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Interview With Senators Chambliss, Menendez; Interview With Governor Granholm

Aired April 25, 2010 - 09:00   ET


CANDY CROWLEY, HOST: In election years, April can sound a lot like November. It sure did this week. As the Senate moved toward a test vote on financial industry reform, Democrats threw a change-up, signaling that climate change, scheduled to be next on the legislative agenda, would be set aside for immigration reform.

Pictures like these testify to the power of the issue. Protesters took to the streets in Arizona when Republican Governor Jan Brewer signed a measure that requires police officers to question anyone suspected to be an illegal immigrant. More demonstrations are scheduled for this afternoon. Brewer, in a tough primary race in a border state with huge immigration problems, says Washington left her no choice.


GOV. JANICE K. BREWER, R-ARIZ.: Decades of federal inaction and misguided policy have created a dangerous and unacceptable situation.


CROWLEY: Just hours before Brewer signed the bill into law, the president jumped in.


PRESIDENT BARACK OBAMA: Our failure to act responsibly at the federal level will only open the door to irresponsibility by others.


CROWLEY: Immigration reform is a politically perilous issue for Republicans, who are divided on what to do. It's also politically potent for Democrats under pressure from Hispanic-Americans to deal with the issue as the president promised in his campaign.

So moving immigration up on the legislative calendar gives Democrats a chance to placate a part of their base, all of which makes Republicans suspicious.

Senator Jeff Sessions of Alabama asked, "Are they raising the idea of comprehensive reform now because they believe the majority of Americans truly want it or because it serves a specific political purpose in a tough election year?" Every election year, there comes a time when legislating is completely overtaken by politicking. Are we there yet?

(voice-over): We'll sort this out with the head of the Democratic Senatorial Campaign Committee, Robert Menendez and the senior senator from Georgia, Saxby Chambliss from Georgia.

Then, a conversation with Michigan's Governor Granholm, who's on the short list for the Supreme Court.

(BEGIN VIDEO CLIP) GRANHOLM: I mean, I'm from the most challenged state in the country.


CROWLEY: I'm Candy Crowley and this is "State of the Union."

(on camera): A small but significant bit of bipartisanship imploded when word got out that Democrats want to front-burner immigration. South Carolina Senator Lindsey Graham, probably the closest to a Republican ally the president has, had been working with Democrats for months on a range of issues, including climate change.

Graham was supposed to be at a bipartisan news conference tomorrow to talk about the proposal. He's not going now. He is furious. "Moving forward on immigration in this hurried, panicked manner," Graham said, "is nothing more than a cynical, political ploy."

Senate Democratic Leader Harry Reid sniffed at that accusation, saying, "I understand the tremendous pressure he is under from members of his own party not to work with us on either measure."

Joining me now, Democratic Senator Robert Menendez of New Jersey and Republican senator Saxby Chambliss of Georgia.

Senator Menendez, let me start with you. I spoke with senators and congressmen, Democrats, last night, a couple of whom said to me, we actually don't want immigration to come up; this isn't our particular issue that is helpful to me in my district or in my state.

Are you on board with this changeover?

MENENDEZ: Well, first of all, Candy, I think what Harry Reid simply said is that we're going to get to both issues in this session. And he actually...

CROWLEY: Is that possible, Senator?

MENENDEZ: I think it is. And he actually noted that, in fact, more work had been done on climate change than on immigration. So whichever is ready to go up would likely come up after we get through Wall Street reform, which is incredibly important to this country and to the taxpayers, so that they never reach into their pockets again.

CROWLEY: Senator Chambliss, when you look and you see the pictures out of Arizona and you listen to the governor, what you do know is that this is an urgent issue. So why not go ahead and take it up now?

CHAMBLISS: Well, it's a very peculiar issue to Arizona that is not taking place in many other states. Border states have unique problems when it comes to immigration. We -- we have an illegal alien problem here in Georgia, but it pales in comparison to what's going on out there. And we have this issue called state's rights. And this is one situation where the states of Arizona has decided to take matters into their own hands. And if that's what the people of Arizona want to do, then certainly they have that right.

Now, we do have a...


CHAMBLISS: We have a national problem. It is a national issue that needs to be addressed. And I hope we can do it in a reasonable and cautious manner, not let the emotions of people run away with this. Because it is, just simply stated, a very, very serious issue.

CROWLEY: But you're on -- you're on to go at it now rather than put climate change up on the docket?

CHAMBLISS: Well, I'm not sure how you can really justify bringing either one of them up at this point. I mean, we've got a budget to deal with. We normally get that done before the 15th of April. That has not been done. We have not done one single appropriation bill in the Senate. We have not done a defense authorization bill.

We've got a lot of work left on our plate between now and the end of the summer. And we're starting on financial regulatory reform, I assume, this week. That's going to consume an extensive period of time. I'm not sure where you find the time to deal with these other major issues.

CROWLEY: Gentlemen, stand by for me. We will be back with both senators. More on immigration and politics.


CROWLEY: We are back with Republican Senator Saxby Chambliss of Georgia and Democratic Senator Robert Menendez of New Jersey.

Senator Chambliss, just to button up how you feel about taking up immigration reform next, you don't see politics in a scheduling change?

CHAMBLISS: Oh, sure. I mean, it's pretty clear that's what this is all about. But here's the problem with trying to deal with an immigration reform bill now, Candy, from a realistic standpoint and from a legislative standpoint.

We know, because of what we tried to do back in 2007, that trying to deal with the immigration issue, particularly those that are here illegally today, is not practical because we still haven't sealed the border. And until you secure the border, trying to really have an overall reform package on immigration just simply can't be done.

CROWLEY: Senator Menendez, there had been suggestions by some Democratic members of the House, Latinos, who said, if the president didn't deal with this; if there wasn't a serious effort by the White House and by Congress to deal with immigration reform this year, that some Hispanic-American voters might be encouraged to stay home.

How much of a factor is that in this?

MENENDEZ: Well, Candy, first of all, again, Harry Reid simply said, we want to do both. And I believe that.

Secondly, as it relates to Latinos and the question of immigration, I think it's beyond Latinos. It's for everybody in this country. But there is a problem in the Latino community. They see it as a civil rights issue of their time.

When U.S. citizens and legal permanent residents of the United States are getting captured in raids simply because of they are, detained unlawfully and against their constitutional rights -- there are a couple hundred cases of this across the country -- it is fundamentally wrong to be a second-class citizen just because you have a certain accent or you look a certain way.

That's what Arizona is pursuing. That's why we need comprehensive immigration reform to secure our borders. And by the way, the legislation that I've seen Senator -- the efforts being worked by Senator Schumer and Senator Graham are actually pretty tough on the whole question of border enforcement and also on how you find a pathway for earned permanent residency in the United States.

But I'd rather know who is here to pursue the American dream versus who might be here to harm it. I'd rather make all of those undocumented individuals pay taxes to our country. I'd want them to learn English. I want them to go through a criminal background check, so we know who is, in fact, overall, obeying the law.

And those things cannot happen unless we have comprehensive immigration reform. I also don't want to see wages depressed for all American workers by having a sub-class of workers who can be exploited.

MENENDEZ: So this is about economic interests, it's about security interests. But this will come after we do Wall Street reform, because that is pressing to the country. We can never have the taxpayers reach into their pockets again because big businesses on Wall Street make risky gambles. When it paid off for them, they kept the money. When it didn't pay off for them, we had to pay.

CROWLEY: We want -- Senator Menendez, we're going to get to financial reform here in a minute. I want to turn you both to politics though first. And Senator Chambliss, I want to draw your attention to a statement, written statement from former vice president, Dick Cheney, talking about the Florida race. Charlie Crist, as you know, the governor, running against Marco Rubio in a Senate primary for Republicans.

And Dick Cheney in backing Marco Rubio said this of a fellow Republican, "Charlie Crist has shown time and again that he cannot be trusted in Washington to take on the Obama agenda because on issue after issue, he actually supports that agenda. Lately," the vice president said, "It seems Charlie Crist cannot be trusted even to remain a Republican."

I checked the figures before coming on air -- 28 percent of Americans now self-identify themselves as Republicans. Is this sort of attack on a registered Republican-sitting governor, as it is not really a real Republican, is that helpful to the kind of outreach Republicans need to do?

CHAMBLISS: Well, probably not. But obviously, in politics, everybody is entitled to their own opinion. I know Charlie Crist very well. Lived very close to the Florida line, follow Florida politics, encouraged Governor Crist to run for the Senate when Senator Martinez decided he was not going to run again.

And he is involved in a very heated primary with a very good man in Marco Rubio. And you jump on one side or the other occasionally in these races and that's obviously what has happened. And it has stepped up the rhetoric a little bit because it's very, very high-profile race.

CROWLEY: What do you expect the governor to do? Do you think he will run as an Independent?

CHAMBLISS: You know, I don't know. That's obviously an interesting question. I have not talked to Governor Crist in about a month. And last time I did talk to him, I brought the issue up. He told me then that he intended to pursue the Republican primary.

CROWLEY: It doesn't look like that now, though, does it?

CHAMBLISS: There is a lot of conversation about it, certainly.

CROWLEY: Thanks. Senator Menendez, I want to play for you, the president was out in California helping raise money for Senator Boxer's campaign this year. He said something that caught my ear. I want to play it for you.


OBAMA: These mid-year races are the ones where historically, it has always been hardest to get folks activated, particularly the party in power. You remember, 2008, that was fun, right?


CROWLEY: This sounds to me like a president worried that his base isn't excited enough to get out there and the numbers that you need. How much do you worry about that?

MENENDEZ: Well, certainly, mid-term election history of the president's party is always challenging. And so I think the president recognizes that and we recognize that. But we see our base increasingly enthused when we pass landmark health care reform legislation, the loss of that no citizen goes to sleep at night worried they don't have health care. We can control cost and make sure no one gets denied because of a pre-existing condition.

CROWLEY: But your base hasn't been all that excited, has it?

MENENDEZ: No, it has. I can see it as chairman of the Democratic Senatorial Campaign Committee. I saw it on our direct line fundraising where in fact people said good, it did something incredibly important. I think that Wall Street reform is going to engender our base. And the average taxpayer and the Independents who felt they got ripped off, and so that's why Democrats are leading the way on this. We hope our Republican friends will join us. There will be a vote tomorrow. I hope they will join us and just simply go ahead and let us have a debate on it.

CROWLEY: We are going to move up to Wall Street reform right after this next break.


CROWLEY: This deal made on financial reform may be traced to this. Both parties see their arguments validated in recent polls. Republicans see success in November by arguing that more government may not be the answer. And the number of people who say they trust the government to do the right thing has fallen from 40 percent in 2000 to 22 percent today. So when people were asked whether there should be more government control over the economy, 51 percent said, bad idea. But Democrats argue Wall Street is one place where the public wants more regulation. When asked about stricter regulation of major financial companies, 61 percent said, good idea. We'll talk about all that with Senators Chambliss and Menendez in just a moment.


CROWLEY: We are back with Republican Senator Saxby Chambliss and Democrat Robert Menendez. Senator Chambliss, first to you. Financial reform, Senator Shelby, who has been working on trying to figure out a deal, says that Democrats are not going to get closure. They can't get to the magic 60. They haven't found a deal that will bring over any Republicans. Is this ever going to happen?

CHAMBLISS: Well first of all, Candy, there is not a member of the United States Senate that doesn't understand very well that we have got to eliminate this too big to fail. What we saw in the financial collapse has happened over the last couple of years, is that not just Wall Street got hurt but Main Street got hurt. And we need to put in place tougher regulations and tougher sanctions on Wall Street that don't have the same impact on community banks in rural America.

CROWLEY: By approving this bill that's there now, senator, do you think the Republicans run a risk of looking like they are the friends of Wall Street versus Main Street? CHAMBLISS: Absolutely not. That's simply untrue. Republicans have been very clear that we want tougher regulations and stronger sanctions against Wall Street and against the type of things that happened.

CHAMBLISS: We need to put more regulations in place and we need to give our regulators the right kind of tools.

But bigger government, Candy, does not translate into better government. So we don't need to overreach so that we have unintended consequences of costing consumers higher prices for energy prices, higher prices for consumer products by what we do in the regulatory process of banks.

Make no mistake about it. We have got to have tougher regulations on Wall Street. We have got to have tougher sanctions. And we hope we can get together in a bipartisan way to do that. It's been pretty difficult as of late to have much in the way of substantive bipartisan conversations like this. We are still hoping.

CROWLEY: I think Senator Menendez would probably agree with you on that. Senator, let me turn to a slightly different part of the financial reform. And that is we heard this week as a result of a government investigation that we have had members of the SEC has over 3,000 employees, this involved less than 1 percent of them. But that they were spending an inordinate amount of work time watching porn on their commuters. We are talking about people -- senior people making $100,000 up to $200,000 a year.

Now, let me put up on our screen some of the things that over time the financial crimes that were missed by government financial regulators. AIG, Enron, WorldCom, Bernie Madoff, Allen Sanford. All of those things missed by regulators across the board. And yet we have in this new bill that you all are proposing, new regulatory agencies. So where does your faith come from that two new regulatory agencies are going to do any better than the other regulatory agencies that missed all of this?

MENENDEZ: Well, Candy, first of all, those people should be fired if that's what they were doing, number one. Number two is, we need a cop who is on the beat, not asleep at the switch. And I have said that at banking hearings time and time again for over the past year and pushed the new chair lady to move much more aggressively. And we have seen that aggressive action in the recent Goldman case that was bought which I think is incredibly -- if true, it reveals what's going on in the industry.

Secondly, the Consumer Financial Protection Agency, that basically is to empower consumers to give them plain English language opportunities for them to understand and be part of a system that protects themselves. At the end of the day, I just think that the abuses of some who were not spending their time doing what they should be doing as regulars doesn't undermine the fact that if we just let Wall Street run wild, they will run wild.

So the bottom line is this is about stopping banks and financial institutions from making risky bets that we all have to pay for. This is about making sure that they are better collateralized, less debt. This is about taking leverage out of the system. This is about ensuring that in fact we don't have taxpayers pay for them again. And that will not happen by just sitting back and saying the Wall Street crowd will take care of making sure they don't have excesses again.

CROWLEY: Senators, I have less than two minutes left. I want to do a 180 here and ask you about a story that came up this week. Reverend Franklin Graham, son of Billy Graham, was disinvited to be part of a group that was going to hold a prayer day for the Pentagon. He was disinvited because Franklin Graham has called Islam an evil religion. He has said he doesn't like the way that -- he loves Muslims but he doesn't like the way the religion treats women. He doesn't like the way it has encouraged violence.

Was it right or wrong? I need quick answers from both you. I just want to know if you think it was right or wrong that he was disinvited. Senator Chambliss?

CHAMBLISS: Candy, I think it is very unfortunate that he was disinvited. There is not a more spiritual family in America than the family of Billy Graham. For this instant to happen because of a statement that was made years ago as well as months ago, I think is truly unfortunate.

CROWLEY: Senator Menendez, he never backed away from that. He in fact still believes that. Should he have been disinvited?

MENENDEZ: Well, I just simply think that when we invite people to pray, we should invite all faiths to be able to join in that prayer. We are one country and ultimately I would hope that when they make choices like that, they make choices that let everybody know that we are all praying collectively to one god and we need his protection.

CROWLEY: Senator Robert Menendez, Senator Saxby Chambliss, thank you both very much for joining us. We appreciate it.

Coming up next, Michigan's governor, Jennifer Granholm, who is on the short list for the Supreme Court.


GRANHOLM: It is safe to say that someone like me would be an unconventional nominee, at least in the recent appointments that have been made.



CROWLEY: Before our interview with Governor Granholm, let's break down Michigan's disastrous decade. Unemployment has been a growing problem for the whole nation. But in 2000, Michigan's jobless rate was lower than the national average. Now, it is the highest in the country. Down from a December high, unemployment in Michigan stands at 14.1 percent, almost 4.5 points higher than the national average. Last year, 80,000 manufacturing jobs disappeared in Michigan and personal income continued to slide.

Still, there is encouraging news from the automotive world. A White House report says 45,000 auto industry jobs have been created since GM emerged from bankruptcy. The fallout from Toyota's safety problem appears to have given Americans a renewed confidence in U.S. cars. Four years ago, 46 percent of Americans said Asian cars were superior to American cars.

Now, American cars are preferred by a 38-33 percent margin. Economists at the University of Michigan say that despite the gains in the auto industry this year, the state will lose 40,000 jobs. That is sadly encouraging news, simply because original forecasts had Michigan braced to lose twice that many jobs. In a moment, Governor Granholm.


CROWLEY: Welcome back to "State of the Union." Let's get to my interview with -- with Governor Jennifer Granholm. We sat down earlier in the week in her office in Lansing, Michigan.


CROWLEY: I want to talk to you about Michigan's economy.


CROWLEY: Signs everywhere across the country the economy has turned the corner. How confident are you that, in Michigan, which still struggles, the economy has turned around?

GRANHOLM: You've actually come on a really good week. Because this is the week that General Motors has paid back its loan. They announced $120 million investment in their plant in Detroit. Chrysler had some additional challenges, but their net operating profit was $200 million, almost.

You know, I announced during the week that we were -- 10 job projects that created 15,000 jobs. I did a ground-breaking at one of the battery companies that we have recruited to provide the supply for the electric vehicle. We are just seeing a lot of movement.

You know, we're obviously not there yet, but...

CROWLEY: You haven't turned the corner, but you feel like, OK, we're on the upswing?

GRANHOLM: I -- we have hit bottom. I know that. And we are starting to emerge. Obviously, it's going to be a -- you know, an extended climb up. But we've got to keep pushing into this effort of diversifying our economy and educating our kids.

CROWLEY: And you still, at this point, though unemployment has come down, ticked down, it's still 14.1 percent. Some of jobs are not coming back.

GRANHOLM: Well, we know that that's true. And that is a really important point for Michigan citizens to hear, for all citizens to hear, that we know that the traditional repetitive-motion kind of manufacturing jobs are not coming back. You have to be honest about that. But what we have the opportunity do, like Tom Friedman keeps saying, is to make the products in advanced manufacturing that move us toward energy independence. And that's what we have been focused on, advanced manufacturing, clean technology, diversifying into that. Those are the jobs we can create.

CROWLEY: Do you need another jobs bill and do you need more help on mortgage -- home foreclosure?

GRANHOLM: Yes, we absolutely need both. On the jobs bill front, Secretary Duncan, this week, was out trumpeting the fact that, across the country, states are facing still enormous problems because we have to balance our budgets, obviously, and the economy hasn't completely recovered.

And that means, for teachers across the country, thousands -- hundreds of thousands of layoffs. We need to prevent that from happening at a time when our nation has a goal of becoming the most well-educated in the world. We can't be having class sizes of 40.

So we need a jobs bill to prevent layoffs of teachers and cops and firefighters. The president had put that recommendation into his budget. We hope that Congress passes it. Because many states have based their budget on it.

CROWLEY: You had once said, famously, I think, NAFTA and CAFTA gave us the shaft-a. President Obama campaigned on opening up NAFTA. He has not done that. How badly has that hurt you?

GRANHOLM: Well, clearly, we have had a system where the trade agreements that were negotiated, one, have not been enforced, and, two, did not require our trading partners to abide by the same rules that we were abiding by. And that created a huge trade imbalance.

That meant that all of these...

CROWLEY: It still is, isn't it?

GRANHOLM: It's a huge trade imbalance, still. And all of these jobs, here, that were manufacturing jobs where people could go to low- wage countries and make the same product for much less and they didn't have the same labor standards; they didn't have the same environmental standards and they were allowing countries like China, et cetera, to steal intellectual property and ideas, to copy a design and then to sell it -- those things still have not been addressed.

And you can adopt great trade agreements. And we're not afraid of trade. We believe that we can compete and beat anyone, anywhere, any time. But just give us a fair playing field. We'd love to be the export nation rather than the import nation.

CROWLEY: But you need NAFTA reopened for those labor agreements...

GRANHOLM: We need to make it fair.

CROWLEY: ... those environmental agreements?

GRANHOLM: That's correct.

CROWLEY: Are you disappointed the president hasn't done that?

GRANHOLM: Well, I know he said that he was going to do that, and he's abiding by almost of his campaign promises, as he said. And I expect -- and I've had conversations and meetings with his trade representative on the trade agreements that they're in the process of negotiating.

I believe that he is committed to fair -- to robust trade but fair trade for our businesses to be able to compete on a fair playing field. And I think he's going to hold his trade rep to that.

CROWLEY: Let me ask you about bailouts in general. Americans hate them. They think that they have spent a lot of money to bail out Wall Street. Is it different to bail out the car companies?

GRANHOLM: I think it is. This is Main Street. And look at what's happening. I mean, Chrysler is going to pay back its loan, too. GM has paid back its loan. They are -- they've completely redesigned their management structure. They have shaken the blanket and done something new.

They're going to come out with the first all-electric vehicle. I think it's going to be extremely successful, the Volt. So -- and, in the process, we saved millions of American jobs.

So the taxpayers will get paid back with interest. They'll make money on it. And we will have saved all of these jobs in the manufacturing backbone of the United States. That is a good deal.

CROWLEY: In the end, though, Americans are going to lose money for the -- the amount that was put in. I mean, the Treasury Department, CBO are saying the car bailout and the financial bailout -- and we still own 61 percent of GM.

GRANHOLM: Right, and obviously, they've got to go public and sell their shares back. But I don't think people are saying the Americans will lose money. I think, like what happened -- as what happened in Chrysler back in the day, I think the taxpayers are going to make money on it and our economy will have been stabilized.

If you -- if you carve out and hollow out manufacturing from the American economy, you have made a weaker nation.

CROWLEY: But you could make the same argument, could you not, for financial markets, that we could not have let the financial market implode, that certainly those who were heading up some of these financial institutions were making millions of dollars, but so are car company executives. GRANHOLM: They were, but they're not any more, at least the ones that are -- that had received the bailout. And there is -- I don't -- I mean, clearly, you have to have a financial sector. And I think they had to do that to stabilize it. And I think Geithner's plan to do that, to stabilize it, has demonstrated that the economy has turned around.

But there is no doubt these ridiculous bonuses, et cetera, just slap the taxpayers in the face, even though they have been paid back. It just seems like such an affront that all of the people who created the problem end up benefiting enormously from it.

But that's different than the car companies. The car companies are more blue-collar, American companies. Wall Street seems to be on a different plain.

CROWLEY: Well, it's -- you're right, but, in effect, we did have an industry that was too big to fail, and that was the car industry, was it not?

GRANHOLM: Too important to fail, too important in that it is the backbone of the manufacturing sector. I think people don't realize that the car itself is the last -- you know, is the glass industry, the steel industry, the rubber industry, the electronics industry, technology. There's more technology in your car than there is in your computer.

It is a very sophisticated product that has tentacles all throughout the American economy. So, so much is embedded in that product that ripples throughout other sectors, that I think it was too important to allow that to fail.

CROWLEY: I want to talk to you about politics and your future and the city of Detroit.


CROWLEY: We're going to take a break. We'll be right back.


CROWLEY: Welcome back.

I'm sitting here talking to the governor of Michigan, Jennifer Granholm.

Detroit -- lots of -- lots of press about Detroit lately, that it's a dying city, that it's -- it's no longer that big Motor City that we talked about before.

David Simon, who has been in New Orleans doing a series for HBO on post-Katrina New Orleans and its battle to come back said something to me in an interview that -- that struck me, which is great countries don't abandon their great cities.

Is there any feeling in Detroit that a great country has abandoned a great city?

GRANHOLM: I think there's a lot more hope in Detroit. There is no doubt -- I mean the analogies, frankly, between New Orleans and Katrina -- they had a natural disaster which was immediate. Our hurricane has been an economic hurricane. But the impact on the citizens has been similar in the loss of population, the loss of jobs and really the hollowing out of this great city.

But we've got a new mayor who is fantastic. And, you know, it doesn't -- it's not that Detroit has to be the same size. They're trying to right size the city. And so they're doing unique things, like urban farming, taking a lot of vacant land and turning it into farming, which is sort of an interesting thinning when you think about a city.

But abandoning cities is absolutely not the option. Michigan and Detroit -- the only thing that separates Detroit from Michigan is a comma.

CROWLEY: Let me turn to politics, one of our favorite subjects.


CROWLEY: Just looking at the national scene, how does the Democrat win in this environment?

GRANHOLM: Well, I think that the president is give -- is providing a good road map, even though I know the health care bill was controversial. I think that people don't understand the benefits of it fully yet. And so there has to be an effort to try to educate citizens about that but -- between now and October and November.

But Wall Street reform, it's a very good thing. And the Democrats should stand up and trump it -- supplying help to Main Street and not to Wall Street and to making sure that it doesn't happen again.

I think the -- the stories from the Recovery Act -- we have them everyday in Michigan. There is a story about a company that's coming or somebody who's diversifying because of what the Recovery Act provided. Those stories need to be amplified.

If that -- if that happens, then I think Democrats can win. But it is a tough time to be an incumbent on the ballot, for sure.

CROWLEY: What do you think of the Tea Party?

GRANHOLM: Well, I mean I appreciate free speech and I think everybody has the right to get on a soapbox and -- and complain. But there has to be an agreed. It's not just about no and anger. I understand people are angry. And the -- everybody's...

CROWLEY: But they're angry about deficits...

GRANHOLM: Yes. CROWLEY: -- and they're angry about taxes are too high. I mean that's a legitimate complaint. GRANHOLM: Well, absolutely. That's legitimate. But there is an outgrowth...

CROWLEY: The reach of government.

GRANHOLM: There is an outgrowth from the Tea Party, if you look at some of the signs, some of it is very -- it's -- it's so angry that it is unhealthy, I think, and dangerous. So not -- certainly not all of the Tea Partiers are like that. A lot of people -- most people are out there because they legitimately have an expression that they want to vocalize.

But there are -- there is an outgrowth of that anger that is really, I think, unhealthy. I think that the -- there is a lot of us who wonder well, where were they when the other party was in charge and deficits were way out of control?

And there seemed to be no nod to any of that and spending was completely out of control. And there seemed to be votes in favor of more and more spending on the other party's side.

CROWLEY: But our street is a little different than -- than Congress. And we are where we are.

GRANHOLM: Yes. CROWLEY: And there are people out there -- and that's where the passion is in politics, frankly. When you look, the passion really has come from...

GRANHOLM: -- the Tea Party people. And I think that there is a feeling inside the Tea Party -- I know there is -- that they're being sort of -- that Democrats tend to try to marginalize them by saying oh, well, it's a little dangerous; oh, well, they're -- they're fomenting things that might lead to something bad.

CROWLEY: I mean the -- the movement itself, do you see danger in that?

GRANHOLM: No, I don't see danger in any legitimate mainstream movement. And I think a movement that is angry about deficits and the size of government is obviously legitimate. That's been in our DNA as a nation for -- for over 200 years.

But you have to admit that there is a fringe element that builds off of that and I think uses the Tea Party as a way to -- to pro -- to push into the mainstream -- what are really and have been fringe sentiments.

And I think, frankly, the -- the volume of channels, whether it's blogs or Facebook or -- or, you know, various cable outlets -- amplifies a voice that would previously have been unacceptable, I think, in most mainstream.

That's not, again, all of the Tea Partiers. That is a fringe that I think uses the Tea Party as a way to make sound normal what is very fringe and dangerous. CROWLEY: Have you talked to anybody in the administration about possibly being a Supreme Court nominee?

GRANHOLM: Well, you might be aware, I was vetted in the last go around.

CROWLEY: This time around, I mean.

GRANHOLM: Yes. And I'm going to allow the -- the administration to speak on anything on this go around.

CROWLEY: If I could just quote a -- a colleague: "We won't tell anyone, we'll just (INAUDIBLE)."


GRANHOLM: We'll leave open the possibility they have done that.

CROWLEY: What do you think in general about -- because obviously there are federal appellate judges currently on the court.

What do you think about the idea of someone like yourself or someone else who doesn't have, necessarily, that federal court experience, but you're a Harvard trained lawyer. It's not as though the law is foreign to you.

GRANHOLM: I think it's -- I think it's a very wise move to consider experience that is not just from the judicial monastery because -- I mean not just me but Janet Napolitano, people that have applied the laws that Congress enacts, that have seen their impact on people, that -- you know, I mean I'm from the most challenged state in the country. And, you know, for somebody to experience and see what everyday people are feeling and experiencing out there, I think is an important thing to consider.

Now, whether that's something that would trump judicial experience, etc. That's obviously the president's call to say that someone like me would be an unconventional nominee, at least in -- in the recent appointments that have been made.

CROWLEY: Oh, I won't even ask you if you would accept if there was a nomination, because I think probably there's no one on the face of the Earth that wouldn't accept something like that.

Am I right, wrong?

GRANHOLM: Well, it certainly would be -- it's a -- well, I'll just say this. It's a great honor to be on -- considered on the list. But there are a lot of great people who are on the list. Let's leave it at that.


CROWLEY: Jennifer Granholm, the governor of the state where I was born. Up next, a check of today's other top stories and then, a look at that new fancy $100 bill. As you'll see, it is more than just a pretty face.


CROWLEY: I'm Candy Crowley, and this is "State of the Union." Let's check some of today's other top stories.

Treasury Secretary Timothy Geithner says he's confident Senate Republicans will join Democrats in passing a financial reform bill. In an interview with CNN's Fareed Zakaria, Geithner emphasized the need to pass the sweeping legislation in order to prevent another economic meltdown.


SECRETARY OF THE TREASURY TIMOTHY F. GEITHNER: But again, based on all my conversations, and I think, if you listen carefully to the tone in Washington just over the last couple of days, I think there has been a substantial shift. And I think, really, on balance, there are a very substantial number of Republicans who want to be for a strong set of reforms.


CROWLEY: But this morning, the top Republican on the Senate Banking Committee said he's not optimistic about a deal before a so- called test vote tomorrow.

You can see the entire interview with Secretary Geithner, as well as a panel on the economy, at the top of the hour on "Fareed Zakaria: GPS."

Officials in Mississippi worry the death toll may rise this morning as they reach areas hard-hit by what's being described as a gigantic tornado. The twister, reported to be almost a mile wide, ripped through the state Saturday, killing at least 10 people. Damage from the tornado was also reported in northern Alabama.

Al Qaida in Iraq has confirmed that two of its senior leaders were killed in a joint raid led by U.S. and Iraqi troops last week near Tikrit. The statement was posted last night on Islamist Web sites, a week after U.S. officials announced the deaths of Abu Ayyub al-Masri and Abu Omar al-Baghdadi.

In an interview with CNN, the commander of U.S. forces in Iraq, General Ray Odierno, said it would be very difficult for the Al Qaida network to replace the two men.

An explosion from a torpedo may have sunk a South Korean Navy ship that went down off the peninsula's west coast last month. That's according to the -- South Korea's defense minister. South Korean officials have not directly accused the North for the blast that killed at least 40 sailors, but there is growing speculation that Pyongyang may be to blame, given the tense relationship between the two nations. North Korea has denied any involvement.

President Obama will deliver a eulogy today for the 29 West Virginia coal miners killed in an explosion earlier this month. Before the service, the president, along with Vice President Biden, are expected to meet privately with the miners' families. The April 5th blast at the Upper Big Branch mine was the nation's worst coal mine disaster in nearly 40 years. President Obama has since called for a sweeping review of mine safety laws.

CNN will have live coverage of the president's eulogy later this afternoon. Those are your top stories here on "State of the Union." Up next, a makeover for Ben Franklin.


CROWLEY: And now our "American Dispatch." This week the U.S. Treasury, the Federal Reserve and the Secret Service unveiled a new $100 bill that is truly high-tech.


FEDERAL RESERVE SYSTEM BOARD OF GOVERNORS CHAIRMAN BEN BERNANKE: The United States government must stay ahead of counterfeiters and protect the integrity of our currency.


CROWLEY: Thursday's newspapers gave it prominent play, but it's hard to show on paper what makes this note such a leap forward. Video does it more justice.

Watch the gold inkwell that then holds a liberty bell. That blue ribbon down the middle uses the same 3-D technology used in movies. It cost the government about 12 cents to produce each new $100 bill, about 3.5 cents more than the old bill.


BERNANKE: We estimate that as many as two-thirds of all the $100 notes circulate outside the United States.


Overseas counterfeiters are using the latest copying technology because the $100 has gone global. Fifteen countries use the U.S. dollar as its currency, but it's circulated in virtually every country in the world.

Lest you think people like changing their currency, Representative Patrick McHenry has proposed changing the face of the $50 bill from Ulysses Grant to Ronald Reagan. He says it's time to give Reagan a place beside Presidents Roosevelt and Kennedy. They are commemorated on the dime and half-dollar.

Earlier this year the Harris poll asked, "Who is the best president in history?"

Reagan came in second to Lincoln. But this weekend, the Marist poll asked what Americans thought swapping the Gipper for Grant. Only 12 percent of those polled thought it was a good idea; 79 percent were against it. Even Republicans were against it. Only 18 percent liked the idea.

The new Benjamin Franklin comes out in February. The new Reagan bill may take a little longer.

Thanks for watching "State of the Union." I'm Candy Crowley in Washington.