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State of the Union

Interview With Tom Donilon; Interview With Richard Lugar; Interview With Anders Fogh Rasmussen

Aired May 08, 2011 - 09:00   ET

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

CANDY CROWLEY, HOST: The demythification of Osama bin Laden as the U.S. government releases slices of five videos taken from the concrete compound where he lived and died. Four videos the administration did not release any audio are the bin Laden he wanted the world to see, images of an in-charge, neatly attired robust leader, terrorist propaganda with production value. The fifth is bin Laden channel surfing. apparently looking for coverage of himself. He sits in a tenement-like room, a frail looking old man with gray beard, knit cap and blanket around his shoulders. The tapes are part of what intelligence officials call the most significant amount of intelligence ever collected from a senior terrorist.

Today, the post-bin Laden world with the president's national security adviser Tom Donilon.

(BEGIN VIDEO CLIP)

DONILON: About 20 minutes after 8:00 he asked me to come over the diplomatic room and told me it was a go.

(END VIDEO CLIP)

CROWLEY: Then, the ranking Republican on the Senate foreign relations committee, Richard Lugar,

And as Libyan leader Moammar Gadhafi continues to defy the west, NATO general-secretary Anders Fogh Rasmussen.

(BEGIN VIDEO CLIP)

RASMUSSEN: NATO is saving lives in Libya.

(END VIDEO CLIP)

CROWLEY: Then, bin Laden, the economy and 2012: political analysis with Democrat Anita Dunn and former Republican congressman Tom Davis.

I'm Candy Crowley. And this is State of the Union.

You may not recognize our first guest this morning. He is not a media comfy kind of guy, but you should know what Tom Donilon's been doing this week. AS one of the most powerful men in the West Wing, he was at the center of the bin Laden operation. And yesterday, we sat down with the president's national security adviser.

(BEGIN VIDEOTAPE)

CROWLEY: Tom Donilon, welcome.

DONILON: Thank you, Candy. Glad to be here.

CROWLEY: Pleasure to have you here.

DONILON: Thank you.

CROWLEY: Let me ask you first right off the bat. You've got this a whole treasure trove of information.

DONILON: Yeah.

CROWLEY: I realize it;s going to take you months to go through.

Anything in it or anything happen in what we like to call the chatter since that says to you that there is a threat out there other than the ordinary?

DONILON: Well, there's no such thing as an ordinary threat. And obviously as the president said in his speech to the nation on Sunday night, this was the most significant achievement against al Qaeda and our nation's efforts against al Qaeda over the last ten years. But we have to remain vigilant. And we are remaining vigilant.

The amount of intelligence, though, we got as a result of the raid, in addition to taking out bin Laden, is really extraordinary. In addition to carrying on the operation, our special forces gathered up as much of the data and information there as they could.

It turns out that this is the largest cache information gotten from a senior terrorist, gotten from any terrorist, in one operation. It is about the size of a small college library. And we have put together a multi-agency task force to go through it.

And we'll be looking at exactly the kinds of things you asked about: are there imminent threats? What can we use in the intelligence to disrupt plotting? How can we use the intelligence to gain tactical and strategic advantage over al Qaeda?

CROWLEY: Any huge surprises so far that you know of?

DONILON: Well, at this point, why don't we wait for the experts to review the data and the information. It's a very large cache, as I said.

CROWLEY: Osama bin Laden was the number one wanted man in the world. We've often described that. Who is it now?

DONILON: Fellow leadership of al Qaeda.

CROWLEY: So al Zawahiri? DONILON: Al Zawahiri will be the next number one terrorist that we're looking for in the world. But we have a broad and global effort. It's a really significant -- obviously a very significant event last Sunday evening. As i said, this is the single biggest achievement against al Qaeda in our nation's efforts against al Qaeda.

Also the information that we have gathered from the compound where Osama bin Laden was living is that he was also engaging in a strategic and operational leadership as well, which makes the action last Sunday even more significant in our view.

CROWLEY: You know, so many people told us he's living in a cave. He's symbolic but he doesn't appear to be directing anything, and now he's the operational leader, and so what changed here?

He's not living in a cave clearly, the whole hiding in plain sight thing, and you're now saying I guess based on these documents that he was in charge of a lot.

DONILON: Indeed he was obviously a symbol. He's the only emir or leader of al Qaeda that they ever had in its 22-year history. And he was obviously a symbolic leader, but what we now know, again taking a look initially here, is that he had an operational and strategic role and propaganda role for al Qaeda which, again, makes the operation last Sunday I think more significant in terms of its effect on -- effect on al Qaeda and its effect on them trying to develop additional leadership and carry out operations.

You know, at the end of last year we assessed that al Qaeda had been diminished through efforts -- through our efforts to its weakest point since 2001. And they took a very significant back on Sunday obviously.

CROWLEY: And so do you feel, based on any information that you have, that you are closer to al Zawahiri at this point than you were Saturday, for instance?

DONILON: Well, I don't -- I don't want to comment on our -- on our efforts against al Qaeda leadership, but what I can say is this. Is that our efforts to pursue strategic defeat of al Qaeda, which is our national goal, really was given a significant boost on Sunday in the operation against -- against Osama bin Laden.

CROWLEY: In the interim from last Monday until this, you've been able to talk with some of these Navy SEALs who carried out this operation. Can you tell us now the final moments? Is there anything we don't know now? Was he near a weapon? Was Osama bin Laden reaching for a weapon?

Can you tell us anything that you might have learned from those conversations?

DONILON: The president went to Ft. Campbell and met with the entire group of special operators that carried out this operation last -- last Sunday, And they took the president through a minute-by- minute review of the operation, from the point they left Afghanistan, to the point that they returned.

And what emerged is really -- really an incredible story of precision, the result of careful planning, terrific judgment on the scene, bravery, and I think an absolutely appropriate result.

CROWLEY: And let me say I'm in no way questioning the bravery of guys who would drop into another nation against a guy who is the biggest terrorist in the world, but as you know, there has been a big brouhaha, because originally it was reported that Osama bin Laden was armed that he shielded himself with one of his wives.

Now he didn't do that. He didn't have weaponry. What do we know about what happened in those final moments In that room that you can tell me?

DONILON: Yeah. Let me review the circumstances though. We are at war with al Qaeda. Osama bin Laden is the leader of the entity that we're -- a group that we're at war with. Our forces went basically to their commander's headquarters here in Abbottabad, Pakistan. They entered the compound and were fired upon. They had to breach several walls and doors to get to where Osama bin Laden was. At no point during the course of this operation did Osama bin Laden indicate that he was prepared to surrender.

This is an organization known obviously for suicide bombing, IEDs, booby-trapping buildings. And our forces, no signal from him that he was prepared to surrender, acted completely appropriately. And I don't think anybody is going to second guess their judgment.

CROWLEY: Right. Well, I mean, I must say I think certainly in this country you're right, but I'm sure you've seen the web site that in other countries, for those who might be sympathetic with what they believed bin Laden to be, that the fact that he was unarmed and which I'm going to assume that your non-answer is that he was unarmed in the sense that he wasn't holding a weapon, and obviously he could have had all kinds of things nearby in all of that.

Do you worry that the initial misreporting from the administration on what happened here undercut this -- this moment with some of those most like to bring into the fold?

DONILON: I don't. And I haven't seen it in the reporting. The messages that have come back to us from around the world, and I study this fairly closely, is that this was a just action, that in fact this was a just action against a man who had committed murder, not just in the United States but around the world.

And the other message that's come back has been interesting, from a strategic point of view, a step back, is a message of United States carrying out here over the course of two administrations, a persistent, deliberate and dedicated effort to achieve its goals. The message is that the United States will carry out and execute now what it says it's going to do, and it has the capability to do so.

And the president obviously has been familiar with that capability as president, and he met directly for an extended period of time yesterday with the folks who carried out these operations.

That message is very important, I think, that the United States does what it says it's going to do even if it's across administrations, across parties and across presidencies.

CROWLEY: The president's national security adviser, stick with us for just a minute, Tom, we'll be right back after this.

(COMMERCIAL BREAK)

CROWLEY: We are back with National Security Adviser Tom Donilon.

Before we moved to Pakistan, because there really -- our relation with Pakistan at this point post-bin Laden, let me ask you about that picture that we've now all seen of all of you in the Situation Room, and see if you can recall for me what were you thinking at this moment while you were waiting for something to happen.

DONILON: Well, obviously we're thinking about the successful and safe completion of the mission. That was first and foremost in everybody's mind as we were monitoring the mission as it was ongoing.

You know, as I look at the picture now though, and focus in on the president, having served three presidents, as you know, Candy, you really are struck by these being quintessentially presidential decisions, and you see it in new experiences that you have.

You know, On Thursday night, the 28th at around 7:00, the president left the Situation Room, and he had gotten his final briefing on the various courses of action, including where we were on the planning for the military action. And he had gotten divided counsel, and that happens a lot in these things, as would you imagine, and he didn't make a decision that night.

Stood up, walked out, walks across the across the colonnade, into the residence, and makes that decision by himself. And then the next morning at about 20 minutes after 8:00, he asked me to come to the Diplomatic Room and tell me that it was a go and we should start draft the orders.

But these really are -- that's what strikes me now, looking at the president, is that we ask our presidents to make these exceedingly difficult decisions. And at the end of the day, 300 million Americans are looking to him to make the right decision.

CROWLEY: I want to read you something that Senator Frank Lautenberg said in a statement on Monday, talking about Pakistan. "Before we send another dime, we need to know whether Pakistan truly stands with us in the fight against terrorism. Until Congress and the American public are as sure that the Pakistani government is not shielding terrorists, financial aid to Pakistan should be suspended."

Does Pakistan stand with the U.S. against terrorism? DONILON: Well, let's talk about Pakistan, and the importance of their relationship, and let me say a couple of things at the front end. One, I've not seen any evidence, at least to date, that the political, military, or intelligence leadership in Pakistan knew about Osama bin Laden at Abbottabad, Pakistan.

CROWLEY: And that includes the ISI?

DONILON: At this point, that's exactly right. As I said, the political, military, and intelligence leadership in Pakistan, I've not seen any evidence to indicate that they had foreknowledge of this.

Secondly, though, there is a fact here that we have to deal with, right? And the fact is that Osama bin Laden was in Abbottabad, Pakistan, 35 miles from Islamabad, in a town that was essentially seen as a military town. There was an important military school there and other installations.

That needs to be investigated, and the Pakistanis are investigating. And, indeed, this has been obviously a very big set of questions in their country about what happened and how this came about.

The Pakistanis need to investigate that. We need to work with them to investigate what happened and how Osama bin Laden came to this place as his home for the last -- for the last six years.

CROWLEY: Will they give us access to like bin Laden's wives or to any members of ISI who might have been in contact with him?

DONILON: That's very important. And we have asked for access, both to the people, including three wives who they now have in custody from the compound, as well as additional materials that they took from the compound...

CROWLEY: Right.

DONILON: ... that can be used for intelligence analysis, and we'll clearly be working with them to understand how we got to this point.

But I also would be remiss though not to talk about the overall relationship for just a minute, and to look at it from the perspective of the United States interest. Yes, the fact is Osama bin Laden was in Abbottabad, Pakistan, for six years or so.

But the fact also is that more terrorists and extremists have been captured or killed in Pakistan's soil than any other place in the world, and they have been a very important partner for the United States in our efforts against terrorism. And in particular...

CROWLEY: We don't fully trust them.

DONILON: ... in our efforts against -- well, let me get to that in a second, in our efforts against al Qaeda as well. They have been a very important partner in our intensified efforts to press -- to press al Qaeda.

We have differences with the Pakistanis, no doubt about it, and we work those through. And I've been deeply involved in a number of these conversations with the Pakistanis about differences that we do have with them.

But it is not -- it would not be a complete answer and it would not be responsible for me as a national security adviser not to point out that in fact they have been a very important partner of ours in our terror efforts, and I think we need to look at this in a calm and cool way, pursuing U.S. interests, but pressing the Pakistanis to be as good a partner as they can on these -- on these issues.

CROWLEY: Are you going to get access, do you think, to the bin Laden wives and to any members of the -- of their intelligence force that you think might have been in contact with...

DONILON: Well, we would expect to have access to the things that we need...

(CROSSTALK)

CROWLEY: ... could have access yet, you've requested but...

DONILON: Yes, we haven't been told we can't either at this point, right. You know, but we'll certainly press on this very hard, Candy.

CROWLEY: Glass half full guy, and nothing there yet that leads you to believe they knew or were complicit.

DONILON: Right.

CROWLEY: Incompetent, maybe, but not complicit.

DONILON: Well, I don't want to comment on the competency or not of another nation.

CROWLEY: I was just giving...

(CROSSTALK)

DONILON: But not on the complicity at this point. That's right.

CROWLEY: Tom Donilon, national security adviser to President Obama, thank you so much, come back.

DONILON: Candy, wonderful to see you.

CROWLEY: Up next, we'll get reaction from the top Republican on the Foreign Relations Committee, Senator Richard Lugar of Indiana.

(COMMERCIAL BREAK)

CROWLEY: Joining me now, Senator Richard Lugar of Indiana, the top Republican on the Senate foreign relations committee.

Senator Lugar, thank you for being here.

Let me -- let me sort of clean up a couple of things and just get your take on this. Why is it, do you think, that we were told for years that Osama bin Laden was probably on dialysis, on the run and in a cave some place between Afghanistan and Pakistan, and yet he's living a confined but relatively normal Islamabad, you know, suburban life.

Is this a failure of intelligence?

LUGAR: Well, probably.

We may have had more intelligence, and obviously this would be very highly, highly classified, so it may have been useful simply to continue to give that impression.

CROWLEY: So they may have been letting -- not letting those looking for know that he might be some place other than the mountains.

LUGAR: Precisely. There would be no reason in the form of a statement to give out more than useful.

CROWLEY: You're not suggesting that the government would lie to us about stuff?

LUGAR: No. But it would be very careful in terms of this collection of intelligence over the course of several years.

CROWLEY: And let me ask you, on the whole issue of Osama bin Laden in his final moments, it's very clear I think when you listen to Tom Donilon that he was not armed, and he may not have been within reach of a gun.

Middle of the night, it's a terrorist compound. There were shots fired as they were making their way up these steps, at least in the initial phases, so no one is saying that this man was still not dangerous. He could have had anything strapped on his body, but what I want to know is whether you have any qualms as to the notion of how this plays overseas, that the United States SEALs went in, in great force and shot an unarmed man? Does that bother you in any way? Do you have any qualms about that?

LUGAR: No. Given the circumstances I think it was perfectly appropriate. It's remarkable that just 25 SEALs were able to get inside of that compound, take on all comers and come out alive, all 25 of them, as a matter of fact.

CROWLEY: So it was a very -- from our perspective, a very clean, clear cut event. And despite kind of getting the narrative mixed up and saying he was armed and this, you don't think that that hurts overseas in some Muslim or Arab countries?

LUGAR: No. There will be people overseas in various countries who really do not care for our war on terror or find objections to it, that would find objections to almost any aspect of this.

CROWLEY: Let me ask you about a relationship with Pakistan. There's two schools of thought now. You heard Tom Donilon say, listen, there's no evidence at this point, we're still looking at it, but no evidence at any level that the Pakistani government, at least I guess the higher ups is all they can speak for at this point, were involved, complicitly involved in hiding Osama bin Laden.

You have people like Senator Frank Lautenberg on Capitol Hill going, wait a second, there's just no way they could not have known. Carl Levin I think saying much the same thing.

Where are you on this?

LUGAR: I think Tom Donilon as an able diplomat and representative of the White House and perhaps gives the official view, but it appears to me very logical that if Osama bin Laden was in that home for six years of time, a group of people there connected with the military, that a lot of people in Pakistan knew about his whereabouts.

Now the problem is that the divisions in the Pakistani government, between the ISI, the intelligence people, the military, the civilian, are very, very severe. Not really clear how many persons in each of these categories were informed or how they entered the dialogue within Pakistan.

So that when something like this occurs, the divisions then within that government become acute, and people then become more bellicose in berating the United States or somebody else to try to protect themselves against criticism within the country.

CROWLEY: And the bottom line it seems to me of this is Pakistan is a country with nuclear weapons, so it's better to have them semi in the U.S. fold than not. It has been, everyone says helpful, the war on terrorism.

LUGAR: Yes.

CROWLEY: And they need our money. So in the end, isn't this kind of show time? In the end do you see the U.S. going, OK, no more money. You tried to protect Osama bin Laden? LUGAR: No, I don't see that at all. As a matter of fact, Pakistan is a critical factor in the war against terror, our war, the world's war against it, simply because there are a lot of terrorists in Pakistan. There are al Qaeda still. There are many Taliban. They go back and forth to Afghanistan.

There are, as you point out, nuclear weapons. And we are hopeful that they are secure, because the most awesome aspect of this would be that whether it be Taliban, al Qaeda or al Shabaab or somebody else get their hands on nuclear material because the Pakistanis are not secure in this respect, and then have an attack on the United States of a very different character.

Now, that's a big difference from the thoughts that bin Laden might have been proposing attacks on American trains or bridges or this very possibly and a portfolio of circumstances. But Pakistan is a very critical country.

But we are critical to them likewise, because their focus is India and will continue to be, unfortunately, for a long period of time. So, quite apart from Afghanistan, which they have perceived sometimes as a very useful place for them to deal with India or others, India is the big situation.

CROWLEY: You have repeatedly said that the administration doesn't seem to have a clear cut vision of victory when it comes to Afghanistan, hinting that it's now about time that we begin to withdraw, at least. And that this is probably further evidence. We now have the head of al Qaeda, the whole reason we went to Afghanistan was that it was a safe place for people like bin Laden.

When you see that we are going to begin a drawdown in July, what size of a drawdown are you looking for? What would satisfy you at this point?

LUGAR: Well, I would look, first of all, as to whether our strategy of getting Afghan forces in preparation to defend Afghan cities and provinces is coming along. The Soviet Union tried this and had quite a bit of success for quite a while but never quite brought it off. And, as a matter of fact, at the end of the day, the people they had trained and were loyal to them deserted and went to either the Taliban or elsewhere.

Now in our situation, we had a test this week in Kandahar. The Taliban simply going to attack, they did. The Afghan forces apparently resisted successfully their attack in Kandahar, very important.

My point in the hearings we had this week was to pick up on words of one of our fine testifiers that -- that perhaps 10,000 to 25,000 troops after 18 months or so would satisfy our ability to fight terror, that is, with intelligence backing, with very resourceful people that can make attacks in various areas. We might be able to get the job done for a great deal less money.

Now why would I consider that? Because in the front room we discuss money every day. We discuss the debt of our nation and the catastrophic situation fiscally, but in the back room we talk about foreign policy as if there was nothing in relationship to this. There is a big relationship. We are overstretched in terms of our defense budget and our military, so we're going to have think very carefully about our objectives.

I would like to see the administration define this much more precisely as opposed to the fact that we're simply going to have a general review and 2014 is out there in some fashion, And many members of Congress think that won't be the end of it. We'll be supporting the Afghan army indefinitely on our budget, on our time.

CROWLEY: Senator Richard Lugar, it's always a pleasure to have you here.

LUGAR: Thank you.

CROWLEY: Thanks for coming by.

Up next, how long will the NATO mission in Libya last? It turns out the allies have differing opinions.

(COMMERCIAL BREAK)

CROWLEY: This week's progress in dismantling al Qaeda with bin Laden's death does not extend to NATO's effort in Libya. With a donor's conference as a backdrop, member nations don't seem to agree on how much longer NATO air strikes will be under way. Turkey is aiming for a cease-fire within a week, Italy calling for a few weeks. France predicts the campaign will last months. This amidst conflicting reports whether Italy will up the ante by arming Libyan rebels directly.

Meanwhile, Secretary of State Hillary Clinton unveiled America's latest effort to put diplomatic and financial pressure on Libya by tapping into Gadhafi's frozen assets to fund the rebels.

Where NATO members seem at odds on how to best deal with Gadhafi, NATO's secretary-general sees unity.

(BEGIN VIDEO CLIP)

RASMUSSEN: I don't sense any fatigue. On the contrary, we have just had a meeting today. And it has been a reaffirmation of the strong commitment to our operation.

(END VIDEO CLIP)

CROWLEY: Where does the mission stand and when does it end? We'll talk to the NATO secretary-general up next.

(COMMERCIAL BREAK)

CROWLEY: A setback for rebels in Libya. Moammar Gadhafi forces bomb the contested port city of Misrata. At least five cities, mostly in the eastern part of Libya, are under rebel control. A rebel spokesman says the bombings in Misrata destroyed six fuel containers and caused a massive fire.

Joining me now here in Washington, NATO Secretary-General Anders Fogh Rasmussen. Thanks so much for being here, Mr. Secretary-General, appreciate it.

RASMUSSEN: You're welcome.

CROWLEY: Do you need in NATO, in this military mission over Libya, the return of those low-flying U.S. planes to try to stop some of the ongoing violence from Gadhafi?

RASMUSSEN: The U.S. already participates which we highly appreciate.

CROWLEY: But not with those low-flying planes.

RASMUSSEN: Yeah, but the Europeans provide a number of very important assets, so in conclusion we have stopped Gadhafi in his track. His time is running out. He's more and more isolated.

CROWLEY: You know, what do you base that on because most of the world looks and sees this stalemate, what is NATO going to do to break the stalemate?

RASMUSSEN: First of all, we have to realize there's no military solution solely. We will need a political solution. And let me also put this in a greater perspective, we are witnessing a wind of change in North Africa and the Middle East. People's desire for freedom and democracy will prevail.

This week we have seen a major blow to al Qaeda and Osama bin Laden's evil vision of conflict as a means to create conflict between the Muslim world and the rest of the world. And in Afghanistan the Taliban is under pressure everywhere, so basically I am very optimistic.

Gadhafi's time is over. He should leave power and open for peaceful transition to democracy.

CROWLEY: Well, at the moment Gadhafi doesn't seem to know his time is up. He remains there. And perhaps he's feeling the pressure more every day, but he is also pressuring the rebels every day.

How long is NATO in this for, because you're already seeing, for instance, the Italian foreign minister saying it needs an end date. Does it need an end date, or does it need an end of the mission? And what's the end of the mission?

RASMUSSEN: Yeah. It needs an end of the mission. And we have defined three very clear military objectives.

Firstly, a complete end to all attacks against civilians. Secondly, a free and unhindered and immediate access for humanitarian assistance. And thirdly, a withdrawal of Gadhafi military forces and paramilitary forces to their bases and barracks.

When these objectives are fulfilled, our mission is accomplished.

CROWLEY: Mr. Secretary-General, you are a seasoned diplomat and politician. Do you see Gadhafi doing that?

CROWLEY: Is there a way of fulfilling this mission as long as Gadhafi remains in power?

RASMUSSEN: Yes, I mean, the game is over for Gadhafi. He should realize sooner rather than later that there's no future for him or his regime. The future belongs to the Libyan people, and it's for the Libyan people to decide the future of the country. We are there to protect civilians against any attack according to the U.N. Security Council mandate, and we will stay as long as necessary to fulfill that mandate.

CROWLEY: And do you see a scenario under which Gadhafi remains in power and NATO can call it a success?

RASMUSSEN: Frankly speaking, I think it's hard to imagine that the attacks, the outrageous and systematic attacks against the Libyan people will stop as long as Gadhafi remains in power, and this is also reason why NATO countries and our partners have endorsed the call for Gadhafi to leave power.

CROWLEY: I any NATO member currently arming the rebels? Are arms flowing from the NATO members to the rebels?

RASMUSSEN: What I can say that it's not part of the NATO mandate.

CROWLEY: Sure.

RASMUSSEN: We conduct our operations in strict conformity with the U.N. Security Council resolution, that is to protect civilians against all attacks and take all necessary measures to protect civilians and to enforce an arms embargo.

CROWLEY: Can we talk a little bit about Afghanistan here? NATO is also involved there. The U.S. administration is looking to 2014 for the last U.S. combat troops, at any rate, to be out. Is NATO in this fight until 2014 in its current permutation?

RASMUSSEN: Yes, this road map has actually been adopted at the NATO Summit in Lisbon in November. We will start a gradual transition to leave Afghan responsibility this year and hopefully see completed by the end of 2014. So we are in this together, 28 NATO allies including the U.S., and 20 partners within the eyes of the coalition.

CROWLEY: You saw Senator Richard Lugar, who preceded you here, talking about a much smaller -- much smaller brigades, much fewer people -- military people on the ground in Afghanistan, sort of backing up the military and the police in Afghanistan. Do you see that happening there any time before 2014?

RASMUSSEN: The development will very much depend on conditions on the ground, but it's clearly our objective to gradually move into a more supporting role so that the Afghan security forces do the combat, and we will support, train, and educate Afghan security forces.

CROWLEY: Secretary-General of NATO, Anders Fogh Rasmussen, thank you so much for stopping by. Appreciate it.

RASMUSSEN: You're welcome. Thank you.

CROWLEY: When we come back, we'll turn to politics and President Obama's new poll numbers, a "bin Laden bounce," but lingering worries about the economy. ..

(COMMERCIAL BREAK)

CROWLEY: The president's latest poll numbers look like a Monet. The big picture is good, but it gets blurry close up. Two new polls out this week from CNN and The New York Times show the president's overall approval rating over 50 percent. On the specific issue of terrorism, the CNN poll found a 7-point increase in approval since January.

But on the economy and the deficit, the president's approval ratings dropped 3 points in both categories to 42 and 35 percent. And then there is this. Despite continuing signs of economic progress, more than eight in 10 Americans say economic conditions in the country are poor.

The terrorist, the economy, and the presidential candidates, politics next with former Congressman Tom Davis and former Obama White House aide Anita Dunn.

(COMMERCIAL BREAK)

CROWLEY: With me now here in Washington former White House communications director Anita Dunn and former Republican congressman Tom Davis. Welcome both.

I wanted to talk to you about the president's poll numbers, because we could have expected that he would get a big bounce out of what was just an amazing piece of news this week and greeted with open arms and in some cases great celebration among the American public. A big bounce in terms of his approval rating, and go inside them and you see him numbers on the economy have gone down, dropped about 3 points. That has to be troublesome at the White House looking at if in terms of a re-elect.

ANITA DUNN, FRM. WHITE HOUSE COMMUNICATIONS DIRECTOR: You know, Candy polls are a snapshot. And we have never paid that much attention to where the polls are at any given time.

I think what has happened over the last week, though, that is the more important is that the American people realize, they have been reminded, that there is some very serious issues facing this nation both in terms of the challenges internationally and also certainly the economy and job growth.

Now an important number that we saw this last week was on Friday when it was reveal that had the economy produced 268,000 private sector jobs in this last month, the most in one month since 2006. Those are the numbers that are really going to matter, is kind of the feeling that the economy is starting to move, and it's critical to keep that going for the president.

CROWLEY: And they don't feel that way, though, because you also heard that 80 percent of people think the economy -- the condition of the economy is bad. That's huge.

DUNN: It is huge. And it's a function, I think, of how low it's been for how long coming out of the horrible recession that almost turned into a depression And also things like gas prices which are too high right now.

I think that the challenge for the Republicans, though, is to find a candidate who really can have a serious debate about these serious issues facing the country. If you look at the field right now, it's the early stages of American Idol and you are wondering when does the person come who will carry a tune? CROWLEY: I think some people would -- Tim Pawlenty, I think there's some serious folks in the race that you would defend, congressman. And I want to get to the race and have you looking. But I want to talk and ask you the effect of bin Laden death and this amazing Navy SEAL mission. It seems to me while you can argue it won't have a staying power in the polls, that perhaps the president has done a lot to kind of push back against that he's a multilateralist, he won't go it alone. He's too timid. Has that added anything to it this?

TOM DAVIS, FRM. REPUBLICAN CONGRESSMAN: It eminence (ph) factor. I think particularly when you talk about homeland security and these issues where he was viewed as relatively weak before. But remember, the Brits turned Churchill out of office after World War II. These are very fleeting -- this is going to be about the economy and where it is when we get to 2012 at this point.

And the smaller bump that he got talks about how polarized this country is.

CROWLEY: And I think, though, that what one of the things that we saw kind of early on taking shape was an undercurrent issue, if you will, certainly the economies at the top, but the undercurrent of he's not a leader. He sits back and contemplates too much. And then suddenly you had guy going, OK, 50/50 chance, go get him.

Doesn't that go a long way to king of erase that feeling, because people vote for who they think is the leader?

DAVIS: Well, that's the narrative. But I think at the end of the day this is about the economic situation on the ground. It's going to return to that. And where we are a year from now economically I think is going to determine how this president turns out.

CROWLEY: You would agree the economy is the main issue here going forward?

DUNN: I think the economy is the main issue. But I also think that when people look at the economy and they look at the challenges facing us in terms of the deficit, they're going to look at the people. I mean, elections are choices between two people, not between two sets of issues.

And I think that what they see when they see the president is somebody who is an advocate for their interests. And that's going to be critical, because on the Republican side right now the economic issue they're becoming most identified with is the proposal to get rid of Medicare, which is not popular, Candy.

CROWLEY: Also something to get to.

But I want to first play you something that Rudolph Giuliani said to one of our reporters this week.

(BEGIN VIDEO CLIP) RUDY GIULIANI, FRM. MAYOR OF NEW YORK: It's too early, and I want to see how it all develops. My major goal is to elect a Republican in 2012. And if it turns out that I'm the best one to do that, then I could probably be talked into doing it or convince myself to do it.

(END VIDEO CLIP0

CROWLEY: Talking about another presidential run.

DAVIS: It's wide open.

Look, when Donald Trump jumps to the head of the field it tells you right now how open this is. Basically the Republican Party got, I won't say taken over, but you look at how the Tea Party moved in to a position there.

The party after President Bush's branding was awful. I wrote that memo talking about, if we were dog food, they'd take us of the shelf. We're recovering at this point. We have been kind of the anti-Obama party. We're going to have to define ourselves at this point. And I think these primaries are going to be a way for the party to redefine itself and reposition itself.

CROWLEY: Let me ask you, do you buy that it's a weak field at this point? I want to put up names here in a poll we did. And you know Huckabee, 16%, Trump, Mitt Romney, Palin, Newt Gingrich, and you go down. Ron Paul, Michelle Bachmann, Mitch Daniels, Tim Pawlenty and Rick Santorum and get down you see John Huntsman who is not yet in -- of course, most of them are not yet in, but John Huntsman now sort of playing with the idea.

When you look at that field, who's the most exciting to you?

DAVIS: Exciting at this point? This is going to be a referendum on the president at this point.

But look at where Bill Clinton was at this point.

CROWLEY: But you have got to have somebody.

DAVIS: Well, I think a bunch have a -- could be exciting from Romney, Pawlenty, Mitch Daniels who is almost the anti-Obama. He gives a fireside chat and the fire goes off. But he's been a really good governor of Indiana. He showed that he can govern. Gingrich can still excite a crowd.

See, that's why you have primaries. This will sort itself out as they go through that process. And you'll see some excitement and electricity emerging from that.

CROWLEY: Anita, who looks strongest to you? If you were you looking and said boy I hope they don't zero in on this guy because he can be something?

DUNN: You know, Candy, I've learned over the years trying to pick who is the strongest candidate at this point in this cycle is a fool's errand.

CROWLEY: Me too.

DUNN: I know. And we do it, right? But it still doesn't mean that it makes any difference who I think is the strongest. What I will say, though, coming off what Congressman Davis said about the Republican Party branding is that they have a significant problem, which only a candidate can help them with. And it is that their branding right now is being controlled by the House Republicans and in particular the House Republican budget that was passed and the proposal to gut Medicare and replace it with the voucher system.

I think if you look at their town halls, if you look at what -- if you look at the New York 26 special election, which has tightened up to everyone's surprise, because it's a referendum on this policy, that their branding right now is in great peril of being, you know, hijacked by their right.

CROWLEY: Was Medicare a mistake, Paul Ryan?

DAVIS: It's the fastest-growing program in government. It's growing 7% a year. Baby Boomers are retiring. If you don't touch Medicare, you can't have meaningful reform so I think they put their step forward at this point.

The question for the administration is, are they going to seize on this and try to get a budget deal or are they going to Mediscare people over the next two years?

CROWLEY: But purely in the politics of it, was this a mistake to put out there saying, hey, why don't we made Medicaid a subsidy and people can buy their own health insurance?

DAVIS: Well, I think time will tell. But the budget deficit is so real, we're borrowing 41 cents on the dollar. People want realistic solution. And all we see are Band-Aids.

CROWLEY: And when you look at -- I mean, the Medicare thing is not going anywhere in an election year, probably not even after an election year. But you were hearing stories of Republicans starting to back off, which says to me it wasn't a great political move.

Might have been great economics.

DAVIS: Well, they were BTU-ed in a sense, because this is not going to become law. But the president loses an opportunity to get a budget deal, which would have to include Medicare, Social Security, Medicaid, these fast growing programs in government, if you want a meaningful deal on this. And I think to opt it out of that at this point.

DUNN: Candy, the Republicans have proposed and voted for in the House a budget that not only gets rid of Medicare and replaces it with a voucher program, but also lowers taxes for the top earners once again, another huge tax cut. Which is what caused the deficit. And until they're ready to look realistically to borrow a phrase at the entire deficit here and the entire problem, then it's going to be very difficult to get a deal.

However, having said that, the president -- it is in both parties' interests to address this issue. The American people want it. The president has laid out a program, and I think you will see some progress.

DAVIS: Candy, 51% of American households pay no federal income tax the IRS announced last week. This is hardly a situation where the underclass is overtaxed and the upper-class are getting off.

CROWLEY: Let me ask you just on the sheer politics, very little time left. When you look at the polling, Republicans are still favored by several points as who do you most trust to handle the budget? So that tells you something, that they hate the Medicare idea, but when you say who do you most favor, they say Republicans.

Problem?

DUNN: Well, Candy, I think that the more people learn, the less they're going to like it. And it's still very early, but there's a lot of time to discuss the two different visions and the president's vision for keeping this economy moving.

CROWLEY: I have got to thank you here. Anita Dunn and Tom Davis, thank you so much.

And thank you for watching State of the Union. Happy Mother's Day to all the moms out there.

I'm Candy Crowley in Washington. Up next for our viewers here in the United States Fareed Zakaria GPS.