[John King:] And now we'd like to welcome back our international viewers to our STATE OF THE UNION report for this Sunday, June 21st. Once again today, protesters are out on the streets of Tehran after a day marked by violent clashes between demonstrators, police and pro-government militia men. Throughout this hour, we'll bring you the latest and breaking news on this developing story. Health care reform off to a rocky start in Congress with predictions of sky high costs and limited results. Can we afford to insure all Americans? Four leading senators, players for both parties, are with us throughout the hour to tell us what comes next in the Iran and the health care debates and to answer your questions and concerns. And this week, we give the last word to the people of Iran. The protesters who stormed the streets of Tehran as the whole world watches. That's all ahead this hour on STATE OF THE UNION. Protesters there, I believe these shots are here in Washington. Protesters protesting the handling of the election in Iran today. And on the streets of Tehran, additional protests, thousands in the street in defiance of their supreme leader who have urged the protesters to stop. Our Christiane Amanpour has been following these developments. She was in Iran. She is just out of that country. She joins us now with the latest. Christiane, the demonstrators are back in the streets today, help us understand the significance.
[Christiane Amanpour, Cnn Chief International Correspondent:] Well, we're being told, John, and of course it's always difficult to confirm that it's much less than yesterday and so far not violent. I'm told by calls that I've made and people that I talked to that there are scores and scores, if not hundreds, many, many hundreds, of police and riot police out on many, many parts of the city, whether it be an intersection, a square, in various neighborhoods and are not just preventing people from coming and gathering but also going in and basically using their batons to disburse anybody who is just standing around. In addition, going house to house in some areas and cracking down there. So an attempt to put this down. What we're also seeing amongst officials is a widening rift as well as accusations against, quote, foreign interference. For the first time in a few days, President Ahmadinejad has been quoted speaking to clerics in which he has accused specifically the United States and Britain of interfering and of having premature statements on these international Iranian matters. He says that specifically addressing both Prime Minister Gordon Brown and U.S. President Barack Obama that you will not be considered, quote, "in the circle of friends and you must reconsider your statement." This after the foreign minister, Manouchehr Mottaki addressed diplomats in Iran and specifically blamed Britain for pre-involvement in this and alleging that they were involved in the protest. Britain has categorically rejected that in a statement by the foreign secretary today. Now, Facebook, we're told, the Facebook page of Mir-Hossein Mousavi are not what we should be looking to for his messages. Instead, they are being carried on a particular Iranian Web site, the Ghalam News and he has issued a long message to the Iranians today in which he describes all that's happened. It's much more measured than some of the more hysterical comments that are being attributed to him. But he does call for an annulment of the election. He says that a nationwide neutral commission should be formed to investigate, and that is echoed by former reformist president and supporter Mohammad Khatami who also calls for a neutral commission to investigate, and also says that it's insulting to accuse Iranians of being stirred up by foreign interference, that the protesters are and should have the right to peaceful protests and peaceful civil response to their elections. The speaker on the Iranian parliament, conservative Ali Larijani came out and accused the guardian council of unfairly and improperly siding with one candidate on this. So rifts opening up amongst very elite leaders both conservative and reform in Iran at this time.
[King:] Christiane Amanpour joining us from London just out of Iran. Christiane, thank you, we'll continue to check in as this dramatic day unfolds. A conversation this Sunday with four senators with unique insights in critical roles in the pressing debates over Iran, North Korea, health care and the nation's struggling economy. Senator Chuck Grassley is the top Republican on the Finance Committee, where the Democrats leading health care reform proposals stalled this past week. He joins us from Cedar Falls, Iowa. Coming to us from Scranton, Pennsylvania, Democratic Senator Bob Casey, who serves on the Foreign Relations Committee, and one of the key panels in the health care debate. With me here in Washington, California Senator Dianne Feinstein, she leads the Intelligence Committee, and her state has perhaps the biggest stake in the health care financing fight. And Senator Richard Lugar of Indiana, who is a ranking Republican on the Foreign Relations Committee, and a leading voice in international policy for a quarter century. We begin with the election fallout in Iran, and I begin at the magic wall because I want to take us through some of these dramatic images we have seen. First a reminder, as we watch the fallout in Iran, it is, of course, in one of the most unpredictable and volatile neighborhoods of the world. Iraq here, Afghanistan and Pakistan here. And the images we have seen, and we've said, we've just confirmed more protests today, here are some images throughout the weekend. Rock-throwing on the streets here. Those who support the candidate who lost the election, Mr. Mousavi. Flames and fire in the street. And I want to begin with you, Senator Lugar, you're one of the leading voices in this town on foreign policy. When you these pictures and more protests today even after the supreme leader said, stay out of the streets, are we seeing frustration at the election or are we seeing the seeds of another Iranian revolution?
[Lugar:] I think we're seeing a challenge of the regime. The leader, Khamenei, perhaps made a grievous error by making that the issue. In other words, he could have called for another election or for reforms or various other things. But in his speech on Friday, comprehensibly, he said now out in the streets you're indicating opposition to the state, to the regime itself. It's not a question of Mousavi or Ahmadinejad, it's me and the supreme council. So the protests have continued. The challenge continues, which is is going to come to a conclusion one way or another in which either the protesters bring about change or they're suppressed. And it's a potentially very brutal outcome at the end of the day.
[King:] And, Senator Feinstein, you are the chairwoman of the Intelligence Committee. As we watch this very volatile situation unfold, do you believe, based on what you're being told by U.S. intelligence, is this regime's survival at stake? Is that at issue in the streets of Tehran?
[Feinstein:] Well, I think Senator Lugar said it correctly. I think what became as what began as a challenge to the election has become a challenge to the leadership now. And I think the way the leadership has behaved is really terrible for leadership that derives its authority from religion. And a president newly elected who calls hundreds of thousands of people who protest an election just "dust," I mean, these were they threw the gauntlet to the people, essentially. When there was a way out for the supreme leader, simply to say, so many people object to this election, we will do it over and we will show that we can do an election correctly, and with the people's confidence in our country. Instead what you have is a total putdown by the leadership of what began as a legitimate protest, which has now turned into much more than that because of the brutality that the regime has shown to its people.
[King:] And one of the questions, of course, any time you have a dramatic world event like this is, what is the role of the United States? And what is the role of the U.S. president? Senator Grassley, I want to go to you, because some Republicans and conservatives have said that President Obama has not been bold enough. That he should stand at the White House and tell those people in the streets risking their lives that he stands with them and that the people of the United States stand with them. I want you to listen to Senator John McCain and Congressman Mike Pence, two Republicans who say the president has this wrong.
[Sen. John Mccain, R-ariz:] On this issue, I do not believe that the president is taking the leadership that is incumbent upon an American president.
[Rep. Mike Pence, R-ind:] When Ronald Reagan went before the Brandenburg Gate, he did not say, Mr. Gorbachev, that wall is none of our business.
[King:] Senator Grassley, the president says to be more direct than he has been. And he has said, the world is watching, and he has said he sees things that he believes are unjust by the Iranian regime. He says to go further would be to give a foil to Ahmadinejad and the supreme leader. How do you rate the president's performance on this one?
[Grassley:] Well, I believe that we could be more forceful than we have, and I believe that the United States being a democracy for 200 years, we've bragged about what we want to do, extending democracy around the world. We've been involved in the Philippines, in Bosnia, several other countries over the last several years and actually being very forceful in promoting democracy. If America stands for democracy and all of these demonstrations are going on in Tehran and other cities over there, and people don't think that we really care, then obviously they're going to question, do we really believe in our principles? So wherever there's opportunity to promote democracy, it seems to me we ought to be in the forefront of that promotion, particularly when it comes from the grassroots demonstration that the people really want the ballot box to work and people to be elected honestly as opposed to what looks like a charade that went on last weekend in Iran.
[King:] Senator Casey, you're on the Foreign Relations Committee, has your friend, the president, been too timid here, as Senator Grassley suggests?
[Casey:] No, John. I think he has gotten it just right. The president, I think, has struck the right balance between making sure that we affirm and speak out in favor of the universal values of the freedom to assembly, the freedom of speech, all of those important values that our history has taught us. But at this moment in the history of Iran, we should not politicize this issue here in the United States. The key thing here is striking the right balance, telling those who are protesting that we share their values, but also making sure that we keep our eye on the ball here. The biggest threat down the road in terms of our security and the security of the region is Iran's nuclear program. And the best way to approach that is to leave every option on the table, including the strong and tough diplomacy, but also, and the Congress plays a role in this especially, and I've been a leader on introducing legislation on sanctioning Iran, or at least giving the president the authority to provide or to impose, I should say, sanctions on the Iranian regime if they continue to pursue a nuclear weapon strategy. So I think he has gotten the balance just right.
[King:] On that point, I want to get up and walk over to the wall, because I want to remind our viewers about the government structure in Iran. Senator Casey, you just say you believe diplomacy should stay an option. I want to show this float chart just so the American people understand. President Ahmadinejad is down here in this structure. And President Obama has said he would like high-level diplomacy, even leaving the door open to a meeting with President Ahmadinejad early on in the administration. It is the supreme leader, of course, who calls the shots, the armed forces report to him, the state media reports to him. Senator Lugar, I want to come back to you on Senator Casey's point. The president said diplomacy should be on the table. He has been waiting for the Iranians to come back to him. If President Ahmadinejad or the supreme leader, Mr. Khamenei, came back now and said, we want to sit down with the United States at a high level, Secretary Clinton perhaps to the foreign minister, or president to president, should the United States say yes or would you be rewarding the unjust, to use the president's word, behavior he sees on the streets of Iran right now?
[Lugar:] We would sit down because our objective is to eliminate the nuclear program that is in Iran. This is...
[King:] Even though even though they are shooting people in the streets and beating people in the streets and arresting political opponents, if they called tomorrow, you would sit down with them?
[Lugar:] Yes, it's totally improbable. And the reason is that this regime now is under fire. This is not a stable regime in which two people suddenly sit down with the United States. They may not be able to impose their will. This is what this is all about in the streets. But in direct answer to your question, of course, we really have to get into the nuclear weapons. We have to get in the terrorism of Iran in other areas in the Middle East. Now we have a new opportunity in which we might very well say we want communication with Iran. We want openness of the press. We don't want to have use Twitter. We want to have to press on the ground. But in order to have any kind of relationship, we need to be able to talk to people, hear from people, argue with people.
[King:] Up next, more on Iran, as well as health care in the economy with our four senators. STATE OF THE UNION will be right back.