Transcript: “State of the Union” October 31, 2010

CROWLEY: A look at Tuesday by the numbers. Ten points, the advantage Republicans have when likely voters are asked which party they’re going to support in Tuesday’s House elections. Thirty-nine, the number of seats Republicans need to gain control of the House. Three prominent election trackers say it’s a go. Fifty-five, the number of seats the University of Virginia’s Larry Sabato predicts will turn from Democrat to Republican. Fifty to 60 pickups, says political veteran Charlie Cook of the Cook Political Report. Up to 65 seats according to longtime analyst Stu Rothenberg of the Rothenberg Political Report.

Ten, the magic number for Senate Republicans, but it’s not adding up. None of the three experts believe Republicans will take control of the Senate. Four months, politicians and pundits have talked about the pendulum swing of 2010, away from the Democrats, toward the Republicans. Tuesday, voters speak.

(BEGIN VIDEOTAPE)

CROWLEY (voice-over): Today the latest on the terrorist bomb threat from Yemen, we begin with the president’s counter-terrorism adviser John Brennan.

BRENNAN: The materials that were found and the device that was uncovered was intended to do harm.

CROWLEY: And two days before the midterm elections, we are joined by Michael Steele, chairman of the Republican National Committee.

STEELE: Washington isn’t prepared for the wave that’s about to hit it.

CROWLEY: And Dick Durbin, the Senate’s number two Democrat.

DURBIN: Now, Illinois, it’s our chance to make history again.

CROWLEY: Then looking at Tuesday and beyond with former Democratic Senator Bob Kerrey, and CNN contributor Bill Bennett. From the CNN election center in New York, I’m Candy Crowley and this is STATE OF THE UNION.

(END VIDEOTAPE)

CROWLEY: We will get to Chairman Steele and Senator Durbin in just a moment. But first the latest on this week’s suspected terror plot with John Brennan, assistant to the president for homeland security and counter-terrorism.

Mr. Brennan, thanks for joining us.

BRENNAN: Good morning, Candy.

CROWLEY: Let me ask you first, what do you know this morning that you didn’t know last night? What have you learned?

BRENNAN: Well, as was announced yesterday by Yemeni officials, they have picked up two individuals they believe were responsible for mailing these packages. So we’re working very closely with the Yemenis to find out what these individuals know, where that investigation might lead inside of Yemen, and we’re still working very closely with British and Emirati authorities on the construction of the IED which seems to be very sophisticated both in terms of the type of construction as well as the concealment techniques that were used.

So we’re still learning a lot about this plot and we’re trying to make sure that we do everything possible to protect air travel as well as the American public and others.

CROWLEY: Are you fairly certain that you are not looking for any suspects in the U.S. that might be connected to this?

BRENNAN: Well, we can’t presume that there are not individuals in different locations throughout the world, including the U.S., who might have some association with this plot. So the FBI is working very closely with the Department of Homeland Security and the intelligence agencies to run to ground any lead.

And we know that these packages were sent to locations in Chicago that have been associated with synagogues, so working very closely with the Chicago authorities as well. So what we have the need to do is to make sure that we’re pursuing every lead possible again to understand the full and comprehensive picture of the threat that we face.

CROWLEY: So if I understand you, you do have leads that might bring you to someone in the U.S. in connection with this.

BRENNAN: All of those packages were addressed to locations in Chicago, so what we have to do is to make sure that we run to ground every possible lead that we might have there. And we know al Qaeda has been determined to carry out attacks in the homeland, so whether it’s al Qaeda in the Arabian Peninsula or other franchises of al Qaeda throughout the world, we need to stay on top of this, because they look at the United States as the target that they really want to be able to attack successfully.

CROWLEY: Has there been any claim of responsibility?

BRENNAN: Not to my knowledge to this point.

CROWLEY: But you are convinced that this was al Qaeda in the Arabian Peninsula?

BRENNAN: It certainly bears all of the hallmarks of AQAP. It’s very similar in terms of the types of materials and the construction to some other devices that we have seen, the Christmas Day bomber, an attempted attack against one of the senior Saudi counter-terrorism officials. So AQAP has been outspoken in its determination to carry out attacks, so yes, it certainly points in that direction.

CROWLEY: And have you found yet any connection with Anwar al- Awlaki in terms of this particular attempt?

BRENNAN: Well, he is a self-proclaimed member of al Qaeda in the Arabian Peninsula. And so all of those individuals and members we’re looking very carefully at, the involvement of individuals in this plot we’re still tracking down. But AQAP as an organization as a whole is something that we need to maintain pressure on, working very closely with Yemeni officials. And we will destroy that organization as we’re going to destroy the rest of al Qaeda.

CROWLEY: Can you tell me what you think the intended target was? As you know, the British think that these devices were intended to blow up in air, in other words, the cargo plane. You all have talked about their being intended for two Jewish synagogues in Chicago. Which is it?

BRENNAN: Well, they were addressed to two locations in Chicago that have been associated with Jewish synagogues. That said, the British have the lead on the investigation on the device that was found at the East Midlands Airport. And Prime Minister Cameron said yesterday that it appears as though they were designed to detonate on board that aircraft, but that they don’t believe that the terrorists would have known the location of that aircraft when it was going to be detonated.

They were self-contained. They were able to be detonated at a time of the terrorists’ choosing. And so we’re again looking very closely at this. There is a lot of forensic analysis that’s going on. So, again, they were destined for a particular location in the United States and Chicago, but it appears as though they had the capability to be detonated on board that aircraft, and they could have brought that — those planes down.

CROWLEY: Similarly, could it have been detonated in the Chicago — at the Chicago addresses? In other words, would someone have to be on the ground in Chicago to have detonated these things in Chicago?

BRENNAN: It is my understanding that these devices did not need someone to actually physically detonate them, that they could have been detonated in the location where they were on the plane or they could have been detonated when they reached their destination.

Again we’re still looking very carefully at that. I think there is some, you know, analysis that’s still being done. So we are not going to presume anything in this case, because we need to take precautions for aircraft, for cargo, as well as for locations here in the United States.

CROWLEY: A two-part question, is this particular threat now over? This incident. And does it make you want to take a look at that UPS plane crash in Dubai in early September?

BRENNAN: Well, some very good work was done both overseas as well as here in the United States to find those two packages and to make sure that those devices were made inert. Very close in strong partnership there. So we don’t know whether or not that’s the extent of it, so we’re going to continue to pursue all possible leads in the event that there are some other devices that are out there.

The crash of the one plane off of Dubai, we are looking very carefully at that. Working with the NTSB and others to make sure that we understand the cause of that crash. And so right now we’re making sure that we look at possible other events or other developments that might have some relationship with the most recent packages that we’ve discovered.

CROWLEY: So again, just to clarify, you believe there is a possibility that there are other packages out there somewhere en route someplace, that’s what you’re looking at now?

BRENNAN: It would be very imprudent for me and for others within the counter-terrorism community here and abroad to presume that there are no others out there. That said, we are working with the intelligence that we have. We feel as though we’ve stopped all of the packages that have come into the United States that were originating in Yemen.

The Yemeni authorities have cooperated to date. I really hope that cooperation continues. So we’re trying to make sure that if there are other packages out there, other IEDs, that we’re able to find them before they’re able to be detonated.

CROWLEY: John Brennan, senior White House counter-terrorism official, thank you so much for joining us.

BRENNAN: Thank you very much, Candy.

CROWLEY: Up next, Republican National Committee Chairman Michael Steele on what could be a big election day for his party.

(COMMERCIAL BREAK)

CROWLEY: For endangered Democrats, this is the year of throwing Jell-O against the wall to get something to stick against the backdrop of doubt and anxiety. In the final days of this political season, the president is hammering top Republicans for being political.

(BEGIN VIDEO CLIP)

PRESIDENT BARACK OBAMA: The Republican leader of the Senate said that his main goal for the next two years — this is his top priority — is to beat me in the next election.

(LAUGHTER)

(BOOING)

That’s his top priority. I mean, you know, he didn’t say, “My top priority is to create jobs for folks in Virginia.” He didn’t say, “My top priority is to make America more competitive.” He’s already thinking about the next election. This one’s not even over yet.

(APPLAUSE)

We haven’t even finished this election. He’s already thinking about the next election. That’s what’s wrong with Washington.

(END VIDEO CLIP)

CROWLEY: The president’s remarks came on the heels of news that the Democratic National Committee has begun gathering opposition research material for nine Republicans who may run for president.

Is 2010 really about 2012? Joining me now for that answer, the chairman of the Republican National Committee, Chairman Michael Steele.

Thank you for joining us.

STEELE: It’s great to be with you, Candy. Good morning.

CROWLEY: Let me start first with the majority leader of the Senate saying the single most important thing that Republicans want to achieve in the next two years is to make the president a one-term president.

You’ve had the Republican leader on the House side saying this is — no, we’re not going to compromise, and you yourself had said that Republicans are not looking to compromise. Is that what you’re taking away from the polls right now, that the American public doesn’t want the Republicans to compromise on anything?

STEELE: Well, I think that, to be very clear here, when we talk about not compromising, not compromising away on the principles that our party have run on and have stood for, for a long time. For example, we’re not going to compromise on creating more debt. We’re not going to compromise on raising the debt ceiling. We’re not going to compromise on increasing the burdens on the backs of small-business owners and families.

The administration has got to come to the table at some point, Candy, to deal with these issues. When we talked about health care, we put a series of agenda items on the table. We couldn’t even getting a meeting with the White House to talk about those things. So you pass a health care reform without tort reform, which is a major dollar point that goes into the cost of health care.

These are the types…

(CROSSTALK)

STEELE: These are the types of things, on issues — let me just make this point — these are the types of things on issues that Republicans feel that the administration has not come to the table on. And with the Republican majority in the house, or Senate or hopefully both, we’re not going to compromise on those things. We’re going to stick to try to get that business done.

CROWLEY: Mr. Chairman, it just sounds like a recipe for gridlock. You know, you’ve got Republicans already talking about we’re not going to — we’re not going to compromise on our principles, but the principles –you know, it’s not like the president says, gee, I can’t wait to run up the debt. That’s not where the argument is.

(LAUGHTER)

The argument is about how do you stimulate jobs; how do you get people back to work? And you have to make choices there. And all we’ve really heard from Republicans is, you know what, no, we’re not going to compromise; we’re not going to compromise on…

STEELE: Well, no, I disagree with that, Candy. And while the president may not have said, oh, gee we’re not going to — we don’t want to run up the debt, his actions have done that. And that has been the frustration and the anger that’s been brewing out there for the past 18 months.

People have heard the rhetoric of change but they’ve seen that the total capitulation to government in implementing that change — small-business owners, families and communities have been locked out of this process. You don’t create the kind of jobs we need to stimulate this economy by going first to government. You go into the marketplace. And that’s been the argument that’s been made.

Number two, in terms of the policy issues, all you have to do is you want to get a sense of where we want to go in the economic front, look at what Paul Ryan has put out there; look what others have written and stated politically this is where we want to go.

CROWLEY: But Republicans can’t have — I mean, my point being the Republicans can’t have everything they want.

STEELE: Well, sure.

CROWLEY: And the president, you know, clearly knows that he can’t, if he’s working with a more Republican Congress, regardless of what the numbers are going to be.

I want to show you something from a new CNN/Opinion Research Corporation poll that we’re putting out today, it’s about the Republican Party, people’s opinion of the Republican Party: 44 percent of those asked had a favorable opinion; 43 percent had an unfavorable opinion. So really, they’re not thinking the Republicans are so great here.

STEELE: Oh…

CROWLEY: Don’t you have to be careful?

STEELE: Oh, yes and I’m glad — Well, look, first thing, I’m glad to see it said 44, because, remember, a year ago we were in the low 20s. And so the party has made steady gains back — back to engaging with the American people.

But your point is exactly the point. We do need to be very careful here. We do need to be very smart about the kind of leadership we bring to the table come January with a Republican majority in the House and hopefully the Senate. We do need to be very, very smart about what the American people are saying they want us to address in terms of the economy, jobs creation and the like.

You can’t — I agree you cannot just go and do the same old same old because, if you do, then you’re going to wind up seeing such a split in the party, you’re going to wind up seeing a lot of people take that support that that newly found support that they have for the party and place it elsewhere.

So the leadership has got to be very strategic and very smart about two things; one, how it continues to address the concerns that the people have while hopefully bringing the administration to the table to get something done.

CROWLEY: Let me ask you, just turning to Tuesday night, it now has been looking so good for Republicans for so long that and the expectations game goes like this. Less than 50 seats gained by Republicans in the House, it’s a failure of a night…

(LAUGHTER)

… fewer than eight seats gained in the Senate, it’s a failure of a night. What are your expectations for Tuesday?

STEELE: Well, that’s bogus. First off, we need 39. If we get 39 seats and take the majority, that’s success. If we get 37 seats, that’s success. Keep in mind, I mean, we’ve got to keep this thing in context here. We were — we were a party out of power. We were a party that, on the covers of magazines around this country, were called an endangered species. We were going to be regionalized, marginalized to the lower, you know, portions of the political spectrum.

We have battled our way back here, so to have the kind of night that we’re anticipating on Tuesday is not just a blessing but it comes from the hard work of our candidates out there engaging with the people.

So as the national chairman, you know, I tell — have told our folks around the country we’re at 38 seats; now let’s get to 39, and anything that we do that evening is going to be a great success, given where we started this journey a year and a half ago.

So you know, I appreciate all the numbers, 50, 60, 70. I just — my number is 39. Let’s get to 39, because then you can begin to put in place the governing structure that you’re going to need for your majority leadership in 2011.

CROWLEY: Mr. Chairman, since you took over the Republican National Committee, you have won three elections, New Jersey, Massachusetts and Virginia. You look to be on the cusp of a pretty darned good night on Tuesday night.

STEELE: Right.

CROWLEY: And yet, on the record and off the record, you have a number of Republicans still firing at your chairmanship.

STEELE: Yes.

CROWLEY: I wonder what you make of that.

STEELE: Well, you know, look, not everybody plays well with others on the playground. We understand that. I’m a different kind of chairman. I said I would be. I’m not a status quo guy. I believe in shaking the system up. I’m a grassroots, bottom-up kind of activist. And I think the party needs that kind of leadership right now. The status quo, the establishment in Washington — they’ll get used to me.

(LAUGHTER)

CROWLEY: And finally, how long will they need — will they have to get used to you? Specifically…

(LAUGHTER)

… do you want to be chairman again for another term?

STEELE: I’ve enjoyed my two years so far as chairman of the Republican National Committee. I hope that my contribution has allowed us, as you’ve noted, to win the elections that the leadership that put me in the chairmanship have asked me to win.

CROWLEY: But do you want — do you want a second term?

STEELE: We’re going to evaluate that once we get past this Tuesday. My focus–

CROWLEY: Because we’re hearing that you’re already talking to people about that.

STEELE: No, that’s just — I find that amusing that people are already saying I’m having conversations like that. The reality–

CROWLEY: You’re not?

STEELE: No. The reality of it is I’ve been focused on this Tuesday. After this Tuesday, we’ll let whatever come, come.

CROWLEY: Chairman of the Republican National Committee, Michael Steele, thanks for joining us.

STEELE: All righty.

CROWLEY: Up next, why Democratic candidates in conservative areas are having a tough time finding the right message.

(COMMERCIAL BREAK)

CROWLEY: The Democrats having the hardest time finding their footing this year are the conservative ones running on conservative turf. They seem boxed in by the Obama record. They can’t run from it and they can’t cling to it. Many of them have tried both.

In an ad last month, Congressman Earl Pomeroy embraced his vote for the president’s final health care reform bill, and got pounded by his Republican opponent. Pomeroy, North Dakota’s only representative for 18 years, is at best tied in the polls with one weekend to turn it around. Here’s his final pitch.

(BEGIN VIDEO CLIP)

REP. EARL POMEROY (D), NORTH DAKOTA: I know I’ve disappointed you with a vote here or there, but you can always count on the fact that I do what I do for the right reason, for the people of North Dakota.

(END VIDEO CLIP)

CROWLEY: Like Pomeroy, Senator Blanche Lincoln voted for the bank bailout, the economic stimulus plan, and health care preform. She’s been Arkansas’s senator for 12 years and is down by double digits in all the polling. Her final push?

(BEGIN VIDEO CLIP)

SEN. BLANCHE LINCOLN (D), ARKANSAS: I’ve always tried to do what was best for Arkansas, even if it meant taking on my party, the president, the Wall Street banks or the Washington unions that spent $10 million to defeat me. I approve this message, because I’ve never lost faith in you, and I ask that you not lose faith in me.

(END VIDEO CLIP)

CROWLEY: Having to say you’re sorry or something close to it is not the most compelling closing argument, and worse it’s fodder for late-night politics.

(BEGIN VIDEO CLIP)

JON STEWART, HOST, DAILY SHOW: You ran on very high rhetoric, hope and change, and the Democrats this year seem to be running on please, baby, one more chance.

(END VIDEO CLIP)

CROWLEY: Dick Durbin, the No. 2 Democrat in the Senate, is next.

(COMMERCIAL BREAK)

CROWLEY: Welcome back. Joining me now from Springfield, Illinois, the No. 2 Democrat in the Senate, Majority Whip Dick Durbin. Senator Durbin, thanks so much for joining us. I want to —

DURBIN: Good to be with you, Candy.

CROWLEY: Thanks. I want to replay or re-show you a new CNN poll that we’re putting out today. It’s likely voters’ choice for Congress, that is the House, in their district. Those who are going to vote for a Republican candidate, 52 percent. For a Democratic candidate, 42 percent. A ten-point gap in what we call the generic ballot.

Two years ago, when the president looked as though he was going to win, he was still a candidate, and then through January we were talking about the demise of the Republican Party. It was going to take a decade for the Republicans to rebuild. Now it looks as though they’re going to clock you on Tuesday night. Looks as though they’re going to take control of the House, that you’re going to lose some Senate seats. What happened?

DURBIN: Well, of course, off-year elections are never kind to an incumbent president’s party. Only twice in history has a president gained ground in an off-year election. So history tells us–

CROWLEY: This was less than kind.

DURBIN: — there is — well, let me take another step into it. People aren’t going to be voting for generic candidates on Tuesday. They’ll be voting for actual candidates. And what I found as I traveled around is that in many of the states that I visited, when people listen to the candidates and know them and directly ask them questions and trust them, you get a much different outcome.

CROWLEY: Well, surely. Are you suggesting that the House might stay Democratic? Are you suggesting you’re not going to lose seats in the Senate?

DURBIN: Oh, of course we’ll lose some seats in the Senate and in the House. That’s what history tells us.

But here is the thing that gets down to it. You brought it up with Chairman Steele. When people are asked directly, what do you think about the Republican Party and the Democratic Party, usually we fair a point or two better than the Republicans. There is no mad love affair with Republicans across America, and I think it gets down to a basic thing in this election campaign. If you had to identify the message of the Republican Party, it’s basically what you said to Chairman Steele, we are not Democrats. That’s all they’re saying. And when it gets down to specifics, you say, well, let’s hear what unifies your party. What unifies them? Privatizing Social Security and Medicare, that unifies them. The Republicans also tell us they don’t want to change the tax code that rewards corporations for moving jobs overseas. They also tell us that we ought to be sticking with the tax cuts from the Bush era, tax cuts which unfortunately led to the greatest deficits in our history and led to massive unemployment.

CROWLEY: The truth is, I mean, you do–

DURBIN: And those things, I think when you look at specifics, are important.

CROWLEY: You do speak the truth when you say they don’t like Republicans any better than they like Democrats, but they don’t like Democrats very much. And at some point, you are going to have to come back to the U.S. Senate with a lesser majority or perhaps be in a minority position — most people think it will be a lesser majority for Democrats in the Senate. How does that affect the big-ticket items on the Obama agenda, immigration and energy reform?

DURBIN: Well, I can tell you, when you’re dealing with Republican Senate leadership that brings 100 filibusters to the floor in a given year, and now you will have more Republicans, at least a few more, and fewer Democrats, if they want to stick with this filibuster strategy, obstruction and saying no, it’s going to be difficult to do anything.

CROWLEY: What about you? What about Democrats?

DURBIN: Anything at all.

CROWLEY: What is your — what is your responsibility going back in whatever position you go back to? Aren’t the voters, even in the polling, aren’t the voters telling you something, and what is it they’re telling you?

DURBIN: They’re telling us they’re in pain. They are in pain over the unemployment in America and the fact —

CROWLEY: And they blame Democrats.

DURBIN: — they have bean increasing — well, they do. And though we’ve increased jobs in the private sector and things are moving in the right direction, and we’re not sinking into a depression, people are impatient. They want to see results, not just when it comes to jobs but also when it comes to health care reform. And some of these things will take time to bring us out of the morass that we are in.

When you ask, what about the big issues? Well, I have big questions. Will we see Republican leadership as we did in the past when it comes to comprehensive immigration reform, will we find a few Republicans willing to step up and deal with the whole energy and environment challenge that we face? In the past, they’ve been there. Over the last two years, we haven’t had their help.

CROWLEY: But what are the questions to the Democrats? Because surely there must be some voters in there somewhere — because whenever you talk to a Democrat, they say, oh the messaging has been bad, or people are impatient or they don’t really understand what we’ve passed. Maybe some voters think you’ve done the wrong thing. And if they think that–

DURBIN: Of course some do.

CROWLEY: Yes, and so that may have voted for you previously. So what is the message you take from that that is going to make the dynamic different? We understand what you think the Republicans should do. But what should you all do?

DURBIN: I think fundamentally the major elements of what President Obama set out to do were important to be done. First that we don’t sink deeper into a depression. And our recovery package was really geared toward creating more good-paying jobs in this country, giving tax breaks, the largest tax breaks in history to middle-income families. Those were good things.

Secondly, the health care reform. The cost of health care is breaking the bank for families and businesses as well as for government.

And finally, when it comes to Wall Street reform, to say once and for all there will be no more bailouts. We’re going to make fundamental change, oversight, and regulation of Wall Street so we don’t sink into another recession. Those are three fundamentally sound things that history will prove were essential to turn this economy around and move us forward.

So yes, we can learn lessons and we have learned lessons, but in terms of the basic principles, I think we are moving America in the right direction.

CROWLEY: Have you — you look at let’s take a look at the Senator Reid’s contest in Nevada against Sharron Angle, your majority leader in the Senate. They were delighted when Sharron Angle frankly was nominated. They thought they could portray her as an extremist, too conservative for Nevada. He’s in the fight for his political career, as you know. Have Democrats underestimated the anxiety in this country?

DURBIN: No, I don’t think we’ve underestimated it, but I think we’ve also seen, particularly in the case of Nevada, that when the Tea Party Republicans produce a candidate, many times they are candidates that have views that are very extreme. Most Americans are not going to agree–

CROWLEY: Except for that she’s beating him in the polls, so they can’t be that extreme, can they?

DURBIN: Well, I see different polls. And although it’s close, I believe Harry Reid has maintained a lead and he is going to win on Tuesday.

CROWLEY: And if he should not, can you see yourself supporting Senator Schumer, your roommate down there in Washington, as majority or minority leader in the Senate?

DURBIN: I made a promise to Harry Reid I wouldn’t even speculate on this possibility. Harry Reid is our majority leader and I support him.

CROWLEY: Well, we are always sorry when you make that kind of deal, but we appreciate you spending some time with us, Senator Durbin.

DURBIN: Thanks, Candy.

CROWLEY: Up next, we’ll break down last-minute strategy. Is there anything Democrats or Republicans can do to swing the polls before Tuesday?

(COMMERCIAL BREAK)

CROWLEY: Welcome to the political edition of “Where Are They Now.” Women, independents and lower-income families, they were a huge chunk of the Obama victory coalition two years ago. For instance, the president won independents by eight percentage points.

Where are they now? Republicans have a 20-point edge among independents. The president’s 22-point advantage among families making less than $50,000 has evaporated into a 2-percent advantage for Republicans this year.

Most worrisome for Democrats is the female vote, a usually reliable, always necessary part of the Democratic constituency. The president’s 13-percent margin among women in 2008 is a four-percent advantage for Republicans in 2010. The New York Times put it succinctly — the Obama coalition is fraying. What that means for Tuesday when we come back with former Senator Bob Kerrey and CNN contributor Bill Bennett.

(COMMERCIAL BREAK)

CROWLEY: Joining me now here in New York, CNN political contributor and host of “Morning in America” Bill Bennett, and former Democratic senator and current president of the New School in New York Bob Kerrey.

Thanks for joining us, both of you.

(CROSSTALK)

CROWLEY: Let me just start out, because we’ve had this terrorism scare out of Yemen, apparently. You were on the 9/11 Commission. And we always say — you know, the first question is always, are we safer now, and then something like this comes up, and it just feels as though, once we feel safer, a new sort of form of attack on the U.S. happens. Is that — is this one of these times?

KERREY: Well, yes, it’s one of those times where something new — but they’re constantly working to perfect their technologies and their — their means to do damage to the United States.

But the most encouraging thing for me is that President Obama, with his team, John Brennan being the lead, has essentially adopted the same strategies that the Bush administration had, criticized by many Democrats who didn’t want him to plus-up in Afghanistan, didn’t want to continue the — you know, the rigorous effort to bring down Al Qaida outside the United States.

And I think, as a consequence of that and increased cooperation from the Saudis and others, we were able to prevent a serious attack on the United States from happening.

CROWLEY: I’m not — I’m not sure if the Democrats will really be pleased that you’re praising him for following the Bush strategy, but nonetheless…

KERREY: But it’s true.

CROWLEY: Yes, no, I understand what you’re saying. You also had recommended, in this report, looking at all the cargo material that heads for the U.S. But in the end that’s not realistic.

KERREY: Well, I think, in general — I don’t think it is realistic. In general, one of the things you have to be careful not to do with a terrorist attack is what they want you to do, which is to overreact. And in this case you have to be careful not to do something that puts additional regulatory friction upon our economy, that makes it difficult to ship things, and increase the cost, et cetera.

So this was — this was an incident that was prevented as a consequence of intelligence being delivered to us. We prevented it from happening and Americans actually should feel quite good about it, again, I would say mostly because the president has adopted most of the strategies that President Bush put in place, and it’s actually a good demonstration of where foreign policy does stop at the water’s edge.

CROWLEY: Does it stop at the political edge? I mean, there’s — you know, we’re about to have an election that’s all about the economy. Should it be and is it?

BENNETT: It seems to have, doesn’t it? And this thing, kind of, jars, and breaks in. Let me say it’s an honor to sit next to Senator Kerry, who has served his country as a Navy SEAL and as a senator and as an honest broker about things.

I mean, there’s been a hard edge to our politics, and some of that edge has, I think, been too hard beyond the water’s edge on issues such as what we’re discussing.

Yes, this thing comes and reminds us again what the main function of government is, while we’re discussing all these other things. The main function of government performed well, I will say to this administration, in the last few days — I think they did a good job as best as anyone can tell — is the defense of its citizens, the safety of its citizens.

But I ask all the candidates who come on my radio show, do you ever get a question about foreign policy? And they say, yes, about once every day or two. So this is a reminder — in 2009, I think there were more attempts, terrorist attempts attacks on us than any other year. But we are doing some things right. That’s good.

CROWLEY: And I think the fact that something doesn’t blow up; this was caught.

BENNETT: That’s right.

CROWLEY: It tends to have less effect because people think, oh, good, something’s working, and they kind of turn back to their own lives and say, OK – because it’s on the economy. And I want to see if I can…

BENNETT: It’s that little part of the back of your brain, still, that…

CROWLEY: That worries?

(CROSSTALK)

CROWLEY: Right. I want to ask you all a question I asked Senator Durbin, which is we are two years almost since the election of President Obama, and we all talked about the end of the Republican Party for a decade, and now all of the sudden we’re talking about, oh, the Republican Party’s coming back and they may take control of the House and the Senate. What happened?

KERREY: Well, that’s a good question. I mean, I’m not sure I have the answer. I mean, what happened is that — beginning sometime around 2007, but by 2008 we saw it clearly — you’ve got a tremendous collapse in the economy led by a collapse of the financial sector. And those kinds of recessions are deeper and longer-lasting.

And it’s — my own view is it’s — in some ways it’s a continuation as well as almost a disinvestment strategy that’s been going on since the 1970s, so there’s a lot of economic anxiety. It’s very difficult to make the case when you’re campaigning, if we have 9.7 percent or 9.6 percent or maybe…

CROWLEY: Things are great, yes.

KERREY: Then what have to say is, it would have been worse if we hadn’t done it, and that’s the best you can say at the moment. It’s very…

CROWLEY: It’s not much of a bumper sticker for Democrats at this point, with that kind of unemployment and the mortgage foreclosures and that kind of thing.

But when you talk to Democrats — in general, when you talk to Democrats, they think it’s a messaging; they think that people don’t get it; they think that they don’t know that things are getting better. Is there something in the policy that they don’t like and that Democrats are not seeing?

BENNETT: Yes, for narrow partisan interests, I hope they persevere in this belief that it’s just the…

(LAUGHTER)

… it’s just the packaging. It’s not. It’s the policy. I think that some of the things they did were wrong and I think they did it in the wrong way and the wrong kind of message. The health care — the country was not clamoring for health care reform. Is this health care system in need of reform? Sure, there are things we should do, yes. We take care of people, absolutely. This was not the number one priority.

It took an awful lot of time. It took an awful lot of political capital. And I have to tell you. And I’ve been going around the country, these campaigns, the tone of things, how somebody could run such a brilliant campaign, as Obama did, and then be so tone deaf in office — Maureen Dowd this morning says, he got elected because of the brilliance of his story, but he’s going to get defeated on Tuesday, or his party, because he didn’t listen to our story.

These comments about American people clinging to guns and religion and they’re scared and they don’t understand the scientific method.

CROWLEY: Well, he got elected after that.

BENNETT: No, but — I know, but now there’s this record of other comments about — this last thing in Newton about they’re scared; they can’t think, this condescending attitude toward the Americans — they just got it; if they just knew what I knew — that is no way to deliver the American people to your side.

CROWLEY: Have there been mistakes? Did they make policy mistakes that Democrats aren’t seeing, or is it — I mean, you know, because we’re hearing it’s an overreach; they overreach; they’re spending too much money; they’re taxing too much; they’re getting involved too much in American lives. Is that…

KERREY: Well, no, but on are they getting too much involved in American lives, I’m not sure that’s the mistake. Look, I’ll repeat, I think you’re — we’re dealing with an economic set of circumstances that are unique and aren’t going to be solved merely by spending more money or regulating a little bit less or taxing a little bit less.

I mean, our competitive position relative to China is in — is in decline, and — and it’s going to take a different kind of response. Do I think it’s going to take a lot of market activity? Absolutely.

But unless and until we’re able to face the fact that we’re converting both our state government and our federal government into an ATM machine by putting more and more money into mandated programs is going to be exceptionally difficult whoever is in power, Republican or Democrat, to make the kind of strategic investments that the market can use to get real gains in GDP and real gains in productivity such as the kinds we’re seeing from our competitors.

CROWLEY: So you don’t think it’s been helping the right way?

KERREY: No. I think you’re dealing with a very different kind of economic challenge. I think the president would have been smarter if he just said, look, a financial meltdown of this kind is apt to produce economic hardship for a five or six-year period. Maybe we need more government in certain circumstances, but in certain circumstances, we probably need a whole lot less in order to get — because every time you create a job, Candy, even if you’re going out and just be self-employed, you’ve got to get government’s permission.

So you have to acknowledge that the regulatory burdens are a big part of the problem of trying to create job employment — jobs in the United States. That’s where Democrats have to yield ground in order to bring Republicans on, because once you do that, then you’ve got the opportunity to build out a different kind of an economic program.

CROWLEY: Let me ask you — in the minute we’ve got left, just give me a prediction. I’m going to ask you, too. What’s going to happen?

BENNETT: Oh, a prediction? Angle beats Reid, I think. The one I care about, the marijuana initiative, goes down in California. We don’t need to be dopier in California.

(LAUGHTER)

And maybe that Marine, Bielat, beats Barney Frank in Boston.

CROWLEY: OK, and Democrats take control of the — Republicans take control of the House and the Senate?

BENNETT: Yes, 70 and, yes, 10.

CROWLEY: Wow.

KERREY: It all depends on turnout. If Democrats turn out, the — the losses will be a lot less than otherwise you’d expect in a midterm election. So it really — it’s all going to be about turnout. If turnout is higher than expected on the Democratic side, it’s likely that the losses in the midterm will be less.

CROWLEY: They’re going to staunch the flow at any rate?

KERREY: Right.

CROWLEY: Thank you so much. I’m really happy to see you, Bob Kerrey, Bill Bennett. Come back again.

(CROSSTALK)

CROWLEY: Up next, a check of today’s top headlines and then some of the year’s spookiest moments come courtesy of political campaigns. We’ll share our favorites.

(COMMERCIAL BREAK)

CROWLEY: Now time for a check of today’s top stories. There’s a new development this morning on the bomb threat from Yemen. A Qatar Airways spokesman tells CNN that the explosive found on a plane in the United Arab Emirates Friday had traveled on two passengers planes to get there. The president’s counter-terrorism adviser, John Brennan, also told me earlier that while unlikely, authorities are still operating under the assumption that there are other explosive devices disguised as cargo.

Indonesia’s Mount Merapi volcano is spewing more hot ash this morning. The latest eruption sent residents searching for safer grounds. A series of natural disasters have struck Indonesia recently. Last week a major earthquake hit the nation’s coast, triggering a tsunami that killed more than 400 people.

This afternoon President Obama will be in Cleveland for his final campaign stop before voters hit the polls Tuesday. The president will be speaking at a rally at Cleveland State University in Ohio, a state Obama carried in 2008. Ohio is the fourth state President Obama has visited this weekend.

And tonight the father and son team of former presidents George H.W. Bush and George W. Bush will throw out the ceremonial first pitches at the World Series in Arlington, Texas. George W. Bush was once a part owner of the Rangers. This the fourth game in the World Series where the San Francisco Giants lead the Texas Rangers lead two games to one.

Those are your top stories on STATE OF THE UNION. Up next, the really frightening side of this campaign season.

(COMMERCIAL BREAK)

CROWLEY: In answer to your question, is there anything worse than all of these political ads? Yes, all of these political ads on Halloween.

(BEGIN VIDEO CLIP)

CHRISTINE O’DONNELL (R-DE), SENATE CANDIDATE: I’m not a witch.

UNIDENTIFIED FEMALE: Hello, my pretties, I will save you from those evil Republicans.

UNIDENTIFIED MALE: Igor!

UNIDENTIFIED MALE: Yes, doctor.

UNIDENTIFIED MALE: I need a heart, a spleen, and a liver for tonight’s sale.

UNIDENTIFIED MALE: The dead whose stolen names vote for the living.

UNIDENTIFIED MALE: Washington is boiling over with special interests, and nightmarish deficits for as far as the eye can see.

(END VIDEO CLIP)

CROWLEY: And nothing says “send me to Washington” like a cauldron. Overall it has been a pretty scary time to turn on the TV even before Halloween. This may be the season politicians gave negative ads a bad name.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: Barack Obama is the worst president in history.

UNIDENTIFIED FEMALE: “Taliban Dan” Webster, hands off our bodies.

UNIDENTIFIED MALE: A FCINO, “fiscal conservative in name only.” A wolf in sheep’s clothing.

UNIDENTIFIED MALE: Why did Rand Paul once tie a woman up, tell her to bow down before a false idol, and say his god was “Aqua Buddha.”

UNIDENTIFIED MALE: Who on earth would support such a dummy, and why?

(END VIDEO CLIP)

CROWLEY: And as we wrap up our too weird even on Halloween section, we don’t want you to miss these efforts by candidates to prove their right to bear arms bona fides.

(BEGIN VIDEO CLIP)

GOV. JOE MANCHIN (D-WV), SENATE CANDIDATE: And I’ll take dead aim at the cap and trade bill.

UNIDENTIFIED FEMALE: Ladies and gentlemen, topic tonight, Second Amendment.

UNIDENTIFIED MALE: Conservative Pamela Gorman is always right on target.

PAMELA GORMAN (R-AZ), HOUSE CANDIDATE : I’m Pamela Gorman, and I approve this message.

(END VIDEO CLIP)

CROWLEY: Scariest thing yet, experts believe by the time the election is over, $3 billion will have been spent on political ads just like those.

Two more days, we know you can make it. From our staff here at STATE OF THE UNION, have a happy Halloween and safe voting. And don’t forget to tune in tonight for two CNN specials, first at 8:00, “Boiling Point: Inside the Tea Party. Then at 9:00, “Countdown to Election Night in America.” Until then, I’m Candy Crowley in New York.

Up next for our viewers here in the United States, “FAREED ZAKARIA: GPS.”

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