the federal government spends 1 of 4 dollars in the economy. no nation, no entity large or small, public or private, can thrive or survive intact with debts as suj as hours. the grand experiment in trickle down government has held back and not sped up the economy. he seems to believe we can build a middle class out of government jobs paid for with borrowed dollars. in fact, it works the other way. a government as big and bossy as this one is maintains on the backs of the middle class and those who hope to join it. those punished most by the wrong turns of the last three years are those unemployed or underemployed tonight, and also discouraged, they have abandoned the search for work all together. and no one has been more tragically harmed than the young peop of the country, the first

generation to face a future less promising than their parents did. for republicans, the first concern is for those waiting to begin or resume the climb up the ice ladder. we don't believe our nation will ever be one of hads and have nots. in our economic stagnation, and indebt indebtedness, we're only a short distance behind greece, spain, and other countries facing economic catastrophe, but ours is a fortunate land because the world uses our dollar for trade, we have a short grace period to deep with our danger, but time is running out if we're to avoid the fate of union and the once great countries in history that fell from the positions of leadership. 2012 is a year of true opportunity, maybe our last, to restore an america of help and upward mobility and greater equality. the challenges aren't matters of

ideology or party preference. they're mathematical and the answers are practical. an opposition that would earn it way to leadership must not offer criticism of failures anyone can see, but a positive plan to make life better, particularly for those aspiring to make life better for themselves. republicans accept this duty gratefully. reach back to a america of promise and go back to a america that can pay its bills and protect its vulnerable start in the same place. the only way up for those suffering and the only way out from the dead end of debt is a private economy that begins to grow and create jobs, real jobs, at a much faster rate than today. contrary to the president's constant disparagement to people in business, it's one of the noblest of human disputs.

the late steve jobs, what a fitting name he had, created more of them than all of the stimulus dollars the president borrowed and blew. out here in indiana whrx, when a business person asked what they can do, i said, make money, be successful. when you make a profit, you'll have more to hire someone else and donate to the causes we love. the agreement that stifles the home grown energy or cancels a perfect safe pipeline that would have employed tens of thousands, or jacks up utility bills is a pro poverty policy. it must be replaced by a passionate pro growth approach that breaks all ties and calls all close ones in favor of private sector jobs that restore opportunity for all and generate the public revenues to pay our bills. that means a dramatically

simpler tax system. a pause in the mindless piling on of expensive new regulations that devour ballers that otherwise could be used to hire somebody. it means maximizing on the new domestic energy technology that are the best break our economy has gotten in years. there's a second item on the national must-do list. we must unite to save the safety net. medicare and social security have served us well, and that must continue. but after a half and three quarters of a century respectively, it's not surprising they need some repairs. we can preserve them unchanged and untouched for those now in or near retirement, but we must fashion a new, affordable safety net so feech future americans are protected, too. decades ago, for instance, we could afford to send millionaires pension checks and pay welfare bills for the wealthiest among us. now we can't, so the dollars we

have should be devoted to those who need it most. the mortal enemies of social security and medicare are those who in contempt of the plain arrhyth mutic convince americans that we need to change nothing. the proud programs implode and take the american economy with them. it will mean that coming generations are denied the jobs made in their youth and the protection they deserve in their later years. it's so that everyone should contribute to the national recovery, including, of course, the most affluent among us. there are smart way said as and ways to do that. the dumb way is to raiseerates in a broken tax system, choking off growth without the revenues we need. the better source is to stop sending the wealthy benefits they don't need and providing them with so many tax cuts that

distort the economy and do little but stifle growth. they and they alone have passed bills to reduce borrowing and job creation only to be shot down time and time again by the president and his great extended allies. this year t falls to republicans to level with our fellow citizens about this reality. if we fail to act to grow the private sector and save the safety net, nothing else will matter much. but the tyke such action happen, we also must work in ways we republicans have not always practiced, to bring americans together. no feature of the obama presidency has been sadder than its constant efforts to divide us, by currying relationships with some by castigating others. we americans are all in the same

boat. if we drift, quarreling and paralyzed over a niagara of death, we will all suffer, regardless of income, race, gender, or other category. if we fail to shift to a pro-jobs, pro-growth economic policy, there will never be enough public revenue to pay for our safety net, national security, or whatever sized government we decide to have. as a loyal opposition, to put patriotism and success ahead of party or ediology, we say anyone who will join us in the cause of growth and solve nlsy is our ally and our friend. we will speak the language of unity. let us rebuild our finances and the safety net and reopen the door to the stairway upward. any other disagreements we have can wait. the most troubling contention in

our national life isn't about economics or policy at all. it's about us as a free people. in two alarming ways, that contention is that we americans just can't cut it anymore. in word, indeed, the president and his allies tell us we just cannot handle ourselves in this complex, perilous world without their benevolent protection. left to ourselves, we might pick the wrong health insurance, the wrong insurance, the wrong schools for our kids. if they don't stop us, we might pick the wrong light bulb. the view is we americans are no longer up to the job of self government. we can't use the safety net programs or the government we have. we'll follow for the con job that says we'll plow ahead psomeone will pick up the job.

we pit ourselves one against other, blaming our neighbor for the problems we have caused. 2012 must be the year ye prove the doubters wrong. the year we strike out bodily to say to a new generation that america is still the world's premier land of opportunity. republicans will speak for those who believe in the dignity and capacity of the individual citizens who believe the government is meant to serve the people rather than supersize them. who trust americans enough to tell them the plain truth and to lay before them a specific credible program of change big enough to meet the emergency we're facing. we'll face the prospects with confidence. there is nothing wrong with the state of the union that the american people addressed as

free-born mature citizens can't set right. republicans in 2012 welcome all of our countrymen to a program of renewal that we build the dream for all and make our city on the hill shine once again. thanks for listening. good night. >> so we have now heard two aspects of the state of the union. one from the president of the united states. one from mitch daniels, the republican senator from indiana. anderson? >> coverage is going to continue until the midnight hour. if you're just joining us on this, you have been watching the president's state of the union dress. we're joined shortly by jeff and also jim demint. president obama in his third annual message to congress laying out his economic agenda and his political road map from 2012, demanding action from congress, outlined steps he's taking that don't need congress.

the state of the yunnian, he said, is getting stronger. mitch daniels giving the republican response. we'll show you how a panel of undecided voters reacted to what they heard in live protesting. candy crowley, senior political analyst, david gergen, john king, political analyst, gloekn yeah burger, paul begala, and ari fleischer. any surprises tonight? >> i think it was a solid speech. book ending it with two foreign policy achievements, the end of the war in iraq and the death of osama bin laden made it a very sort of solid speak and a reminder to voters, hey, by the way, remember, here are the two

things i did. as i mentioned before, here is a president who gets tire marks for his foreign policy than dome domestic. >> were a lot of the things he was suggesting, that states require that students stay in school until 18 -- >> a nice call, but no, much of this will not happen. this was far more designed to be an agenda for his second term too, take it into the debates in november. i think it was politically deft from his standpoint. he showed democrats that he's willing to fight. that he's got some fresh ideas. he was deft in the way he shifted the emphasize away from deficits, away from jobs, onto things like energy and skills and manufacturing. he's trying to shake it up and keep the focus on fairness.

i thought mitch daniels just got one of the best rebuttles i have heard. you can understand why so many leading conservatives really wanted mitch daniels in the race. a sensible voice, and principle conservative, and didn't engage in the hyperrhetoric we have been hearing in the debates. >> ari fleischer, do you agree with mitch daniels? >> i sure did. i'm neutral in the republican race, but i'm a mitch daniels and/or paul ryan guy. you would see tremendous more energy in the republican side and see the disciplined focus on what i think are the core issues of the country, fwhut economic issues, and you see it in a friendly and inclusive way as well. that's the point i was making about the fath that daniels emphasized, different than what president obama addressed tonight. one really sees staving off the

debt is the biggest challenge we face. let let's-year-o yield for a second the tax cuts on the wealthy. we have $25 trillion of debt in the same period of time. for obama, he seemed to think it's the solution. we're in so much debt, taxes doesn't go far enough, of course it's a spending problem. >> you have a great segm, keeping them honest. it's heart to hear mitch daniels talk about the deficit when he was on the board for president bush when their amount turned into the deficit. i also thought it was interesting when he talked about a pro-poverty plan if you will, from the president. that was striking there, the first time you heard poverty

come out tonight. what is going to be interesting going forward, what is the next step? >> i think the president should take his message to some of the core, some of the red states in the country, some of the poor states in the country and begin to say, look, show me how their plans have turn out for you. so me how they have made your life better and are you going to have health care under their plans, better education under their plans. i don't know if he wants to go there, but i think he should. >> paul begala there, wasn't much talk about reducing the deficit in the speech, which is something for a lot of republicans should be front and center. >> you're right, david gergen is right. much more eemphasis in the speech about jobs, health care, tax policy, interestingly enough. whatulse struck me is if you just looked at it parachuting in from a foreign country, you

wouldn't know this is a president who is stuck at 44% going into his re-election wf a painfully, almost 9% unemploymentera rate. more if you watched governor daniels you would know his party won a landslide election a year ago. governor daniels has his admirers. for me, his speech was so pessimistic, and this is hard to do. it was like a glass of warm milk with a fly in it. boring and depressing at the same time. i didn't quite go for it, but i want an optimist, and barack obama doesn't have that much to be optimistic about, but he made the most of it tonight. >> i don't think it was that bad, paul. what i think mitch daniels was trying to do was shift the agenda away from what barack obama was talking about and talk about the deficit issues. in addition to talking about obama's policy, pro-poverty, as

roland points out, he said it was extremism that stifles the development of home grown energy, and he's referring to keystone there. let me get back to the president. i think what he was trying to do, and he succeeded, was to thread the needle here. because he didn't want independent voter watching him saying, you know what, you don't like the rich, and what he's rying to to is tax the rich, or you're anti-wealth creation. what he went out of his way to say is we don't begrudge financial success in the country, we admire it,then he started to talk about having the wealthy pay their fair share. if you look at the polls, poem don't begrudge wealth. they just want taxes to be fair. and so he was speaking -- >> the argument over what is the word fair mean in this case?

stick around, everyone. a lot more to talk about. up next, a tea party republican takesoon tonight jim demint. we'll talk to him in a moment. we'll also show you the emotional high point of the night. gabby giffords' first state of the union since a gunman nearly took her life and her last as a congresswoman. ♪

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as long as i'm president, i will work with anyone in this chamber to build on this momentum, but i intend to fight obstruction with action, and i will oppose any effort to return to the very same policies that

brought on this economic crisis in the first place. >> president obama laying down a marker on wall street regulation and other issues outlining the action the white house could take without congressional approval. we'll deturn to dana bash insid the house, and gabby giffords' remarkable appearance a high point. >> no doubt, i have sat in many a speech from republican candidates, democrat, candidates, and you hear applause and you see it's forced because it's political. nothing forced about this. republicans and democrats happy to see gabby giffords and emotional about the fact she decides she was going to resign. tomorrow will be her last day so he is focus on her recovery from a gun shot wound in her head. i want to bring in jeff blake who is a republican, and i

wanted to tell you my observation watching you from up in the gallery. you were sitting next to her, you're a republican, she's a democrat. whether the democrats stood for the president's applause lines, you helped her stand up. you were oftentimes, most times the only republican standing up. tell me about that. >> the least i could do. it was an incredible experience to be there with her. particularly after last year, having an empty chair where she should have been. so it was just an overwhelming emotional experience for i think all of us. >> we could see her, we couldn't hear her. tell us what she said to you? >> we talked about the resignation tomorrow and the fact they will be able to pass one of the pieces of legislation she worked so hard on just before she retires. and also, she mentioned that she tried. she tried and tried to come back, and we all know that she gives 100%. and whatever is in store for her, we know that she'll give

100%. >> she specifically said she tried to come back but she couldn't. >> she mentioned to a few people, i tried, i tried. it was just for all of us, we're very saddened to see her retire, but just grateful for the service she's given and the bipartisan atmosphere she brought to the chamber. the fact we all sat together last year and the tradition continued this year. i hope it continues on. >> i heard you saying you were getting tweets from your fellow republicans saying you supported that, you supported this? >> i think most people will understand, and i support my colleague and friend. >> thank you very much. and anderson, the irony, and i think you'll agree with this, is that gabby giffords, we now know, was considering running for the that, and you're running for the congress. you could have been opponents. >> we could have been. i would love nothing more than

for her to be able to run and participate fully in that way, and i'm just grateful that she's recovering and continues to. >> thank you very much. appreciate it. you see there, that really was one of the most remarkable moments of the day, no question about it. he mentioned the fact that last year at this time, pretty much everybody, republican and democrat, came with everybody from the other side of the aisle and sat with them to show their solidarity and to show that there's bipartisan feeling here. i have to say, unfortunately, some members decided not to do that this year because following that things devolved into partisanship last year. >> we're going to take a quick break. we'll talk to one of the president's staunchest critics, jim demint. we'll be right back. ?ññnñnñn we're america's natural gas

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coverage. with us now, one of president obama's sharpest critics. jim demint. thanks for being with us. first of all, the moment where gabby giffords entered the chamber, you were in the room. what was that like? >> it was really touching. for her to be there with jeff blake and the cheers, obviously, our hearts and prayers continue to go out to her. it was one of those wonderful moments there on the house floor. >> in terms of what the president had to say, was there anything there that you really agreed with? is there any room you see for compromise, for getting things done this year? >> oh, anderson, he said a lot of wonderful things. and it would be wonderful if it was true. so there were things there that i certainly agreed with, but when he talked about us being more energy secure one week from killing the keystone pipeline, talking about building manufacturing jobs in the

country when i talked to manufacturers and they know that obama care, dodd-frank, all of the regulations are killing manufacturing jobs, so it was hard to take him seriously. i think americans are going to have to ask themselves are they better off now than they were $4 trillion ago? this sounded like this first speech to the nation. he's trying to run from a record of broken promises and we're going to have to hold him accountable. >> you wrote an op ed in a paper. you said, quote, for the last three years, the values have only been punished. do you support him when he said that people who make more than $1 million shouldn't get a lower tax rate than other middle class americans. >> a lot of us for years have been trying to get president obama, first senator obama, to

go with a low, simple flat rate and take out the subsidies and loopholes. we're all for that. then he wants to come back and offer loopholes to his choice of manufacturers. he wants to pick winners and losers. we need a simple tax rate that allows our companies to agree. we agree with the concept, but that's not what the president has been doing. he wants to punish people who earn $1 million a year, people who earn $1 million a year average doing it one or two million a year. there aren't too many people like warren buffett, so to make a policy around him doesn't make sense. the things he has done has made it harder for people to sustain middle class jobs. and the biggest point of the speech for me, it was irresponsible for him not to recognize the dire circs our country is in because of the debt. when he ends his first term,

we're going to be $5 trillion more in dent when he got here. the euro is close to collapse, and he spent most of his speech making more promises from government. that's really just irresponsible, and again, he said some wonderful things. and i would love to cheer for all of them, but what he says doesn't match up with what he's been doing for the last three years. >> i appreciate your time tonight. thank you. >> thank you, anderson. >> it is the top of the hour. 11:00 here on the east coast. want to quickly welcome viewers here and around the world who may be just tuning in. special "360" coverage of obama's state of the union speech and the republican response. the president's third state of the union speech. a lot has happened since the first. this time, he's speaking on the verge of his re-election. moments just before were especially touching, as we talked about with jim demint.

giffords, just a year ago, she was fighting to recover a gun shot wound to the hid. she's made remarkable recovery, but she's stepping down to focus on it. there was a call to action in the house and senate who have gotten precious little done lately. we'll talk with a senior advideser for the house. first, though, here are key moments from tonight's speech. >> we are not going to settle for a country where a shrinking number of people do well while a growing number of people barely get by, a we can restore an economy where every gets their fair shot, their fair share, and everyone plays by the same rules. i will oppose any effort to return to the very same policies that brought on this economic crisis in the first place. >> let's agree right here, right

now, no side issues, no drama. pass the pay roll tax cut without delay. let's get it done. >> send me these tax reforms and i will sign them right away. >> send me a law that gives them the chance to earn their citizenship. i will sign it right away. >> send me a bill that creates these jobs. >> so put them in a bill and get it on my disk this year. >> we subsidized oil countries for a century. that's long enough. it's time to add the tax cuts to an industry that has been more profitable and double down on the clean air industry that has never been more promising. >> for the first time in nine years, there are no americans fighting in iraq. for the first time in two decades, osama bin laden is not a threat to this country.

>> let there be no doubt, america is determined to prevent iran from getting a nuclear weapon, and i will take no options off the table to keep that going. >> millions of americans who work hard and play by the rules every day deserve a government and a financial system that do the same. it's time to apply the same rules from top to bottom. no bail-outs, no hand-outs, and no cop-outs. >> if you're a big bank or financial institution, you're no longer allowed to make risky bets with your customers' deposits because the rest of us are not going to bail you out. you can call it class war fare, but asking a billionaire to pay as much as his saecretary in taxes, that's common sense. i realize some of you have diffing views about taxes and debts, energy and health care,

but no matter what party they belong to, i bet most americans are thinking about the same thing right now, nothing will get done in washington this year. or next year, or maybe even the year after that. because washington is broken. can you blame them for feeling a little cynical? i'm a democrat. but i believe what republican abraham lincoln believes. the government should do for people only what they cannot do better for themselves and no more. >> the key moments from tonight's speech. joining me is the senior adviser to the president and his campaign manager four years ago. there were some conciliatory moments in the speech. overall, it was pretty clear this is a president running for re-election. he said he, quote, tends to fight obstruction with reaction. moving forward, is he running

against the republican-controlled house? >> not at all. we would rather get a lot of things done with it but we don't have that opportunity. the president said he's not going to obide in action. he's going to take action. but there's a lot of areas, tax cuts for the middle class, manufacturing sector, working on natural gas. some education reforms. there's a lot of places where in a normal political environment, you would have common ground in both parties, that's what we're going to focus on. right now, we have to focus on building an economy that is more durable for the middle class, where we're rewarding hard work and responsibility and everybody does their fair share. >> a lot of republicans are saying the president didn't speak much about debt at all. >> they were sending out press releases before the speech. hopefully they listened because there were a lot of common sense

ideas, main stream ideas that would make sense. the president was clear about this. he's already signed into law over $2 trillion in savings, willing to do more, saves, even look at medicare, medicaid, and social security if a guarantee for seniors is protected. there's only one way to close the deficit. that's for more republicans, and some are starting to, but to have more republicans say the wealthy need to do their fair share. we're going to continue to make that case. >> we heard the word fair tonight, and the president kept making the point, saying everyone should get a fair shot as long as everyone does their fair share. what does fair mean to the president, to the white house? >> in skills and education, investing in manufacturing, that everyone has a fair shot in that there are skills and jobs in the educational system we need to allow people to compete. in terms of fair share, we have a tax code that doesn't allow

millionaires, people making $50 million, $60 million a year to pay less than a middle class worker. if you make over $1 million, you shouldn't pay less than 30% in taxes. now we have to get it more broadly so we can lower rates, make the tax codes more simple. >> talk about tax reform and making it simple, there were a lot of tax credits suggested tonight, that makes things more complex, no? >> there are tax credits, even in tax reform, you have to keep in place. i think the goal was to make things more simp le for the mo e aamerican people and more fair. the president has proven he's willing to cut spending, even in programs, in better times, he believed strong lly in. we need the republicans to join

the democrats in washington to do the right thing and ask everybody to do their fair share, as the president outlined tonight. >> i'm not sure if you heard the republican response. mitch daniels referred to his quote, conitance disparagement of people in business and the extremism that stifles the prevention of home grown energy. >> those lines, to me, don't resemble reality at all in terms of president obama's record. we have partnered with the private sector in many ways, from rescuing the automobile industry, which we get a great political cause, to looking ahead to community colleges. we're working to the private sector to do the smart things, to build an economy that is going to work with more middle class people. again, as the president said, if they're not going to join him,

he's going to do everything he can to make sure that the manufacturing and skills and edge kalz, we're doing every we can to build the more durability economy. >> thanks. let's bring in host of cnn state of the junior, candy crowley, paul begala, ari fleischer, and do we still have john king? yes, we have john king in there. john, let me start off with you. it does seem when you talk to whether it's senator demint or jeff or folks on the left or right, they're on completely different planets. >> that's a good way to put it, on different planets. elections matter. if the american people hear anything, it's contrast. a very unapologetic speech from the president defending the role of the government in economy. you went through the tax credits, the president sharing

his tax law. he's talking about the regulations after the oil spill. you could go on and on. government aides to keep certain manufacturing incentives in place. an an apologetic hand in the government, and from the predsaying he's not spending enough time on the debt, and mitch daniels, he said the pretdz believes in a government with benevolent government. david was being cute by saying the campaign can wait. it's already under way. >> i don't know when one of you is from mars or seens, but it seems like you see the same set of facts and interpret them differently. >> i'm from texas and fleisher is from new york. which one is liberal and which one is conservative?

i'm struck at both sides, but more aura's side. they were tough, and now they're a bunch of wimps. he called for a 30% tax rate for wealthy americans. and what a contrast. he was so careful doing it, i don't want to disrespect wealth, and there was steve jobs' widow, sitting in the first lady's box. contrast that with, say, newt gingrich who says poor people lack a work ethic. and he said the naacp would rather have food stamps than paychecks or mitt romney who said the president wants an entitlement society. both folks are disrespengting. but they don't address them. but if mitt romney or warren buffett is asked to pay more,

that's class warfare. >> that's why paul is from venus and mars. on the stimulus, when that was passed, the president was at the height of his popularity. he still lost almost a dozen democrats in the house. health care reform, 38 democrats in the house voted no on obama care. why, because it wasn't close to thestuff, wasn't close to the center left, it was so far over. let alone, the republicans who voted against it. the president had the biggest majorities in the congress. he didn't push those repeals. he extended them. he likes to blame and complain about everything that comes before him. when it comes to the hard work of governor, he likes to do speeches. that's what the republicans heard and why there's a sense he won't get things done. >> david, you worked with a lot

of republican and democratic governors. >> it's a remarkable contrast between the way bill clinton handled his last state of the union versus what barack obama did tonight. and others have made this point, but bill clinton when he came into the last state of the union went to the center. he said the era of big government is over. he talked about how to shrink things down. barack obama has doubled down in his speech on using more government, what republicans would call the nanny state, creation of a nanny state, and it's -- we're going to have to see how it works. he helped himself with his base. we'll have to see how it goes with the rest of the country wrfrb republicans, there's going oo be a big premium, finding people who can argue well. >> we'll have have more of roland and candy and gloria. we'll take a quick break.

we're on until midnight. a lot to talk about. on facebook, google. up next, the results of the dial testing. this is fascinating. a grup of undecided independents, democratics, and republicans in real time, watching the results of the president's speech. [ male announcer ] no one just hands you the title, most advanced technology in its class. it needs to be earned. earned with smartbeam head lamps. earned with vented temperature control seats. earned with an 8.4-inch touch screen. and if you're driving one, you know what it means to earn something. ♪ a body at rest tends to stay at rest... while a body in motion tends to stay in motion. staying active can actually ease arthritis symptoms. but if you have arthritis, staying active can be difficult. prescription celebrex can help relieve arthritis pain

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gabrielle giffords, tonight, she's come so far in the last year. no one who knows her doesn't belief she wont recover from the guntshot won gunshot wound she suffered a year ago. joining us now to see how the speech was perceived by some undecided voters, tom foreman. was there anything that the republicans -- actually, what did you see tonight? how did that reaction? >> down hoar ere at the time wa media lab, it was interesting. here is the mixed group, n independents, republicans, and democrats. all of you who came in undecided

on who you want to vote for? a pretty good crowd there. some, even though they have some affiliations, i'm guessing the republicans don't want to vote for president obama, and democrats do, but nevertheless, a lot of uncertainty about it. but as you watch the dial testing, watch the lines go by, we had the red for the republicans, blue for democrats, yellow for independents, watch one of the most dramatic changes that came when president obama talked about the bush tax cuts. >> right now, we're poised to spend nearly $1 trillion more on what was supposed to be a temporary tax break for the wealthiest 2% of americans. >> look at the numbers fall off there, the republicans fall right off the cliff. the independents not far behind. democrats like the idea. you're one of the democrats here tonight. >> yes, i am. >> the idea of dealing with the tax cuts and getting rid of the bush tax cuts, you like.

why? >> why, i believe the bush tax cuts were put in for the rich. this would help the poor. >> you think that's worth taking. >> yes. >> you're an independent. how did you feel about that? republicans and independents, republicans really fell off the cliff. independent said, not as much, bull still not as warm as democrats. what do you think? >> it's a great idea, i think it will help to balance things out and it goes right back to responsibility. actually helping -- actually being realistic and looking at where we need help. >> the question of responsibility, let me talk to a republican back there, you, not so thrilled about the idea when you saw that. you're one of those who dialed way down? >> yeah, i think not necessarily taxing the highest earners more isn't going to necessarily solve any problems at all.

a climate needs to stay where people want to put their money at riv and not take it out of the game. you want people to keep their money, you know, not punish the achievement if they happen to do well. >> that was a theme we saw a lot. sort of a general sense, the republicans more or less saying they wanted more accountability, democrats saying they wanted more concern from the government about people by and large. and independents, really interesting. one thing i noticed, independents by and large, whenever the president said something that would seemingly be inspirational, things getting better, independents just did not like that. we talked to some of you around the whole idea. one of the things they said, by and large, they don't believe that. they don't believe things are getting better and they don't like hearing the president say that when they're not convinced. >> that is interesting. is there anything that the republicans liked better than

the democrats and independents? >> they did. democrats by and large went to a high level and stayed there almost the whole time. little fluctuation. republicans, however, beat them out when the president talked about education. >> grant schools flexibility to teach with creativity and passion. to stop teaching to the test. and to replace teachers who just aren't helping kids learn. >> so this idea, you're a republican, right? this idea of saying, you know, you have to hold teachers accountable, make them do a good job. is that because you like education or the idea of accountability? >> it's both. for america to maintain standing in the international community and to develop that tradition of slen excellence that america has over the years. >> you think that's what this is about? >> absolutely.

>> i will say interestingly enough, that the change, right after he said that and got off the accountability part and talked about aid to the teachers and students, the republicans said, no, not more government program tz and the democrats liked it more. really interesting group here. >> tom, appreciate it. thanks very much and our thanks to all who participated. like most political speeches, there were passionate passages that were tailor made to make a point. warren buffett's secretary who pays more in taxes than he does was there to drive the point home. >> stop subsidizing millionaires, if you're earning over a million a year, you shouldn't get special tax subsidies or deductions. on the other hand, if you make less than $250,000 a year like 98% of american families, your taxes shouldn't go up.

you're the ones struggling. with rising costs and staggering wages. you're the ones who need relief. now, you can call this class warfare all you want, but asking a billionaire to pay as least as much as his secretary in taxes, most americans would call that common sense. >> let's bring back our panel. it is interesting to hear him say most americans would call that common sense. again, the divide is so great now that the definition of what is common sense, no one really on the left or right seemed to agree on it. >> i have to dell you something, my observation, i'm curious how candy is feeling, i talk to a lot of affluent people, and many are prepared to pay higher taxes. they're not all against this. what they will do, though, they will do that if it's not part of some deal with the government

cleans up its act and starts wasting it. and they don't want to be vilified like they brought it on. they don't see it this way, it's a much more complex story. beating up on people who are affluent. i think they would be prepared to do this if some sensible republican would come up with this. >> candy, which the president backed away from -- >> and they're republican candidates. >> it can't be just a coincidence on the day that mitt romney releases hireturns, this president is focusing so much on taxes, or is it a coincidence? >> he was going to do that anyway, i'm sure that mitt romney, i mean, if you're trying to figure out their strategy here, i would assume that they put his taxes out, thinking they would get buried by the state of the union address. instead, they dovetailed into it. it did back fire. i think they thought the story would go away, but instead, it feeds into it. i think david on david's point,

he's right. people don't -- people want to be wealthy. it's not like they, you know, they hate wealthy people. they want to be a wealthy person. i do think there's some danger in vilifying those who make more money, et cetera. i also think what's interesting here is that republicans have been talking for a year about tax reform. and the president spent most of the speech saying good, well, everybody thinks we ought to have tax reform, the problem is what the republicans want is -- this is a huge surprise, i know, a vastly different form of tax reform than what the president was talking about. anderson? >> go ahead. in the debt ceiling debate when the president offered 3 to 1, cuts to revenue, gops still said no. you have seen that take place, so the issue is not to david's point. people are saying i want to pay

more, i want to make sure there are cuts. the problem is that the gop has made it clear, absolutely no increases, no taxes whatsoever. so that's why you have the whole back and forth. so for the president to make that point again, and what did he say? we went through the whole deal. where did it get us? what did we get out of that conversation? and so at some point, republicans and democrats have to say if i'm going to give a little bit, you have to give a little bit. it can't be i want no increases whatsoever, total cuts. that's what the president said, that's not going to happen. >> on the campaign trail against mitt romney or whoever, fair taxation is something we're going to hear a lot about. >> it is, and it was interesting about the debate when mitt romney had admitted he paid around a 15% rate, newt gingrich made the point, it's unearned income, he made the point it should be zero, and romney

should not pay any taxes on that unearned income, and even romney disagreed with him on that. this is a huge split right now between these two parties. and there is a split within the republican party, i would also say. but going back to the point that david or candy was making about that, he had the opportunity to grab the mantel of tax return and run with it and he did not do that. now when you talk to people in the administration and they have this plan, the question is, okay, are you going to set up some legislation now that is going to propose major tax reform. are you laying down a marker. is this just a campaign plan? what it is is the marker. they're saying 30%, let's be fair. millionaires should pay at least that. let's see what the republicans come up with. and i think that's going to be the framework of the debate. >> why did the president back

away? >> from what i understand back at the time talking to some of his aitd aides, he thought it should be the end product. it's like football f he embraced it, as soon as he embraced it, it wouldn't be that. it wood be left wing socialist obomb oz. he didn't want to poison the well. let's say, the beginning of the presidency, he was a pretty terrible negotiator, he's gotten better. he had a game theory, it would have been less likely if he had imblaembraced it early. >> leadership is about seizing the initiative and trying to persuade people. it's not about i'll wait until the end of the negotiate and it will come out my way. i think wirlt one of the worse mistakes of his pres dnlsy. >> we have to take a quick break, but quickly, ari.

>> come back after the break. >> all right. we'll have more from the panel. also, how did president obama's speak play in florida where unemployment is higher than the national average. we'll show you ahead. >> announcer: with nothing but his computer, an identity thief is able to use your information to open a bank account... in order to make your money his money. [whoosh, clang] you need lifelock-- the only identity protection company that now monitors bank accounts for takeover fraud. lifelock-- relentlessly protecting your identity. call 1-800-lifelock or go to lifelock.com today. [ male announcer ] how can power consumption in china, impact wool exports from new zealand, textile production in spain, and the use of medical technology in the u.s.? at t. rowe price, we understand the connections of a complex, global economy. it's just one reason over 75% of our mutual funds

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we are not going to settle for a country where a shrinking number of people do really well where a growing number of people barely get by.

a we we can restore an economy where everyone gets a fair shot, everyone gets a fair share, and everyone played by the sait same set of rules. >> inequality was written throughout the address. he called on congress to eliminate tax cuts and subsidies for those earning more than a million. in unemployment, the unemployment rate is 9.9%. the republicans have been bashing obama's record on the economy. john king joins us. >> you mentioned the unemploymenterate. 9.9%. this is florida in 2008. it's always a swing state. you have ari fleischer with us. it was the ultmal swing state when it began. florida was close. let's look at it now.

you mentioned the unemployment rate going up. i'm going to move this a bit. the darker the green, there higher the unemployment. it was 8% when it president took off. some of the state lighter, but a lot of dark green. it's at 9.9%. this is what the republican candidates for president are hammering and how much of a role did the economy play? what do they think about the president's economic policy as we go forward. they need republican votes or democratic votes. you see the blue up here. this is the most important part of the state. you saw earlier the green, you see blue, blue, obama care last time. independent voters, republicans and swing voters. most of this was john mccain. down here is important for the president, but again, a lot of retires from the north. most of them democrats, but it

could be competitive in a tough election. if you blank it out, go back to the map, the demographics, poverty, the darker, the higher rate. it's an issue in parts of florida. the president talked about raising taxes on parts of the rich. the darker area is where you find higher incomes. as the president makes this case, he's in a state with a lot of swing voters, the most diverse state we see in the primary so far. watch how republicans respond to the state of the union address. this state will be a key battle ground in the month of november. he has to say, i know the unemployment rate it's gone up. but one of the reasons all of the republicans think it's open for them is it's tougher for the president to make the case because at 9.9%, will the people listen to florida or say they need a change. >> i want to bring back the panel. ari, let me start off with you.

i had to jump away before the break. >> in fitting in on a point john was making about if people were listening to obama or economic circumstances stop them from hearing the message, when he was talking about raiseing the taxes on 1%, we're a very aspirational nation. everyone wants to be successful. when the president is saying he'll raise every tax he can find on you, the medicare tax, the income tax, and now he'll take away all your deductions, the problem is if republicans do that and back off the bush tax cuts, he'll put social security and medicare on the table, but no specifics. he said be specific about the tax hikes. but then he evades on social security and medicare. republicans think it's a trap and not leadership. the worst victim of that would be charity in america. the president said you should give a 25% deduction instead of 30% for charity.

tonight he went farther and said a zero percent deduction for charity tz. that's going to hurt a lot of charities. >> i don't think that's clear on the charitable deduction. >> he said no deduction. >> in the details, in the detailed blueprint, charity is not listed. >> so why did he say it? >> you know, anderson, and i sit here, first, let's go back to what john king laid out. john king laid out the poverty rate in florida. one of the things that has bothered me when i watched these gop debates that doesn't come up, and we love to talk about everybody else, and what you're seeing is that a number of people who are sitting here saying i'm doing the best i can. and i'm still not getting enough. and the president talked about saying let's stop giving people tax incentives who take jobs overseas. that's speaking directly to that. that's why i was amused earlier.

ari said there was nothing in the speech that he liked. man, you can't like that, supporting businesses that are here, let's stop taking jobs overseas. i think it is typical when you say why can't we say, if you talk american jobs out of the country, you don't get tax breaks. you don't get to write it off. how is that not fair? >> what you're saying is that bmw that employs all those people in south carolina should no longer employ people in south carolina. the toyota plant in indiana shouldn't employ americans? if it's in one direction it's going to get played in the other direction. >> if you choose to move jobs out of this country, you shouldn't get to write expenses off. that's fair. >> if you're going to do the same thing, they're going to say we're not hiring americans anymore. >> if you don't have a job in alabama, you're concerned about it. >> i want to make a brief point. there is a huge danger if you

start monkeying around with the taxes saying american companies saying we'll move our other country overseas. let me come back to the florida point. i keep wondering, is the nan ofact going help newt gingrich and mitt romney. they're going to say we have to put one tough debater in the ringer against obama. he's tough, he has a lot of arguments that appeal to people on the surface. and the juxtaposition of romney's taxes, they backfired. it's going to cause further sort of focus on romney and his taxes at the very time he's trying to catch gingrich and florida. the washington post reporting they got new numbers out, looking at white voters with $50,000 or less, which republicans need to get in order to win this. romney is unfavorable with the white voters, unsaveerable

numbers have risen to 49%. to have this compounded in from the republican dynamic, i would think this might help. >> let's talk about how it's going to impact the campaign trail, starting tomorrow. we'll have a quick break. even before the president began this speech tonight, the republican hopefuls were bashing what they thought he would say.

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take the money we're no longer spending at war, use half of it to pay down our debt and use the rest to do some nation building right here at home. >> the gop candidates who want to take president obama's place come november waste node time bashing his state of the union address. the criticism came hours before his speech. let's hear what they had to say today. >> tonight, we're also going to get treated to more divisive rhetoric to a desperate campa n campaigncampaig campaigner in chief. it's shameful of the president to use our nation to divide us. and someone ought to tell him in order to put the economy back to work, everyone needs to be working. more than anything, i expect the president will take this opportunity to take a big victory lap in the speeches where he tends to tell tall t e tales about an america thriving on his watch.

>> his is why it's interesting to watch him, because he doesn't seem to operate in the same planet you and i do. he has this sort of a planet obama somewhere out there. >> let's bring back our panel. how do you think this plays out -- john king is not there. ari, how do you think it plays out on the campaign trail starting tomorrow? >> i think they quickly move beyond it. you have a republican on republican fight, so they're going to say the same thing about barack obama. what is going to make the difference in florida is what romney says about gingrich and gingrich says about romney. they'll go back to basics. >> balpaul do you agree with th? >> mitt missed the opportunity. david's point was important, the number one thing is someone who can defeat obama. i think the definition is shifting. in new hampshire, they saw it as mitt romney, but they like the fire, the bombast, the aggressiveness of newt gingrich. at least the newt gingrich we

saw in south carolina. that's why the debate in jackson rl is going to be critical. if i was with romney i would say, they like all that stuff. >> it's that kind of anger, though, that can sometimes really end up kind of aggravating voters who don't node meringue ee anger in their. >> costly in the general, but in the primary, they seem to want it. >> you saw gingrich pull back in the debate the other night because being as angry as he has been, and we'll see what he does thursday night with wolf because the anger kind of rallies the base, but it also can be unappealing, particularly when you see someone like barack obama. who is very sort of cool in his speech. >> one of the things we have to recognize with the gop race is that you're going to see a

different style of campaigning based upon the state that they're in. so those conditions on the ground also change that. i think what happened in south carolina was different from new hampshire. what happened in new hampshire and south carolina is different than florida. what i want to see on thursday is also when you will see these candidates really begin to talk about the bread and butter issues of the working man and woman, that is college tuition, education. the president talked about immigration reform. you can talk about build a wall all day, but you're going to have to confront that. if you're a republican, you have todeal with it or you're going to have a problem in colorado, nevada, even florida if you don't confront what is happening in this country. >> candy? >> back to the sort of newt gingrich being the embodiment of the fury that many republicans have about the policies of barack obama.

it's great, i think one of the things we saw in the last debate was mitt romney kind of ratcheting up his game and actively being quite aggressive toward gingrich, but it doesn't quite work. in the end, mitt romney is not an angry guy. and newt gingrich can do that a lot better. newt gingrich is the guy who says you think of only when you're in the shower. he's the guy that comes up with that stuff, you know, just right out of the box. that's not who mitt romney is. the more he gets away from that, the less effective -- gets away from who he is, the less effective he is. >> david? >> i go back to paul, i think he was right saying in the primaries opposed to the general election, republicans are looking for a brawler. and he's channeling a lot of that. the second point is i disagree with roland in florida being

different from south carolina. the republican race is becoming nationalized. the gap up nationwide is saying it's different. >> i have to take a break here. thank you all. up next, more results of our exclusive dial testing. how undecided democrats, independents, and republicans reacted on jobs and clean energy. we'll be right back. the employee of the month isss... the new spark card from capital one. spark miles gives me the most rewards of any small business credit card. the spark card earns double miles...

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tonight, a panel of undec e undecided voters reacted to hot they heard in the state of the union speech. >> our group down here in the time warner media lab, an equal number of independents and republicans, and democrats, how many of you have been irritated over the issue of gasoline prices in the past couple of years. that's produced one of the biggest reactions in the whole speech when he talked about the idea of ending subsidies for oil companies. watch. >> we subsidize oil companies for a century. that's long enough. it's time to end the give aways to an industry that rarely has been more popular and double down on the clean industry that has never been more promising. >> democrats seem to really like this idea. you're a democrat?

why do you like the idea of going after the oil companies like this? >> they get so many tax breaks, and the gas prices keep going up and up and up. so if they cut the tax breaks, maybe the prices will go down? >> you think that will make a difference. give me a republican? what do you think? >> i don't know. i don't think there should be any particular industry that the federal government goes after to try to -- i like what they said about drilling capabilities, open up some of the offshore capabilities high mentioned. >> there seemed to be response from that, independents likes that as well, more energy unless independence in that. let's hear about how business is creating work. >> last year, they created the most jobs since 2005.

american manufacturers are hiring again. creating jocks for the first time since the late 1990s. >> you notice how the republicans and independents in particular fell off when the president said that things are getting so much better. why is that? >> well, i didn't see anything that backed that up that it's getting better. seems to be a matter of opinion. >> you doubt the reality of that? >> i doubt the reality. i don't see it. >> anderson, that's something we saw several times here, whenever the president talked about how things are getting better and they're okay, generally, nments and republicans we saw a real fall-off. let me ask you one more question, how many of you came in here undecided before this all started tonight? and how many of you feel closer to feeling decided about whether you will vote for this president or not in the next election? so a little change. maybe not much, but some.

all right, anderson, so our dial test group took a look at it all and that what they think. >> more reaction from the state of the union address tomorrow. with soledad o'brien, she's going to talk to eric cantor,y . thanks for staying up with us. if you missed the president's state of the union address, you'll see it up full coming up next. >> announcer: with nothing but his computer, an identity thief is able to use your information to open a bank account... in order to make your money his money. [whoosh, clang] you need lifelock-- the only identity protection company that now monitors bank accounts for takeover fraud. lifelock-- relentlessly protecting your identity. call 1-800-lifelock or go to lifelock.com today. ♪

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