KING: Financial reform, jobs, maybe immigration as if Congress didn't have enough hot button issues on its front burner, Democratic Senator John Kerry and Independent Senator Joe Lieberman today unveiled their long delayed, long awaited energy and climate change bill. They did it significantly without the help of their longtime partner, Republican Senator Lindsey Graham.

Let's take a peek at just what this proposal would do. Number one, the senators proposed dramatic cuts in greenhouse gas emissions, 17 percent by 2020, 83 percent under this plan by 2050. It would affect 7,500 factories and power plants all across the United States. Any state that allowed offshore drilling off its coast would share in some of the revenues from that oil exploration.

Now there would be a 75-mile limit, the rigs would have to be 75 miles out, but the states could opt out of that and allow the drilling closer to shore. Seven billion dollars in investments in so-called green energy, natural gas, electric cars, other projects. This plan envisions up to 12 new nuclear power plants in the United States.

And Republicans -- some Republicans say it's big tax increases, but the authors insist that two-thirds of the savings would be refunded back to consumers as part of rebates in their energy bills. Will this sell? Well a little bit ago I went over to Capitol Hill to go "One-on-One", you might call this two-on-one with Senators Kerry and Lieberman.

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KING: Let me start with this premise. I called around today to the Democratic leadership, to the Republican leadership and senior people on both sides say admirable effort, but dead on arrival this year, do you accept that?

UNIDENTIFIED MALE: No.

KING: Why? You don't have 60 votes; there are some Democrats who aren't necessarily with you on this day.

SEN. JOHN KERRY (D), MASSACHUSETTS: Well we believe that as people see who is supporting this bill, the prep that the support that it has, the urgency for shifting Americans' energy dependency, making America more secure, creating millions of jobs. You know there's a compelling reason to do this bill that has nothing to do with politics. It strengthens America. That's what we're supposed to be here to do and we hope our colleagues will embrace that.

KING: That's what you're supposed to be here to do, but we are five months from an election, what has turned out to be a very volatile, very contentious election year. Let's even just start with the Democrats. There are a lot of Democrats -- you know them well -- in your caucus and even people across the House who don't want this to come back up this year. They passed their one bill, but they don't want to deal with this again this year who don't want to take anymore tough votes.

SEN. JOSEPH LIEBERMAN (I), CONNECTICUT: Yes. Well here's I think what we're going to argue, that this bill is the best thing members of Congress could pass that would actually create jobs here in America. I mean it not only stops the flow of dollars out of our country to buy foreign oil, it stops the flow of new energy jobs out of America to places like China and for the first time, an energy independence climate change bill has broad support from the business community. And I think that's going to have an effect on Republicans and moderate Democrats.

There's another clock ticking here -- we say it's the election -- and it's the clock that goes off on January 1st next year when the Environmental Protection Agency has the power and has promised to begin to regulate greenhouse gas emissions, carbon pollution by executive order. The businesses don't want that. I think they're going to go to members of the Senate and say hey, this is a good bargain for everybody including our country. Please vote for it.

KING: Your politics would be better if there were three senators here. You had Republican Lindsey Graham working with you for the longest time. And the legislation reflects a lot of work that he put into it and that he helped build this coalition you have. He has walked away for now, he applauds the effort, but he says he doesn't think the time is right in part because he thinks Leader Reid has poisoned the political environment by saying immigration reform will come up this year.

Now I know you've both spoken to Leader Reid about this. Did Leader Reid put his personal Nevada politics maybe ahead of the greater goal of passing this legislation this year? Where I don't think he will disagree with me that the chances for immigration are way down here. This bill faces a struggle but it's in better shape than immigration. Is that right?

LIEBERMAN: Yes, that's -- it's a very important point. This bill has real potential for bipartisan support, there's not a single Republican including Lindsey Graham who has said that they would support immigration reform. Look Senator Graham's support is all over the bill that Senator Kerry and I introduced today. He said he supports the policies in it.

The reason he's not with us today is because of unrelated political concerns mostly around the immigration reform bill. So I hope that we can put that all to sleep and Lindsey will be considered to have been on a brief sabbatical and he will rejoin us quite soon.

KING: A brief sabbatical -- how did that play out though? When you went to Leader Reid and said hey wait a minute. We're going to lose Lindsey here. Why can't we do this first? What happened? KERRY: I think that the idea that I or Joe or any of us are going to you know somehow take a major issue like immigration, which is a major issue and side track it or suggest that the leader you know doesn't have a right to represent those interests is just crazy. That's not what we did and that's not what we're trying to do.

KING: But you don't think it can pass this year, so the leader would bring this up --

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KERRY: I don't want to get caught up anywhere near the struggle between one issue or another issue, that's not what -- what will drive this issue is simply the value of doing this because it creates jobs in America, this is the next big transformational economic change for our country. This is going to create millions of jobs, it makes us more secure. As we sit here we're sending $100 million a day to Iran. What are we doing that for?

We need to put that money here in the United States into our energy sources, and we think this bill is compelling, leave aside all the extraneous issues, whatever the issue is, immigration or otherwise politics, this issue is important because it represents a bipartisan effort in order to try to push America's economy to a very important place. Ability to compete with China, India, Brazil, Mexico, create the jobs of the future, reduce pollution, clean our air, our water and make America stronger in terms of national security.

LIEBERMAN: John, let me add a word -- just to back up John Kerry's contention that this is a bipartisan bill, the group that we had behind us was very diversified. We had strong environmental community support, but we had the kinds of businesses and business leaders that are really part of the normal Republican political base, and I think that's going to have an affect on our Republican colleagues and a lot of the moderate Democrats.

KING: A former Democratic presidential nominee who came back to the Senate and said I'm going to do some big things, a former Democratic vice presidential nominee, now an Independent, who says you want to work in the Senate to do some big things. There's another guy who spent the whole last presidential campaign as a Republican and took some heat for it, John McCain who talked about this issue. Where is he now? Is the primary in Arizona driving John McCain away from this conversation?

KERRY: You know once again can I just say we're not fixated on or focused on what the rationale is for one senator or another --

KING: But you need those votes.

KERRY: Yes we do --

KING: I'm not fixated on the rationale.

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KING: I'm fixated on the math.

KERRY: But John, what's important is we know to a certainty there are well more than 60 votes that are in play, and whether it's John McCain or someone else, that's not the key. The key is there are those votes in play. Now what's going to change their minds? We believe that the force of the legitimacy of the arguments that major business people made today, when you have companies like Florida Power and Light and, you know, Brute (ph) and DOW Corning and General Electric, and you know other -- Duke Energy --

LIEBERMAN: Honeywell.

KERRY: Honeywell saying we've got to do this because this is about jobs for Americans. This is about our ability to compete in the world. It's about American leadership. It's about our strength in terms of being energy independent. Those are unbelievably compelling reasons for us to get this done. And those guys, you know they're not -- they're wearing a Republican hat, a Democrat hat, they're wearing an American hat as a business person who wants to hire more people and win in the marketplace, that ought to be persuasive to people.

KING: Much more to talk about with Senator John Kerry, Senator Joe Lieberman. We'll be back in just a minute.

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KING: Let's continue the conversation with Democratic Senator John Kerry of Massachusetts and Independent Senator Joe Lieberman of Connecticut. I want to talk to you both about this remarkable political year we are in and I want to start with you Senator Kerry.

I read your statement the other day when you decided to speak out in favor of Senator Arlen Specter in the Pennsylvania primary. And you could read that statement over and over again, and you said nice things about Senator Specter. You condemned some of the tone in the campaign there. I had to call your office to make sure that you were actually endorsing Senator Specter, tough decision for you. Explain why you decided between Congressman Sestak, Admiral Sestak and Arlen Specter.

KERRY: Well I -- what I did was I vouched for Senator Specter's character, which was under attack. I don't think I started getting involved in the race directly. In fact I very specifically said I do not want to be the arbiter of swift boating in America and my crew and I would love it if that term were given back the honor and the appropriate place that it deserves. It is not a political term. It's an experience, and a meaningful one. I think that what I was trying to do is simply say that I don't think that Arlen Specter deserved the kind of challenge to his integrity and I was trying really to get both people to sort of look at this thing a little bit differently.

KING: But when you called -- when we called your office, they say but yes that was an endorsement of Senator Specter.

KERRY: Well it is --

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KING: Do you not view it that way?

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KERRY: Sure, yes.

KING: Yes, but his candidacy --

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KING: No, not just --

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KING: His candidacy.

KERRY: Yes.

KING: You think he's a better candidate than --

KERRY: I think he deserves our support and I support him.

KING: As a man who was a Democrat, who is now an Independent, who talk a lot of beef for supporting the last Republican nominee for president, when you look at what's happening in the country right now, your colleague Bob Bennett, a Republican, just denied the endorsement of his party by the Utah Republican Convention, Mollohan a Democrat of the house loses a primary last night, what do you see going on?

LIEBERMAN: What I see going on is a lot of people in our country who are anxious about our future, particularly economically, who are angry that people in Washington seem to spend most of their time in irrelevant partisan political fights, we're going to give them an opportunity to say it's not right. I think the net effect of that is that every incumbent in either party up for election this year is anxious now, I think overall the trend lines seem to favor Republicans in terms of the November election, but anybody in a primary who's an incumbent right now in either party is concerned and the Republican party, they see the tea party coming on with real energy and force and are worried about what change that portends for the party. So it's -- in a way, the way I put it, the established political order in America is under attack, by people who are dissatisfied with the way people in office have gambled their lives and their country.

KING: NBC and "The Wall Street Journal" are out with a new poll, 80 percent of America see a problem with the two-party system. Some say it can be fixed, others would like a third party. You mentioned your bill. It's a big huge issue. Climate changes and energy is one big issue. I know you disagreed with President Bush when he tried on social security, back in the Clinton days they tried on some of the big entitlements. Is that the frustration that this building and the people who work in it can't do big things because of the polarization?

KERRY: I believe personally that the problem in American politics is the amount of money that's in it. And I think that's the polarizing factor, and it distracts people from their ability to both be focused all the time on the things they ought to be and number two it sets too much of the agenda, period.

KING: You have to fight the Supreme Court to change that.

KERRY: Absolutely. And I think it's a very dangerous decision that the Supreme Court made.

LIEBERMAN: And there's legislation introduced which I co- sponsored so essentially try to put back some limits on the amount of money being spent in political campaigns, consistent with the recent Supreme Court decision, but the system's not working, and the public is -- they're -- people in this country are anxious about their own lives and they feel that the people in power in Washington today are not only not helping them, in some sense they're hurting them and the only way they can express it that they feel right now is to vote no. And I think that's where the best thing that we could do here in Washington is get some big things done that really make life better for the people in the country, and I think our energy independence climate change bill will do that, most of all because it's the best way to create millions of new jobs that otherwise will not be created here in America.

KING: The chairman of the homeland security, the chairman of the foreign relations committee, President Karzai is in town, he was in this building a short time ago, he was at the white house earlier today. You and I spoke when you were in Afghanistan just after the election trying to help broker some say calmness, we'll put it the polite way there. This administration had been very hard on him, saying they didn't think he was dealing with governance, getting services out to his people, stepping up to the plate as a commander in chief. Rolled out the red carpet for him here in Washington. Are you convinced now that President Karzai has changed enough to be that reliable, trust worthy partner?

KERRY: I believe President Karzai has the ability to be a reliable partner and obviously these next months are critical. We're going to be having lunch with him tomorrow and I look forward to welcoming him up here, we'll ask a lot of good questions and have a good dialogue about it, but my judgment is that he does that have ability, I think he's a patriot, he's a man that cares enormously about the future of his country, about Afghanistan and he's taking great risks to be where he is today. We haven't always agreed, there were real differences a few months ago about certain things, but that's not unusual among friends and allies, and I think the important thing is he's here with a very significant portion of his cabinet. There have been three days of really good talks and work and effort and I'm convinced everybody's going to go back now with a better sense of strategy and of the stakes.

KING: Convinced to the point that 87,000 troops in Afghanistan are about to - the paths are about to cross as the draw down continues in Iraq. There will be in a very short period of time more troops in Afghanistan than in Iraq. Are you convinced that that is worth the risk and the cost to the American people that President Karzai now gets it and is doing what it takes to eventually starting next July, if the president gets his way, reversing that and starting reducing troop size?

LIEBERMAN: No question about it, it's worth it for American troops to be there, remember this is the country Afghanistan from which we were attacked on 9/11, if we let the Taliban come back; it's really an insult to those who we lost on 9/11 and the troops who have been fighting in Afghanistan. The U.S. Afghan relationship was in a bad place a couple of months ago. There are always disagreements among allies and unfortunately the disagreements between us and the Afghans went public, that was a bad thing, that's behind us, it's been settled. And I think President Karzai is getting some of the respect he deserves, you can always fault any leader, but Hamid Karzai is by far the most popular individual in Afghanistan, the most popular political leader and he's the only one who really represents national unity. As Senator Kerry said, he's a patriot, he's returned some very excellent cabinet ministers, the minister of defense, the minister of the interior. He really wants a long-term partnership with the United States that goes beyond the war on terrorism, not with 100,000 American troops there, but a real alliance and that's only good for him and that critical part of the world, it's good for us. So I think we have learned a lot, both sides from the last couple of tough months in the U.S.-Afghan relationship. President Karzai and President Obama and their staffs seem very happy with the way the meetings are going in Washington this week and that's good for both countries.

KING: All right, thanks to Senators Kerry and Lieberman for their time on Capitol Hill today.