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State of the Union

Interview With Gov. Martin O'Malley; Interview With Sen. Kay Bailey Hutchison

Aired November 06, 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: President Obama's got trouble with a capital "T" and that rhymes with "B" and that stands for battlegrounds.

Today, swing state politics with Martin O'Malley, head of the Democratic Governor's Association; 2012, the economy and taxes with Republican senator Kay Bailey Hutchison of Texas.

Plus, a conversation with lobbyists hoping to influence the debt reduction work of congressional negotiators.

Cain's chaos with our veteran political panel.

And the role of religion in presidential politics.

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

The leader of the western world was wrapping up a meeting with world leaders dominated by the debt crisis in Europe when he was reminded of oncoming U.S. elections.

(BEGIN VIDEO CLIP)

PRESIDENT BARACK OBAMA: The least of my concerns at the moment is the politics of a year from now.

(END VIDEO CLIP)

CROWLEY: No one believes him, of course, but there are people who get paid to worry about the president's re-election bid and there is cause for concern.

USA Today and Gallup polled 12 swing states the president carried in 2008. They found that in late October he was running a close race with Mitt Romney, Herman Cain and Rick Perry. Nearly two-thirds of swing state residents say their families are not better of now than when President Obama first took office.

Joining me now for a look at states in play, Maryland Governor Martin O'Malley who heads the Democratic Governor's Association.

Thank you, governor, for being here.

GOV. MARTIN O'MALLEY (D), MARYLAND: Thank you. CROWLEY: Let's talk first about the president's prospects. That is fairly grim at this point. Look at the battleground fields, and that is most of which the president must win. That same poll also showed us that almost three-quarters of the American public are not satisfied with the direction of the country.

So be the president's political adviser. What does he need to do?

O'MALLEY: Well, I think that we have to acknowledge the fact that none of us is really happy with the present state of our economy but the question is, Candy, whether or not our economies becoming better or not. You cannot make the argument that, hey, we're all better of than we were before this huge Bush recession and all of the job losses. However, for the first time since 2005 our national economy has put together 13 months in a row of positive job growth, our unemployment rate just went down...

CROWLEY: 9 percent.

O'MALLEY: Hey, better isn't good enough. Foreclosures though are now down to their second lowest level since November of 2007. Is it good enough? No, it is not good enough which is why the president is still fighting for jobs. Rightly putting forward the American Jobs Act on infrastructure, on education, because look, what's happening, there's a sense out there in our country right now that we're taking two steps forward and one step back. That's because for every three jobs our private sector is creating we're eliminating one job in the public sector so the president's on the side of creating jobs and people will see that.

Once people make a decision between two alternatives, they are going to choose a man who's earnest, who's committed and who's working hard on the things they care about, which is job creation.

CROWLEY: When you look at numbers -- and you look at the administration's own forecast that says we're going to have slow growth and high unemployment through next year's election, that is a fairly grim picture. You can talk about the Bush recession but he's been gone for three years now and the president's been in charge.

There have been -- you're right, there has been some job growth but certainly not enough to make the country feel as though there is a recovery here. There's always talk about a double-dip recession. How does he battle that? I mean it is a huge hill for him, is it not?

O'MALLEY: Well, he battles it every day. And I think what's becoming clear over time as the president puts forward proposals that had been accepted in the past but Democrats and Republicans alike is that we have a very, very obstructionist wing of the Republican Party who's been very successful at keeping the president from accelerating this jobs recovery as quickly as he would like.

CROWLEY: But do you accept that when the economy's bad, the president's holding the bag. O'MALLEY: Yes, except that I think you cannot ignore the fact that we have in this Tea Party Republican congress people who have taken an oath to be obstructionist. They're willing to block the creation of millions of American jobs in order to put the president out of his job.

CROWLEY: They didn't take an oath to put the president out of a job. they took an oath, did they not, to not raise taxes.

O'MALLEY: I was referring more to Mitch McConnell's very direct statement that he has one priority. It is not the nation's priority of job creation -- it is his political priority of putting the president out of a job. And I think that's becoming apparent to people, Candy, and over time as people are looking at this -- Democrats, independents, Republicans alike -- they are all saying you know what we're in a serious problem here in this country, we need a balanced approach, we need to make investments an we need everybody to pay their fair share.

CROWLEY: One more political question. Bill Clinton's coming out with a book soon. The Washington Post got a hold of it and printed some excerpts. And in it they quoted the former president as saying about Wall Street executives -- many of them supported me when I raised their taxes in 1993 because I didn't attack them for their success. The unspoken words there is that President Obama has been pretty hard -- on especially the last couple months.

Has the president made a tactical error in going after the wealthy and going after Wall Street?

O'MALLEY: Well, it's difficult to talk about the gross inequality that's been brought about by the policies of the Bush administration without people who are in that highest income bracket becoming defensive about it.

What we need to do as a people, though, is to realize that it's really not about the -- I mean the inequality, there are those that will debate the morality of that inequality. But I think what all of us should be concerned about is what our country has been unable to do because of the huge windfall that has gone to the 1 percent. We have been unable to make the investments that a modern economy requires in order to create jobs. And I hope that's where the president -- in fact I believe that's where the president's trying to move this discussion.

CROWLEY: Let me ask you about the state of Maryland where you have proposed or supported at this point a -- almost a 15-cent per gallon increase in gas taxes, a hike in the fees per car registration, hike in inspection fees, hike in mass transit fares and a hike in the sewer tax as well. Is this not the very kind of regressive sort of tax that Democrats always rail against?

Because pretty much everybody -- most people have to use either mass transit or their own car and that's a tax hike on the middle class which Democrats are always saying we can't do this, as well as Republicans. O'MALLEY: Right. Well, it is all about balance. And those items that you just ticked through were recommendations from the blue ribbon commission and I said -- yes, we do need to consider these things. We have in Maryland I think about the -- in the mid range in terms of our tax on gasoline and most importantly..

CROWLEY: This would make you probably the highest gas tax in the nation.

O'MALLEY: If we were to go to 15 cents. But we need to figure out what the right balance is. All of those things you rattle off, all of those suggestions, those various fees and the like, have to be contrasted with the mission we have right now of creating jobs. And last month, Maryland had the second biggest improvement in terms of private job creation...

CROWLEY: You could then argue you don't need all those. If you're improving it already without all these taxes, couldn't you argue it why do it then? Because are you going to hurt folks with this.

O'MALLEY: It depends on how it is done, doesn't it? I mean, there are ways on some of those things to do it in a more progressive way. In Maryland we have a more progressive income tax. We actually lowered income taxes on lower earning families when we did that. We have right now the 32nd lowest sales tax in the nation.

So it is all about balance. It is all about protecting our quality of life and also making together those investments that only we can make in a modern economy, our economy, in order to create jobs and expand opportunity. And that's what we need to be able to do as a country as well, to acknowledge that this is a great nation, a country that can generate jobs and opportunities but we have to be willing to do the hard work and make the investments in our own time to make that happen.

CROWLEY: What one thing can you name me that the state of Maryland would give up that it's getting from the federal government in order to try to bring down the federal debt?

O'MALLEY: Well we...

CROWLEY: What will you do without?

O'MALLEY: Well, we've made suggestions that we can do a much better job of managing health care costs when it comes to dual- eligible citizens, those citizens that are eligible...

CROWLEY: For Medicare and Medicaid.

O'MALLEY: Right. And the federal government now has incentives that go at cross purposes and actually bring down the quality of that care while driving up its costs. And other Democratic governors have been advancing that as well, and some Republican governors. We can save a lot of money by better care and better coordinated care for dual-eligible citizens. CROWLEY: And finally the word is that you're interested in national office and are eying the 2016 race. Yes?

O'MALLEY: I am eying the 2012 race, and I'm going to...

CROWLEY: After that will you eye the 2016 race?

O'MALLEY: ...do what's in my power to help President Obama get reelected so he can accelerate this nation's job recovery.

CROWLEY: So not no. I'll take that as a not no.

O'MALLEY: I am going to do everything I can to help President Obama get reelected. Our country needs leadership. We need to create jobs.

CROWLEY: Thank you so much.

O'MALLEY: Thank you, Candy.

CROWLEY: Appreciate it.

Coming up, Republican Senator Kay Bailey Hutchison on what happens if the super committee can't find compromise on spending cuts.

(COMMERCIAL BREAK)

CROWLEY: Joining me from her home state of Texas, Republican Senator Kay Bailey Hutchison.

Senator, thanks so much for being here. I wanted to start off with a little bit of politics. As you know, the Republicans are having a primary race and one of the things that happens when you run in a primary is that you say things about fellow Republicans, you then are asked about later.

So you ran against Governor Rick Perry for the Republican nomination for governor in Texas. You said he was soft on immigration. You said that you were the real conservative in the race and not him, and that he was basically a good old boy, backroom politics.

Does any of that change now that you're looking at the presidential race? You've said this is a man you can support, but does that criticism still hold?

SEN. KAY BAILEY HUTCHISON (R), TEXAS: Well, I'm not going to backtrack on anything I said. I tried to give Texas a choice. I didn't think he was going to run for re-election. That's what I had been told. So I wasn't challenging him, but it was a very tough race and he was pretty brutal on my record, and I took on his record. And so that's the way politics is and it does come back.

But I thought that we needed a choice in Texas. And I certainly feel the same way about the United States. CROWLEY: There is a poll out in Texas about the Republican presidential primary race which essentially shows that Herman Cain is tied with Rick Perry, the governor of Texas, the sitting governor of Texas, in the presidential primary race there. Does that surprise you?

HUTCHISON: Well, you know, I think that if you ask Texans about this race, it's more mixed than it was, for instance, when George W. Bush was running. And...

CROWLEY: Why is that?

HUTCHISON: I guess -- well, I think when you've been in office for a long time, you have a record and that record is fair game. And I think that some of the things in his record have certainly not been helpful. And certainly the Trans-Texas Corridor was something that I had talked about and it was running over private property rights. And I think that that's something that has stuck with the farm bureau and people who own land.

So I think those are some of the things that you just -- you have a record, just like I have a record. And any senator who is running has had votes that are controversial. And I think that you have to make choices and you do make choices, you make people mad, that's part of the political process. And so I think that it's just different and it is what it is.

CROWLEY: Let me ask you about Herman Cain specifically. Is anything that you've heard publicly over the past week disturbed you or made you think, I'm not sure Herman Cain is the best answer for the Republican Party in 2012?

HUTCHISON: Not at all. I just don't see anonymous sources as fair against a candidate. I think if someone has a real concern, they should come out and say it. But nothing that I've heard, in the press that I have read is other than off-color remarks which, you know, I think that he paid a price for that, as maybe he should, but I don't sense that there is something, so far that has come out, other than from anonymous sources that he spoke badly.

And so I don't think that -- I kind of think that this is a presidential campaign thing where his, you know, opponents are coming forward and trying to dredge things up. But unless there's something that's really sexual harassment, which I would stand firmly against, and say that would be a problem.

But until something comes out that's concrete, I think it is politics as usual.

CROWLEY: OK. Let me turn you to somewhat politics as usual up on Capitol Hill, where we have 33 senators who have written the super committee and said, listen, rewrite the tax code with no net tax increase. Does that letter not doom the super committee to failure given what the Democrats want and this is supposed to be a compromise?

HUTCHISON: No, I don't think it dooms it to failure. I think if we are going to realistically get our budget house in order, we've got to cut spending, we have to have a fairer tax code, one in which it is lower and promotes growth in business, but does catch people who aren't paying taxes right now who should be paying taxes.

You get revenue increase by increasing the growth in our business sector, our private sector. You increase growth in the private sector and you'll get new revenue, because people will be working and paying taxes rather than having to be on unemployment.

CROWLEY: Which has been the Republican position for some time now, but the super committee is supposed to come up with a compromise. And if 33 senators, and we know there's probably more than that, are going to say, listen, you know, fix the tax code, don't raise taxes, and keep it net revenue neutral, it just seems to me that there is not -- to a lot of people it seems that there is not a compromise there. So what is the point of the super committee?

HUTCHISON: Well, I think you're saying revenue neutral means no added revenue. I don't think anyone is saying that. Republicans are saying we want new revenue to come from growth in the economy. And growth in the economy requires that we don't increase taxes, that in some cases, like corporate side and even individual small businesses, we want to lower taxes.

We want people to be hired. We want jobs to be created by people having more of the money that they're earning to plow back into the business. That means that we're going to have a fairer tax code which will bring in revenue through growth in the economy.

CROWLEY: Senator, if the super committee does not come to any kind of agreement, there will be across-the-board cuts split evenly between domestic spending, with some programs protected, and defense spending. Are you willing to live with that? Is that all right with you?

HUTCHISON: I don't like it. I do not like it, 1.2 trillion...

CROWLEY: Would you try to change it?

HUTCHISON: That would be $600 billion in cuts in our military when we are in a conflict and we've got our troops in harm's way. I don't like that at all. And the reason that we need for the super committee to succeed is to keep that from happening.

CROWLEY: Senator Kay Bailey Hutchison, thank you so much for joining us this morning. I appreciate it.

HUTCHISON: Thank you, Candy.

CROWLEY: When we come back, fighting over $1 trillion in cuts is difficult enough, but the super committee is also facing pressure from hundreds of organizations. We'll explain next.

(COMMERCIAL BREAK)

CROWLEY: Still no agreement from Capitol Hill's super committee. 12 lawmakers trying to cut $1.2 trillion out of the deficit. They do not lack for suggestions. An NPR analysis found over 600 interest groups and corporations have lobbied the super committee privately and very publicly.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: I'm not a number. I'm not a line item on a budget. And I'm definitely not a pushover.

(END VIDEO CLIP)

CROWLEY: Senior advocates want Social Security and Medicare left alone. Oil companies want to keep their tax breaks.

(BEGIN VIDEO CLIP) UNIDENTIFIED FEMALE: Some want new job crushing energy taxes, sending our economy at risk again.

(END VIDEO CLIP)

CROWLEY: A group called the Medical Imaging and Technology Alliance is pretty much warning patients will die if Medicare reimbursements are cut for things like MRIs.

And the airline industry is fighting against increases in aviation fees, and so on, and so forth.

Up next, we'll talk with representatives from a few of the interest groups trying to sway the committee.

(COMMERCIAL BREAK)

CROWLEY: Joining me here in Washington, Marty Durbin, executive vice president of government affairs for the American Petroleum Institute, Sean Kennedy, senior vice president of Global Government Affairs for the Air Transport Association, and David Certner, legislative policy director for the AARP.

Before we begin we want to disclose that the AARP and the American Petroleum Institute's advocacy and industry ads have run on CNN. I've seen them many, many times.

I'm sure that makes you all happy.

So listen, I want to start out with the AARP ad. This is representing seniors, for those who might not know. And this is one of the public ways you've been pressuring the super committee.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: Here's a number you should remember. 50 million. We are 50 million seniors who earned our benefits. And you will be hearing from us today and on election day.

(END VIDEO CLIP)

CROWLEY: David, it seems to me that in fact this has become a threat, you know, to the super committee. Here's the super committee which we're all hoping will do the best thing for the country and everybody's out protecting their bailiwick. So what I want to know from each of you, I'm starting with David, is what are you willing to give up? What will seniors give up to help the country that's in a big problem at this point?

CERTNER: Well, seniors of course are always willing to sacrifice for the country. But when you talk about programs like Medicare and Social Security in this kind of an economic situation where people are hurting and they're critical programs that people have paid into over their lifetimes, they can't understand why they're looking for people who basically have incomes less than $20,000 to first put their benefits on the table. People outside of Washington think very differently about protecting Social Security and Medicare than people inside Washington who are in a closed-door meeting who are thinking about numbers and not the impact on real people.

CROWLEY: I want to read you something. This came up in a Washington Post editorial talking about these ads. The crunch time for the congressional super committee has arrived and with it comes a new round of self-centered shortsighted intransigence on the part of the AARP and its fellow "don't touch my benefits" purists.

I think that grasps at least -- maybe it is inside the Beltway but it is also a lot of young people looking at the kind of benefits with Medicare, with Social Security, and saying everybody's got to put skin in the game. That's what we're hearing all the time, and yet there are groups that don't seem as though they're willing to put skin in the game.

CERTNER: I think most Americans today feel like they put a lot of skin in the game over what's happened to the economy and what's happened to their finances the last ten years.

CROWLEY; Sure.

CERTNER: And these programs are not just for seniors, they're going to be important not just for families today but for people in the future as well. And we need to protect these programs because they are what provides economic and financial security.

Budgets, remember, are not a goal in and of themselves. Budgets are meant to get you somewhere and we're trying to get to a better economy and strong economic and health security. That's what Medicare and Social Security already provide.

CROWLEY: But the way to do that of course is to either raise revenues or make cuts in some of these programs and probably a combination of both.

Let me get to the Air Transport Association where you all have a print ad that you put out that has this big image of a barf bag, an airline barfing about, that says "sick of taxes? Stop new airline taxes from driving up costs and reducing service. Add taxes, ground the economy." OK. So it seems to me that the implied threat here is if they raise some of these taxes for take-offs and various things, we're going to raise the price of your ticket. It just is pretty hard-ball lobbying. Isn't it?

KENNEDY: You have to remember that the airline industry is one that over the past 10 years has lost $55 billion, has shed a third of its workforce, 161,000 jobs. Proposals they're circulating on Capitol Hill would impose another $36 billion in taxes on this industry.

Fortune magazine has rated us dead last in profitability. So if you're looking for a new taxes on an industry that's the number three contributor to GDP, but continues to lose jobs, continues to lose money, there's no place the airlines are going to be able to go.

CROWLEY: But your own figures say that per mile prices have risen 9.1 percent for domestic flights this year. So you're essentially saying, well, if you put more taxes on us, we're going to increase them even further.

KENNEDY: Actually airline prices have stayed -- are much lower than inflation for the past 10 years. Inflation has gone up 27 percent, airline tickets have only gone up 10 percent.

KENNEDY: So air travel is still a relative bargain.

But at the end of the day, if it is an industry that's lost $55 billion, simple math will dictate that putting an additional $36 billion in taxes on it is not going to help us for jobs, it is not going to help us for service to small and mid-size communities.

CROWLEY: All right. Let me move to your all's ads, which at this point are aimed actually at the friendly bunch, the people you think are on your side. What you don't want is any closing of the loopholes from some of the oil industry.

Here's a little bit of your ad that you have out there.

(BEGIN VIDEO CLIP)

UNIDENTIFIED FEMALE: While America struggles with unemployment, one industry is creating jobs in Michigan. But some want new job crushing energy taxes putting our economy at risk again.

(END VIDEO CLIP)

CROWLEY: OK. And let me just add to this, six big oil companies piled up $32.6 billion in profit in the third quarter of 2011, making their good fortunes over $100 billion in profits so far this year.

And there is this complaint that they're going to get rid of your loopholes. Can you see how a lot of people will look at that and go, the oil industry, we need to help the oil industry?

DURBIN: Well, part of problem, Candy, is that the facts aren't out there. There are no loopholes. These are basic tax deductions that every industry gets to -- is allowed to use. And actually if we want to compare apples to apples on the profits you're talking about, let's actually talk about apples versus energy companies.

You know, Apple, the company, posts similar profits to the largest oil companies, yet their return on investment is far higher and their tax rate is lower. Now nobody is calling on getting rid of Apple's tax provisions, and nor should they.

We need to make sure that we maintain the competitiveness of the companies that are actually creating jobs and generating the revenue that the super committee and the Congress are focused on solving.

CROWLEY: Let me go down the line fairly quickly, if I can, and starting with you, David. Is there anything in terms of what seniors get from the federal government that you think the AARP could get behind if there were a cut in it? Is there anything the AARP is willing to give on?

CERTNER: Well, let's take the Medicare program, and health care in general. There are lots of ways we can save money in health care. For example, we can attack high drug costs, we can do a better job of care coordination. So there are ways we can save money.

CROWLEY: But not for the people you represent, right.

CERTNER: We can save money in these programs without cutting benefits, without hurting people. That's what we need to tackle, are high health care costs, not just simply say to seniors, you need to keep paying more.

CROWLEY: Sean, anything -- in the transport industry, were you all are willing to say, yes, we'll give up this tax deduction, we'll give up this -- what?

KENNEDY: We're going to live with whatever super committee puts upon us. But, again, for an industry that's lost, that continues to be in the red over the last 10 years, that continues shut jobs, it's going to be very hard for the industry to turn that into new investments in aircraft, in jobs, and in service.

CROWLEY: Marty, you get the last word on this. Is there anything big oil, which is making lots of money, is willing to give up that it now gets from the federal government in the way of tax breaks or anything else in order to help solve this debt crisis?

DURBIN: Our members have been clear they're willing to put all of the tax provisions on the table in comprehensive tax reform. The thing we have to be careful about is that we are already -- we are generating $86 million every day for the federal government and creating jobs. Let's not put anything in the way of doing that.

CROWLEY: Marty Durbin, Sean Kennedy, David Certner, thank you all so much for joining us. You're going to have a busy week coming up, I think.

UNIDENTIFIED MALE: Happy to be here. CROWLEY: Up next, it has also been quite a week last week for Herman Cain. We wrap up the week in politics with our political panel.

(COMMERCIAL BREAK)

CROWLEY: Joining me to talk a little politics, former U.S. Congressman Tom Davis and former Obama White House Communications Director Anita Dunn. Thanks, both.

I want to start out with something that came in The New York Times yesterday, an article by Jodi Kantor, in which she says: "Last summer, as Bill and Hillary Rodham Clinton celebrated the former president's 65th birthday with a party at their rented Hamptons home, talk among their guests turned to President Obama's travails over the debt crisis and doubts about his re-election. 'I'm really trying to help him,' the white-haired former president said, shaking his head, but he seems to have lost his narrative."

So this is sort of a common thread. What is the president's narrative at this point as he goes in to his re-election bid -- well, he's already in his re-election bid.

ANITA DUNN, FORMER OBAMA WHITE HOUSE COMMUNICATIONS DIRECTOR: The president came in to office having inherited an economic collapse that didn't happen overnight, it was years in the making. When he started running for office in 2007, he talked about the stresses middle class families felt and how they felt they were working harder and getting farther behind.

So this wasn't a new set of problems. And slowly, after staving off the crisis, we are starting slowly to build the foundation for the future. And it is a future that requires -- that he sees rebuilding a secure middle class in this country.

And what does that mean? It means fairness and balance as we confront the challenges. And that narrative about the tough times, but the fact that this is a resilient country and that we're going to make it, is an important part of what he'll be talking about.

CROWLEY: Can he...

TOM DAVIS (R), FORMER REPRESENTATIVE: They changed the narrative. Some days he's the adult in the room, other days he's the firebrand out there fighting for the middle class. If they don't get unemployment down, they don't have a narrative except that somehow the other guys are worse. And they've got to focus on getting that down if they want to stay competitive.

CROWLEY: And, I mean, would you agree the administration itself has said, well, you know, the economy is going to still say that growth is going to stay sort of sluggish and, by the way, unemployment will probably still be around 9 percent in November of next year?

That's not a -- I mean, you've got to have a really boffo narrative to overcome that. DUNN: Candy, elections are about choices. And the fact of the matter is that we've seen over the last month every single Republican senator voting against common-sense programs to create jobs in this country. And over the next 10 days or so we'll get to see whether they'll vote against giving tax credit to businesses that hire veterans who are returning from Iraq and Afghanistan.

We'll see if their ideological kind of fight against this administration goes so far as to deny those veterans jobs.

Here's the thing, which is the American people are going to look and they're going to say who's going to really look out for my interests and who can we trust to move this country forward? We all know it is tough times but who's going to build that foundation for an economy that lasts.

CROWLEY: So it is basically what the Democrats want to do is set this up as it is either him or me. I know it is not great but...

DAVIS: But remember this, the Republican House has passed dozens of economic bills that are stopped over in the Senate and they can't get a hearing over there.

CROWLEY: They do, but they have a worse approval rating at this point than the president.

DAVIS: Everybody's got a bad approval rating. Everybody. I mean, it's about friends and family, that's it right now.

But remember this -- the president's in charge and traditionally on the economy, the president's party is the one that takes the hit on the economy. That's just been traditionally true in American politics.

The public doesn't like either party. We need to understand that going in. So there is some volatility to this. I think it gives the Obama camp some hope but they own the economy at this point.

DUNN: But Candy, let me just say one thing which is that traditionally the congress, and the Republican congress hasn't actually caused America's standing in the world to be downgraded as they did over the debt ceiling. I think it is -- but it is a very different situation here.

Yes, but it is hard to deny, Tom, that at the end of the day it is the Republican intransigence and kind of working with the president to come up with some balanced policies to move this economy forward that's caused the gridlock and the American people know that.

CROWLEY: Quickly, because I want to go to the Republican side of the ledger, Herman Cain, is he toast?

DUNN: Well, I think Republican voters will have the final say on Herman Cain but clearly, it's hard to believe anybody could have had a rougher week.

DAVIS: Candy, he was flavor of the month. I think his month is up.

CROWLEY: He's done.

Is it Romney?

DAVIS: Look, I think that he's going to be the front-runner at this point but we have proportional voting now as we move through these primaries. It is a long road at this point. So it looks like it could end up there, but nothing is certain in this volatile political climate.

CROWLEY: And in fact, we could look back four years ago, the person leading now, Rudy Giuliani, didn't quite make it. Anita, let me -- while we are on the subject of Herman Cain, I would be remiss if I didn't bring up there have been complaints about the White House, you quoted in some of them. And without getting into that specifically, that there have been complaints from women at the White House about not similar to Herman Cain but just that it was -- it is an unfriendly workplace for women, an unwelcoming workplace for women.

And I look back and I think, are we really here in 2011 talking about workplace harassment on the Republican side and complaints about the White House?

DUNN: Well, I think that as we all know, women in this country still struggle with all kinds of things, including balance between their personal lives and their professional lives. The White House is a tough place not just for women, but for men as well. It is a very rough place to work under any president.

But one thing that this president has done is made a real attempt to make sure that he reaches out to the senior women on his staff. And it is something I appreciated when i was there.

CROWLEY: But not necessarily did that filter down or does that filter down at this point to those -- the males who work for him?

DUNN: Listen, I think it is any workplace in this country still you are going to find challenges that women face, you are going to find challenges that everybody faces. But I will say that at the end of the day you have to look at the leader and you have to look at the president and this president has done not just from policies to help women and women in the workplace but also from his own personal experience. He's married to a very strong woman. He's got two daughters and he understands these issues as well as anyone I've ever met.

CROWLEY: Anita Dunn, Tom David I have to end it there. I hope you both come back.

DAVIS: Thank you.

DUNN: Thank you.

CROWLEY: Thank you. After the break, will the accusations against Herman Cain hurt his support from religious conservatives? We'll ask an expert panel next.

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CROWLEY: Joining me to talk about the roll of religion in 2012, Gary Bauer, president of American Values and a former Republican presidential candidate, and Reverend Jim Wallis, president and CEO of The Sojourners.

Thank you both.

Let me start out with Herman Cain. I was interested in something in the Des Moines Register on Saturday. This is from a Cain supporter, self-described born-again Christian who said of Cain -- "I feel like everyone of the candidates we can probably find some skeleton in their little closet. And you know what? We make mistakes. It doesn't bug me."

From the point of view of a Republican Christian conservative, did anything you hear about -- not the anonymity of the sources, that I understand. But did anything you hear, were it true, bother you in terms of this guy should be our presidential candidate?

GARY BAUER, AMERICAN VALUES: Look, Candy. I think Americans are fair whether they're evangelicals or Catholics or people are no faith. And I'm not going to brush offer the anonymity point because I think that's central to this. We don't know exactly what he's allegedly done. And we don't have the names of any accusers, so I'm not surprised at all that it hasn't moved his support and it certainly hasn't changed my opinion of him.

I hope we don't get to a point in this country where anonymous allegations can ruin a decent man's career. I don't think we are. And I hope we never get there.

CROWLEY: Reverend Wallis, do you think that things like this speak to a society or do they speak to -- let's take -- let's pretend Herman Cain's name is not on this, because there have been plenty of people right and left, Democrat and Republican, who have stumbled into either extramarital affairs and they've stumbled on the campaign trail over this, or things like sexual harassment in the workplace.

Are those things a sign of a culture or a religious values?

REV. JIM WALLIS, SOJOURNERS: I think personal integrity is connected to public leadership. We both were able to agree with that. The real issue here beyond Cain is what a candidate's moral compasses and how that shapes their policy views.

WALLIS: And for people of faith, we have to bring our moral compass into this election. And -- and many of us would raise issues like in your last segment here. I mean, a budget is a moral document. And many of us are saying that. And so when you're -- when you're going to cut next week a million vaccinations for kids and 14 million people who are hungry going to have their -- their money cut when subsidies for oil companies continue, that for me is a moral compass issue.

So a lot of younger evangelicals are going to say how the poor and vulnerable are treated, undocumented immigrants, how they fare in deficit reduction -- deficits are moral issues. You were raising that. But how you reduce them is a moral issue, too. So moral compass is important.

The environment, the -- the creation care is important. This afternoon I'll be going down to the White House, 15,000 people, about a pipeline with dirty oil that could increase climate change.

Those are the issues that a number of people of faith are going to raise in this election because they're about our moral compass. We want to hold both sides accountable to those values questions.

CROWLEY: Let me -- Gary, I want to get your response to that, but I want to bring this in only because it speaks to what Reverend Wallis is talking about.

And this is from President Obama, speaking at a private DNC event where he said, "This is a contest of values. This is a choice about who we are and what we stand for. And whoever wins this next election is going to set the template for this country for a long time to come."

When you talk to Democrats about the role that spirituality or religion or morals in a campaign, they do tend to talk about things like is it moral to give big oil giant tax cuts...

BAUER: Right, yes.

CROWLEY: ... and then cut Medicare or Medicaid.

When Republicans talk about, you know, what moves their vote, what moves the religious vote, in the Republican Party, it tends to be things like abortion, stem cell research. Is there a commonality here at all? BAUER: Well, look, I think Jim would readily admit that he's aligned with the religious left. He's going to vote for Barack Obama no matter who the Republicans nominate.

I'm a religious conservative. I'm going to vote, overwhelmingly likely, for whatever the Republican nominee is.

We have great disagreements about the moral definitions or implications of all of these issues. I look at that pipeline, for example, and I see the opportunity for 30,000 Americans that don't have jobs and can't provide for their families to have a job if that pipeline is filled. I see that as a moral issue that our government policies ought to produce outcomes that make it more likely that Americans can work instead of not work.

Yes, I feel strongly about the sanctity of life. And millions of religious Americans do, which is why, even though Jim has a different perspective on the morality of all this, overwhelmingly, as you know, Candy, the more religious an American is, the more likely they are to vote for conservative candidates. That's been the trend for decades.

CROWLEY: It is true. The polls continue to show that people who identify themselves as religious, which is how many times -- I guess we use the -- how many times you go to church...

WALLIS: Yeah, well...

CROWLEY: They are overwhelmingly Republican.

WALLIS: And that changed significantly in 2008. It changed back in 2010.

I'm less interested in those voting patterns as what the issues are. I think it's changing. The National Association of Evangelicals, the bishops -- these not religious left organizations -- we're part, together, of a circle of protection around those programs most critical, the survival of low-income people around the world and here at home.

So we're breaking up those old categories. Richard Land and I, last week, on "Morning Joe," talked about international aid being a critical issue that we as Sojourners and Southern Baptists all are trying to support, or immigration reform.

So I think things are changing. The left/right categories are too narrow. People of faith have to go across those boundaries and talk about what are the Biblical issues for us.

CROWLEY: And let me give you the last 30 seconds here.

BAUER: Yeah, look, whatever's going on with various organizations, millions of faith-based voters do vote on ideas like whether all of our children should be welcomed into the world, protected by the life -- protected by the law.

If you care about the poor, you should support policies that promote economic growth, that lower the tax burden on the American people, because that would stimulate the kind of growing economy that helps everyone, including the millions of Americans in the last three years that have fallen into poverty and food stamps and so forth because of the failed policies in Washington, D.C.

CROWLEY: One-word answer: Would it matter if a president were a Mormon?

BAUER: No.

WALLIS: His moral compass matters and supporting kids after they're born, too, would be something we could agree on.

CROWLEY: Thank you so much.

Reverend Wallis, Gary Bauer, thank you for being here. BAUER: You're welcome.

CROWLEY: We appreciate it.

WALLIS: Thank you.

CROWLEY: Up next, top stories. And then, on "Fareed Zakaria: GPS," an interview with Microsoft founder Bill Gates, at the top of the hour.

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CROWLEY: Time for a check of today's stories. Breaking news: Greek Prime Minister George Papandreou will resign after a new coalition government is formed. The move follows Papandreou's acceptance of a bailout package from the European Union to keep his country from falling into bankruptcy.

There are fresh concerns about Iran's nuclear program. Western diplomats tell CNN an International Atomic Energy Agency report, due out this week, will make the most detailed claims yet that Iran is trying to build nuclear weapons for military use.

At least one person was killed, 15 injured when four IEDs blew up at an indoor market in central Baghdad today. The latest explosions came despite the extra security measures put in place across Iraq for a Muslim holiday.

Thank you so much for watching "State of the Union." I'm Candy Crowley in Washington.