DAVID GREGORY: But first, good morning, live from Lexington, Kentucky, where I'm spending some time over the holidays with family. And while families around the nation celebrated Christmas on Friday, we came very close to coping with tragedy as a deadly act of terror was attempted on board a U.S. airliner. Yesterday, federal officials charged 23-year-old Nigerian Umar Farouk Abdul Mutallab with trying to destroy Northwest Delta Flight 253 bound from Amsterdam to Detroit. And joining us now live from San Francisco for the very latest on the investigation in the situation is the secretary of Homeland Security, Janet Napolitano.

Secretary Napolitano, good morning and welcome back to MEET THE PRESS. Let me start by asking you, the suspect allegedly was carrying a compound on his body of PETN. That was the same chemical compound that the "Shoe Bomber," Richard Reid, had on him some eight years ago. The fact that he had this very same compound, does this, to you, represent a failure of security to detect?

SEC'Y JANET NAPOLITANO: Well, I think we don't know enough to say one way or the other in that respect. The forensics are still being done, the investigation is still underway. I think the important point here is that once the incident occurred, everybody reacted the way they should; the passengers did, the flight crew did. And literally, within an hour, additional measures had been instituted not only on the ground here in the United States, but abroad and, indeed, on the 128 flights that were already in the air from Europe.

MR. GREGORY: Is this suspect a part of al-Qaeda?

SEC'Y NAPOLITANO: Again, we don't know. There's allegations that have been made public in the criminal complaint, but the FBI now has that matter. It's under investigation and we shall see. What we are looking at is literally how he got on the plane, to make sure that the screening procedures were followed; and if they were followed, whether they need to be changed. And then, again, making sure that on the ground the, the air environment remains a safe environment, which indeed it is.

MR. GREGORY: Let me just clarify, though. Is your suspicion, based on intelligence you're seeing and information that he's providing, is your suspicion that he is part of al-Qaeda?

SEC'Y NAPOLITANO: You know, David, I, I, I don't want to speculate on that. Again, the, the FBI has that under investigation. We'll ascertain whether or not he is what he, he allegedly says he is. But what we are focused on, again, is screening, making sure that mitigation measures are in place at airports across the country. And one thing I would say to the traveling public over this holiday season as they return home is to get to the airport a little bit earlier, because there will be some additional measures, and to say we, we won't do the same thing at every airport, because one of the things we try not to be is predictable in this regard. So if you see screeners at one airport doing one thing but not doing it at another, at another airport, that's not because anybody's doing anything wrong. Indeed, they're following our protocols.

MR. GREGORY: Based on what you know so far, in terms of how much and what he had in his possession in terms of explosives, was it sufficient to bring down the plane had he succeeded?

SEC'Y NAPOLITANO: Oh, I think we're far from knowing that. The forensics as to what he actually had have yet to be complete. And stepping back from this case, what it takes to actually bring down an airliner depends not only on the chemical and the amount, but where a person is on the plane, how it's detonated, all sorts of questions on that score. So the minute he began setting himself on fire, which is what it, it looked like, the passengers acted quickly. And indeed, that's part of what I keep saying, is security is everybody's responsibility. The passengers and the flight crew deserve our praise, and the system went into full alert mode leaning forward, literally, within, within a, within minutes, an hour of the incident occurring in the air.

MR. GREGORY: Right. But, Secretary Napolitano, the question is whether the system really did do everything that it should have done. He was on a terror watch list. His father had raised concerns about him being radicalized to the U.S. Embassy in Nigeria. He was not on a do not fly list, which is a, a separate kind of cataloguing of threats. Do you think the fact that he was on a watch list should have triggered a secondary screening in the airport in Amsterdam?

SEC'Y NAPOLITANO: Well, this is the way it works. He was on a TIDE list. There are over a half a million people on that TIDE list, and that information was shared throughout the federal family. There's no question about information sharing here. There had never been any additional information supplied that would move him to what's called a Selectee list, where you are--where you do that kind of secondary screening, or indeed to the No Fly list, which requires specific, credible, derogatory information. Now, I think one of the things we will do--because that's a system that has been in place for a number of years. One of the things we will do is go back and look and say, well, maybe in this day and age, with the kind of environment we have, we should change some of those protocols. But right now he, he was on a, a generic list, if I could use that phrase, but we did not have the kind of information that under the current rules would elevate him.

MR. GREGORY: Final question, Madame Secretary. Given this incident, given an attempt to use an airplane as a weapon yet again, what does it say about the nature of the threat that terrorists generally, but more specifically al-Qaeda, if that's in fact the case, still poses to the United States?

SEC'Y NAPOLITANO: Well, I think, stepping back from this case, what we see is that al-Qaeda remains a source of threat streams to the, to the world and indeed to the United States. And while this case does not appear specifically connected there, that leadership, that organization, that training, much of it emanates from the Afghanistan-Pakistan area. And indeed, that is, that is why al-Qaeda and going after al-Qaeda is such an important part of the president's Afghanistan strategy.

MR. GREGORY: All right, Secretary Napolitano, I know your time is limited this morning as you're getting back to Washington. Thank you very much for being with us.

Joining us now, White House press secretary Robert Gibbs. He's live from the White House this morning.

Robert, good morning. Welcome back to MEET THE PRESS. The president, of course, is vacationing with family on this holiday weekend in Hawaii, and I know that he's been kept abreast of developments as they've occurred over the past several days. What's his priority now in terms of what he would like to know, what kind of accountability he would like to see as a result of this?

MR. ROBERT GIBBS: Well, David, as you mentioned, he's been briefed very regularly by national security staffers that are with him in Hawaii and has been involved with conference calls to and from the Situation Room since we first learned of this incident on Christmas Day. I'd say the two priorities that the president has right now, first and foremost, ensuring the safety and security of the American people and doing everything that we can and continue to do everything that we can to make sure that that's happening. And secondly, David, he's asked for two different reviews to be conducted, which you heard Secretary Napolitano mention. First, digging into this listing--the listing procedures that she talked about, figuring out if the information that the U.S. government had was used properly. But also, to go back and look at the protocols for how listing is done that, as the secretary mentioned, in some cases there are several years old, and ensure that we're using all the information that we have properly. She mentioned a list of 550,000 people. There's a smaller list of 400,000 people of which this Selectee list that you mentioned, and the No Fly list, are drawn from. Those two lists encompass about 18,000 people. So you can see there are a series of database universes that list people that are of some concern to several agencies across the government. We want to ensure that information sharing is always happening as it should. And I think secondly, a review to ensure and figure out why a, an individual with the chemical explosive that he had on him could get onto an airliner in Amsterdam and fly into this country. So a listing review and a detection capabilities review so that we can look, going forward, about what has happened now in the past.

MR. GREGORY: There, there's obviously an investigation that's ongoing. But just as after 9/11, then President Bush's national security team knew that, that the attack had the feel and the look of an al-Qaeda attack. To, to the president's national security team, does it feel the same way here?

MR. GIBBS: Well, David, I don't want to get into classified intelligence matters. I think pretty quickly the White House determined, and we told many in the media and you all reported, that we believe this was a potential terrorist attack that, that could have occurred. The president certainly has taken steps in his time in office to reorient our priorities as it comes to fighting that war on terror. We're drawing down in Iraq and focusing, as the secretary said, on Pakistan and Afghanistan, the place where the attacks of 9/11 originated and where people sit in caves and in houses today planning more attacks in this country, using all elements of American power in places not just like Pakistan, but throughout the world in places like Yemen and Somalia. And you've seen already leaders from al-Qaeda and other terrorist organizations in Pakistan, Yemen and Somalia that have been targeted and eliminated. We've increased our capabilities...

MR. GREGORY: Right.

MR. GIBBS: ...and our information sharing, and we want to do the same throughout the federal government.

I would say lastly, David, I think going forward, the president believes strongly that this has to be a nonpartisan issue. This should not be a tug-of-war between the two political parties. I hope that, that, that everyone will resolve in the new year to make protecting our nation a nonpartisan issue rather than what normally happens in Washington, and that is devolving into politics.

MR. GREGORY: Final point on this. Is there any intelligence or information to indicate this was part of a larger plot?

MR. GIBBS: David, I don't want to get into some of that intelligence, except to say this, that immediately security procedures were reviewed, as the secretary said, capabilities were strengthened at screening facilities in this country and throughout the world. We added air marshals to flights coming in and out of this country. So certainly, steps were taken to assume and plan for the very worst in order to prevent anything from happening in this country.

MR. GREGORY: Robert, let me turn, if I can, to a couple of other matters in our remaining moments...

MR. GIBBS: Sure.

MR. GREGORY: ...the first being health care. The president achieved a major legislative success with healthcare reform passing the Senate this week. Now comes the tricky task of reconciling the Senate bill with the House bill, and there are differences. There's a public option in the House bill, not in the Senate bill; there's the question of different taxes, there's the restrictions on abortion. What will the president's priorities be as he approaches this attempt to reconcile theses two pieces of legislation?

MR. GIBBS: Well, first and foremost, David, I think the president would tell you that what he sees in each of these bills is, in many cases, virtually identical. The major parts of healthcare reform that the president sought to have enacted as a candidate are now very close to happening, and he thinks the commonalty between the two proposals overlaps quite a bit. Obviously, he'll be involved with House and Senate leaders in working through the last remaining details that have to be ironed out. But as I said earlier this week, and I think the president believes strongly, healthcare reform in this country is not a matter of if, it's now just a matter of when. People will have access to affordable insurance. People with insurance won't be discriminated against because of a pre-existing condition. We'll take some tough steps to ensure that insurance companies aren't using the money that's gotten from your premiums to pad their profits, but instead to provide much-needed medical care. I think the American people are on the verge of a very big win in healthcare reform in the--early in the next year.

MR. GREGORY: Let me just, let me just try to pin you down on a couple of, of points of dispute. First of all, on taxes, the president indicated earlier in the year that he would not demand on this--demand a surtax on wealthy Americans in the House bill. But this excise tax that's on so-called Cadillac plans in the Senate bill, which are more generous healthcare benefits that a lot of union members have, is the president committed to keeping that in the legislation?

MR. GIBBS: Well, the president is committed to working out fairness and ensuring that--again, understand that that is not a tax on a worker or an individual, that's an attacks on--that's a tax on an insurance company that provides a plan that, quite frankly, many would deem is far too generous. The best way to bend that cost curve is to go after and work on eliminating excessive Cadillac plans that people at Goldman Sachs and big bankers might get. That's what the focus will be in this. I think the president believes that we can work out a solution. And what's important in this is, David, the bill that the president has proposed and the bill that he will sign will be paid for and it will reduce the deficit, two things that haven't been said in this town in quite a long time.

MR. GREGORY: Let me ask you about the economy, as there's a focus on getting people back to work. Here in Kentucky, like the national average, unemployment's at 10.6 percent. Here in Kentucky, you've got state budget shortfalls...

MR. GIBBS: Sure.

MR. GREGORY: ...that may require $800 million-plus in spending cuts. In California, that shortfall is in the billions of dollars and there's actually been a request from California for some federal aid.

MR. GIBBS: Right.

MR. GREGORY: Will that be something that the, the administration will consider, providing help to these cash-strapped states?

MR. GIBBS: Well, David, understand that cash is--help for cash-strapped states has already come from the federal government in the form of the recovery act. I certainly hope that you'll ask all of your guests today that may or may not represent Kentucky where they are in making sure that cash-strap--cash-strapped states, excuse me, have the resources that they need. We provided immediate assistance to ensure that health care was funded in these states, and also to ensure that fire and police and teachers could remain on the job. That's where we've seen a lot of jobs saved as a result of the recovery act. The president will focus like a laser beam in the next year, as he has this year, in getting our economy back on track. We've made tremendous strides; we've got a long way to go. When the president took office, that January we lost 741,000 jobs. Just last month that number was whittled down to only 11,000 jobs. But this president, David, isn't going to rest until we begin to create jobs, see that unemployment rate come down and put people who want to work back to work...

MR. GREGORY: All right.

MR. GIBBS: ...providing for their families.

MR. GREGORY: All right, Robert Gibbs, happy holidays to you. Thank you for being with us this Sunday.

MR. GIBBS: David, happy holidays. And to all your viewers, a happy new year.

MR. GREGORY: Thank you.