time and their stories with us. And as you know, one of our goals is to get out of Washington as often as we can. We’ve made it our pledge here on “State of the Union” to travel to all 50 states in our first year. So far, 45 and counting, including Montana, Michigan, North Carolina and Washington state. Check out CNN.com/stateoftheunion, where you can see what we’ve learned when we visited your state.

We want to say goodbye to our international audience for this hour. But up next, for our viewers here in the United States, Howard Kurtz and his “Reliable Sources” look at how media coverage of President Obama has changed dramatically during his first year in office.

(COMMERCIAL BREAK)

KING: I’m John King, and this is “State of the Union.”

(voice over): High unemployment, an unpopular war in Afghanistan and slipping job approval numbers. Is a string of bad news turning the media against President Obama?

And with the economy struggling to recover, are journalists partly to blame for the nation’s financial meltdown?

In this hour of “State of the Union,” Howard Kurtz, as always, breaks it down with his reliable sources.

KURTZ: I’ve been trying to put my finger on what changed for President Obama this week, why the media coverage turned sharply negative.

KURTZ: High unemployment has been around for awhile. The Afghanistan dilemma has been building for months. And the health care bill remains a cliffhanger even after the Democrats mustered 60 votes to send it to the Senate floor.

Could it maybe, just possibly, be a Gallup poll that had Obama dropping to 49 percent for the first time? Whatever it is this Thanksgiving week, the media are suddenly treating the Obama presidency like a turkey.

(BEGIN VIDEO CLIP)

KATIE COURIC, CBS NEWS: Tonight, the president under pressure. His job approval ratings slide as he wrestles with everything from job creation to the future of Afghanistan.

CHIP REID, CBS NEWS CHIEF WHITE HOUSE CORRESPONDENT: The president is getting battered on every from health care to the economy, to foreign policy. Some polls show Americans are increasingly questioning his credibility.

SAVANNAH GUTHRIE, NBC NEWS: With the president’s approval rating dipping below 50 percent in some polls, it’s clear the health care debate is taking a toll.

CHARLES GIBSON, ABC NEWS: When you look at this, he faces the Afghanistan problem, the health care problem, the deficit problem. And yet none of those actually get at or help him in his central problem, which is still creating jobs.

(END VIDEO CLIP) KURTZ: So, why do so many journalists seem to be souring on Obama, and are these verdicts on his tenure premature?

Joining us now in New York, Chrystia Freeland, U.S. managing editor of the “Financial Times.” In Philadelphia, Jim Geraghty, contributing editor at “National Review.” And here in Washington, Bill Press, host of “The Bill Press Show” on Sirius Satellite Radio.

Chrystia Freeland, unemployment, as I mentioned, has been rising all year, broke 10 percent weeks ago. Why are we suddenly seeing this spate of reports saying that President Obama is blowing it on the economy?

FREELAND: Well, Howard, I think that your analysis is right and I think that Gallup poll was a tipping point. There was a number of factors that were building up -- the very, very long time spent deciding about Afghanistan, the very, very long health care debate and its big cloud of the economy -- and I think when that poll came out, that was a moment for people to say, you know what? Now it’s time to do the big story.

But I do think that it’s premature to say, this is the end of Obama. If he gets that health care reform through -- and I think he probably will -- that is a historic achievement.

KURTZ: I’m going to agree with you. It’s premature to say this is the end of Obama, 10 months into his term.

Bill Press, but the president did talk about jobs this week, so the topic is certainly fair and game. But the coverage, I think, is really headed south.

PRESS: By the way, we haven’t even gotten to the second term yet. You know what I mean?

I do think the coverage is a little exaggerated in terms of how much trouble Obama is in, but I think, Howie, what’s happening is people see that he is no longer -- doesn’t really walk on water. He’s got polls that look like -- they’re better than Bush’s polls, but still, they ain’t great.

KURTZ: Doesn’t walk on water the way the press made him look during the campaign?

PRESS: Exactly, right.

KURTZ: OK.

PRESS: And the other thing is I think that at some point, you know, the reservoir of good will runs out and reality sets in and you get down to delivery. And I have to tell you, 11 months in, what has the Obama presidency delivered, as opposed to talk about? Not much yet. I think it’s fair game.

KURTZ: Well, government and bureaucracy moves slowly.

Jim Geraghty, in fairness, Obama did inherit a lousy economy from George Bush. But did the press give him an easy pass up until now and maybe now are charging him for going down this road?

GERAGHTY: Yes, yes, yes.

(CROSSTALK)

GERAGHTY: I did like that question, Howard. Kudos to you on that one, for picking up on that obscure, ancient mystery.

I would note that the Gallup poll indicator probably was a key psychological barrier. He won with more than 50 percent of the vote, a pretty healthy six percent margin, very big sweep in the Electoral College. And he started with, you know, really high approval ratings up in the 70s. Some polls even had it up to 80 percent. Everybody went in, or many people came in to his presidency wanting to like the guy, wanting to give him the benefit of the doubt.

We’re now nine months since the stimulus passed. It’s been about a year and change since he got elected. You know, 10, 11 months on the job. People are starting to realize, this is not where we thought we would be at this point when we went in and entered with such great fanfare and hope and change and la-di-da.

PRESS: I think largely because the expectations were really unrealistic.

KURTZ: And who inflated the expectations, Bill Press?

PRESS: We did.

KURTZ: OK, I just wanted to plead guilty on that.

FREELAND: Well, so did Obama. Obama also inflated the expectations.

KURTZ: Of course.

FREELAND: And if I could borrow an idea from Tom Friedman, part of what I think is going on here is actually, surprisingly, Obama failing to frame the debate. It’s a failure of oratory, in part, and I think during the campaign, he was great at giving everyone a storyline. And I think since taking office, he has really failed to put all this stuff together to tell us why health care is connected to the economy.

KURTZ: OK, but let’s look at another possible failure, Chrystia. Is it possible that with the 10,000 stories that have been written in broadcast about health care, the public option, the trigger, opting in, opting out, all that, that the press missed the boat on the story that most Americans really care about, and that’s jobs?

FREELAND: Well, I work for “The Financial Times,” so we write about jobs and the economy constantly.

KURTZ: Right. But look at the broad media landscape.

FREELAND: I think the press has really focused on jobs, and I think, actually, it would be a mistake for us to be short-termist in how we look at the health care debate.

Now, as I was saying, if the health care debate -- if health care reform actually happens, that is huge. What I do think the White House has failed to do is say to someone who feels their job is at risk right now, why health care reform is central to that. And it is. You could make the sale.

You could say, look, if we had universal health care, then losing your job wouldn’t be quite so traumatic. But they’re not really saying that.

KURTZ: Right.

Let me come back to the commentary, Bill Press.

Arianna Huffington, on her liberal Web site, had a headline, a story, “Unemployment: Is It Obama’s New Katrina?” Maureen Dowd the other day in the “New York Times” said, “Obama’s a cold shower, whereas Bill Clinton was a warm bath.”

There’s a new twist here that the left wing pundits are coming at Obama very critically from that side of the spectrum.

PRESS: On several -- yes -- and on several issues. Health care, that the president has not been decisive enough or shown enough leadership or given enough direction to the Congress. He’s sort of laid back and letting Congress decide. Like, he’s just about stopped talking about the public plan option. That’s one issue.

On global warming...

KURTZ: But you don’t give me the substance of it. I want to know why.

PRESS: Got it.

KURTZ: Are they out of patience? Are they disappointed? Are they disillusioned? Why?

And this is supposed to be their guy, right?

PRESS: Right. They are frustrated on what they perceive as a lack of leadership on Obama’s part on the key issues. And now you add health care and some others, and you add on top of that Afghanistan, and he’s really got trouble. He’s really got trouble on the left.

KURTZ: Jim Geraghty, is it more newsworthy when liberals criticize President Obama, such as similar to the rare events when conservative pundits revolted against Bush?

GERAGHTY: I don’t think it’s quite so rare. And I just want to preface by saying that Bill Clinton was a warm bath in a Jacuzzi compared to this presidency.

It is a bit rare. I think to a certain extent, it isn’t just a matter of Barack Obama failing to meet liberal expectations. It’s a matter of reality not comporting to the way liberals thought it would.

We talk about the jobs issue. This administration basically thought the jobs issue was going to be solved by the stimulus, that that was a checkmark on their to-do list.

KURTZ: And did -- I want to come back to the coverage here. Did the press buy into that? Did the press over promote that $787 billion bill?

GERAGHTY: Oh, absolutely. Somehow we’re in this bizarre situation in which we spent $787 billion but no one has any money. PRESS: I think the media lost track of the jobs issue, which is the number one issue. So did the administration. And now they’re trying to get back on track.

KURTZ: In fairness, all the stimulus money hasn’t been spent, but unemployment is much higher than the White House had projected.

I want to turn to the subject of leaks, and this fits in with the situation in Afghanistan, which the president is going to address on national television on Tuesday night.

During the Asia trip, he gave an interview to CBS’s Chip Reid, and he expressed his frustration about how much was leaking out of the administration as the president conducted this long review with all of these national security meetings about whether to send more troops to Kabul.

Let’s take a look at that interview.

(BEGIN VIDEO CLIP)

REID: Are you that angry about these leaks? And do you think it does make you look uncertain?

OBAMA: I think I’m probably angrier than Bob Gates about it, partly because we have these deliberations in the Situation Room for a reason, because we are making decisions that are life and death, that affect how our troops are going to be able to operate in a theater of war. For people to be releasing information during the course of deliberations where we haven’t made final decisions yet, I think is not appropriate.

REID: Is it a firing offense?

OBAMA: Absolutely.

(END VIDEO CLIP)

KURTZ: Well, Chrystia Freeland, I don’t think anyone is going to get fired, because they’re not going to know who does the leaking. But this week, before the president has made his announcement, we had reports on CNN and the other networks about 34,000 troops most likely to be sent to Afghanistan.

This situation with leaks seems to drive every president crazy. And, of course, journalists love to get the unauthorized disclosures.

FREELAND: But presidents also love to leak. I mean, I think as you pointed out in your column about this, I think this is a combination of hypocrisy and fantasy on the part of the White House.

The hypocrisy is they don’t consider it a leak when they’re behind it. That is called, I think, media management, or something like that. And the fantasy is there are always factions, there are always different points of view in government, in politics. And a great way to fight your fight can be in the court of the media, and we’re always going to be eager recipients. So, I don’t think the president is going to win this one and I don’t think he really wants to.

KURTZ: You’re certainly right that every administration does leak and people are pushing their agendas. Sometimes if they lost out in a policy debate, somehow that information turns up in the newspaper the next morning.

You know, a few weeks ago on this program, I talked about why I thought that CNN and MSNBC and other news outlets should have devoted more attention to something that Democratic Congressman Alan Grayson said. He called a lobbyist a “K Street whore.”

FOX News went wild on this story. I thought it was underplayed elsewhere.

Now we have Glenn Beck using a similar term on FOX News. Let me play that for you and we’ll come back on the other side.

(BEGIN VIDEO CLIP)

GLENN BECK, FOX NEWS: Well, I’m sorry. So we know you’re hooking, but you’re just not cheap. It’s $300 million...

(END VIDEO CLIP)

KURTZ: OK. He’s talking there about Louisiana Senator Mary Landrieu, who did get a provision in order to get her support for breaking the filibuster on the health care bill, $300 million for Louisiana.

He said she was hooking. He basically called her a prostitute.

Let’s go back a couple of weeks to what Sean Hannity and Michelle Malkin were saying on FOX News when the Alan Grayson “whore” comment was made.

(BEGIN VIDEO CLIP)

SEAN HANNITY, FOX NEWS: What would be the reaction if it was a Republican?

MICHELLE MALKIN, FOX NEWS CONTRIBUTOR: Well, you know, we would be strung up by our toes. Imagine if you had said something like this, Sean, about a lobbyist on Capitol Hill or any other Democratic public figure.

(END VIDEO CLIP)

KURTZ: Bill Press, I didn’t hear anyone else on FOX criticizing Glenn Beck for essentially calling Mary Landrieu a prostitute.

PRESS: Neither did I. I have to tell you, look, I’m a talk show host, I am totally for talk show hosts almost getting away with almost anything they say, on the radio particularly. But I’m amazed at how much FOX lets Glenn Beck get away with. I think he is a ticking time bomb, and one day he’s going to explode in the face of Roger Ailes, and they’re going to be sorry they gave him that television show.

KURTZ: Jim Geraghty, did Beck go too far in his language?

GERAGHTY: Well, it was a little bit crass, but nobody elected Glenn Beck to Congress -- yet.

KURTZ: All right, so you’re saying there should be no standards for what people say on television?

GERAGHTY: I’m saying I think it’s not unnatural to expect more from a member of Congress or elected official...

(CROSSTALK)

KURTZ: Oh, I see. So you’re saying it’s OK -- I mean, Grayson should be held accountable because he’s an elected official, and Glenn Beck is in the (INAUDIBLE) business like many of us on television.

GERAGHTY: I think I expect more out of a member of Congress than the 5:00 p.m. hour of FOX News.

KURTZ: Before we go, Chrystia Freeland, I have been amazed at how much attention the Obama’s first State Dinner got this week. I mean, it was everywhere, as if no president ever held a state dinner before.

Let’s roll some tape from that. We see some of the media celebrities coming in. There’s Katie Couric, Sanjay Gupta from CNN, Brian Williams and his wife Jane. Robin Roberts from ABC was there as well.

Why was this treated like some sort of political Super Bowl?

FREELAND: Well, maybe because of the whole celebrity air around the Obama presidency, or what used to be this celebrity mood until everyone decided this week that he was a loser.

But to tell you the truth, Howie, I was also really surprised at the focus and the sort of gamesmanship focus. It seemed to me that maybe more attention was paid to it than the politics around the (INAUDIBLE), and since “FT” is a deeply, geeky newspaper, we think that’s more important.

KURTZ: So you think there’s a little bit too attention to who is invited, who wasn’t invited, where they were sitting. A lot of...

FREELAND: What they were wearing.

KURTZ: What they were wearing. Yes, I’ve never seen that before. A lot of media stars there.

PRESS: It’s a State Dinner. It’s Obama’s first State Dinner. I mean, I don’t think it was over done at all. People are interested in that.

KURTZ: Maybe you’ll get to go to the next one with comments like that.

KURTZ: I hope so.

(LAUGHTER)

KURTZ: All right.

Bill Press, Jim Geraghty, Chrystia Freeland, thanks very much for joining us.

When we come back, bashing the banks. CNBC’s Charlie Gasparino on the financial meltdown and whether journalists bear some of the blame for letting Wall Street run wild.

(COMMERCIAL BREAK)

KURTZ: “Charlie Gasparino Takes No Prisoners.” That’s the headline on a “Financial Times” profile of the hard-charging CNBC correspondent who comes up with his share of scoops, but also manages to tick off folks on Wall Street and sometimes his own colleagues, as we see in this exchange with Dennis Kneale over the Citigroup CEO, Vikram Pandit.

(BEGIN VIDEO CLIP)

DENNIS KNEALE, CNBC CORRESPONDENT: It’s kind of interesting that you would be defending him, especially since I read a story on CNBC.com by Charlie Gasparino on Tuesday that said Pandit’s in trouble.

CHARLES GASPARINO, CNBC CORRESPONDENT: Right. That doesn’t mean I think he should go. That means, Dennis, I’m doing what maybe you should do, be a reporter.

KNEALE: You know what? It’s really bad...

GASPARINO: All I’m doing is talking to people that are telling me this, Dennis.

(CROSSTALK)

(END VIDEO CLIP)

KURTZ: As the economy struggles to recover, does the press bear a share of the blame for the financial meltdown? And what, if anything, have journalists learned from that brush with depression?

Who better to ask than the author of “The Sellout: How Three Decades of Wall Street Greed and Government Mismanagement Destroyed the Global Financial System”?

Charlie Gasparino joins us from New York.

Welcome.

GASPARINO: Thanks for dredging that out of the dumpster.

KURTZ: There’s a lot of clips where you’re fighting with people on CNBC. What’s up with that?

GASPARINO: Well, I think there is a degree of -- you know, listen, it’s live TV, and sometimes you butt heads, and sometimes you have strong opinions both ways. And, you know, listen, I was an ex- fighter, so it comes easy to me. But one of the interesting things on CNBC, at least in my experience, after you do something like that, after you strongly disagree on the air, you kind of shake hands. It’s like when I was boxing as a kid, it was almost the same thing. And I think people respond to that and like that.

I really think for all the chatter that CNBC and cable news is just too much controversy, too much yelling, I really do think that people want to see strong opinions. And I’m here to provide one end of the strong opinions.

KURTZ: We’ll test your boxing skills in this segment.

Now, in your book, you blame Wall Street executives, mortgage lenders, government bureaucrats for the near collapse of the economy. What about journalists? Shouldn’t the press have done a better job giving us warnings of this impending meltdown?

GASPARINO: You know, that’s another old story of yours. Come on here.

KURTZ: It’s relevant today.

GASPARINO: Well, do you remember the quote I gave you about a year ago?

KURTZ: You said, “We all failed.”

GASPARINO: We all failed. Now, that is true. But remember the context I gave you.

And here’s the problem. Here’s my problem with blaming the press. Now, you know, if you look at a bubble, there’s a degree of mass hysteria going on. And if you look at what was going on -- and this is the last 10, 20 years -- you know, there weren’t very many people on the inside that thought something was wrong.

You know, think about major scandals, Watergate, for instance, right? There was somebody on the inside that saw something wrong.

What’s interesting about this, this bubble, is that a lot of people on the inside didn’t think anything was wrong.

KURTZ: But Charlie, there were all those risky loans, all those subprime loans. Those signals were there.

GASPARINO: But Howie, be precise in what you’re asking me. Should we have known about the housing bubble blowing up, or should we have known about the banking crisis? What are you asking?

KURTZ: What I’m asking is, isn’t it quite apparent, in retrospect -- and some people did the stories and they often ran on inside pages of the newspapers -- that journalists were not vigilant enough in looking at the degree of risk that was pumped into the economy by these Wall Street geniuses who you now properly, I think, blame for nearly blowing up the U.S. economy? GASPARINO: Right. Well, I blame the government, too. And you see, you have to look at it -- I think that’s too simplistic of a question.

The problem is that all those bonds that blew up, they were AAA. OK? They were rated -- many of them were rated AAA. So, if you look at what was on the bank’s balance sheets, the banks themselves believed because they were insured, because they were hedged, because of all the derivatives, they believed that those bonds were money good.

GASPARINO: Now, you have to ask yourself, why weren’t there more whistleblowers on the inside telling people like me that, hey, Citigroup has got billions of dollars of bad debt on the balance sheet? And I can tell you, Howie, my opinion is the reason why is because they believe that they were money good.

And you have to ask yourself this -- there’s going to be a lot of cases out there, right? There’s a lot of investigations for essentially fraud, why Wall Street didn’t disclose the problems earlier to investors. And I bet you there’s not going to be many prosecutions, like the two Bear Stearns guys that just got off.

And the reason why is because there’s a difference between intent and making a bad investment. And I’ll tell you, what you’re going to see here is that a lot of these guys, Dick Fuld...

KURTZ: OK, Charlie. You’ve got to let me interrupt you because I’m the host.

Do you think that CNBC itself was unfairly blaming you? Remember, of course, when Jon Stewart went after Jim Cramer?

(BEGIN VIDEO CLIP)

JON STEWART, HOST, “THE DAILY SHOW”: Listen, you knew what the banks were doing and, yet, were touting it for months and months. The entire network was. And so, now to pretend that this was some sort of crazy, once-in-a-lifetime tsunami that nobody could have seen coming is disingenuous at best and criminal at worst.

(END VIDEO CLIP)

KURTZ: Was that an unfair attack on CNBC’s role in this?

GASPARINO: You know, I do, and I’ll tell you why. I mean, if you listen to me, right, if you listen to my coverage of Bear Stearns, of Citigroup, I was warning about those two firms -- well, Citigroup in 2006 and Bear Stearns in early 2007.

I mean, if you’re going to look at CNBC, look at the whole product and look at the people that were very critical on Wall Street. And there was a lot of criticism. It was from people like me warning very early on. By the way, warning very early on and then going to bars where some of these Wall Street guys hang out and being harassed. I mean, there’s a reason why I go to bars and people yell at me from Bear Stearns, from Lehman Brothers, from all these places, because they really feel that I was too critical about these firms.

KURTZ: Well, that’s the thing. If you get out there before everyone else and you say there are problems, that the stock may be too high, that the ratings agencies may be in over their head, you take heat. But since you mentioned Bear Stearns, your book begins with your getting a phone call from Jimmy Coyne (sic), the CEO of Bear Stearns.

GASPARINO: Right, Jimmy Cayne.

KURTZ: Jimmy Cayne, excuse me. And he takes you to dinner and says this company is in trouble. Well, it turned out to be in a lot of trouble and obviously later collapsed.

You told the “Financial Times” that when it became harder to get access to Jimmy, you wrote -- you said that “Jimmy made himself easy to write about because he stopped talking to me. So what do I care?”

So, does that suggest that you reward sources who cooperate?

GASPARINO: No. It suggests the truism in journalism.

If you -- listen, right now, Goldman Sachs, there’s a book being written about Goldman Sachs, right? The author is Bill Cohen. He wrote a book about Bear Stearns.

Goldman Sachs, from what I understand, is cooperating with him because they want to get their side of the story out. And this is true of any journalist.

If you basically deal with that journalist, you’re going to get your side of the story. And I think that was the problem with Bear Stearns. They wouldn’t deal with me, so it was essentially me reporting about them without their side fully played out.

KURTZ: So it’s not that you were going easier on a company whose CEO is going out to dinner with you, but at least you’re saying you’re hearing the other side of the story.

GASPARINO: Yes. I mean, listen, I can only ask, right? Please talk to me, give me your side of the story. And if you do that, I will give you your side of the story.

Listen, what was it -- I can’t remember -- I think it was Robert Novak -- “I have sources and I have targets,” right? I mean, there’s a degree of that, there’s a reality to that.

If you don’t talk to a journalist, your side will not get out there. That’s why Goldman Sachs, which in the past has been one of the most tightly -- tight firms in the world with dealing with reporters, is now going out on a...

(CROSSTALK)

KURTZ: But the suggestion there is that if you don’t talk to me, you’re going to pay a price. GASPARINO: No, no. But it’s not pay a price. It’s you’re not getting your side of the story out. And by doing that, you pay a price.

KURTZ: I want to get your side of the story on this. Andrew Ross Sorkin, the “New York Times” business columnist, quoted the CEO of Goldman Sachs, Lloyd Blankfein, as saying that he turned off the TV because you, Charlie Gasparino, were rumor mongering.

You were not happy with that report.

GASPARINO: Yes. And have you read the subsequent press reports on that?

KURTZ: Well, go -- I’m giving you the floor.

GASPARINO: I don’t know if he said it. I don’t know if he said it. There was a couple of stories out there that suggested that he did not make those comments.

Listen, I could only tell you this -- you guys -- you know people criticize CNBC for not being aggressive. I was very aggressive. And if you’re going to say I was a rumormonger, tell me what rumor.

KURTZ: OK.

GASPARINO: Was it that they had exposure to AIG? Was it that their stock was going from $170 to $50, that people that were giving them money, the people in their prime brokerage accounts, they were pulling them out?

I mean, these are sort of things that are true. And, you know, he didn’t like it, but I’m not sure if he actually said that quote. I think there’s a debate about the quote.

KURTZ: OK. Hold on, Charlie. We need aggressive coverage now, I think, more than ever with Wall Street making big money again, big bonuses and all that.

But I want to close by playing a clip of you calling into your network. Let’s roll that.

(BEGIN VIDEO CLIP)

GASPARINO: By the way, I have a massive hangover. I was out at -- what is that Frankie Sapp’s (ph) place? It’s called Gaetano’s (ph).

That’s the best Italian restaurant in the city. They make great martinis. I drank about eight of them.

(END VIDEO CLIP)

KURTZ: Is that full disclosure? You just let it all hang out there.

GASPARINO: I’m an honest guy. I mean, listen, you know me for how long?

KURTZ: A long time.

GASPARINO: I don’t mince words. I’m honest. I don’t rumor monger, but I’m tough with these guys. They don’t like it when I’m tough, and I shoot from the hip. And they asked me how I was felling, and I told them.

KURTZ: All right.

Charlie Gasparino, hope you’re feeling good today. Thanks very much for joining us.

GASPARINO: I am. Thank you, Howie.

KURTZ: Coming up in the second half of RELIABLE SOURCES, the throwback. Harold Evans on running British newspapers in the heyday of ink-stained wretches (ph) and why he thinks so little of television news.

Plus, “Times” trouble. A management shake-up at “The Washington Times” leads to charges of a staffer being forced to attend a mass wedding conducted by the Reverend Sun Myung Moon. Former editorial page editor Rich Miniter on why he’s suing his former paper.

(COMMERCIAL BREAK)

KING: I’m John King and this is STATE OF THE UNION. Here are stories breaking this Sunday morning.

Lawmakers are already weighing in on President Obama’s new plan for Afghanistan which he’ll announce Tuesday night. Speaking on this program a bit earlier this morning, Republican Senator Richard Lugar said the president needs to clearly outline the U.S. objective in Afghanistan. Democratic Senator Jack Reed says the president must also include a strategy to show the American people troops will eventually be brought home.

Investigators in Florida are hoping to interview Tiger Woods and his wife today about the golfer’s mysterious car accident. Two previous attempts to meet with them have failed. Woods was treated for minor injuries when he crashed his SUV into a fire hydrant and then a tree outside his Orlando-area home early Friday morning.

KING: And a relatively solid start to the holiday shopping season. Retailers raked in about $10.66 billion on Black Friday. That’s according to ShopperTrak, which keeps an eye on sales. That’s about a half-percent increase over last year’s shopping.

Those are your top stories here on STATE OF THE UNION.

KURTZ: Harold Evans has had one of the storied careers in journalism. He rose from the hardscrabble British city of Manchester to become editor of “The Sunday Times,” and, under Rupert Murdoch, “The Times of London.”

On this side of the Atlantic, he was the founding editor of “Conde Nast Traveler” and has worked with “The Atlantic,” “US News” and “The Week” magazine. Evans is something of a throwback to the rough and tumble days of newspapering, an era he recounts in a new memoir, “My Paper Chase: True Stories of Vanished Times.”

(BEGIN VIDEOTAPE)

KURTZ: Harold Evans, welcome.

EVANS: Thank you. Thank you.

KURTZ: This is a tough time for the newspaper business. I don’t have to tell you that. I have the impression that British papers are feistier and maybe more competitive than their American counterparts.

EVANS: Well, first of all, there’s not so many monopoly positions. There’s I think 12 or 13 dailies in Britain.

KURTZ: And they’re all fighting for an audience.

EVANS: Yes. And there’s provincial papers too. So the competition is intense. And, of course, I have to say this -- the writing and the design in the British press, though sometimes put to nefarious uses, is extremely good.

So they’re getting by. The circulations have shrunk. Revenues have shrunk, as it has around the world.

KURTZ: Of course.

EVANS: But there isn’t the constant beating of the doomsday drum in London that you get in the United States.

KURTZ: Right. You write in this book about the era of hot tie ben (ph), newsrooms filled with colorful characters.

EVANS: Yes.

KURTZ: You know, who like to keep some booze in their drawer.

Do you miss those days? We’re in a totally different era now.

EVANS: Well, I was kind of a puritan myself. I didn’t sort of go -- booze. I had a family.

When I got the big (INAUDIBLE) at “The Sunday Times,” it was 1.5 million circulation with foreign correspondents from around the world. I’m the bit of a sober side, actually. And I really -- what I really miss -- I don’t miss the hot metal (ph) very much, although I write about. They’re a lot of fun.

What I really miss is the capacity to ask a question -- a very complicated question -- and have it answered by the best journalist I’ve ever come across. When I say, “Why did Philby get away with spying on...”

KURTZ: Kim Philby?

EVANS: ... on -- Kim Philby get away with spying all these years? We didn’t even know that he was a spy when I asked the question. Why did Kim Philby defect and go to Moscow? We didn’t know the greatest spy of this century -- of last century.

KURTZ: But there is a sense that journalists -- and I’m all in favor of journalists being well compensated for their talents -- but that they’ve become, you know, wine-sipping members of the upper middle class elite and out of touch with -- you know, reporters used to be kind of lovable rogues. They’d go down to the corner bar.

Haven’t you seen that cultural shift in the newspaper business?

EVANS: Well it’s true. And I mean, many of the public, particularly in the United States, where newspapers, by comparison with Britain, were much over-staffed. I think the drinking level was higher in Britain. I think the America drinking level is lower, surprisingly. But the number of people drawing big salaries has been much higher in America than Britain.

You know, this quite -- I quite like the lovable rogue picture. “Lunch time o’booze,” we called it. Lunch -- you know? A private eye has the best question. When it’s expenses (ph) of a question, he said, “Surely there’s some mistake.” You know, kind of drunken answer.

(LAUGHTER)

EVANS: But actually, I must say my guys -- I mean, I lost three correspondents, killed in action. They would work all hours to get to the bottom of a story, like when we did the thalidomide campaign. How is it that the world’s biggest drug disaster -- a most appalling situation with children being born without arms and legs -- how did it happen?

KURTZ: Well, you were at the Sunday -- you were editing “The Sunday Times of London,” and you went on a crusade on that. I don’t...

EVANS: Yes.

KURTZ: ... see newspapers mounting crusades today. Maybe it’s not considered the in thing to do.

But let me ask you this. I came to this one page in your book, and I just stopped. And you wrote that you were, “... troubled by the media intruding into the private lives of people without the slightest justification.”

You’re a member of the British press. And look what you folks have done to the royal family.

EVANS: Oh, I know. Listen, here’s...

(CROSSTALK)

KURTZ: Is rooting into the private lives -- does that really bother you?

EVANS: The British press is divided into good guys and sort of not so good guys. And the not so good guys would put on a doctor’s uniform and go into a hospital to photograph a sick footballer. I mean, totally appalling.

And the number of speeches I made against that kind of thing -- but you have occasionally to intrude on what’s called “privacy” when a financial embezzler is swindling millions and millions. He says, “You can’t ask those questions. That’s my private life.”

No, it’s not. You’re actually stealing. And I had to ask those questions when I was trying to find out why one of my correspondents was murdered in Cairo, assassinated -- terrorists maybe. But to find out what happened, you had to go into his private life too.

KURTZ: What about all the private gossip that is constantly being regurgitated by Fleet Street about Princess Di when she was alive, and Prince Harry, and Prince Charles, and who’s fooling around with who? I mean, that seems to be a staple of British journalism.

EVANS: Well it is. It has been. Not only has that been a staple of British journalism, but also there’s been a great amount of what I call “political fabrication,” where very vivid imaginations work on presenting a picture of the opposition which they happen to be -- dislike, rather than the truth.

But bear in mind, that isn’t the best -- that isn’t the most -- that isn’t the serious press. And also, some of that is harmless froth. And bear this in mind -- the public seems to love it. Why do they keep on buying this stuff? I mean, look at television. Your own business is -- runs away from news now. If it can get somebody on whose made a faux pas, or failed to answer a question of Larry King -- beautiful woman that she was -- that becomes more important than a whole week in Afghanistan. That’s television for you.

KURTZ: Yes. Yes. The power of dealing with a former beauty queen, or...

EVANS: Yes.

KURTZ: ... the balloon boy that turned out to be...

EVANS: Look, the balloon boy was absolutely ridiculous. How many nights did the balloon boy lead the news? A total nonsense story worth that much.

KURTZ: Or a “non-balloon boy,” as I call it.

When you were editor of “The Times of London,” Rupert Murdoch had bought the paper. He made all kinds of promises of independence to you. And now you say in this book that he told you to “fix the news,” by which you mean.?

EVANS: Fix the...

KURTZ: Fix the news?

EVANS: Well...

KURTZ: Fiddle with it?

(CROSSTALK)

EVANS: Well his managing director, an absolutely brilliant man, but misguided, thought that the purpose of the paper was to support Margaret Thatcher, come what may. We supported her a lot, but we couldn’t support her come what may.

So, occasionally, we would say, for instance, that when the government would say the recession has ended, it hasn’t. Although pointing this out was regarded as laissez majeste and difficulties. But I don’t want to spend too much time talking about...

KURTZ: No. But the reason I bring up Murdoch, of course, just for viewers who don’t know, that within the year you were out of there -- you were fired...

EVANS: Yes.

KURTZ: ... despite those guarantees of independence.

EVANS: That’s right.

KURTZ: Murdoch -- there was a great debate in America when Murdoch bought “The Wall Street Journal.” Was he going to tart it up? Was he going to ruin it? Was he going to make it politically biased?

I haven’t seen that happen. What do you think?

EVANS: I think not. I think, in fact, “The Wall Street Journal,” under Murdoch and Robert Thomson, and Les Hinton -- those three characters -- it’s a vastly improved newspaper. There’s more space than news.

I see no bias in it. I have...

KURTZ: Are you surprised that...

(CROSSTALK)

EVANS: No, I’m not actually.

KURTZ: ... the mogul who couldn’t tolerate Harry Evans at “The Times of London,” has actually improved, in your view, “The Wall Street Journal?”

EVANS: Yes. Well don’t forget, he had a debt to Margaret Thatcher because she enabled him to avoid monopolist legislation and get control of the paper.

I understand that. But the point about Murdoch is that he’s not easy. He’s too easy to portray as a caricature.

What he did in Britain after I’d been fired to tackle the print unions which were sabotaging the entire production of “The Sunday Times” -- in fact, killed “The Sunday Times” -- he sorted them out. And without Murdoch, there would be no variety in the British press today, because until he came along, our computers were shrouded under linen on the third floor, there for nearly 10 years that we couldn’t use them.

So I have a -- I think that what he did there, as he himself put it, “It was a carnivore liberating the herbivores.”

KURTZ: At the height of your career in London, you met and later married, after your divorce, Tina Brown. In addition to the impact on your personal life, has she changed her thinking about journalism?

EVANS: Well she has, actually, because she started off as a brilliant columnist. And she’s come up with some phrases which are very perceptive, I think.

Too long to be important has not made attractive enough in the reading. She’s a first class editor of “The New Yorker” magazine. And the way she presented some of those longer stories made me think again about some of the things we did.

And secondly, of course, what I learned from her most of all was, when I founded “Conde Nast Traveler” magazine, I was kind of a child in this world of the glosses.

KURTZ: Sure. EVANS: And she taught me, as she’d been taught by the great Alexander Liberman, the importance of glory spreads in color magazines.

And the third thing which I really fell in love with her about originally, she has a fantastic sense of humor. And that’s good, because if you’re an editor, as I was when I met her, you certainly need a sense of humor somewhere...

KURTZ: Absolutely, to survive the ups and downs of the business.

I’ve got about half a minute.

You were knighted by the queen?

EVANS: Yes.

KURTZ: Is that an uncommon honor for a journalist?

EVANS: Actually I’m sorry to tell you, it’s not all that uncommon for an editor at the top of the profession. And unfortunately, it was too often rewarded for the politically motivated. In my case, of course, it was rewarded for valiant service to the public.

(LAUGHTER)

KURTZ: And does it change you? Do you have to get a better tailor? Or what is it? I mean, I should call you “Sir Harold.”

EVANS: Yes. I wish -- you can just call me “Sir Harry,” or call me “Harry.” I don’t care.

You know why I accepted that? Because it reflected on what my colleagues had done, and the great things that they did when I was editor of “The Sunday Times.” I just was the nominal recipient of the honor.

KURTZ: All right, Sir. Thank you very much for stopping by. We enjoyed it.

EVANS: Thank you.

(END VIDEOTAPE)

KURTZ: After the break, firing fallout. Rich Miniter is out as “The Washington Times” opinion editor after just six months, and he’s charging the company and its Unification Church owners with religious discrimination.

We’ll talk with him next.

(COMMERCIAL BREAK)

KURTZ: When “The Washington Times” named Richard Miniter as its editorial page editor last March, the paper called the conservative commentator’s appointment the latest in a series of dramatic moves to boost the newspaper’s global impact. But things soon fell apart at the paper founded by follows of the Reverend Sun Myung Moon.

Miniter says he was fired last month and has filed both a lawsuit and a discrimination complaint against the Times. The paper, meanwhile, is reeling from a management shakeup that included the resignation of its executive editor.

Rich Miniter joins us now to talk about just what is going on at “The Washington Times.”

Welcome.

MINITER: Thanks, Howie. KURTZ: The Unification Church officials who control the company have replaced the publisher. John Solomon who was the editor who came over from “The Washington Post,” has resigned without a public word of explanation.

A lot of fine journalists who work there, but is the place imploding?

MINITER: Well, a lot of fine journalists do work there, and they’re in the middle of a tragedy not of their own making. This is a fight within the Unification Church. And the three top executives who were fired were themselves Unification Church members to be replaced by other church members.

This also appears to be a fight between Preston Moon, one of the 13 children of Reverend Sun Myung Moon, and his other siblings over control of the North American empire.

KURTZ: And the paper has always lost money and has been subsidized by the church officials.

MINITER: Well, that’s right. I mean, the fact that the paper has lost money for more than 27 straight years, and losing about $40 million a year. And the church actually doles the money out in weekly amounts in order to keep complete control over the paper.

KURTZ: Now, you say that after you were first hired, that you were coerced into attending a Unification Church weekend in New York. What happened during that weekend?

MINITER: Well, I was told that it would be very -- “very good for me to go” to this, what I was originally told was a peace festival, and it would be a business expense, a trip. Perhaps I had to cover it -- I wasn’t quite sure of this assignment -- by Thomas McDevitt, who was the president and publisher at the time. And he was the guy who was largely going to decide whether or not I was made editorial page editor.

So, a lot of pressure was on me. I took it to mean that if I did not go, that my chances of being employed by “The Washington Times” would be roughly zero.

KURTZ: So you felt you didn’t really have a choice?

MINITER: I felt I had no choice at all. And...

(CROSSTALK)

KURTZ: What happened during that weekend?

MINITER: Well, to my surprise at the New Yorker hotel in New York, that Reverend Moon appeared, that it was a largely religious service that lasted several hours, and that my boss’ boss, Preston Moon, appeared on the stage alongside his father, was wearing a long flowing robe and kind of crown. And it -- clearly, for a lot of other Times employees who were in the room with me who were true believers, it was an ecstatic moment. They were very excited that “father” was coming, as they called him, to celebrate their 90th -- for his 90th birthday -- with them.

KURTZ: How did the whole thing make you feel?

MINITER: You know, I thought it was kind of creepy. I mean, why was I on a weekend, as a “business expense,” forced to participate in someone else’s religious service? I wasn’t there covering it as a journalist. I wasn’t there as an observer. But they were using my position at the paper...

KURTZ: Right.

MINITER: ... or the position I wanted to force me to be there and be an actor in their drama.

KURTZ: Right.

MINITER: Something far beyond my job description.

KURTZ: Now, “The Washington Times” declined our invitation to send a representative to this program, but I want to read a statement by the paper’s acting president, Jonathon Slevin, if we can put that up on the screen.

“’The Washington Times’ does not discriminate and does not tolerate discrimination. We operate within the law and require the same of employees. I am confident that once the charges raised by Mr. Miniter are investigated, the company will be fully vindicated.”

You were...

(CROSSTALK)

MINITER: How many lawyers it took to write that?

KURTZ: A few months ago, you were asked to stay home -- to work from home -- while a personnel investigation was conducted. Clearly, your staff had some complaints about your management style.

MINITER: Well, not that I was aware of. None of those complaints were presented to me.

I asked for the reason. There were two compelling causes.

One is that I had made a joke about Reverend Moon to a co-worker, which was then subsequently passed on to the president and publisher himself, who was a believer in Reverend Moon. That didn’t play well.

You know, newsrooms are often jokey places. And you know, that’s the nature of us journalists. We make jokes about things.

But the idea that would lead to me going home -- in addition, I refused to sign a form saying that the vice president of human resources, that her son lived at my home. She wanted to send him to an elementary school in my state, not her home state of...

KURTZ: Using your address, which you wouldn’t go along with.

MINITER: Right.

KURTZ: Now you...

MINITER: Well, that’s an illegal and illicit request, Howie.

KURTZ: I’m not trying to minimize it.

MINITER: And who the heck does that?

KURTZ: You previously led a group of authors in a suit against Regnery Publishing.

MINITER: Sure.

KURTZ: A contract dispute. The suit was ultimately thrown out. So some people are saying, is this part of a pattern with you?

MINITER: Well, two things don’t make a pattern, Howard, one. Two, you know, again, in both of these cases, I was forced into the courts, made numerous efforts to settle with Regnery. In fact, Regnery has just sent us a settlement offer. And we made -- and I spent from July up and through November trying to come up with some settlement with “The Washington Times.”

KURTZ: You also say that you were asked -- you, the editorial page editor, the vice present of opinion, were asked to help attract advertisers to “The Washington Times.” What were you supposed to do?

MINITER: Well, you tell me. I mean, they...

KURTZ: Meet with them?

MINITER: They wanted to -- they wanted me to recruit advertisers to use contacts and connections found in the course of newsgathering, and turn that over to -- you know, to the advertising department to work more closely with...

KURTZ: And your reaction to that request?

MINITER: Well, I think that’s ridiculous.

KURTZ: Why? Explain why?

MINITER: Well, I mean, that’s just not what I do. I mean, I’ve won awards as a journalist, as an investigative reporter. That’s not what I do.

I mean, there are -- these are two different professions. You don’t take the heart surgeon and have him argue your case in a court of law.

KURTZ: I’ve got about half a minute. I mean, now that this has gone into the courts, and the charges are flying, what do you want to happen? What do you want to see as the ultimate outcome here?

MINITER: Well, I’d like to see some resolution of the contractual -- the breaches of contract. They need to pay me the money that they owe me.

KURTZ: For the last couple months?

MINITER: For the last few months and under the contract.

But secondly, I think, you know, there needs to be some change in ownership of “The Washington Times.” If this paper is going to survive, and the worthy journalists who work there are going to have a future, a real shot at a future, it needs to be outside of the confines of the Unification Church.

KURTZ: So you want the church to sell the paper to someone else?

MINITER: Why not?

KURTZ: All right.

Rich Miniter, thanks very much for joining us.

(END VIDEOTAPE)

KURTZ: Up next, Lou Dobbs busy talking about his post-CNN life. And he seems to have ambitions that go beyond television.

(COMMERCIAL BREAK)

KURTZ: When Lou Dobbs abruptly quit CNN, he was kind of cagey about what he’d do next. But this week he floated the possibility of taking another job, a pretty big job, in fact -- president of the United States.

(BEGIN AUDIO CLIP)

UNIDENTIFIED MALE: As crazy as it may sound, there is talk of Lou Dobbs for president in 2012.

Is that crazy talk?

LOU DOBBS, FMR. HOST, “LOU DOBBS TONIGHT”: What’s so crazy about that?

UNIDENTIFIED MALE: Well, that’s what I’m asking you.

(LAUGHTER)

DOBBS: Well, golly. I mean...

UNIDENTIFIED MALE: Well, is it crazy talk or is it real?

DOBBS: Well, I’ll tell you this much -- it’s one of the discussions that we’re having...

UNIDENTIFIED MALE: Really?

DOBBS: ... about politics. And, you know, I’ve got to -- for the first time, I’m actually listening to some people about politics.

(END AUDIO CLIP)

KURTZ: So, is it crazy? Mike Huckabee hosts a weekend show for Fox News, and he’s ahead in some of the Republican polls for 2012.

Fred Thompson had a radio show before running for president last year, albeit badly.

Al Franken was an Air America radio personality before winning a Minnesota Senate seat after that endless recount.

And there was one other guy who used to co-host a talk show, run for president, and go back to the show. What was his name? Oh, right, Pat Buchanan on “CROSSFIRE.”

Of course, it’s possible that Dobbs is merely encouraging the White House speculation because, well, it gets everyone talking about him and boosts his stature.

I’ll tell you this -- if Lou does run, I’m signing up to cover his campaign.

Still to come, the mayor of San Francisco walks out of a TV interview and takes an off-the-record shot at the reporter. Should that have been broadcast?

(COMMERCIAL BREAK)

KURTZ: San Francisco Mayor Gavin Newsom had kind of disappeared after dropping out of the California governor’s race a month ago. When he finally resurfaced, he sat down with Hank Plante, political editor at CBS affiliate KPIX, and the mayor got increasingly defensive and testy during the questioning.

Keep an eye on what Newsom does when the interview is over.

(BEGIN VIDEO CLIP)

HANK PLANTE, KPIX: You know the criticism, that you have been dodging not just the press, but also the public, that you have been sulking after dropping out of the governor’s race, that you’re having a temper tantrum.

MAYOR GAVIN NEWSOM (D), SAN FRANCISCO: I don’t read the press. It is comical, some of the things that have been written. I don’t know where you come up with this. And it sort of misleads people and creates a sense of something that really doesn’t exist.

Off the record, I’m amazingly disappointed. Amazingly. I just am personally. You know?

(END VIDEO CLIP)

KURTZ: So, should the station have aired that off-the-record swipe? CNBC didn’t use off-the-record footage of President Obama calling Kanye West a jackass, even though that quickly leaked out on Twitter.

I probably would have cut the mayor’s parting shot. But here’s the thing -- when a newsmaker wants something off the record, the journalist first has to agree. Newsom muttered that so quickly as he walked out of there, that there was no chance for the reporter to respond. And besides, the cameras were rolling. Every politician should see that as a flashing danger sign.

Well, that does it for this edition of RELIABLE SOURCES.

We’ll see you back here next Sunday, 10:00 a.m. Eastern.

Now let’s turn things back over to John King for more “State of the Union.”

KING: Thanks, Howie. Have a great Sunday.

(voice over): I’m John King and this is “State of the Union.”

It’s 11 a.m. Eastern, time for “State of the Union’s” “Sound of Sunday.”

Seventeen government officials, politicians and analysts have had their say. Key senators from both sides of the aisle and philanthropists Bill and Melinda Gates. We’ve watched the Sunday shows, so you don’t have to.

We’ll break it all down with Donna Brazile and Ed Rollins, the best political team on television. “State of the Union’s” “Sound of Sunday” for November 29th.

(on camera): As President Obama prepares to announce his new Afghanistan strategy, key members of his own Democratic Party warn he must strike a difficult balance, persuading the American people that sending more troops now is the key to getting out of Afghanistan as soon as possible.

(BEGIN VIDEO CLIP)

REED: I think he has to make a speech that shows that all of our efforts are pointed to our reduced presence in Afghanistan, but I think he has to also indicate again and again how critical this is to our national security.

(END VIDEO CLIP)

KING: But a key Republican senator says one thing the commander in chief must not demonstrate is a weakening of U.S. resolve.

(BEGIN VIDEO CLIP)

SEN. JON KYL, R-ARIZ.: You cannot signal that they are going to be doing their part, but then, as soon as it’s inconvenient for us to stay, we begin to leave. Because that’s exactly what we’ve done in the past. That’s exactly what they fear.

I talked to a bunch of tribal leaders out in Kandahar. That’s what they feared. They want us to make sure that the job is done before we leave. And that’s why I think all of this talk about an exit strategy is really dangerous. It tells the Taliban just to lay low until we leave, and it does not encourage the Europeans, for example, or other NATO allies that this is a cause worth sending their troops to support.

(END VIDEO CLIP)

KING: Another leading Republican says the president would be smart to set aside the health care debate and focus on what he sees as the two more urgent priorities, the war and the economy.

(BEGIN VIDEO CLIP)

LUGAR: But we’re not going to do that debating health care in the Senate for three weeks, through all sorts of strategies and so forth. The war is terribly important. Jobs and our economy are terribly important. So this may be an audacious suggestion, but I would suggest we put aside the health care debate until next year, the same way we put cap-and-trade and climate change, and talk now about the essentials, the war and money.

(END VIDEO CLIP)

KING: As you can see, we’ve been watching all the other Sunday shows so maybe you don’t have to.

Let’s bring in the best political team on television, as we do every Sunday at this hour, and break down the key issues.

In our New York bureau this morning, Republican strategist and CNN political contributor Ed Rollins. Here in Washington, senior correspondent Joe Johns, senior White House correspondent Ed Henry, senior political correspondent Candy Crowley and Democratic strategist and CNN political contributor Donna Brazile.

Let’s start with the debate you heard in the opening of the program.

And Ed, you’re out of the room. I’ll go to you first. What is the single biggest challenge for the president of the United States when he speaks to the nation Tuesday night, Ed Rollins?

ROLLINS: There has to be real clarity. Why are we there? How long are we going to be there?

And equally as important, what is the mission and how is the mission different now than it was two years ago or four years ago?

You know, Democrats have to be convinced. The president’s party is certainly very divided on this issue. I think he’ll have the Republican support he needs, but at the end of day, if this is not a bipartisan effort, long-term, they won’t get the resources and the funding to make it work.

KING: Donna Brazile, to Ed Rollins’s point, the biggest, toughest sales job is to the left, the anti-war left of the Democratic Party.

How does the president convince them either to support him or at least keep quiet their criticism? BRAZILE: Well, John, after eight years, public support for this war has diminished across the board, not just with the left, but across the country and even across the world, where we depend on troops from other countries to help us in Afghanistan.

The president gave a very thorough speech back in March, laying out our objectives. He said it was to dismantle, disrupt and destroy Al Qaida. He also talked about the Afghan government.

I think the president needs to update us on what has occurred since March that requires to send more troops, more civilians, and how will this be different than, say, what it was two years ago or even in the near future?

So I think this is a very important speech to not just convince the left but to convince the country that this is an important use of our resources.

KING: Well, Candy, jump on in, but first let’s listen to one of the independents in the United States Senate, Bernie Sanders of Vermont, who obviously votes with the Democrats most of the time, but he is making clear even before the president speaks he thinks sending 30,000 more troops is a bad idea.

(BEGIN VIDEO CLIP)

SEN. BERNARD SANDERS, I-VT.: I’ve got a real problem about expanding this war, where the rest of the world is sitting around and saying, isn’t it a nice thing that the taxpayers of the United States and the U.S. military are doing the work that the rest of the world should be doing?

So what I want to see is some real international cooperation, not just from Europe but from Russia and from China.

(END VIDEO CLIP)

KING: Not happening in the Russia and China department.

(LAUGHTER)

How much -- how complicated does it make it? This is an enormous challenge anyway, but when you have people out there saying, you know, look, why are we doing this; why is it all our men and women, all our money?

CROWLEY: Well, and what’s interesting is that, when the president campaigned and when he was the nominee for the Democratic Party, he said the reason we can’t get their cooperation is because we’re go-it-alone; we’re always, you know, off -- we don’t consult them.

And so now he’s had a year where he’s become the most traveled freshman president of any president. So is France going to step up to the plate? Is Germany going to step up to the plate? Is NATO going to step up to the plate? Maybe they will, and then he can say, you see, it worked. Maybe they won’t. Because they have been -- they may send troops there. The question is, are they going to send combat troops? Because I think what people object to is that the U.S. is always the combat brigade.

KING: And so you’re the senior White House correspondent. How much do they view that, the NATO credibility test -- never mind the sales job at home, but will they have specific commitments of real troops, not 20 guys to be there for six months or 50 guys to train guys for six weeks. Will they have real combat troops?

HENRY: They believe that they’re going to get up to 10,000 of those combat troops from NATO. We’ll see whether it -- it follows through.

And that is key and critical because the president is probably only going to send, we hear, about 30,000 to 34,000 U.S. troops. So to get to the 40,000 that General McChrystal wants, you need those NATO troops to make the difference.

That will be big. And the other key will be what the president kept saying when I interviewed him in China a couple of weeks ago, was end game, end game, that we’ve got to have the Afghan army stand up; they’ve got to take responsibility.

And Candy and I were speaking a few moments ago about how this sounds like President Bush, 2005, 2006, “As the Iraqis stand up, we’ll stand down.”

Well, you know what? Here we are, almost into 2010, and while it looks like Iraq is going to finally take over, maybe by the end of 2010, there’s some real uncertainty about, when the U.S. finally leaves, can they really stand up, several years later.

So the same may hold true for Afghanistan. How do we really know whether they can stand up?

KING: I want you to listen, before you jump in. Evan Bayh -- this is a guy from a conservative state. He’s a relatively moderate to conservative Democrat. Of all of the Democrats you’d think would be with the president, you’d think guys from Indiana like Evan Bayh would be. And it’s clear that he wants to be, but even he understands the dicey politics here. He says send more troops, Mr. President, but don’t -- maybe not give the generals everything they want.

(BEGIN VIDEO CLIP)

SEN. EVAN BAYH, D-IND.: I think the president and the secretary of defense have to show some deference to the generals’ recommendations. But these are just recommendations. They’re not the 10 commandments, after all, Chris.

You’ll remember General Westmoreland, in Vietnam, wanted more troops, even at the end. I think -- wasn’t it General MacArthur, in Korea, wanted to drop nuclear weapons on China. You don’t always go with the recommendations of the battlefield commander. You take them into account and then make the appropriate decisions.

(END VIDEO CLIP)

KING: I’m guessing, Joe, the White House just sent “Memo to Senator Bayh: Say whatever you want, but please don’t add Vietnam in the back half of your quote.”

(LAUGHTER)

JOHNS: That’s absolutely right. And the -- the other thing that’s really funny about this is Obama is the guy the left voted for. And Obama said, on the campaign trail, that Afghanistan was the problem.

Now he’s, sort of, moving into that realm and actually owning it. And the fact of the matter is he’s probably never going to get a certain portion of the left on his side, either in the Congress or out in the country.

All he can really do, right now, is make a justification based on reasonableness about what you’ve got to do at this point, going forward, in the hopes that you at least explain your position to the middle and realize that the certain segment is just not going to go for war, period.

KING: And, Ed Rollins, some conservatives have used the word “dithering.” We’ve been waiting now more than 90 days since General McChrystal’s recommendation arrived to when the president will make his decision.

Now Republicans are saying, Mr. President, we will support you as you send more troops. But listen to Senator Lindsey Graham -- essentially, the Republicans now laying down a new threshold, saying, “You better sound tough.”

(BEGIN VIDEO CLIP)

SEN. LINDSEY GRAHAM, R-S.C.: We’ll be evaluated by some pretty tough characters in the world as to how we handle Afghanistan. This is not just any place on the planet. This is the place where the Taliban took control after the Russians left, aligned themselves with Al Qaida and attacked this nation and killed 3,000 Americans.

And I hope the president will tell the world, our troops and anybody listening Tuesday, that will never happen again with this new surge of forces.

(END VIDEO CLIP)

KING: So, Ed Rollins, how do you do it, as a president with a divided country, say, I’m sending in 30,000, maybe 35,000 more troops, but the reason I’m doing that is because it means we can get home sooner?

ROLLINS: Well, we can get home sooner. The critical thing here, and unlike Iraq, there is no real army in Afghanistan. I mean, there’s 50,000, 60,000 troops that wouldn’t be put into real battle at this point in time.

We’ve got to train 5,000 a month for at least a year to get to the 134,000 mark, which is now updated from -- we were going to do that four years ago.

We’ve got to build an army there to 250,000, 300,000, 400,000, some people think, that they’ve never had before. Iraq had an army that we dismantled foolishly, but you can at least go get soldiers and bring them back.

ROLLINS: Here, you have an uneducated population. You’ve got the competition with the Taliban offering the same kind of money and basically saying every day, who do you think long-term is going to be here? Us or them? Do you want to be part of the Afghan army or do you want to be part of our group that has been here and we will be here. That’s a long, hard battle and I think to a certain extent, that’s what the president has to say is that we’re going to get in there. We’re going to hold them accountable. We’re going to make sure they build their own army because if they don’t build their own army, there is not going to be any success here. We’re not going to stay there indefinitely.

KING: Quick break. Our group will stay with us. We’re going to take a quick break here. When we come back, we’ll talk more about the dicey politics as the president prepares to make that big speech to the nation Tuesday night about sending tens of thousands more U.S. troops to Afghanistan. Stay with us.

(COMMERCIAL BREAK)

KING: Back to our Afghanistan discussion in a moment, but first this breaking news just in to CNN. The Iranian state news agency is reporting that the Iranian government has authorized the construction of 10 new industrial-scale uranium enrichment facilities, a dramatic expansion of its nuclear program and a dramatic defiance of the United Nations Nuclear Agency which has called on Iran to suspend that program. The Iranian news agency saying the decision comes only days after the U.N. nuclear watchdog agency censured Iran over its program. It says it now has approved the construction of five uranium- enrichment sites that have already been studied and proposes five additional sites for construction. The decision, the state agency saying, made during a cabinet meeting today, headed by President Mahmoud Ahmadinejad.

Donna Brazile, this is, shall we say, not the way the Obama administration and the world were hoping Iran would go.

BRAZILE: Well, just 24 hours ago, everyone was applauding the fact that the IAEA had rebuked the Iranians for the developments in Qom. Now this will give the administration perhaps and others the ammunition, I hate to use that word, but hopefully the impetus to go to the United Nations and to finally propose those tough sanctions. But we have to keep China and Russia onboard. That’s the key to having any successful strategy before we look at the other options involved in trying to halt their nuclear program. KING: In an odd way, Candy, does it help the president? Russia and China have been saying give them time, give them time, give them time. When they do something like this does it give the president of the United States say --

CROWLEY: Well sure, it gives him saying, look, they haven’t responded, I’ve been the one out there, I’ve opened my hand saying if you’ll just come into the family of nations. And I think all along what this administration is calculated is, if they do these things with places likes Iran or North Korea and say you can come into the family of nations and here’s how, and if they don’t do that that they can then go back to some of these nations.

And really, it’s not just Russia and China. It’s France and people that do business in Iran that have been reluctant to impose the sanctions. They can go back and say we tried it. We went out there, we extended our hand. We gave them a pathway and they haven’t done it and now you’ve got to come with us and do these sanctions. I think this is the stick to the carrots that they’ve been holding out there.

KING: And Ed, how do they assess the Iranians in the Obama White House. When North Korea does things like this, eight times out of 10 times whether it’s the Bush administration, even back to the Clinton administration, now the Obama administration that they’re just trying to get attention, that they’re just sort of show boating on the world stage. Is it the White House calculation that Iran is different? That they are dead set serious on expanding this program?

HENRY: They believe so. And that’s why the president in recent days has been saying look, when he was inaugurated as president there was no consensus about how to deal with Iran. And as Candy is saying, they believe this shows that maybe they are, you know, bent on making sure that they can continue this nuclear program.

That is going give fuel for the White House to continue to say, look, we’ve reached out. We’ve extended the hand. The president of the United States wrote letters to the government, to the religious leaders, trying to reach out and they have consistently pushed back. And so this gives them more fuel to say it’s time to get tough before the U.N. and that is the key as you said with China and Russia. They supported this IAEA resolution. Will they support sanctions before the U.N.? These kinds of moves might suggest China and Russia finally will.

JOHNS: All of the choices are bad here. On the one hand, you have China and Russia actually who have a lot of business interests in Iran and on the other hand, kind of like the idea of a country sticking its finger in the eye of the super power United States. They got off to a wrong start.

There are a lot of people who say the United States should have gone the route of trying to destabilize this regime at the very beginning rather than finding itself in this position because all of your choices are bad. The thought of going in and bombing nuclear facilities is just terrible. The thought of trying to create some type of a dialogue with a country that’s been playing sort of push me/pull you, it’s all really tough for this administration. And somehow or another, they’re going to have to unravel it in a peaceful way where the rest of the world looks at the United States and says, OK, I’m satisfied with that. Tough choices.

KING: And Ed Rollins, a test of the president’s toughness. Is it not? His critics say he bows to the emperor of Japan. He wants to negotiate with North Korea and he wants to negotiation with Iran. Now he’s sending more troops into Afghanistan, which is even some conservative critics will say good for you, Mr. President, maybe you took longer to get there than we wanted you to. Now he might have a stronger showdown with Iran.

ROLLINS: We drew a line in the sand and they walked up to the line and kicked the sand into our face. They’re not afraid of us. They watch CNN International and other entities. They know we’re in two wars. They know we’re bogged down. We know that the choices are very difficult. But at the end of the day, they’re not afraid of us. They’re not afraid of their own people and they basically have subjected them to cruelty and lack of governance. And I think to a certain extent, unless we can push the most severe sanctions on them and we take some other action, we’re going to have to basically live with them having nuclear weapons and I don’t think that’s good for their neighborhood and I don’t think our ally Israel is going to basically tolerate that very long.

KING: Our assessment there, that news just into us, Iran building new uranium enrichment facilities. We’ll continue to track that story. Right now, we’re gong to take a quick break here on STATE OF THE UNION. When we come back, we’ll get back to Afghanistan and the president’s big decision next Tuesday night, his big announcement, sending upwards of 30,000 more troops to Afghanistan and the challenge of trying to sell that to a very skeptical American public. Stay with us.

(COMMERCIAL BREAK)

KING: Let’s get back to the big political challenge facing the president as he makes a major policy announcement about Afghanistan. Joining us in New York is Ed Rollins, our CNN political contributor and Republican strategist. Here with me in Washington, Joe Johns, Ed Henry, Candy Crowley, and Donna Brazile.

Let’s look at the polling to underscore the president’s very tough challenge. “USA Today”/Gallup poll asked the American people, how is President Obama handling Afghanistan? And look at these stunning numbers. Approval rating, 35 percent, down 21 points from July when it was 56 percent. Disapproval of how the president is handling Iraq now at 55 percent, up nearly 20 points from 37 percent in July.

Ed Henry, they knew at the White House they were facing all of this criticism, conservatives saying you’re dithering, Mr. President. the general has given you his recommendations. They believed they needed a long, well-thought-out deliberative process. But do they now see these numbers and say, we think our process was right, but we may have paid a political price?

HENRY: Sure, absolutely. Because it appeared that, you know, violence was increasing while the White House was weighing all of the different options. And what is also interesting is at the beginning of this process, we knew that the options essentially were, you know, 20,000 on the low end, 30,000 in the middle, 40,000 if you did the full McChrystal.

After this long process they winded up with the middle approach, which is at the beginning a lot of people expected they probably would do, try to split the difference. I think the other difficult issue -- and there’s another “USA Today”/Gallup poll that basically asked the American people, what should President Obama do? Thirty-nine percent say, begin to withdraw, 37 percent say, increase by 40,000. A split.

And these are the tough decisions that you’re elected president to make. The American people, frankly, don’t know what to do next. You’re paid the big bucks to come up with the tough decision and, frankly, deal with the consequences because they’re not certain this is going to work.

KING: Well, on that point, let’s listen to some of the American people. I was out in Montana for this week’s diner segment. This was a question I asked -- I’ve been in 45 states. It’s a question I ask just about every one of them. Essentially, who is the enemy in Afghanistan? Should the U.S. -- should we send more troops? Should we bring troops home? This is Steve’s Cafe, Helena, Montana.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: I think we need to bring our boys home, actually.

GEORGE JENSEN, OWNS LANDSCAPING COMPANY: I would like to see them come home too. The thing is, is that we’re not going to win either one of the wars by force. It’s going to have to be winning the hearts and the minds of the people. Now how do we get from point A to point B because it has been -- totally the ball has been dropped seriously ever since the start of these things.

STEVE VINCELLI, OWNER, STEVE’S CAFE: How do you back a government without a fair -- that can’t even do a fair election? How do you continue to put your money into that debacle like that when you don’t even know -- if you would lead well, will it ever last? It seems like everything goes corrupt.

(END VIDEO CLIP)

KING: So, Donna Brazile, how does the president -- pretty fair- minded people there, all of them said, look, he inherited this, the problems in both Iraq and Afghanistan started under President Bush, but he’s the boss now. And they see the corruption in the election, they see the opium trade, they see eight years and billions of dollars and they say, you know what, bring the troops home.

How does the president convince them to sign back up?

BRAZILE: Well, I think the most important thing is the president once again defined the objective. What is the objective? The war should have an objective. When we focused the last two-and-a-half months on the troop level. Once we know what the admission is and the objectives, then the troops should help define the cause of the campaign.

I think we’ve spent so much time focusing on the wrong thing and trying to win over the situation in Afghanistan, and it is important that we focus simply on training the Afghan army, trying to hold those provinces, and those areas where we believe the Taliban is putting their minions in, and then bring our troops home. But I don’t think the president can announce an endgame, because I think would undermine our campaign there. So it’s a tough call.

CROWLEY: He needs to come out and draw that line from Afghanistan to the United States of America and say, you know why we’re here? Do you remember 9/11? Do you remember al Qaeda? Our mission, as he described early spring, is to seek and destroy and get rid of al Qaeda, to a certain extent, the Taliban when there’s overlap there, which there is a lot of it.

So he needs to remind people that this isn’t about propping up Karzai. This is not about the Afghan government. I mean, that’s obviously an element you’ve got to strengthen, but it’s not about that, it’s about us. And if he can’t make that connection, then he has got a problem.

HENRY: And by the way, if this still continues to spiral downward, next door you have Pakistan where they have nuclear weapons. So...

BRAZILE: And bin Laden.

(CROSSTALK)

KING: And to that point, Joe, have the American people -- do our presidents, do our members of Congress, do us in our business, do we spend enough time constantly reminding people? Because even if things go perfectly in Afghanistan, most of al Qaeda is on the Pakistan side.

So essentially U.S. forces in Afghanistan are the fire department that if Pakistan does its job, al Qaeda can’t come across the border seeking refuge.

JOHNS: Absolutely. We don’t necessarily do that good a job, and here’s what I mean. So much of this has been about process and the words that have been used. I’ve seen all of these articles about whether this president has a foreign policy based in realism. There has been all of this talk about counter-insurgency, which might be the better idea, versus counter-terrorism, which sounds like the better idea.

So it’s very difficult to sort of put this in a person’s kitchen where they live and explain to them the stakes for you, the American public. This is the challenge also for the president to try to lay in it on the line, as we’ve already said here, and say, this is what’s in it for you, more safety, more security at home, trying to stabilize this region and getting out in a reasonable period of time. It’s the words they use, in part.

KING: So, Ed Rollins, how much more difficult is this challenge because the world is a more fragmented, fractured, less predictable place than when you were sitting at Ronald Reagan’s side in the early -- at the end of the Cold War?

ROLLINS: Well, the lesson I learned from Ronald Reagan is you can’t do it in one speech. No matter how brilliant this speech is on Tuesday night, you have got to go out continuously and convince the American public of why you’re there, particularly when you need the support of the Congress.

The biggest problem this president has today is he has got so much on his plate. He has a -- he speaks Tuesday. He has a job summit on Thursday. He’s going off the following week to do Copenhagen, get up the Nobel Peace prize. Then we’re into Christmas parties and all the rest of it. And there’s nothing sustained. And then you have the health care being battled on the congressional front.

So I think the bottom line here is that he has got to basically realize he can’t do it in one speech, it has to be a sustained effort. It’s an educational process. And the educational processes is, we are going to build them an army and once they have an army they can defend themes and defend the region, then we can back away.

That is what we did in Iraq, that’s what we want to do there. That’s going to take a couple of years and the moment we basically start waving the white flag, though, we’ll lose that battle very quickly.

KING: And even as the president tries to sell this policy and rally support, one of the big questions will be, how do we pay for it? And we’re going to talk to David Obey, the House Appropriations Committee chairman, later in the program. He says, let’s have a special tax so that everybody knows that’s the war tax. That’s what it has cost.

Carl Levin is the chairman of the Senate Armed Services Committee, he doesn’t go that far, but he does think -- he does think we need to raise revenues to pay for war.

(BEGIN VIDEO CLIP FROM “FACE THE NATION”)

SEN. CARL LEVIN, D-MICH.: We’re in the middle of a recession, we’re probably not going to be able to increase taxes to pay for it. In the middle of this recession, I don’t think you’re going to be able to successfully or fairly to add a tax burden to middle-income people.

(END VIDEO CLIP)

KING: Not to middle-income people, but he says maybe a surtax or higher on upper-income people to pay for the war.

KING: Do we want to get into a taxist debate, paying for the war debate in the middle of the policy debate?

HENRY: In the middle of a debate about how to raise taxes to pay for health care, it gets very complicated. But I had sources in early October who were in the room when the president brought Congress in to talk about his deliberations on Afghanistan. They’re going to be coming back this Tuesday, including David Obey, Carl Levin , some of these key players. And back in the meeting in early October, I am told that David Obey stood up and said, Mr. President, if you escalate this war further, you’re going to make it likely that we can be up into Afghanistan for up to 20 years and it could cost $1 trillion over the next 10 years.

David Obey is the chairman of the House Spending Committee. He knows how much this costs. And to get to Ed Rollins point, I’m not sure that the American people understand the stakes, not just the human cost, but how this is breaking the budget. And as you made the point earlier, this was inherited by this president and clearly, President Bush did not find ways to pay for the wars in Afghanistan, Iraq, et cetera, but now this president needs to find a way to pay for it because when you add it up with health care, the stimulus, et cetera, we’re going broke.

CROWLEY: I find it very hard -- what $30 billion a year, I saw somewhere -- to send those additional troops. This Congress is not going say to this president, no, we’re not going to give you money. It’s not going to happen. There are enough Republicans and enough moderate Democrats and left Democrats who think we ought to go ahead and put those troops in. He’s going get this money.

The question is, like, do they want to tax the rich as they do want to tax the rich for health care reform as well. It’s an OK battle to have right now because there really is a populist strain going on in the country that goes, yeah, tax the rich. You’ll hear the Republicans fighting it, but it’s not an up popular idea. I don’t think the White House seems that crazy about the idea in this instance.

BRAZILE: They have not weighed in on this discussion, but leading Democrats and I think others will raise the question, John, simply because we need to put it on the table. Look, we’ve spent almost $1 trillion so far in these two wars. We know that the Afghanistan war has not been properly resourced but at the same time what it will cost as in terms of the lives of our brave soldiers and what it’s costing the American people in terms of our tax dollars. So we have to have this debate and I hope we can have it in an honest way so that the American people know exactly what the cost is.

JOHNS: The thing I wonder about is how in the world are you going to sell something like that on Capitol Hill? You think of these two words, war tax. On the left, people are going to hate the war part. On the right, the people are going to hate the tax part. And what do you have? You have the middle, but that creates what I’ve always called the Halloween coalition where the wings just hate it. The people in the middle vote for it and it’s shot down.

BRAZILE: Security is not cheap.

KING: The Halloween coalition. Write that down. We’re going take a quick break. When we come back, we’re going to shift gears to politics, including there’s a committee to draft Dick Cheney , the former vice president, for president next time around. No kidding. Stay with us.

(COMMERCIAL BREAK)

KING: I’m John King and this is STATE OF THE UNION. Here are stories breaking this Sunday morning.

Struggling homeowners will find out tomorrow morning what additional steps the Obama administration is planning to take to help them avoid foreclosure. Administration officials are expected to announce a new initiative to get long-term help for borrowers who are trying to modify their loans. The Treasury Department says the plan will provide more resources for homeowners and demand more accountability and transparency from banks.

Investigators in Russia are calling a deadly train derailment an act of terror. At least 26 people were killed and another 100 injured when an explosion caused several cars to jump the tracks Friday night. Several passengers were still unaccounted for. Investigators say they found elements of an explosive device including a crater under the tracks where that train derailed.

Investigators in Florida are hoping to interview Tiger Woods and his wife today about the golfer’s mysterious car accident. Two previous attempts to meet with them have failed. Woods was treated for minor injuries when he crashed his SUV into a fire hydrant and then a tree outside his Orlando-area home early Friday morning. Those are your top stories here on STATE OF THE UNION.

Back with our panel. Ed Rollins is in New York. Joe Johns, Ed Henry, Candy Crowley and Donna Brazile here in Washington. Let’s shift to some politics. There’s a proposed resolution at the Republican National Committee, after the primaries this year and a little bit of strife within the party especially in a New York congressional race, there’s a proposed resolution that some call the purity test for Republicans. And what it would do, it would set these standards to be a Republican candidate and to get party money.

We support smaller government, smaller national debt, lower deficits and lower taxes by opposing bills like Obama’s stimulus bill. We support market-based health care reform and oppose Obama-style government-run health care. We support market-based energy reforms by opposing cap and trade legislation. We support victory in Iraq and Afghanistan by supporting military recommended troop surges and we support protecting the lives of vulnerable persons by opposing health care rationing and denial of health care and government funding of abortion.

I don’t think it takes much to get the picture. If President Obama is for it, you have to be against it under the terms of the resolution on those big issues to get any funding. Ed Rollins, you’re the Republican strategist in the group. A good idea?

ROLLINS: Well, it would be a much better idea if members after they got elected lived up to those issues. Any time the party --

BRAZILE: Say it, brother!

ROLLINS: Any time the party sets a platform, candidates run on their own record and should have the freedom to go do what it is that they think is the best interest of their constituents depending where the district may be. Those are nice principles. They’ve been principles of the Republican Party for a long time, but the party basically ought to realize its role is not setting policy. Its role is raising money, getting good candidates, helping them be trained, getting good campaign managers. And once someone gets elected trying to hold their feet to the fire on some those of principles. But at this point in time, setting a litmus trust prior to them running I think is just kind of foolish.

KING: And Candy, the Republicans have the wind at their back right now. The country is concerned about the spending, history says they’ll do well in an off year anyway. Is this the kind of thing they want to be debating?

CROWLEY: No. You know that there is a center inside the Republican Party that does not like all of the attention to Palin at which probably won’t like the attention to Dick Cheney as a potential presidential guy.

CROWLEY: They also are not going to like this, sort of, you have to be this. But it’s the debate within the party, and we keep seeing it over and over again.

It’s purity versus that, kind of, big tent, you know, do we bring in people, and if they have an “R” after their name and they’ll vote for speaker, and the speaker they vote for is a Republican, we’re with them, or do you go for purity?

And the -- the ongoing feeling of the moderates inside the party is, if you go for this sort of purity, you’re not going have a party, certainly not one that can win.

HENRY: And at a time when the -- one of the president’s problems is that independent voters seem to be moving away from him, it doesn’t seem like a sound political strategy to try to push independents out and say we’re going to go further to the right.

JOHNS: There’s a lot of scoffing out there, especially among Democrats, about this, you know, how ridiculous; why would they do that?

And I have to tell you, though, I mean, we were all around when they rolled out the Contract with America, which sounds a lot like some of these things.

(LAUGHTER)

And I know it’s a different time. It’s a different era, different president and so on, but you have to keep in mind that there’s a segment of the population out there that will pay attention to this and respond to it in a -- in a fairly positive way. So I don’t think...

CROWLEY: Contract with America had Newt Gingrich.

(LAUGHTER)

You have to have a person behind something to push this, and this is, sort of, an amorphous party thing, and that’s not -- you’ve got to have a person.

KING: You’ve had debates within your party about these kind of things before, litmus tests and purity and the like. Do they help or hurt? BRAZILE: Well, John, I know what it’s like to be in the wilderness, but I also know what it’s like to have a flashlight and some leaders who are willing to put forth those ideas, whether it was Bill Clinton and Al Gore in the 1990s or Barack Obama , who just won last year.

I think it’s important the Republican Party begin to harness a new generation of leaders to come up with ideas that will help ignite a new breed of leaders with the country. But to come up with these old tried ideas that have produced the kind of pain that we are now seeing, I don’t think it’s going to get them anywhere.

KING: You mentioned new generation of leaders. I don’t think anyone, even Dick Cheney , would call -- cast himself as a new generation of leadership of the Republican Party.

(LAUGHTER)

But here it is on the cover of Newsweek, up here, Cheney in 2012!” That’s an exclamation point. That’s not a question mark, up here in the top (inaudible).

And there is a committee -- we got the release this past week -- the Draft Dick Cheney for President in 2012 Committee.

And here’s what the organizer says, “The 2012 race for Republican nomination for president will be about much more than who will be the party’s standard bearer against Barack Obama . The race is about the heart and soul of the GOP. There’s only one person in our party with the experience, political courage and unwavering commitment to the values that made our party strong, and that person is Dick Cheney .”

Now, his daughter Liz says she wants him to run, but he’s not listening. On a scale of one to ten...

(LAUGHTER)

He didn’t run when he was vice president and could have had the deck stacked in his favor. On a scale of one to ten, we think the likelihood of that is?

Not real likely, but, I mean, there are people out there who are going to say, “Look, he already ran the country for eight years,” you know...

(LAUGHTER)

KING: Ouch.

HENRY: There’s a term limit.

JOHNS: Exactly.

(LAUGHTER)

HENRY: What did you say before, a Halloween (ph) poll (ph)... JOHNS: Right, right.

HENRY: ... you know, because people used to call him Darth Vader, and I think there’s almost like a Darth Vader vacuum right now. The reason why he’s even being talked about is there’s a vacuum in the Republican Party, in terms of who is going to seize the mantle of leadership.

The only other person out there getting as much attention, perhaps, is Sarah Palin . And, frankly, there are a lot of Republicans who publicly might say, boy, she energizes the party, but privately believe she doesn’t have the experience. Who’s got the experience? Dick Cheney .

(LAUGHTER)

CROWLEY: Well, in the immortal words of Dick Cheney several weeks ago when this subject came up, “Not a chance.”

So on a scale of one to 10, zero.

BRAZILE: It’s time for a new generation of Republicans to take their seats at the table. I endorse that concept.

(LAUGHTER)

KING: Ed Rollins, to the vacuum point, do -- do things like this, which I assume you think is a little silly -- do they come up because we’re, you know, a year into Obama; we’re heading into the midterms; 2012 can seem very far off, but, boy, we do need things to talk about sometimes, don’t we?

ROLLINS: Well, at this point in time, there was no Obama, four years ago. He was -- he as ranked number 99 in the United States Senate.

We will have a candidate. We will -- and obviously, re-elections are about the incumbent. And if this president falters and continues to falter, then I think you’ll find a young governor or even an older governor who is going to come forth.

I think our next nominee will be one of our governors, a new one or an old one. And I think, at the end of the day, we do need a new voice. There’s no -- there’s no leadership in Washington that’s going to step forward and be a presidential candidate.

I remind people who want to draft Dick Cheney -- and I’ve known Dick for a long, long time -- I ran a re-election campaign for Ronald Reagan against a very popular Walter Mondale, and we won 59 percent of the vote. You don’t want to re-run the Bush campaign all over again, of 2000, 2004, 2008. We need to run the campaign against Barack Obama in 2012 with a new candidate.

KING: When I’ve spoken to him, he says he’s enjoying his life. I would agree that the chances -- I would say negative five, maybe, on that one. (LAUGHTER)

All right, we’re going to take a quick break. When we come back, our lightning round, how to crash a state dinner. Stay with us.

(COMMERCIAL BREAK)

KING: We’re back for our lightning round. And unless you are hiding in a cave somewhere, you do know that a couple from Virginia somehow managed to crash a state dinner for the prime minister of India this past week.

Tareq -- there you see them, Tareq and Michaele Salahi, walking in -- that’s out -- that’s into the White House, there. They also not only got to pose with the vice president but the president of the United States.

They were not on the invitation list -- there you see them with President Obama -- and they went right through the security. Now, they did go through the magnetometers. The Secret Service says the president was not at risk, but certainly they were uninvited guests.

Ed Rollins, to you first, you’ve worked in the White House. The Secret Service says it is embarrassed. How did this happen?

ROLLINS: Well, certainly, was there a breakdown on the part of the Secret Service, and I assume it happened at the uniformed level. And they’re first-rate people, but there was a breakdown.

And I think the bottom line is the way you stop this breakdown -- I wrote an article on CNN.com today -- you prosecute them. They basically trespassed. They had no right to be there. The Secret Service has a tough enough task without having people dress up and pretend they’re important. These people want a reality TV show, give them one. It’s called “Dealing with the federal prosecution system of the District of Columbia.”

(LAUGHTER)

KING: Ed Rollins, a tough-on-crime mayor, there, from New York.

(LAUGHTER)

Now, Donna, you’ve been in the White House many, many times. Normally, for these events, there’s somebody from the staff who is standing there with a clipboard, and it says “Donna Brazile,” they check you, and then you show your photo ID, and then the Secret Service looks in your purse and runs everything through the magnetometer.

BRAZILE: Absolutely.

KING: How?

BRAZILE: I don’t -- I don’t know how it happened. I mean, John, this is going to require the White House social office, as well as the Secret Service, to go through everything that happened at that gate to find out, how did they slip by?

I’ve been to the White House on countless occasions, both in this administration and previous administrations, and I tell you, they check everything. So I was surprised.

But maybe -- I don’t have a red dress. Maybe it’s the red dress.

CROWLEY: You know, there are so many things, I mean, one of the things that I totally agree, where was the social office there? Why weren’t they checking off names? Because then it’s a dual job for the Secret Service. The Secret Service should be there screening these people, putting them through the magnetometer, looking in their purses. That’s what they do, not checking them off the social list. So they had dual jobs there.

Plus, the fact they’re dealing with important people and they don’t want to, you know, do something that they shouldn’t do. But it also brings to mind sometimes the simplest things don’t get done. Checking the name, Hinckley was in a press pen without a press pass. There was a time and you may remember this. I think it was George Bush the dad when a band came in and there were 14 members of the band but 15 walked in. They found this guy sort of wandering around the White House counting noses. So it’s always the simplest -- in fact, that first line, the simplest thing.

KING: We had a guy get on the international press charter once on a presidential trip that didn’t belong on the trip. It wasn’t the president’s plane, but it was our plane and somebody said, who’s that?

HENRY: And how did -- they got past the first checkpoint, but there are many other checkpoints when you go through the White House. And why someone didn’t spot them, didn’t double check where they were. That’s why Tiger Woods’ wife was so mad. He didn’t take her to the state dinner. Everybody can get in now.

JOHNS: It’s the first state dinner, too. All right, so you can say mistakes happen. But the bottom line I think here is that, while we all laugh about it and everybody’s talking about it, there is a serious problem when a person can walk in and get within arm’s length of the president of the United States because next time it might not be so, you know, no big deal, so funny.

HENRY: And the prime minister of India as well.

JOHNS: Right. It’s a bit scary.

KING: All right, a time-out here. Ed Rollins in New York, thank you. Joe Johns, Ed Henry, Candy Crowley, Donna Brazile. Up next, we get out of Washington as we do every week to get a good meal. We head to Steve’s Cafe in Helena, Montana, for a great meal and a wonderful discussion about issues that matter to you. Please stay with us.

(COMMERCIAL BREAK) KING: One of the big issues I bet many of you discussed around the Thanksgiving dinner table this past week was the struggling economy and whether you might have a little more or maybe a lot less to spend this holiday season. That was on our mind, the economy, whether people have money this holiday season as we visited the great state of Montana. One of the things we did was a sit-down with the governor who says first and foremost the American people care about jobs.

(BEGIN VIDEO CLIP)

GOV. BRIAN SCHWEITZER (D), MONTANA: I can tell you what people care about most and that’s jobs. If there’s a concern about three or four issues that are at the top and that’s health care and climate change and the war, they all are second place to jobs.

(END VIDEO CLIP)

KING: Second place to jobs. Let’s take a closer look at the state of Montana, 6.4 percent unemployment, that’s better than the national average which of course is in the double digits. Nearly 16 percent of Montana’s residents lack health insurance. It has the highest military volunteer rate in the country. Steve’s Cafe was our diner stop. It’s in the heart of Helena. And our topics included the economy and the president’s big decision about more troops to Afghanistan.

(BEGIN VIDEOTAPE)

KING: As we get toward the holiday season, a lot of people are asking, has the economy hit bottom? Is it coming back? Will we see people spending and head into the New Year with more optimism? We’re five months into a new business. What do you see?

STEVE VINCELLI, OWNER, STEVE’S CAFE: I think the economy, I don’t think it’s completely bottomed out in my opinion yet. I don’t understand why the stock market is going up the way it does. It just seems to be responsive to news that is not really based on any facts sometimes.

KING: Not on the real world. You don’t see it on the ground. Main Street is not experiencing what Wall Street is.

VINCELLI: Right.

KING: Feel the same way?

ROBERTA KNAPP, SMALL BUSINESS OWNER: I do. And I think that the unemployment rate and that scene shows the real picture more than what the stock market is doing.

KING: Are you going to be a little more conservative this holiday season?

KNAPP: Somewhat. I probably won’t spend as much, but I have a grandson and I’ll spend on him all day long. KING: He’s recession-proof.

KNAPP: Right. And I’m almost done shopping. I shopped early.

KING: Wow.

KNAPP: Because I expected them not to have as much and I wanted to get the things that I wanted ahead of time.

GEORGE JENSEN, OWNS LANDSCAPING COMPANY: Our company has definitely seen a downturn in business. I don’t see the bottom yet. I think it’s probably going to be even tighter next year. Our own family, we’re going to cut back on spending considerably for Christmas other than the kids.

KING: People in my town look at this and they say, what do people think about health care? What do people think about the economy? What do people think about the Democrats and the Republicans? A broader way to look at it is to ask a bigger question, which is, is the country on the right track? Is America on the right track right now?

VINCELLI: We just seem to be spending too much money on entitlements and earmarks and instead of taking care of the core of the country and the people in the country.

KNAPP: Look at the bailouts and the people didn’t cut their top- level salaries and bonuses. I think that had a lot -- a real impact on the average person, the everyday person.

KING: Is that the Democrats’ fault? Is it the Republicans’ fault?

JENSEN: It’s both.

KNAPP: It’s both.

JENSEN: The other half of this equation is we’ve got to stop being a consumer nation and start manufacturing. Because when we’re buying all of our goods from overseas, we’re going to go backwards until we correct this.

KING: So at this time of year when we sit around the table with our families and we reflect on what we’re thankful for, are you less thankful because of all of these difficult issues? Are you more concerned?

JENSEN: Concern is the right word. Thankful, I’m thankful that I’m working, thankful that I still have a roof over my head that we’re making payments on and that we’re going forward. We’re hanging on. And that’s the bottom line.

VINCELLI: We had an unemployment rate about a point and a half a couple of years ago. Now it’s over six again. So I mean, it’s kind of relative. And when we were at 1.5, really there’s no one there that you want to employ. We were down to we couldn’t find good people. Now you can find good people again.

KNAPP: And many people with college degrees who you think would be working for corporations or big companies are working in lower level jobs.

KING: The photo on the front page here of a member of your National Guard here. And if all goes as currently on the books, they’ll be shipping out to Afghanistan.

KNAPP: Hope not.

KING: In the new year.

KING: You’re shaking your head. You say hope not. It’s been eight years. Do we need more troops there?

KNAPP: Sending more troops is not the answer to me.

VINCELLI: I agree. I do agree.

KING: Don’t send more.

VINCELLI: No. I think we need to bring our boys home, actually.

JENSEN: I’d like to see them come home, too.

KING: We’re a year after history. We elected our first African- American president. The Democrats picked up more seats in the House and the Senate.

KING: And there was this talk and the overriding promise of the presidential campaign was he was going to change Washington. Has he changed Washington?

UNIDENTIFIED MALE: No.

UNIDENTIFIED FEMALE: No.

UNIDENTIFIED MALE: I don’t think so.

(END VIDEOTAPE)

KING: A little skepticism about changing Washington. A fascinating conversation. We thank everyone at Steve’s Cafe in Helena.

We’d like to welcome back our international viewers. I’m John King and this is STATE OF THE UNION.

KING (voice-over): President Obama prepares to announce his new strategy for Afghanistan.

OBAMA: It is my intention to finish the job.

KING: Two influential senators weigh in on troop levels, the timetable, and the cost of war: Democrat Jack Reed of Rhode Island and Republican Richard Lugar of Indiana.

NETANYAHU: Now is the time to move forward towards peace.

KING: A rare hint of movement in the search for Middle East peace. We’ll check in with special envoy Tony Blair live from the region.

He wants to turn a spotlight on the prize tag of overseas military deployments. Should Americans pay a special tax to cover a troop increase in Afghanistan? Congressman David Obey gets “The Last Word.”

And in our “American Dispatch,” we travel to Seattle to see how, despite scarce resources, one program tries to get homeless teens off the streets and on to a better path.

This is the STATE OF THE UNION report for Sunday, November 29th.

(END VIDEOTAPE) KING: Good morning. Hope you all had a great Thanksgiving.

President Obama this week will unveil his long-awaited new strategy for Afghanistan. Administration sources suggest it includes a significant boost in U.S. troop levels. The official announcement is planned in prime-time Tuesday night at the West Point Military Academy before an audience of Army cadets and military officials.

The bigger audience, of course, is a skeptical American public, which is divided on the question of whether sending more troops is a good idea. And the toughest sell for the president is within his own Democratic Party.

Here to discuss the president’s Afghanistan dilemma are two leading voices on foreign and military affairs. Senator Richard Lugar of Indiana is the top Republican on the Senate Foreign Relations Committee. And in Wilmington, Delaware, Democratic Senator Jack Reed , a member of the Senate Armed Services Committee and himself a West Point graduate.

Senators, thanks for being with us. Let me start just with the basics. And “The Washington Post” lays out some of it today in this story: “Newly Deployed Marines to Target Taliban Bastion,” 30,000 to 35,000 new troops is what we expect, about 9,000 Marines will go first into the Helmand province, where -- has had the heaviest fighting right there.

Senator Lugar, let me start with you, does the president have it right here, 30,000 to 35,000 troops over the next year to 18 months?

LUGAR: Well, the president needs to start by outlining the war we are in. Now by that, I mean, the war not against the Taliban, al Qaeda, but what is, at least, the objective of continuing in Afghanistan or in any place?

That is basic because this has to be a confident speech in which the president recognizes we’re at war. The American public recognizes that. Our friends and foes around the world see the resolution.

Having said that, then the president has to outline why Afghanistan is important. Why -- now, many Americans say, well, of course it’s important, this is where the al Qaeda did their encampment, protected by the Taliban, can’t go through that again.

But next door in Pakistan there are also Taliban, battle going on there. The president has to mention Pakistan. What is the implication of that war there, and Pakistan itself? Or General Petraeus’s survey of the 20 parts of the Central Command, the 20 nations in which there may be other people from al Qaeda, how do we deal with all of that?

In other words, Afghanistan is crucial and we’ve been concentrating on the number of troops and so forth. Now the president will need to outline that and he’s wanting to do so with confidence that this is not a few troops here, a few troops there, a reevaluation each time through. Likewise, he’ll have to talk about, can the Afghans get to 134,000 people on their own to protect what they are doing? Will the allies from NATO come in? How confident we are of that, all of that in a comprehensive speech has to be a part of this picture.

KING: Well, Senator Reed, I want to get to some of the specifics. Senator Lugar teed some of them up right there. But on the basics, are you ready to support 30,000 to 35,000 more troops over the next 12 to 18 months and maybe even more a year from now if General McChrystal comes back and says, Mr. President, things are going well, but I need a little more?

REED: Well, as Senator Lugar said, the president has to speak to the American people, remind them why we’re there, and also lay out a strategy, not just the reflexive response to a recommendation, but a strategy that involves protecting the homeland from al Qaeda.

And that involves a presence in Afghanistan. It involves being influential in Pakistan. It involves having a combination of intelligence, counter-terrorism, and counter-insurgency operations, all of these things.

I think the president has taken appropriately the time to study this carefully. I think his recommendation will be sound. But I think, more importantly, the president will say, not only there’s an increase in troops, but lay it out in the context of how this will allow us to shift the burden to the Afghani forces, to build them up as we go forward.

And the key element here is not just more troops, the key element is shifting the operations to the Afghanis. And if that can be done, then I would support the president.

KING: Well, we’ll talk about in a second. First, I want you to both assess the difficult politics for the president. I want to show some polling numbers. If you ask the American people, what should the president do? They’re pretty divided. Begin to withdraw, 39 percent. Increase by about 40,000 troops, 37 percent. Increase by less than 40,000 troops, 10 percent. Keep it the same, 9 percent.

But here’s the most telling poll numbers. If you look at the recent “USA Today”/Gallup poll, how is the president handling Afghanistan? A 20-point drop in his approval rating between July and now, and a 20 percent increase in the disapproval rate.

So, Senator Lugar, to you first, he took a little more than three months from General McChrystal’s recommendation to the speech he will give Tuesday night. Some have said that’s a deliberative, thoughtful process. Others, some of your conservative friends, have said it is dithering.

Has the president paid a price, a political price, for waiting?

LUGAR: Perhaps. but at this point, that’s beside the point. The president is at a moment in which he really has to regain the approval of the American people, as well as people around the world, that we are on the right course. This is why this speech and the plan is so important.

So I’ll give the president credit for taking time. I think the dilemma for the president, beyond those we’ve already talked about, is that the war is costly. Additional troops will cost a great deal more, by all estimates. We have a...

KING: Some say $1 million per troop per year.

LUGAR: Precisely. And we’ve really not heard good calculations of how much cost the Afghan troops will be for us. In other words, are we as American taxpayers going to pay for this increase to 134,000, even if the Afghans were able to do that in one year, as opposed to four, which used to be the old plan?

We’re going to have to have a serious talk about budget and about the $1 trillion deficit we are in now and will continue to be in. And if we were talking about several years of time, how many more years beyond that? What is the capacity of our country to finance this particular type of situation as opposed to other ways of fighting al Qaeda and the war against terror?

KING: Senator Reed, does the president have to say, I need your trust, citizens, I need your support financially, and here’s the end game? Does he need to draw a date on a calendar out there and say, this is when we get out of Afghanistan? And can he do that right now?

REED: I think he has to make a speech that shows that all of our efforts are pointed to our reduced presence in Afghanistan. But I think he has to also indicate again and again how critical this is to our national security.

The elements -- the al Qaeda elements that attacked us on 9/11 are still on the Afghan/Pakistan border. We still have to keep up the pressure. But I think he has to make it very clear that this is not an unending responsibility of the United States without limit.

Senator Lugar pointed out the issue of cost. You know, we have over eight years in Iraq and Afghanistan under the Bush administration not paid for any of those military operations. Now that is coming home to reckon in terms of a huge deficit. We have to move forward and support this operation responsibly.

But the president’s -- I think the key to the president’s response is laying down a strategy, informing the American public of what is at stake, and I think that when they listen and when they hear, they will be supportive, but it will be a support that has to be continually developed and strengthened going forward.

KING: You’ve both mentioned the cost. Let me ask you, we’re going to talk to Chairman David Obey of the House Appropriations Committee later in the program. He wants a special war surtax. He wants it laid out transparently so the American people know every time they get their tax bill, here’s what goes to the government normally, and here’s the part that’s going to pay for Iraq and Afghanistan. Senator Levin in the Senate has talked about something similar. Senator Reed, to you first, do you support that? Do you think it should be broken out separately so the American people get a separate bill for the wars in Iraq and Afghanistan, so they fully understand the price tag?

REED: We have to begin to pay for everything we do. We’re engaged in a huge debate on health care and central to that debate is paying for it. And if we’re paying for the health and welfare of the American people, we certainly have to pay for our operations overseas. Whether it’s broken out specifically or not, that is a detail.

I think the important point is that we have to commit not to indefinitely, through deficits, fund these operations, but do it in a reasonable, pragmatic way.

KING: Do you support a separate accounting, a separate war surtax?

LUGAR: I believe there will be a separate accounting, but in any event, I think we will have to pay for it. I would just make this suggestion, that in the three weeks of debate we still have ahead of us, we really ought to concentrate in the Congress on the war, on the overall strategy of our country and the cost of it. And we ought to be on the budget. Passing appropriations bills in a proper way.

Now in the course of that, we may wish to break out that. We may wish to discuss higher taxes to pay for it. But we’re not going to do that debating health care and the Senate for three weeks through all sorts of strategies and so forth.

The war is terribly important. Jobs and our economy are terribly important. So this may be an audacious suggestion, but I would suggest we put aside the health care debate until next year, the same way we put cap and trade and climate change and talk now about the essentials, the war and money.

KING: Is your Republican friend making sense, Senator Reed? Should health care be set off to next year?

REED: Absolutely not. I think we’re in the midst of probably the most significant debate and conclusion with legislation that we’ve ever had. And the health care debate is essential to our economic future. There are businesses and individuals each year pay more and more for health care. It has become unaffordable. We have to go ahead and conclude this debate.

To stop now would be stopping on the edge of, I think, significant reform, which is so important for the country. And frankly, it’s ironic, there has -- now under the Bush administration, there was no serious debate about Afghanistan. that was relegated to the sidelines. There was no attempt to pay for it. And suddenly, now, that becomes a critical need that we put aside health care. I don’t think so.

I think we have to push forward. I think the president’s speech will be appropriate. I think the strategy we’ll analyze in the committees and I think we can go forward on both fronts and we have to.

KING: A quick break. The two senators will be back in just a moment. We’ll put to them the question, as the president prepares to send thousands of more U.S. troops to Afghanistan, can his partner in Afghanistan, President Karzai, be trusted? And a reminder that CNN’s coverage of the president’s speech begins Tuesday at 7:00 p.m. Eastern. Please stay with us.

(COMMERCIAL BREAK)

KING: Back with two top senators, Republican Richard Lugar and Democrat Jack Reed . Let’s stay on Afghanistan. You mentioned before the break, Senator Lugar, the goal is to train 134,000 Afghan security forces by next October. That would require 5,000 a month. And yet, just this past month, the Afghani government failed its target by more than 2,000.

Some would say that this is Iraq deja vu. That the United States government keeps saying, we’re going to train them, we’re going to train them, we’re going to train them, and because of problems with the Afghan government, in this case, corruption, people leaving once they get the training, it won’t get done. Do you trust the other side of the equation? Do we have a reliable partner in the Afghan government?

LUGAR: For the moment, we don’t have a reliable partner. And that is a question, clearly, of the building process. If the training occurs, will the government really take hold? We don’t know, frankly. And we know right now, as you say, that the attrition of the forces that are trained as such and the number of people we have to send over to do the training is limited. So that’s a phased-in process, while this acceleration is predicted.

KING: So explain, Senator Reed, to a skeptical American out there who says, if we don’t think we can trust the government, and we need to see, time will tell, to use the cliche, why would you send 30,000 more troops into Afghanistan unless and until you know that President Karzai has his act together this time?

REED: Well, we have to, I believe, increase our forces, first, our trainers, which is consensus to do that. But also some of our brigade combat teams to give us the time and also to seize the initiative from the Taliban so that the Karzai administration can begin to carry through some of its commitments. They made commitments left and right. Now they have to carry those commitments through.

The military forces there, according to our troops, are actually very good fighters. But we need more of those units, more of those small unites. It will take some time. But the effort here really is to stabilize the situation and insist that the government of Afghanistan begin to perform. And I think the other effort is begin to, at the local level, have effective governance.

And that means good governors. That means governors that won’t be interfered with and disrupted from the center. That is something we’re going to have to insist upon. And part of our commitment and part of the president’s speech will be to communicate the fact that we have these understandings and that they’re enforceable.

KING: All right. Senator Reed, your test for General McChrystal’s strategy, not the Afghan government?

REED: Well, a test for the McChrystal strategy is if they can essentially stabilize, particularly the capitals in Helmand province and in Kandahar, and also if they can begin to see a defection from the Taliban ranks of those nonideological fighters.

And the ultimate test is that there are villages able to protect themselves, with the help of the Afghani national army and, to a degree, the United States and NATO forces, and that you’re beginning to see a revival of civic activity, economic activity.

That’s the final test, a return to what would be, sort of, normalcy. And that -- that will take a while, but it will be at the local village level.

KING: There’s a new report from Democrats on the committee on which you are the ranking Republican member, the Foreign Relations Committee, and it looks back at time at Tora Bora and the early days of the war in Afghanistan under the Bush administration.

There have been long rumors that Osama bin Laden was allowed to escape or that he was there and he was not grasped. Here’s what the Democratic report from the Foreign Relations Committee staff says. “The decisions that opened the door for his escape to Pakistan allowed bin Laden to emerge as a potent symbolic figure who continues to attract a steady flow of money and inspire fanatics worldwide. The failure to finish the job represents a lost opportunity that forever altered the course of the conflict in Afghanistan and the future of international terrorism.”

This report, Senator Lugar, prepared by the Democratic staff for the Democratic chairman of your committee -- is it just looking back to learn a history lesson, or is it relevant at the moment?

LUGAR: Well, perhaps both. But at the same time, it does serve as a convenient way for, perhaps, Democrats to say once again, there’s another failing of the past administration; all the problems have accumulated.

I think we have to accept that there were many failings. But the problem right now is, what do we do presently? What will the president’s plan be? How much confidence do we have in this president and this plan?

KING: Is that the way to look at it, Senator Reed, that, yes, there were many mistakes under the Bush administration, but at the moment, now and certainly after the speech Tuesday night, this is President Obama’s war?

REED: Well, the president is confronting the culmination of decisions that were made eight years and -- or more before. That has made the situation much more difficult for him.

The escape of bin Laden is -- is an interesting comment, but the real strategic misjudgment, I think, was shifting our focus away from Afghanistan and Pakistan and under-resourcing it for seven years while the Bush administration pursued a policy in Iraq.

Now we’re living with the consequences of that, in terms of the population of Afghanistan that is much more wary of us because we didn’t deliver the promises they thought were forthcoming in 2002 and 2003. You’ve got a renewed Taliban. You have a situation where al Qaeda has reconstituted itself. You have Pakistan, which is even more unstable today than it was in the past.

All of these things have developed over the last several years. But Senator Lugar is right. The question now is what to do about it. Be informed by the past, make judgments based upon the experience of the past, but we have to look forward and we have to -- and the president has to propose a strategy that will carry us forward and that will ensure the security and safety of the United States.

KING: Well, Senator Lugar, then look forward. In a best-case scenario, what should the American people be prepared for? How long -- five more years, 10 more years, 20 years more in Afghanistan?

LUGAR: The American people will not sustain a war in Afghanistan for five years or 10 years, in my judgment. Below that, we do have troops in many countries still sustaining efforts, so we’re not in a full-scale war, but I -- this is why I get back to the budget.

We’re going to have to take a look at what our own resources are, what our own troop levels are, whether we can continue to recruit enough people and what other things are occurring in the world at the same time. These may not be the only wars America has to face. And that’s an important factor, to have at least some reserve situation.

KING: So, Senator Reed, five years, 10 years? Do you have a sense? Will, 10 years down the road, there be 30,000 U.S. troops still in Iraq and 25,000 or 30,000 still in Afghanistan? REED: What we have to have is a continually decreasing military presence in Afghanistan. I don’t think there’s going to be an overnight withdrawal of American forces, but unless we’re on a trajectory in which our troop levels come down, the ability of the American public to support it and financially to support it is questionable.

But I think that has to be and will be inherent in the president’s speech on Tuesday evening at West Point.

KING: Senator Jack Reed , Democrat of Rhode Island, Senator Richard Lugar, Republican of Indiana, gentlemen, thank you both for your time today, very thoughtful discussion.

REED: Thanks, John.

KING: Up next, we’ll turn to the Middle East, where some see a possible -- possible sign of movement in the effort to revive the Israeli-Palestinian peace talks. The former British prime minister, Tony Blair, now a special envoy to the region, takes us inside this delicate diplomacy. Please stay with us.

(COMMERCIAL BREAK)

KING: After months of stalemate, perhaps a bit of movement in the Israeli-Palestinian dispute. Israeli Prime Minister Benjamin Netanyahu has announced a 10-month freeze of Jewish settlements in the West Bank. But Palestinian officials say the moratorium doesn’t go far enough, because it doesn’t include a halt in construction in East Jerusalem.

So is there an opening for progress or just more finger-pointing and frustration? Our next guest has unique insight. Tony Blair is the former British prime minister and now special envoy to the Middle East for the United States, Russia, the European Union, and the United Nations.

Mr. Prime Minister, thank you for joining us. Let’s start with the basic question, will the Israelis and the Palestinians sit down or will they continue just to talk about sitting down?

BLAIR: Well, I hope they sit down because it’s absolutely essential that we get a political negotiation under way and get it under way as quickly as possible. Because there are things -- positive things happening on the ground right at the moment on the West Bank.

The Palestinian economy is growing. There are check points being opened or removed. There’s a lot of bustle and activity on the West Bank. In Gaza, let us hope we get the release of the kidnapped Israeli soldier and then start to get some opening up of Gaza to the outside world.

So there are positive things that are happening, but it needs an overarching political negotiation in order to succeed. KING: Should the Palestinians, in your view, sit down, even though it’s not perfect? Is it time to sit down and just say, look, you’re not going to get everything you want entering negotiations? Just sit down and negotiate?

BLAIR: Well, I’ve just spent some time with the Israeli prime minister, Mr. Netanyahu, and I think he is genuine and serious in wanting the negotiation to start. I think from the Palestinian point of view, they need to know that this negotiation is going to be credible. In other words, it’s not just going to be sitting down and talking, but it is genuinely going to lead us towards the two-state solution that everyone wants to see.

So the debate at the moment is, how do we create the context in which people think this negotiation is serious, that it will lead to a viable Palestinian state, one that is a secure neighbor for Israel, but also a Palestinian state in which the Palestinians have the freedom to run their own territory?

KING: Assess the politics of the moment. Some would look at these two governments and say Prime Minister Netanyahu cannot afford to give up much or he’ll lose his coalition. President Abbas has said, enough, I’m frustrated with this, I’m not going to stay in power much longer.

So you see two weak governments, some would say, there is no way they could get anything done, and others would say, that’s the perfect opportunity. How do you see it?

BLAIR: Because I’m more naturally optimistic, I see it as an opportunity. I also think both of them have got one great source of strength that’s not to be underestimated here. I mean, I spend a lot of time in Israel and in the Palestinian territory. There is no doubt in my mind at all that a majority of people, both Israelis and Palestinians, want to see a two-state solution.

Their doubt over the past years has been whether it’s possible to have it, but their commitment in principle to getting it has not diminished. So our task, if you like, is to set the context in which they think this can be done.

Now I’ve spent time talking to the leadership of both sides. Whatever doubts they have about each other’s good faith from time to time -- I mean, I don’t doubt the good faith of either. I think they genuinely want to find a way through, but they come at it from completely opposite sides.

Israel wants to know that its security is going to be protected, while on the West Bank the Palestinian Authority have made real strides forward in security.

BLAIR: I mean, I can go to cities on the West Bank now, Jenin and Nablus and Hebron and Qalqilya and Jericho, places that two years ago would have had quite a different security setting, now with security greatly improved. So there are things that the Palestinians are doing, actually, to help meet that Israeli concern.

On the other side, for the Palestinians, what they need to know is that if they sit down and talk so the Israelis, it will lead, genuinely, to an independent Palestinian state. And what is it that they want to know? They want to know that the weight of occupation will be lifted.

But there again, actually, there have been some things that have happened on the West Bank: check points opened, some of the restrictions lifted, Israeli-Arabs coming into the Palestinian territory, an increase in economic growth. As a result, the West Bank economy is probably growing maybe in double digits, actually, at the moment.

So there is real potential and hope, but the next month, I think, will be completely critical, fundamental to this, because if we can’t get negotiations going that are credible, then the vacuum that is created will suit no one but the extremists.

KING: Let me follow up on that point. You mentioned the next month is critical. One of the questions being asked back here in the United States is where is the U.S. leadership? I want to read you a bit from a “New York Times” editorial this Saturday. “Nine months later, the president’s promising peace initiative has unraveled. The Israelis have refused to stop all building. The Palestinians say that they won’t talk to the Israelis until they do and President Mahmoud Abbas is so despondent, he has threatened to quit. Arab states are refusing to do anything. Mr. Obama’s own credibility is so diminished, his own approval rating in Israel is 4 percent, that serious negotiations may be farther off than ever. Peacemaking takes strategic skill, but we see no sign that President Obama and Mr. Mitchell were thinking more than one move down the board.”

That’s a pretty sober, pretty negative assessment of the American diplomatic involvement. Do you share it?

BLAIR: I think when we look at the various strands of negativity there are around at the moment and there always are in these negotiations, there are, nonetheless, positives.

We’ve got to seize on them, work on them, and make sure that we bring about a situation in which the central strategic objective of President Obama, which is right at the outset of his administration, to make this process count and work is achieved. And I do emphasize that as well. The president said this at this beginning. This is, to my mind, the big difference of what has come before.

At the very beginning of this administration, he set that as a core strategic objective. I have absolutely no doubt he holds to that and whatever the difficulties and the obstacles, we have to find a way through. And personally, although as I say I am optimist by nature, I believe we will.

KING: Let me shift subjects. I want to get your thoughts about an inquiry back in your home country. There’s an inquiry into the run-off, the political decisions, the military decisions in the run-up to the Iraq war. And your name, and your credibility have been called into question, your good name has been called into question in this inquiry.

Lord Goldsmith, who was your attorney general back in those days, says that he warned you that this was a breach of international law, but that he was bullied into being quiet and convinced not to resign from the government. Is that an accurate portrayal?

BLAIR: No, it’s not, but I think the best thing with this inquiry is actually to let us all give our evidence to the inquiry. And you know, I’ve been through these issues many, many times over the past few years and I’m very happy to go through them again. But I think probably the appropriate place to do that is in front of the inquiry.

KING: I’ll leave the specifics for when you testify to the inquiry, but if you pick up media accounts in your country, friends of yours are saying that you feel betrayed, that you feel your reputation is being damaged by men you bestowed high offices to in the government. Do you feel betrayed? Are you angry at how this is being done?

BLAIR: Absolutely not. One of the things you learn as a leader in a country is you have the responsibility to take decisions. Some of those decisions are difficult decisions and some of them are very controversial. And what happens, your time in leadership goes on, and I spent 10 years as UK prime minister, is that these controversies, sometimes they can be very bitter, very difficult.

That’s part of being a leader. And I think it was one of your presidents that once said if you can’t stand the heat, don’t come into the kitchen. And that’s my view of politics. So I take decisions, I stand by them, and as I say, these are all questions I’ve answered many times before. I’m happy to go through it again.

KING: The former British Prime Minister Tony Blair, now special envoy to the Middle East. Mr. Prime Minister, thanks so much for your time today.

BLAIR: Thanks, John. KING: Up next, a quick check of today’s top headlines, then growing concerns over the cost of war in Afghanistan have led some lawmakers to propose new measures, including a controversial so- called war tax. An architect of such a proposal, Congressman David Obey, gets “The Last Word” next.

(COMMERCIAL BREAK)

KING: I’m John King and this is STATE OF THE UNION. Here are stories breaking this Sunday.

A show of defiance from Iran. Iran’s state news agency says the Iranian cabinets may authorize the construction of 10 new uranium enrichment plants. That’s a dramatic expansion of the country’s nuclear program and would be a direct rejection of the United Nations demand to freeze all uranium enrichment activities.

A solid start so far to the holiday shopping season. Retailers raked in about $10.66 billion on so-called Black Friday. That’s according to ShopperTrak, which keeps an eye on sales. That’s about a half percent increase over last year.

President Obama is preparing to unveil his new strategy for Afghanistan. It’s expected to include a substantial boost in troop levels. The president will announce that plan during a speech Tuesday night at the West Point military academy. The defense official tells CNN the Pentagon is preparing for an increase of 34,000 troops. CNN of course will carry the president’s speech live. Those are your top stories here on STATE OF THE UNION.

Up next, a strong supporter of a new tax to pay for the war in Afghanistan. House Appropriations Committee Chairman David Obey gets “The Last Word,” next.

(COMMERCIAL BREAK)

KING: Nineteen newsmakers, analysts and reporters were out on the Sunday morning talk shows, but only one gets the last word. That honor today goes to Democratic Congressman David Obey of Wisconsin. He’s the chairman of the House Appropriations Committee.

Mr. Chairman, welcome to “State of the Union.”

OBEY: Thank you for having me.

KING: I’m going to hold up the headline, here, of the Washington Times, “Obama Faces Hard Sell on Afghan War Decision.”

I want to get, in a moment, to your proposal to how to pay for this, if the president goes forward with this. But just on the merits, 30,000-plus more troops to Afghanistan: a good idea or a bad idea?

OBEY: The problem is that you can have the best policy in the world, but if you don’t have the tools to implement it, it isn’t worth a beanbag. And I don’t think we have the tools in the Pakistani government and I don’t think we have the tools in the Afghan government. And until we do, I think much of what we do is a fool’s errand.

KING: If you can see it so clearly, why can’t the president of the United States, if you’re right?

OBEY: Well, the president sits in a different position. I mean, he has inherited an absolute mess. No matter what he does, it’s a -- it’s a no-winner. And I -- you know, I have a great deal of respect for the way he’s gone about this process. But the Pentagon...

KING: But you think he’s wrong?

OBEY: Well, the Pentagon has only one job, and that’s to talk about this war and this war only. But he has, and I have jobs that require us to look at everything else that’s tied into it.

I have to look at the entire federal budget, as chairman of the committee, for instance. I have to see what $400 billion or $500 billion, $600 billion, $700 billion, over a decade, for this effort, will cost us on education, on our efforts to build the entire economy. And -- and when you look at it that way, I come to a different conclusion than he does. KING: And if he goes forward, and even if we stayed at the current level, you believe the American people need greater transparency, greater clarity about how much this is costing.

So you’ve proposed something, along with several of your colleagues, the Share the Sacrifice act of 2010.

I want to show some of the details of it. Couples earning up to $150,000 would see a 1 percent tax increase. Your proposal would exempt service men and women and their families who served in Iraq and Afghanistan since 2001, and it would exempt families who have lost an immediate relative in the war.

So if you make 150 grand or more, you would pay 1 percent, and then you would escalate up. If you made 250 grand, you’d pay more, and so on up the scale, correct?

OBEY: Yes. And my point and our point is simply that, in this war, we have not had any sense of shared sacrifice. The only people being asked to sacrifice are military families. They’ve had to go to the well again and again and again. And yet everybody else in society -- you know, they’re essentially told to go shopping by the previous president.

I just think that, if this war is important enough to engage in the long term, it’s important enough to pay for.

We’re told by people like General Petraeus that we need to be prepared to commit eight to 10 years. First of all, I don’t think that’s sustainable, but if you’re going to do that, at least you ought to pay for it so it doesn’t destroy every other effort that we need to make to rebuild our own economy.

KING: The chairman of the House Appropriations Committee can do a lot, but to pass that proposal, you need the support of the speaker. What does she say?

OBEY: I have no idea where anyone in the leadership will stand, except John Larson, who is a co-sponsor of this proposal. So is Jack Murtha, the Chairman of the Defense Appropriations Subcommittee. So are a number of other people -- Chairman Frank from the banking committee. And my impression is that Charlie Rangel, the -- or the Ways and Means Committee chair is also interested in the idea.

KING: Has anyone in the leadership or anyone at the White House asked you, “Mr. Chairman, we understand your point, but we don’t want to be talking about taxes heading into the midterm election campaign, where we’re already talking about taxes in the health care debate?”

OBEY: No, I think people understand where we’re coming from. And I think people understand that we’re doing this because we believe it’s the right thing to do on the merits.

I’m -- I’m very dubious about this whole effort in Afghanistan and Pakistan, but if we’re going to do it, we shouldn’t do it in a way which will destroy every other initiative that we have to rebuild our own economy.

KING: There was talk during the final years of the Bush administration, when Democrats came back into power, of trying to block him. Will you go so far with a Democratic president or are you more deferential because, of a Democrat in the White House, where you can say, “I oppose it; I think it’s a bad idea; I think we should do this to pay for it,” but would you try to get in front of the train?

OBEY: I owe it to any president to listen to what he has to say before I say what I’m going to do. The important thing is not what Dave Obey is going to do. The important thing is what the country is going to do, long term.

KING: I’m going to get up and go over to the map because I want to try to connect the dots, as you connect them, to talk to the American people.

This is a map, of course, of the Middle East region. And I’m going to pull out Afghanistan because I just want to highlight this point. We’ve discussed this a little bit and you know these numbers very well.

Over $223 billion have been allocated to Afghanistan since the beginning of the war back in 2001; $38 billion in U.S. aid for reconstruction; at the moment, 68,000 troops in Afghanistan, and the president, of course, prepared to go higher than that.

Now, I want to bring the debate back home by bringing us back around this way, and I want to show you these states here.

Here’s the United States here. Let’s zone in on unemployment. With these colors here, you see the states in red, 23 of them, unemployment went up last month. The states in green, the unemployment rate dropped a little bit last month. But you see all that red, double-digit unemployment across the country.

Mr. Chairman, the president will have a job summit on Thursday at the White House. If he could do one thing -- if you could ask him to do one thing to create jobs in those states that are red and in the rest of the United States, what would it be?

OBEY: I think the most important thing is to help state and local governments. We’ve been trying to fill over a $2 trillion hole in the economy with the budget stimulation package because of the collapse of the private economy in the previous administration.

We were be able to fill about 40 percent of the hole in those state budgets, but in the next year, our capacity is going to drop to fill only about 20 percent of that hole. That would mean that states would be raising taxes and cutting services at the very time we’re trying to expand the economy. That’s counterproductive. So I think that really is what has to be done.

KING: Are you worried about the political price of more deficit spending to do that?

The American people, increasingly, if you look at polls, are getting nervous about all the deficit spending.

OBEY: We’ll do what we think is right and worry about the polls later. But I want to make one other point.

We’ve been told for a year that we need to pay for every dollar that it’s going to cost us to reform our health care system. That’s about $900 billion over 10 years.

OBEY: If we wind up being committed in Afghanistan for eight to 10 years, that’s also going to approach $800 billion to $900 billion. And if we’re going to do that, it seems to me that if we’re being told we have to pay for health care, we certainly ought to pay for this effort as well.

KING: The chairman of the House Appropriations Committee, Congressman David Obey, sir, we hope you’ll come back as this debate continues in the weeks and months ahead.

We want to also update you on a breaking news story. Four sheriff’s deputies have been shot dead in Washington State, in Lakewood, that’s about 40 miles south of Seattle. Authorities say the deputies were ambushed in a coffee shop near Seattle. Again, about 40 miles south. No word on suspects. CNN will bring you much more information on this breaking story as it becomes available.

And up next, we head out to Seattle, Washington. A painful recession is causing a spike in teenage homelessness, and testing the resolve of organizations determined to give these struggling youths a hot meal, some shelter, and perhaps some hope.

(COMMERCIAL BREAK)

KING: You see it where you live and we’ve seen it time and time again in our travels, the troubled economy affecting just about everyone. One of the hardest groups hit are young Americans who we see increasingly are homeless. If you take a look, you see them in the allies, and you would be shocked at the faces.

We traveled out to Seattle, Washington, look at this stunning statistic, nearly 30 percent unemployment rate among those 16 to 19 years old. Here’s another stunning stat, 27 percent, children make up 27 percent of the homeless population, and are the fastest-growing segment of those out on the street.

We visited a place called the Orion Center. It has seen in the past year a 50 percent increase in demand for its services. In our “American Dispatch” this week, we wanted to get a close look at this. So we visited the streets of Seattle, Washington, and a remarkable place that for many homeless teens, first is a source of a hot meal and then something more.

(BEGIN VIDEOTAPE)

KING (voice-over): Life on the street has its own rhythm and rules. There is safety in numbers, and a numbing sadness in the search for shelter in Seattle’s cold, raw rain. Living here leaves an indelible mark.

MICHAL, FORMER HOMELESS TEEN: I’ve been cold. I’ve been hungry. I’ve been soaked to the skin and tired and sick and injured, and you definitely learn quite a bit about yourself from that.

KING: At Seattle’s Orion Center, Michal first found smiles and support, then skills in an eight-week computer diagnostics class. MICHAL: If I hadn’t found this place, I’d probably be squatting either in a park or in an abandoned building.

UNIDENTIFIED FEMALE: What you do is you press this, and you start pulling the shot into a shot glass.

KING: Down the hall, Orion’s barista training program...

UNIDENTIFIED FEMALE: Cash handling; you learn interview skills.

KING: ... where Kayla Wyatt (ph) developed new skills and the confidence to move back with her mother after two years off and on on the street.

UNIDENTIFIED FEMALE: You think it’s easy at first, and then it gets harder and harder, especially during the winter because it’s so cold here.

KING: For just about everyone, the first Orion Center visit is for what the street kids call “the feed,” free meals. Some linger longer to enjoy a break from the elements, a hot shower, maybe warmer clothes for the next night.

MELINDA GIOVENGO, EXECUTIVE DIRECTOR, YOUTHCARE: Twelve thousand meals a year, 10,000 showers, and believe it or not, 10,000 pair of socks to keep young people’s feet warm.

KING: Melinda Giovengo is executive director of YouthCare, and Orion Center is its flagship program, needed more than ever in this punishing recession.

GIOVENGO: We’re seeing 180 new faces a month. We’ve had young people come in and say, I’m here; I’m 18 years old; my family can’t afford me anymore. It’s not just affecting, you know, underprivileged kids. It’s affecting the entire strata of America.

KING: A 50 percent spike in demand but fewer resources because a bad economy dries up funding.

GIOVENGO: We’ve had family foundations who have been supportive of us for 20 years are saying, we can’t this year. All the government fundings have been jeopardized, restricted or reduced over the last few years, so we’re just hanging on, trying to do more with less.

KING: The bad economy also takes a toll in other ways. Michal took a position in a bowling alley because technology jobs are so scarce now. Delaun was a classmate in the computer program. He now works as an Orion Center intern because a tough job market is even tougher for someone with no experience and a history on the street.

DELAUN, FORMER HOMELESS TEEN: It’s terribly hard, I mean, especially in certain situations, where you’ve got youth who are being faced with various other challenges that society may bring, as far as trouble with the law and other things that they can get very easily caught up in. I came here kind of lost, and I found myself a whole lot more than I intended to here.

KING: They took different paths to the street. Delaun had problems at home he prefers not to discuss. Michal left home in Ohio to join a young Seattle man he met on the Internet.

MICHAL: Partly to get away from my family because I was just, you know, coming out as queer, and I wanted some time on my own to actually get things sorted out for myself and work up the courage to actually tell them.

KING: Some here have or developed drug problems. Others make life-changing choices in the name of survival.

GIOVENGO: Trading sex for places to live and money to get food with and ending up being seduced into a lifestyle of chronic adult homeless or being seduced into the, kind of, sexual exploitation industry that’s out there.

So it’s more and more dangerous and there’s fewer and fewer of us and fewer, fewer resources to go out and capture them early so that they don’t get absorbed into that very, very dark world.

KING: Here at Orion, there is an escape, a hot meal and, if nothing else, the company and support of others who understand.

(END VIDEOTAPE)

KING: Our thanks to everyone at Orion. And we certainly wish all of those young men and women the best and safety in this holiday season.

As you know, one of our goals is to get out of Washington as often as we can. We made it our pledge here on STATE OF THE UNION to visit all 50 states in our first year. So far, we’ve been to 45, including Washington, Montana, Michigan, and North Carolina. Go to cnn.com/stateoftheunion, and you can see what we’ve learned when we visited your community.

We’ll be here again next Sunday and every Sunday at 9:00 a.m. Eastern for the first and last word in Sunday talk. Until then, I’m John King in Washington, take care.

For our international viewers, “AFRICAN VOICES” is next. For everyone else, “FAREED ZAKARIA: GPS” starts right now.