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Clinton: If 'Obama walked on water...'

by Mark Silva

While maintaining that husband Bill Clinton's journey to North Korea to secure the release of two American journalists was "a private mission,'' apart from any consideration of nuclear proliferation, Secretary of State Hillary Clinton says that the transaction offers an opening for improved relations between Washington and Pyongyang.

"Obviously, what we're hoping is that maybe without it being part of the mission in any way, the fact that this was done will perhaps lead the North Koreans to recognize that they can have a positive relationship with us,'' Clinton said in an interview with CNN's Fareed Zakaria that is airing this afternoon at 1 pm EDT.

What about the contention of former U.N. ambassador John Bolton that the U.S. was rewarding bad behavior, hostage taking in this case, by the North Koreans?

"We've done this so many times before,'' Clinton said. "I mean, we've had former presidents do it. We've had sitting members of Congress do it.

"It is absolutely not rewarding them. It is not in any way responding to specific demands,'' she said. "It is recognition that certain countries that I think are kind of beyond the pale of the rule of law hold people and subject them to long prison terms that are absolutely unfair and unwarranted.

"Maybe it's, you know, the fact I have a daughter, but I believe that if we could bring these young women home, we should bring them home,'' she said. "And it had nothing to do with our policy.''

As for Bolton -- the hardliner from the Bush administration -- the secretary told her interviewer: "You mentioned somebody who, you know, heavens, you know, if President Obama, you know, walked on water, you'd say he couldn't swim. So, I mean, it's just not something that I think is relevant with what we're trying to do.''

Here, courtesy of CNN's "Fareed Zakaria GPS,'' is a transcript of a wide-ranging interview with Secretary of State Hillary Clinton:

FAREED ZAKARIA, HOST: Madame Secretary, thank you very much for taking time out of this very hectic schedule just to spend it with us

HILLARY CLINTON, SECRETARY OF STATE: Thank you Fareed, and thank you for coming to Nairobi for this opportunity.

ZAKARIA: It's my pleasure. North Korea.

CLINTON: Yes.

ZAKARIAQ: So, President Clinton comes back. He spends three hours talking to the leader of North Korea, Kim Jong-il. What was his impression of him?

CLINTON: Well, we're going to get a full debriefing, which we really haven't had the chance to get.

ZAKARIA: But you must have spoken to him on the phone.

CLINTON: Well, I doI have spoken to him on the phone, but I have this policy, I never talk about what I talk to my husband about, Fareed. But I think he's going to be able to meet with a lot of our administration officials over the next days and weeks to share his impressions, along with other members of his delegation. Obviously, what we're hoping is that maybe without it being part of the mission in any way, the fact that this was done will perhaps lead the North Koreans to recognize that they can have a positive relationship with us. I mean, remember when I first went to Japan and South Korea and China right out of the box as secretary of state, I said, look, we have to get back to the full and verifiable denuclearization of the peninsula. But we want to take steps to move toward normalization with North Korea. We have no designs on North Korea. We're not in any way intending to threaten North Korea in an offensive manner. Our concern is what they do internally that then threatens our allies and our partners and eventually us. You know, it's not a good feeling to see them exporting nuclear technology as they have, or to continue to build up their own capacity.

So, we reached out to the North Koreans and made it very clear that we wanted to create that kind of engagement. And they not only rejected it, but they began to take these provocative actions, which resulted in the entire international community, most importantly China, saying, wait, you can't do this.

ZAKARIA: But the Bill Clinton mission was unorthodox. I mean, here you have a former president going on what appeared to be a state visit, from the way in which he was greeted, being received by North Korea's START nuclear negotiator.

CLINTON: I mean, this, as you know, came from the families. I mean, this was a message that Laura and Euna were given by the North Koreans, which they passed on to their families and former Vice President Gore...

ZAKARIA: Naming him specifically.

CLINTON: Naming him specifically. And then they passed it on, obviously, as they should, to the rest of us. And you know, it was not anything, you know, Bill was interested in, seeking or even contemplating. But of course when, you know, Vice President Gore called and when our administration evaluated it and began to brief him, he said, look, if you think it's the right thing to do, and if you think I should do it, of course I will do it. But it is a private humanitarian mission. It was not in any way an official government mission.

ZAKARIA: But John Bolton, the former U.N. ambassador, says...

(LAUGHTER)

ZAKARIA: Should I even go on?

CLINTON: I'm sorry. No, you really shouldn't.

(LAUGHTER)

ZAKARIA: But he says this is rewarding hostage-taking.

CLINTON: Oh, well...

ZAKARIA: Why is he wrong? Because they effectively took hostages.

CLINTON: We've done this so many times before. I mean, we've had former presidents do it. We've had sitting members of Congress do it. It is something thatit, you know, it is absolutely not rewarding them. It is not in any way responding to specific demands. It is recognition that certain countries that I think are kind of beyond the pale of the rule of law hold people and subject them to long prison terms that are absolutely unfair and unwarranted. And maybe it's, you know, the fact I have a daughter, but I believe that if we could bring these young women home, we should bring them home. And it had nothing to do with our policy, and of course, you know, you mentioned somebody who, you know, heavens, you know, if President Obama, you know, walked on water, you'd say he couldn't swim. So, I mean, it's just not something that I think is relevant with what we're trying to do.

ZAKARIA: And then we get to the unusual circumstances of your becoming secretary of state. There was a lot...

CLINTON: "Unusual" is an understated way of saying that.

ZAKARIA: There's no way -- no way around talking about this partnership or this relationship...

CLINTON: Right.

ZAKARIA: ... with Barack Obama.

CLINTON: Right.

ZAKARIA: Because it is very unusual in the American political context to have the chief rival of a presidential candidate then become part of his cabinet. And people have often referred to the experience of Abraham Lincoln picking William Henry Seward.

CLINTON: I think that, in many ways, the policies that President Obama and I talked about during the campaign were maybe difference in degree, not kind. We have a -- a world view that says America should be leading by example. You know, it's not the

-- I think my husband said, actually, it's not the example of our power, but the power of our example that we want to convey.

And so when the president asked me to consider this, I was personally very surprised. And I became even more surprised when accounts of the campaign came out and said that he'd been thinking about it for some time.

But I also believe that what I brought to the job, the real commitment that I have to being not just effective but being part of a team that's effective, which the president knows -- we served in the Senate together

-- has really worked out better than anybody could have predicted. I think our personal relationship has, you know, certainly deepened and broadened over the course of the last six and a half months. The time that we spend together, the difficult problems that we wrestle with.

But also, the team -- Bob Gates and I, Jim Jones and I, others who work with us -- are really open. And Henry Kissinger said to me that he was very surprised. It was the first administration he could remember where, if he talked to me and then he talked to somebody in the White House, he got the same story. And it's because we really try to hash out problems in private. We really understand the significance of the responsibilities that we shoulder at a time of, you know, great peril and promise in American history. And the president is a disciplined, decisive interlocutor in the meetings that we have.

So it's been a rewarding professional and personal experience.

ZAKARIA: So you've watched two White Houses up close. What would you say is the principle difference between the way Bill Clinton ran the White House and Barack Obama runs the White House?

CLINTON: Well, I think both of them bring just enormous intelligence to the job. I mean, obviously, I know Bill much better. But I have seen in President Obama, as well, you know, just an intelligence that is so compelling: to struggle with the difficult issues that are put before you. I think that the time in which Bill served was so different from the time in which President Obama is serving.

And in the White House, I think, you know, Bill is -- is very, you know, constantly seeking out information. You know, always trying to figure out where to end up. And he does it in a very public way. You know, "I mean, what do you think, Fareed? I mean, tell me that."

I think that President Obama is, you know, very clear about the process that he wants to lead to his decision. I think, obviously, my husband made a lot of great decisions for our country, and I think that President Obama is doing the same.

ZAKARIA: Do you worry, though, that with a president who is very interested in foreign policy, as President Obama is, with a national security staff which has many of his old campaign aides on it, that inevitably power will move more and more closely to the White House and things will -- policy will be made there?

CLINTON: No. I don't worry about that for a couple of reasons. First of all, because I'm not exactly a shrinking violet. And my opinion are not only sought, but listened to. And I appreciate that very much.

And obviously we do our homework in the State Department so that when we tee-up something, we can both explain it and defend it. And I have a great team, Jim Steinberg, Jack (ph) Lew, Cheryl Mills, and everybody from the political side. And then these extremely professional foreign service and civil service people.

So we are the implementers, there is no doubt about that. The White House cannot implement policy. But the partnership between the White House, the State Department, the Defense Department, and occasionally other -- the intelligence departments, both the DNI and CIA, and then others coming in, you know, is truly a team effort.

And I think that the White House, in a complicated world with a government as big as ours, has to coordinate. I mean, that is one of its principal roles. And I think the NSC is really growing into an understanding of how best to fulfill its role.

It cannot implement, it cannot execute. And you need very good, solid relationships with the rest of the government to make sure that your policies and your -- the direction you want to set are actually followed up on.

So when it comes to making policy, I think that we've had such a seamless ongoing dialogue about everything. That -- you know, I've been around Washington long enough, unfortunately, to know that there will always be people who want to take credit wherever they are or who want to, you know, try to take advantage over somebody's disadvantage.

But there has been so little of that. And instead, it's a really serious professional operation.

(COMMERCIAL BREAK)

ZAKARIA: On Iran, there are a number of people, as you know, who argue that the president and you were too slow to condemn what seems to have been fraud in the elections, to slow to offer support to people on the ground, because you wanted to preserve the option of negotiating with Iran.

Can you really negotiate with Iran at this point? I understand in general one negotiates with all kinds of regimes. But practically speaking, right now, with Ahmadinejad having been inaugurated in a very disputed atmosphere, won't you be legitimizing him if you negotiate with him?

CLINTON: We did not want to get between the legitimate protests and demonstrations of the Iranian people and the leadership.

And we knew that if we stepped in too soon too hard, the attention might very well shift and the leadership would try to use us to unify the country against the protesters. And that was -- it was a hard judgment call.

But I think we, in retrospect, handled it pretty well. Now behind the scenes, we were doing a lot, as you know, the -- one of our young people in the State Department got Twittered, you know, "keep going," despite the fact that they had planned for a technical shutdown.

So we were doing a lot to really empower the protesters without getting in the way. And we're continuing to speak out and support the opposition. On the question of engagement, that has been the president's policy. We have made it clear, we have communicated in a number of ways to the Iranian leadership.

But we are under no illusions. We were under no illusions before their elections that we can get the kind of engagement we are seeking. The president has also said, look, we need to take stock of this in September. If there is a response, it needs to be on a fast track. We're not going to keep the window open forever.

But we're not just sitting here waiting for somebody in Iran to say, well, let's talk. We're working with our allies to make the case that we need to have prepared a very robust set of sanctions that we can get the international community to sign off on, the way we did with North Korea.

We are also, though, looking at an incentive package. You know, we've got to be able to say to the Iranians, well, here is what is in it for you if you get back into the good graces of the international community on your nuclear program.

You forswear nuclear weapons. You take appropriate safeguards regarding any kind civil nuclear program.

ZAKARIA: I have to ask you a question that is of personal interest. A "Newsweek" reporter, Maziar Bahari...

CLINTON: Right.

ZAKARIA: ... has been arrested and is now going through what can only be called a kind of Stalinist show trial. What is your reaction to that?

CLINTON: Well, I am just appalled at the treatment that Mr. Bahari and others are receiving. It is a show trial. There is no doubt about it.

And it has caught up journalists and clerics and former elected officials, and even people in the currentwhat was the government before the elections.

And it is a sign of weakness. It demonstrates, I think, better than any of us could ever say, that this Iranian leadership is afraid of their own people, and afraid of the truth and the facts coming out.

We've expressed our concern about Mr. Bahari's confinement and now the trial. As you know, he's a Canadian. And we have certainly told the government of Canada that we would be willing to do whatever is appropriate.

They have thanked us for that, thanked us for our concern. They believe that they should take the lead on that. And we're supporting them.

ZAKARIA: Let me ask you about Afghanistan. It's a little bit confusing I think to Americans to understand where we are, because it seems as though there was an Afghanistan strategic review, the president made clear that he was sending troops, but also that this seemed, from a lot of the body language, to be the final increase in troops in Afghanistan, would receive -- Secretary Gates on our program said, it would be a very hard sell to send any more troops.

Now we have a new commander in the field. There is some talk of perhaps needing more troops. Secretary Gates has said well now maybe I'm open to it. All of this happening against a backdrop of the worst month of U.S. casualties in Afghanistan.

Why are the casualties rising? And is sending more troops there in these circumstances sending more troops into a black hole?

CLINTON: Well, Fareed, the strategic review on Afghanistan, which set forth an approach that we're following, made it clear that we needed to integrate military and civilian assets and try to build up the Afghan national army and an Afghan police force as quickly as possible.

What we're finding is that that is the key. You know, if you read the accounts of what our Marines and soldiers are encountering, it's tough fighting. I mean, they are really taking it to the Taliban in areas that have been largely uncontested.

And...

ZAKARIA: So you think this is a little bit like the surge in Iraq? That once you start engaging the enemy, inevitably your casualties mount and perhaps this might even be a sign of success?

CLINTON: There are certainly military experts and analysts who believe that. Who are explaining to me and to others that what we're seeing is tragic. And the loss of life is something that I deeply regret.

I mean, nobody is more anxious than the president and I are for us to be successful and to be able to send our young men and women home.

But not being on the sidelines, moving out of the comfort zone, remember that British and NATO forces have also suffered their greatest losses, is a kind of combat challenge that the Taliban has been able to avoid up until now.

But no decisions have been made about the military side of our strategy.

There is a lot of discussion going on and what I like about the president and the White House and the team that we have is that we're always asking, well, what are we doing? Or can we do it better? What are the costs? What are the consequences?

So there has been no decision, but I think it's important for the American people to know that we have our best commanders. We have our best civilian team. We have an embassy headed by a former general who served in Afghanistan, but who really gets the civilian component of this, to other ambassadors who are there to run our aid program and to, you know, work on the political dynamics inside of Afghanistan.

We're trying to make sure that there is as free and fair and legitimate election as can be held on August 20th. And then once there is a winner of this election, we have some very hard asks about what we expect from the government of Afghanistan.

And first and foremost is helping us expedite the training of an Afghan national army that will help our forces hold ground and then take over that responsibility.

ZAKARIA: Is the current administration in Afghanistan being a useful partner, both in terms of trying to this stuff and actually getting it done? Or could one potentially see a change in administration in Afghanistan as a good thing?

CLINTON: Well, we're actively impartial in what's going on in Afghanistan in terms of the election. I think it has surprised people that this has turned into a real election. There are campaign rallies.

There is radio and television advertising. I think the incumbent, obviously as incumbents do, has an advantage.

But very vigorous campaigns are being run by several contestants. So we're just going to do everything we can to make sure the election is fair.

And then once there is a winner, we will work.

Now the previous years of the term of President Karzai has been mixed. I mean, in some areas we've made a lot of progress and have had a very good relationship. In other areas it needs improvement.

So we will work with whomever the people of Afghanistan select. But we will be very specific about what we need to see coming from the government.

(COMMERCIAL BREAK)

ZAKARIA: You and the president have both communicated to the government of Israel that you do not want any more settlements. You were very clear in your statement. You said, no exceptions.

And yet the government in Israel seems to be making an exception. Do you intend to, in any way, enforce that view that the United States has? To ensure that the government of Israel does not do what you don't want it to do, which is to expand the settlements in the West Bank?

CLINTON: Well, as you know, we're in the midst of the very intense negotiations that Senator Mitchell is carrying out. And I think both Israel and the United States are working from a position of friendship, a durable partnership, a commitment by the United States to the security of Israel, which is absolutely imperative and non-negotiable.

But there are steps we would like to see all of the parties take in order to maximize the chances for success of the negotiations to reach a comprehensive peace that results in a two-state solution.

And there are areas where Senator Mitchell is hammering out the details with the Israelis, with the Palestinians, with Arab countries. And I -- you know, I'm actually cautiously optimistic that we will be able to tee-up negotiations.

Now there is now guarantee. These are very, very difficult issues to resolve. But I think that starting with Prime Minister Netanyahu's important speech where he accepted the two-state solution, and, you know, laid out...

ZAKARIA: But placed conditions on it that the Palestinians regard as entirely unacceptable.

CLINTON: Well, but both sides do that. I mean, you know, that's politics, that's negotiations. I mean, people are likely to end up in a place that makes neither of them happy. And then the rest of us can say, well, that's probably a good outcome.

But they start from maximalist positions. That's where people obviously begin.

ZAKARIA: But the relationship with Israel has been prickly. I'll give you one example. You extended a kind of nuclear umbrella, the prospect of a nuclear umbrella to Israel and potentially other countries in the Gulf.

And we're talking about the Iranian nuclear program. The response from the Israeli government was to criticize you, was to say that you were giving in to -- you know, accepting an Iranian nuclear program.

Were you surprised by their response?

CLINTON: Well, I think they misunderstood what I was saying. I said, "defense umbrella," I didn't specific what kind of defensive measures might be available to those in the region.

But I clearly was sending a message to Iran and we've obviously explained that to our friends in Israel. But the message was to make clear to whoever is making decisions in Iran these days, particularly about something as important as their nuclear weapons potential.

That if they believed that this would give them a more secure position, a greater capacity to influence events, to intimidate their neighbors, to expand the reach of their ideology, they were mistaken.

That there was no chance in the world that even if they were to obtain that and it was obviously prefaced and meant in that way, because our position remains the same. We do not intend to accept nuclear weapons by Iran. We think that is unacceptable.

But for the sake of argument, and for the sake of their calculus, if that is among their objectives, they need to think again, because they will render their position less secure, they will trigger an arms race in the region and they will certainly put greater pressure on the United States to extend a defense umbrella in order to hem in and contain them.

So, I just wanted to be sure that they were thinking like we were thinking, and I think the Israeli response, you know, only looked at the fact that, oh, my gosh, well, does that mean you're changing your policy, that now somehow it's acceptable?

No, of course not. We think this influences the thinking inside Iran.

ZAKARIA: You just got through a bilateral with China, a strategic and economic set of meetings. Do you believe that China is now assured that the United States is managing its fiscal house well. The concerns that they have publicly made several times about their fears of an American deficit, of management of the dollar. Were thosein those discussions, did you get a sense that they're breathing a sigh of relief?

CLINTON: I think that it is fair to say that they are somewhat reassured. I think Secretary Geithner and Larry Summers and the economic team have done an excellent job of keeping the Chinese informed about the steps that we were taking in our government. I think the recent signs of stabilizing in our own economy have been reassuring. Obviously, we are not out of the woods yet. And neither are they. But it is fair to say that the, in my view, the very large stimulus that both of our countries took, ours in dollar terms bigger than theirs, but as a percentage of their economy quite significant for them, have really helped to get the global economic engines at least beginning to turn on.

The problem, of course, is that both of us may well have been, prior to this recession, on unsustainable pathways. We could not continue to spend the way we'd spent on an individual level or government level, and now of course our deficit's even greater, which the president has said is going to be addressed. They have an export-driven approach, but at some point, they're going to have to stimulate internal demand. So...

ZAKARIA: Did they make any assurances that they were going to do that?

Because right now, it is the government spending, the Chinese government and not the Chinese consumer.

CLINTON: That's right. Well, but they are taking some steps toward creating what we would call a safety net, some kind of health insurance program, some kind of Social Security-type program. Because you have to render people secure if you expect them to spend. Otherwise, they have to keep their own money under the mattress or in the bank so that they can draw it down when they need it. So, there has to be some government expenditure to try to create that safety net. Now, you know, we're having our political battles over health care. But certainly we do have a safety netunemployment insurance, Social Security, et cetera. We have to reform it, but it's there. And American consumers have, you know, spent in a way that kept the global economy afloat for years now.

I mean, if you think of the global economy before the recession, it was like an inverted triangle resting on the shoulders of the American consumer. But I think spending habits, at least in the short term within our country, are not going to be what they were before.

So, it is in everyone's interests that some of the developing economies do more to generate internal demand. So, we face our challenges. I think we have gotten through this first period better than many had expected.

We still have, you know, some choppy water ahead, but the president's view is that we inherited this terrible crisis. You know, the ship of state has been stabilized. But now we have to determine what direction we go, and I certainly believe we're going to have to go in the direction of lowering our deficit, reforming some of our entitlement programs, encouraging more exporting of our economy, which means investing in our manufacturing sector, which is part of what I hope comes from the stimulus bill and the investment in clean energy.

So, there's a lot ofa lot to be done, but I think the Chinese are breathing a little easier.

ZAKARIA: Speaking of -- final question -- speaking of hard negotiations, what message would you have to the Senate Democrats who seem to be holding up the passage of a comprehensive health care bill? Or are they amending it in ways that are useful and productive?

CLINTON: Well, actually, I think that it's a very healthy process that's going on. They are having to hammer out all of their differences, and there are serious differences in viewpoints, for example. But what the president has said and what I believe is the right approach is that this can't be put off any longer. I mean, it's a little bit like what I was saying about climate change.

Back in '93 and '94, when I was on the frontlines and taking all the incoming fire on this issue, people didn't really accept in their gut that we had to do this. They kept thinking there's another way out of this, and it's not that bad. And we'll try, you know, managed care, and we'll try more HMOs. We'll try all of that.

And now all these years later, we realize that we have some fundamental problems with our existing system that have to be addressed. So I actually agree that at the end of the day, with all of this negotiation and back and forth, you know, we're going to come up with something.

My hope is that it's going to be meaningful enough to make a differenceto make a difference on the cost side, which is the paramount issue for people like us who have insurance. OK, how do we keep affording it and making sure that it is of high quality; assurances that what we're going to do on the public side, the Medicaid and Medicare programs, are not going to undermine those programs in ways that they can't deliver cost-effective quality care; getting people insured and moving as rapidly as possibly toward universal care; changing the delivery system and the incentives so that we actually figure out ways to reward prevention, pay for prevention.

You know, in '93, for example, Fareed, I had a man who became a friend of mine, but I didn't know him at the timeDean Ornish. He came to see me, and he said, look, I have proof...

ZAKARIA: This is the doctor...

CLINTON: Who did a lot of work on cardiovascular health. And he said, "We have proof that changes in diet, stress reduction, exercise are as effective, if not more effective than medical interventions in lowering people's overall threat of heart disease." He said, "But I can't get Medicare to pay for somebody going to an exercise class or to pay for a nutritionist to come to their house and talk to them."

Well, we worked and worked on that all through the time my husband was president. And then finally sometime during the Bush administration, the Centers for Medicare and Medicaid, CMS, said, "OK, fine, we'll begin to pay for this." Well, it shouldn't be that hard. You know, we're more than happy to pay for a pill or pay for a procedure. How do we change behaviors? How we convince, you know, the medical establishment to do that?

There's just a lot that needs to be at least included, even if though we can't get to the finish line right away.

ZAKARIA: You're passionate about this. Do you ever wish that you were back in the White House running it?

CLINTON: II feel like I, you know, I gave.

(LAUGHTER)

I gave my blood, sweat and tears and I think we, despite all of the difficulties of that effort, we got people thinking and we helped to further the debate. It was, you know, disappointing that wewe didn't get it all done, but we got, you know, the children's health insurance program done. We got portable insurance. We got some things accomplished in the '90s and actually under the Bush administration some changes were made so that the government said to the hospitals, "we're not going to pay for what are, you know, for what are "never" events. Nobody should get bed sores. People should be given an aspirin if they come in and get their pneumonia shotthings that really should be required.

So we made, you know, progress, but the problem is that we just never got to a critical mass of progress, and that's what I'm hoping to see now.

ZAKARIA: Madam Secretary, thank you so much.

CLINTON: Good to talk to you.

ZAKARIA: A pleasure.