i mean, this sounds absurd, absurd enough to fully check it out before running with it. that's it for this special los angeles edition of "reliable sources." i'm howard kurtz. back in washington next sunday morning 11:00 a.m. eastern for another critical look at the media. "state of the union" with candy crowley begins right now. the creditworthiness of the united states government is called into question and the stock market posts its worst week in more than two years. today, the threat of a double-dip recession with the president's former top economic adviser, larry summers, and the ceo of forbes, inc., steve forbes. then washington from afar with california governor jerry brown. >> the washington of today is suffering and experiencing a governability crisis. >> and the week seen through the prism of 2012 politics with former obama adviser aknee that

dunn and former republican congress tom davis. plus, retired admiral mike mcconnell on the looming dangers of international cyber attacks. i'm candy crowley, and this is "state of the union." a better than expected jobs report was the only upbeat economic note this week, and it was pushed off the front pages when one of the three big credit ratings, standard & poor's, downgraded the u.s. government's credit rating, the first time that's ever happened. >> it's a matter of the medium and long-term budget position of the united states that needs to be brought under control, not the immediate fiscal position, it's the one that centers on entitlements and its entitlement reform or having the matching revenues to pay for those entitlements. that's at the crux of the matter. >> larry summers, treasury

secretary under president clinton. in our new york bureau, steve forbes, the president and ceo of forbes, inc., and a former presidential candidate. gentlemen, thank you both. i cannot think of two men better to try and explain to me what to make of the downgrading of the u.s. government's credit rating. let's start with you, steve. >> i think in a narrow sense, it's a political move, and i think it will sound strange for me to say an outrageous move. the government can't pay its debts. it's legally obligated to do so. it's got the wherewithal to do it. in a larger sense about the economy, i think the u.s. economy is in a perilous state. this country has been in its worst recession since the great depression. i am surprised s&p would play politics, and the u.s. government can pay the interest and principle on the bonds, but we do have severe economic troubles but will be able to pay the interest and the principle on the bonds. >> larry, i will have to believe you will agree with him, because

i learned this weekend from a number of administrative officials pushing back hard against this, and talking about how immaturish it was talking about how s&p was looking for its 15 minutes of fame. they really think this was an unjust move. give me your take on why you think s&p did this and do you agree with that? >> look, s&p's track record has been terrible, and as we have seen this weekend, its arithmetic is worse. there's nothing good to say about what they've done. that's not the large issue here. the large issue here is the house majority played chicken with america's credit worthiness, and america's families are going to be the losers, losers in terms of higher interest rates on mortgages and losers in terms of what this will mean for employment, and we have critical economic problems, and the critical economic problem of

slow growth and lack of jobs, and the critical economic problem of a long-run budget situation that needs to be adjusted and needs to be adjusted in a rational way, and we have to find balanced approaches going forward, balanced approached to focus on the jobs deficit. >> if i could, larry, if this was an unjustified move by s&p, a political move and an attempt to get them to get out in front and into the headlines, how can you then blame republicans for it? >> look, candy, the -- steve is right, the united states is going to pay its debts. the united states -- look, s&p said to sell and warren buffett set to buy. that should tell you something about the quality of u.s. bonds. at the same time, this happened because s&p was seeing what most

americans are feeling, which is unhappiness with the solutions that are coming out of congress for critical economic problems. to say that s&p is suspect is fought in any way to say that all is well, and the productive thing here is not to bash on s&p, even if they deserve some of that, but the productive thing is to focus on what we can do going forward. >> steve, do you agree -- >> what we have just been through -- >> i just want to bring steve in here on this. do you agree that this was brought -- i saw you shaking your head, so i know you don't agree. do you agree this has something to do with the republicans and their refusal to go ahead and kind of come up with a broader deal or agree to some kind of tax increases? >> no, i think the republicans were elected precisely to try and undo the fiscal damage this

administration has been doing to the country. what is holding this economy back is a weak dollar. you never get a strong, sustained recovery with a weak currency. unsure about taxes. massive new regulations coming from health care, finance. the national labor relations board is doing things it has never done before, telling companies where it can move and not move. and all of the regulations are hurting, and banks are not lending because of the uncertainty, and that's because the recovery is so weak. if the administration would change policies we would start to see a real recovery. >> and to wrap up the credit worthiness downgrade, how do you think the markets will react to this? >> well, i think the markets are going to be a little uncertain. the key thing is if two of the other rating agencies are going to follow s&p, and i don't think they will and if they don't the reaction will be minimal. you will have a fallout because of the uncertainty. states don't know what they are going to do, and s&p may

downgrade major insurance companies, which means they'll have to raise more capital. just another wallop of uncertainty. but by the way -- >> and do you think interest rates will go up and this will have a practical affect on americans? >> it will have a slight increase on interest rates. the key thing is the federal reserve, punishing savers by its zero interest rate policy. it's killed the inner bank market so you get liquidity where it's needed. the weak dollar is the real disaster. we'll get through the s&p thing. i think it was a political move, a market move, but the broader thing about the economy, weak dollar, uncertainty about taxes, massive new regulations, that's what's holding this economy back. >> larry, i know you'll want to pick up and argue with steve about what's going on in the economy since you were present and accounted for in the administration when some of these policies were put into effect.

the question that has shown up in a number of headlines, are we looking at another recession, a double-dip recession as it's described, and if so doesn't that speak to a failure of current administration policies? >> there's certainly a risk of recession, but god knows if we had not pursued these policies, we would be looking at another version of what happened in the 1930s. steve's thinking about raising interest rates and cutting liquidity in the midst of an economic downturn is the kind of thinking that made the depression great. if you look at what happened in the first six months, the winter of 2009, various indicators were falling faster than they had after 1929. what we are living with is completely unacceptable, but it's very difficult from what happened during the depression, and that's attributed to the policies that were pursued.

that's a tribute to the decision to inject funds on a substantial scale into the economy, to stress test and make transparent what was happening in the banks, and to provide liquidity. without that, the situation would be far worst than it is. >> and yet, larry -- >> we need to do -- we need to do more of that, and unfortunately, at a time when, you know, the state of nevada has a manual for looking for infrastructure, and it says if you delay repairing a highway, in serp situations by two years, the cost of doing that repair costs five times as much. we are not making those investments to pay off five times in two years at a time when the interest rate is at a near-record low, and one in five construction workers are not working. it makes no sense not to be investing and putting people to work -- >> you are talking about a

second stimulus here in some -- a more infusion of government money into the economy to stave this off. let me ask you, and you can answer that, but the economic recovery such as it is at the moment, the growth is slower than you all thought it would be and you all predicted, meaning the obama administration, unemployment is higher at this point than you all predicted it would be, so doesn't that speak to some kind of failure within the administration? >> i don't think so. forecasts have enormous uncertainties. nobody in or outside the administration foresaw the kind of european financial crisis we have had in the last couple of years, no one foresaw how high energy prices would rise. these have been adverse shocks to the economy. but look, the president saw this coming at the end of 2009, and

the president proposed and then the democratic house of representatives passed legislation that would have extended unemployment insurance faster, done more for state and local governments, made necessary public investments and the infrastructure. unfortunately, the congress wasn't willing to go along with that legislation. so you can't judge simply by saying that the economy is not where we would like it to be. it would be much better if all of the president's suggestions had been followed and it would be much worse if his early measures would have been blocked. >> let me bring steve in on this. basically, what is being argued here is that more was needed to kind of prime the pump of the economy, that had the president gotten his way, more money -- and the people around him, more money needs to be put in. we are looking at 9.1%

unemployment rates, and there's a huge number of economists say that's exactly what you need, you do need more money for construction work, anything to get people back to work and prime that pump. >> when you have a severe downturn, the normal reaction is to get at least a good upturn. the question is why aren't we doing better? stimulus money. where does it come from? it doesn't come from heaven. it comes from we the people, either through borrowing or taxing or printing of money which is another form of taxation. japan has been on this path for 15, 20 years, has been an abysmal failure there, low-interest rate policy, art fashtly tamping down rates, binge borrowing and spending. it does not work. that's why the recovery, we're like an automobile going 25 miles per hour, when at this stage we should be on an open highway going 70, 75 miles an hour. again, you never get a sustained recovery when you trash your money. you never get a sustained recovery when you have a massive binge in spending or massive uncertainty about taxes. all these new regulations that

are coming, it creates uncertainty and people hold back. that's why private capital in this country is fleeing overseas. they don't see productive investment opportunities here at home. and that has to be laid at the feet of the obama administration, and they are the ones that put in the massive spending and the health care and all of these other regulations. you can't blame that on george bush. >> in the less than minute i have, first you, steve, if i could get a quick answer from you, if i had a thousand dollars to invest right now, where would you put that money? >> in a stock market in a broad-based index, because in a year and a half, this country will turn around just after it did after the abysmal decade of the 1970s, turned around many the '80s and '90s. this is the time to get in, when everyone else is fleeing. >> larry, same question. a thousand dollars, what would you do with that? >> you will have to use your best judgment, but if you think that washington will come together on a balanced approach to growth and the deficit, then

certainly the united states is the place to put your money. >> larry summers, and steve forbes, can't thank you enough. we really appreciate your expertise on this. hope you will come back. >> yank you. coming up, a dire warning for the west coast. my interview with california governor, jerry brown. >> this is real peril, and i don't think i ever thought that about the united states before. two of the most important are energy security and economic growth. north america actually has one of the largest oil reserves in the world. a large part of that is oil sands. this resource has the ability to create hundreds of thousands of jobs. at our kearl project in canada, we'll be able to produce these oil sands with the same emissions as many other oils and that's a huge breakthrough. that's good for our country's energy security and our economy. what if we designed an electric motorcycle? what if we turned trash into surfboards? whatever your what if is, the new sprint biz 360

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years ago. he was one of the youngest governors ever in california. now he's the oldest, wiser and tougher. >> choices have to be made and difficult decisions taken. at this stage in my life, i have not come here to embrace delay and denial. >> unable to convince republican state lawmakers to even let voters consider tax hikes, brown signed a state budget this summer with steep cuts in education and state services for the poor, the elderly and the mentally ill. my conversation with democratic governor, jerry brown, next. let's say you need home and auto insurance. you give us your information once, online... [ whirring and beeping ] [ ding! ] and we give you a discount on both. sort of like two in one. how did you guys think of that? it just came to us. what? bundling and saving made easy. now, that's progressive. call or click today.

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[ male announcer ] time to check your air conditioning? come to meineke now and get a free ac system check and a free cooler with paid ac service. meineke. we have the coolest customers. governor, first of all, thank you so much for joining us. i wanted you to take a california look at what has been going on in washington. we have just finished up a very grueling debt debate. from your perspective, what did that tell you about washington? >> well, the obvious is that it's dysfunctional, but more than that, that the washington of today is suffering and experiencing a governability crisis. america can't govern when you have two parties so diametrically opposed. i think that is an ominous sign going forward.

>> do you have a solution for that? because i think you're right. i think people look and say they're on the different planets and it's no wonder they can't come to an agreement. what do you think would help? >> i will tell you, we are at a crossroads, and if the republicans cannot give up some of their ideological baggage, and if the democrats can't find a way to create common grounds, the country is going to face some decline. and i think the only way out of that would be a very vigorous election where people lay out the stark alternatives, not muffle it like politicians like to do, smooth out the rough edges. we need a very clear and decisive election. i would say the republicans are gearing up to destroy the president, and the president will have to respond in a very powerful way, and the result for the country could be calamitous. >> what does his response have to be?

what's that powerful response? >> he has to be authentic and powerful and lay out a clear alternative and run a risk that may not work out for him, because the society is in the mood where it wants a lot of things but is not willing to pay for them. >> you think the president needs to run saying, folks, we need to raise taxes? >> i would not put it in those terms, because that we know from mr. mondale is a big fat loser. >> i know, but we are talking about stark contrast? >> the contrast is what the choice is. if you don't want to pay the taxes, you have to cut social security and the military and research and highways and hospitals and schools and universities. you have to retrench from being a great super power. and i think there is a bill at the end of that that people might be willing to pay. if they don't pay it america will never be the same. so there is the tax reform, and

there is the deductions, and the loopholes. there are a lot of ways that the president can present it, but it may be that because of the propaganda or the state of indulgence where we are, maybe the truth cannot be spoken in a way that makes it a successful campaign. if that's true, then we are really in for it. >> let me ask you on the specifics of the debt crisis and some of these confrontations that the president has had with republicans, how do you -- assess his performance for me. how has he done, as far as you're concerned? >> the trouble is with the loss of the house, he's in a defensive position. i support him in what he is trying to do. i just think that he has to dig down into his own soul and connect with the people of america at this hour of peril. this is real peril, and i don't think i ever thought that about

the united states before. but if we are going to be a divided government, our adversaries and the rest of the world, the dollar, the market, the global economy, this is not good. today it appears the ideological obsessions, particularly the no-tax identity is so strong that compromise is no longer a viable concept. now, it would be better if we had more accommodating political parties, and it's not the democrats are free from blame, they will have to look at the entitlements and do something about it. >> i was going to ask you about that, because season that -- clearly, you're a democrat and i understand you come at it from that position. but i think republicans would argue that this whole idea that you can't touch medicare and you can't touch medicaid, you can't touch soeblcial security, that d of thinking also needs to be dropped. >> well, it's good to score points off the republicans by

saying they are going to get rid of medicare, which in many cases is true. however, given the over commitment and under finance of where we are, we're going to have to reshape all these programs. in california, we're trying to get a waiver right now from the obama administration to cut our medicaid costs, and so far we are not getting anywhere. so, yeah, the democrats have to wake up. we've got to constrain costs. we have to find some tax loopholes to close or other revenue, and, yeah, it's not pleasant. >> i want to ask me to stick with me and we will take a break. when we come back we will talk about california's particular problems.

when we come back we will talk

when we come back we will talk welcome back. we're sitting here with california governor, jerry brown. thank you again for joining us. i was really struck by an a paragraph in the "l.a. times"

description of the budget that you signed. in part it said -- that's a democratic signed -- >> doesn't sound like it, though, does it? >> it doesn't. >> well, there's another aspect here, and that is we're to live within our means. i proposed that we did half cuts, painful cuts, and mainly the ones that you just read, and also half continuing the tax revenues that my republican predecessor put in place, but which expired. the republicans wouldn't give me one vote in order to have that balanced program, so we have to cut. i'm going to continue. we are not going to borrow, but

we are going to put our books in order and it's going to be painful and we're going to do things i don't think are things we ought to do. >> looks like a strategy to force the public or republicans into saying let's raise taxes rather than to cut this bone? >> that's not the intention, but it is the consequence. i do think as a state, as wealthy as almost all the countries of the world, the gross domestic product is $2 trillion, and it seems like it makes a lot of sense, at some point i would hope that people are willing to pay more money, if necessary, i believe it will be on the bat lol next november opportunities for the people to say, yeah, i'm willing to pay a little more money. if they don't, we will continue to retrench, and we will erode the university, the safety net, the roads, the firefighting, the

prisons, the jails. so i will engage with a dialogue with california to forge another path that is more positive. >> you are a fiscal conservative? >> i'm willing to spend. i like to invest. but i don't think you can borrow all the time. i don't like borrowing or debts. we are way beyond the ledge of responsible fiscal management, so i'm pulling us back. >> you have slightly under 12% unemployment rate. do you have a plan to bring that down? >> over the long term. the folks in washington can't make up their minds, and the republicans say cut government and spend less, the liberals say spend more in the rooseveltian way of putting america back to work, which is what i believe. >> you have no stimulus funds? >> we have bond funds, and we're spending money on a massive,

multibillion-dollar renewable energy program. we have high-speed rail. >> long term. >> but that's what states do. the short term is the federal reserve. it's the congress. >> in the short term, and let's define that as two or three years, you see california, if there is no help forthcoming from the federal government, and there seems to be no money left for any kind of second stimulus. >> if the stock market keeps falling, people might look themselves in the mirror and say is this what we want for america? do we really want to retrench? >> do you see unemployment in california absen any help from the federal government many the near term, staying where it is? >> well, last time it got up to 11%. this happens. there's no magic bullet other than stimulus, and the stimulus has been stigmatized by the republican leadership, and they want america to go through this, you know, straitjacket, and this is where it is.

that's the gamble. i think come november, the american people will have a better understanding of the choices, and it really is a stark choice, i think, that we are facing. >> i sense that you are angry. >> i am not angry. i am just alarmed at where america is. so i would just say, we better be very careful where we're going, and i hope we watch it, "we" being the congress and the president. the president is the one that really has the most opportunity to turn this around. >> thank you so much. appreciate it. >> okay, good. this weekend, texas governor rick perry is in the national spotlight with his day of prayer. is he the republican who could shake up the presidential race? we will ask our political panel next. ordinary rubs don't always work on my arthritis.

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joining me now, former white house communications director, anita dunn, and former republican congressman, tom davis, of virginia. rick perry, the governor of texas, waiting on the sidelines and everybody expects he will get in. let's assume he does. was he smart to wait? does she shake up the race? >> well, he is flavor of the month. donald trump announces and goes to the head of the pack, kerry

announces and goes to the head of the pack. there's a long way to play. his record will be scrutinized. he will find out on the right, michele bachmann has been out there and it will be hard to shake some of those people away. it's tough getting in this late actually. >> it does remind me a little bit about fred thompson last time around. everyone waited and waited. it was going to be him, save the party, and he was tanked almost from the first day. >> people who want to be president generally start running, and they don't wait for everything to be perfectly in place. i think iowa will be very interesting this week. obviously, i think you guys have something going on out there. it will be very interesting to see how these candidates all react to each other given the fact they have not been together for a couple of months now. so much has happened since then. i think the winner of this kind of period since the last debate has been michele bachmann. rick perry getting in at least on paper appears to hurt her the most, but we will see in terms of who is the alternative to mitt romney and who is the

frontrunner. >> in straw polls -- we have a debate coming up this week in iowa. we have at the ames straw poll, which everyone sort of not -- you know, who doesn't watch this goes the ames straw poll? and to your experience, how much has the ames straw poll, which is basically how many of your supporters can you get to go to ames, iowa, to vote for you, how much has that shaped a race? >> huckabee won it last time and did not win the state. i am not sure how important iowa is. >> no, actually, mitt romney won -- >> huckabee won the state. yeah. but the reality is i don't think much and i am not sure how much iowa matters now except it will take some people out of the pack. it's different from new hampshire. i just add, these are republican activists, and this is not a primary but a convention. >> right, right. one thing that the ames straw poll can tell us this week is whether any of these candidates

are being successful at what obama did in 2008, which is to enlarge the universe of people who potentially attend the caucuses. let's not forget pat robertson surprising everybody with his supporters actually coming where everybody was, like, who are those people. there are a few candidates in this field that can potentially do that and obviously, you know, getting outside of the mainstream usual activists, give somebody a much better shot at winning that caucus. this caucus will be a contest to see who really is an alternative, and who gets to go on to new hampshire. >> who is not mitt romney? >> right. a lot are not mitt romney, actually. >> a number of them. but there can only be one, as the theory goes. i want to switch gears to your side of the aisle and give you a little something from late-night tv here. >> yesterday a man jumped the white house fence. did you hear that? yeah, but after a brief chase, secret service was able to talk president obama into coming back

and continuing his term. >> that was o'brien joking about a fence jumper, but only it was the president trying to get out of the white house. pretty bad week for the president? >> a pretty bad week for congress, which according to "the new york times" poll that was released on thursday, has its lowest rating ever from the american people. 82% unfavorable, and, you know, there is nothing to say can't go lower, and they certainly seem to be trying to do that. a bad week for the country. a bad week for everyone. i think that the president, who started the week, you know, by a compromise debt ceiling deal that, you know, we never should have had -- it's fundamentally, you know, really is smaller than he would have liked. did not represent the kind of bipartisan work that the problems of this economy suggests we should be having. in the end, can the president run saying you know what, i'm

the adult, i'm not, you know, taking cheap shots, and if p i could just have a more democratic congress we could get some stuff done? >> because they tried that and the voters rejected it. look, you got 20% of your homes are under water at this point. you have 9% unemployment. you've got this downgrade, a bad narrative. it's hit on the whole political establishment, both parties. and the question is who's going to take the blame at the end of the day. and we tried one-rule party, and the voters came back. i think they will both take hits. >> i totally agree. my theory is if you're an incumbent this was a bad week for you to be sitting in washington claiming -- >> you better fix it. and you better fix it. right now they continue to point fingers at each other and saying it's the other guy's fault. >> that's absolutely right. if you look at the tone deafness of people this week saying it's your fault, your fault, your fault, what people want in the country is who is going to work together, and who will help my

family and what is relevant to me, and right now washington and congress have never seen seemed more tone deaf. i think if i'm an incumbent this week i'm thinking about a different path for the future. >> be a political consultant for democrats at this point. what's the president's slogan going forward into re-election? >> his slogan right now is they are worst than i am. that's his slogan. you have to go back to 1948 and harry truman when he ran against the congress. it's harder for this president to get a democratic senate, but he's got to come up with a program, send it up. right now he bears the responsibility for voters of what is on the ground. he may not have caused it, but he has not fixed pit. right now they don't see solutions coming out. >> i will let you advise him as i know you still do. i mean, what is the president's pitch to voters when they are looking at currently 9.1%

unemployment, all of these houses under water, and things that really matter to people when they sit around their kitchen table are bad? >> that's exactly right. the president's pitch to voters, and the choice that voters are going to have in 2012 is going to be who actually is going to have a solution to this. and what you have seen from the republican candidates across the board, the people who would be president right now, the men and women who are running, are people who will not stand up to the most extreme elements of their own political party, who this week alone -- people like mitt romney, who likes to tout his business background, who said he would have been against the debt ceiling agreement and who turns around to do the cheap shots. no solutions. the republican congress has not offered any solutions and their programs have been rejected from the paul ryan budget that would have eliminated medicare, the cut, cap, and balance. it's a choice. >> i'll have to interrupt you because we're running out of time and we have one more guest. but i am going to assume, tom, you would say, but the republicans can argue the

president's solutions didn't work. >> well, they didn't work. he had two years. look, with everything else going on, what is on the ground matters. right now, the people are suffering. unemployment is high. houses are under water. lost our credit rating with one of the major houses, and the wars are not going well, and they look to the president and blaming right-wings are narratives that are not going to fly. >> thank you so much for joining us. up next, the danger of cyber attacks on the united states. >> if the nation went to war today in a cyber war, we would lose. we would lose. we are the most honorable and vulnerable, we're the most connected. we have the most to lose. [ man ] i got this new citi thankyou card

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joining me now, retired vice admiral, mike mcconnell, former trek or the of national intelligence. i know this is a subject you are interested in, and we were struck this week by a report from mcafee that said that over the past five years over -- there have been over 70 victims of cyber spying, countries, the

u.n. was also included in this, and that the spying was done by a state actor, which -- the same one, which everybody assumes to be china. when you looked at this report, what worried you the most? >> when i saw the report, i was glad to see it. it's now making the information available to the public. and, candy, the way i would describe the report is the tip of the iceberg, much worst than what is included in the mcafee report. >> let's assume this is china. let's assume this is a state. what are they looking for when they -- i'm assuming they can hack into the u.s. government at many levels. what are they looking for? >> all governments, sophisticated governments, run an electronic espionage effort. the g-8 are the most sophisticated. the united states has a policy of looking for adversaries who might wish us harm, military

secrets, military capabilities and so on. we have a policy of not doing economic espionage. not all those g-8 countries have the same policy. in fact, they focus on economic espionage. >> economic espionage would be, for instance, hacking into the treasury department to see -- internet to see what's going on there? >> could be treasury. could be an oil company. it could be a silicon valley startup. it could be aerospace, anything that would allow the country to have their competing economic activities, have an economic advantage. >> so we could do it to others on an economic basis. >> we could. >> we confine it to the military. but do we have a defense? isn't there some way to kind of -- security walls, right? >> we should. it is not nearly as sophisticated as it needs to be. as a matter of fact, the nation does not even practice good -- what i would call cyber security

hygiene. we could eliminate much of it if we just did the basic things, be aware, change passwords, configure our systems appropriately, but we don't, and we're in a situation now where this nation state is liss rally bleeding the intellectual capital and innovation engine out of this country. if that persists for a long time, it's going to take away a significant economic advantage that we have. >> so presumably they can get company secrets. >> and do. think of it like patent information or a new product or a new software or a new idea. if you can go into a company's computer systems and extract it, particularly if you have a labor force that works at a lower rate and you can turn quickly, then you can take it to market and cost jobs in this country. >> now, i want to just tell our viewers, you're an executive

vice president of booz allen, which is involved in internet security and makes money by offering internet security, and there's been some criticism that you're overstating this case, that the u.s. is -- the obama administration has made it a priority, that, in fact, they are on top of this. what makes you feel that they aren't? >> just look at the mcafee report. i still maintain clearances. i became concerned about this issue when i served as the director of the national security agency in the early '90s in the clinton administration. i felt then i had a responsibility to continue to remind senior officials just how severe this is. i had the opportunity serving as the dni to have a discussion with president bush and later president-elect, now president obama. each of them realized the severity of this issue. this administration has done many good things. they have an international policy, they've sent legislation to the congress for consideration. but it's not nearly enough.

it has to be significantly more enhanced than it is because as a nation we are vulnerable. let me give you two examples. a terrorist group that had cyber skills could attack the critical infrastructure of this country, particularly in the heat of summer or the cold of winter, and cause chaos. it could disrupt banking, electric power. >> it could shut down power grids. >> indeed. remember, there was a blackout in about 2003 in the northeast. we were without power for several days. it put us on the brink of chaos. it's possible for a relatively small group to be able to do that to the country today. now, if you go to cyber war where we were mad at someone, we were exchanging hostilities in some way, some of these nation states have penetrated our systems, not only to gain information advantage but to leave capability that can be used -- >> later on.

>> -- later on when there's a crisis of some sort. at one level we're losing our economic advantage of our innovation engine. at at another level, we haven't adequately addressed the potential for a terrorist group, someone that would not be deterred from inflicting major damage on what i call the soft underbelly of the country. >> admiral mike mcconnell, thank you for coming on. scary stuff. i imagine this will come up again. thank you for being with us. >> thank you. up next, our "sound of sunday," highlights from the other morning talk shows. what if we turned trash into surfboards? whatever your what if is, the new sprint biz 360 has custom solutions to make it happen, including mobile payment processing, instant hot spots, and 4g devices like the motorola photon. so let's all keep asking the big what ifs. sprint business specialists can help you find the answers.

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time for today's "sound of sunday." a sin kron newsed sunday for democrats who simultaneously trashed the decision to downgrade the u.s.'s celt worthiness. >> the tea party brought us to the brink of a default. >> i believe this is without question the tea party downgrade. >> republicans, at least the ones showing up on the sunday shows, said blaming s&p misses the point.

they argue there's plenty of blame to go around. >> on the s&p thing, don't shoot the messenger. is there anybody that believes that s&p is wrong in their assessment of the situation, of the fiscal situation of this country? >> i'm not very surprised at this downgrade. we more or less saw this coming because we're on the wrong fiscal path. both political parties are responsible for the mess we have right now. this is not a republican or democrat only problem. this is both parties got us to where we are. >> on the 2012 presidential watch, former governor and presidential hopeful tim pawlenty, who needs a good showing in next saturday's republican straw poll in iowa, kep up his attacks on fellow minnesotan and presidential candidate michele bachmann. >> whether it's any candidate, i don't think it's unreasonable or inflammatory or indisputable to say the next president of the united states should have experience running a large enterprise. i have that experience. i don't flap my jaw and say i'll