JAKE TAPPER, HOST: Hello, and happy Father's Day. Joining me this morning, the president's chief of staff, Rahm Emanuel.

Mr. Emanuel, happy Father's Day.

RAHN EMANUEL, WHITE HOUSE CHIEF OF STAFF: Thanks, Jake.

TAPPER: Before we start the questions, I'm interested in your reactions to photographs from Saturday's BP CEO Tony Hayward at a yacht race off the Isle of Wight in the clean waters off southern England. What goes through your mind when you see those pictures?

EMANUEL: Well, to quote Tony Hayward, he has got his life back, he would say. And I think we can all conclude that Tony Hayward is not going to have a second career in PR consulting. This has just been part of a long line of PR gaffes and mistakes.

But beyond that photo is really the substance here that matters. That's clearly a PR mistake and he has made a number of those mistakes. What's important is, are we capping the well? Are we capturing the oil? Are we containing the clean-up? Are we filing the claims? Are we also cleaning up the mess? That's what's important.

Now this is a mistake and it's a big mistake, like others he has done in the sense when he said himself, he has got his life back. Well, that's what's more important is, do the people down there in that area have their life back? Do they have their livelihood back?

So this is just another PR mistake in a long line of PR mistakes. What I think you've got to really measure is, what are we doing to deal with this problem? What is BP being forced to do to deal with this problem, both contain the well, even getting the $20 billion for the escrow account.

That's the measure here. This will be fodder, as you would obviously ask this question. People will chew over this. But don't take your eye off the major priorities and the key goals, that is dealing with the problem down in the well, and dealing with the problems of the region as it makes as important the people getting the resources they need to restore their lives and restoring that coastline to it environmental purity that it had at one point.

TAPPER: Well, let's talk about that. Are you satisfied with what BP has done so far in terms of capping the well?

EMANUEL: Well, as you know, there is a test here. OK? BP originally was going to do one relief well. We forced them to do a second relief well. They weren't going to do that. BP originally had a plan on capturing a certain amount of oil. We forced that, as you know, today's reports, they're up to 25,000. By the end of June, we forced them by making them do different things to get up to 50,000 barrels a day.

And by mid-July we think we'll be -- and be able to get them to a point capturing 90 percent of that.

TAPPER: And those relief well...

EMANUEL: And originally...

TAPPER: ... by August, do you think they're going to be working?

EMANUEL: And by -- wait a second, and also, Jake, is they originally weren't thinking about $20 billion. And they originally weren't thinking about an escrow account and forcing them to do that. There are certain things that they had to be pushed -- not certain things, like a lot of things that they had to be pushed to do. And pushed to do faster, more of.

And so when you asked me, do we think the wells will work? Their original plan was only one. We forced them to take a step and have a redundancy in the system, which is what you're also seeing in the capturing of the oil that's spewing right now.

They had a system in place, not extensive enough. Not fast enough. So we've made them go from 25,000 to 50,000 barrels by the end of this month. And we think by mid-July force -- basically making them pick up their game. They can get to 90 percent.

TAPPER: I've been down to the Gulf three times since the crisis. The president has been down there four times. One of the big complaints I hear that I'm sure the president has heard as well is the government bureaucracy and red tape stand in the way of a quicker response.

Here's a phone interview with Alabama Governor Bob Riley.

(BEGIN AUDIO CLIP)

GOV. BOB RILEY (R), ALABAMA: If this is truly a war, then we need to begin to treat it like that. As long as you're having decisions made by committees, it's very difficult to do.

(END VIDEO CLIP)

TAPPER: Are you concerned at all that bureaucracies and red tape are standing in the way of the governors and the Coast Guard being able to stop the environment damage as soon as possible?

EMANUEL: First of all, this is, as you know, and everybody knows by now, the worst environmental disaster in recent memory. Second, it's being met by the largest response ever organized by the United States government.

There are over 6,000 ships in that area, over 25,000 workers dealing with containment and capture and clean-up. And there's also 17,000 National Guard on-call for any governor that needs them and wants them at any time that they need.

Now there is -- as president said in the Oval Address Tuesday night, there is -- given the size and the magnitude of what we're dealing with, there are going to be problems, there are going to be bottlenecks. We want to know about them immediately, and respond to them immediately. So when you're organizing something like this, there are going to be mess-ups. There is no doubt about it.

There are going to be -- because it's changing it all the time because given weather patterns, et cetera. You're going to have move and be flexible. What's happening in Louisiana is not the same thing that's happening in Florida. And you're going to have design a different response.

This has never been done before, basically. And are there going to be mess-ups? Like every other massive major operation, yes. Are you going to be flexible enough to -- smart enough to be able to be responsive and also realize when something is not working to change it and find what is? That is also being done.

TAPPER: During BP hearings this week, you were give what Democrats see as a political gift by Texas Congressman Joe Barton, the ranking Republican on the House Energy and Commerce Committee. Here he is.

(BEGIN VIDEO CLIP)

REP. JOE BARTON (R-TX), RANKING MEMBER, ENERGY AND COMMERCE COMMITTEE: I'm ashamed of what happened in the White House yesterday. I think it is a tragedy of the first proportion that a private corporate can be subjected to what I would characterize as a "shakedown." In this case a $20 billion shakedown

(END VIDEO CLIP)

TAPPER: Now Barton later apologized for his comments after some pressure from House Republican leaders. But the Svengali of the president's political arm, David Plouffe, has called for him to step down as ranking Republican on the House Energy and Commerce Committee. Do you agree?

EMANUEL: That's for the Republicans to decide. What I think is more important, you can say it's a political gift for us, and it is. But it's dangerous for the American people, because while the ranking Republican would have oversight into the energy industry, and if the Republicans were the majority, would have actually the gavel and the chairmanship.

That's not a political gaffe, those were prepared remarks. That is a philosophy. That is an approach to what they see. They see the aggrieved party here is BP, not the fishermen. And remember, this is not just one person. Rand Paul, running for Senate in Kentucky, what did he say? He said the way BP was being treated was un-American.

Other members of the Republican leadership have come to the defense of BP and attacked the administration for forcing them to set up an escrow account and fund it to the level of $20 billion. These aren't political gaffes. You know, I've been in hearings. Joe Barton was speaking from prepared remarks. Rand Paul, who is running Kentucky, a leading Senate candidate for the Republicans said BP, the way they were being treated was un-American.

That is an approach to -- they think the government is the problem. And in this balance, and the difference here is that BP made a mess. And the government, and also in the president's view, in certain areas like MMS, hasn't done its job.

TAPPER: Minerals Management.

EMANUEL: Minerals Management. But the approach here expressed and supported by other voices in the Republican Party, sees the aggrieved party as BP, not the American -- not the fishermen and the communities down there affected. And that would the governing philosophy. And I think what Joe Barton did is remind the American people, in case they've forgotten, this is how the Republicans would govern.

TAPPER: What do you say to -- when you hear criticisms that this administration has used too many strong-arm tactics when it comes to dealing with big business, whether it's in health insurance companies or Wall Street firms or the U.S. auto industry?

EMANUEL: Well, first of all, it has had a different approach based on the situation. And having seen a number of -- let me try to kind of walk through. In the case of General Motors, the prior administration wrote a check without asking for any conditions of change.

We said, without a check from the American people, get yourself right. You've got to make fundamental change. They've made changes and now, as you know, General Motors is going to have an IPO. And most importantly, they're going to keep open factories that they were planning on closing.

So we're righting an industry that was not doing itself, or the American people or its workers, the right thing. So it was a way of getting them to do the changes that they had postponed.

In the case of also the auto industry, for 30 years this country has debating whether we're going to raise the fuel efficiency standards. We finally broke that logjam, not just for cars, but for trucks, by bringing industry together and also all of the other players and we have now a consensus.

And in the case of BP and their $20 billion, in the case WellPoint and the way they were raising insurance premiums, we've jawboned them to do what's right because there are other equities at play here. And if you use all your tools, some cases its jawboning, in some cases it's building a consensus. And in other places, it's also understanding that if you need the government -- or most importantly, the tax-payers' resources, you have to make the changes that are necessary for you to survive and be a viable entity like in General Motors.

So there's not just one kind of tool out of the tool kit box. You apply it with a different way. And I will also draw this consensus -- difference. As we're thinking about energy policy, in the past administration, it was just industry in the room.

In this administration, you're going to have industry, you're going to have labor, you're going to have environmentalists, you're going to have other experts as it relates to the climate. You will have an entire approach rather than one voice, one perspective represented. It's the same way that what Joe Barton expressed.

He views that the industry is the most important voice. The president's views is the fact is there are many equities and they all have to be at the table defining a common ground and common solution.

TAPPER: Well, let's talk about the energy bill, because in the tradition of not letting a crisis go to waste, you guys are talking about an energy bill. And I'm wondering how important is it to the president that energy legislation includes a carbon tax.

Will he sign a bill that doesn't include that?

EMANUEL: He campaigned on the view that you've got to deal with comprehensive energy, and also that energy bill has to have a climate component and helping us reduce our dependence on carbon as well as our carbon -- reducing our carbon pollution.

TAPPER: Does that include the carbon tax?

EMANUEL: Yes -- no, wait, Jake, let me walk through it. In the House of Representatives, they've passed a cap and trade -- an energy bill with cap and trade as a component. He spoke about this in Pittsburgh. He also spoke about it in the Oval Office. Everybody is coming to the meeting next week. There will be a meeting on Wednesday, senators from both parties with array of ideas are coming to the table.

They know the president's perspective. He has been clear with them about what there needs to be done. His goal now, now that the House passed a bill, is to get the Senate to pass a comprehensive energy bill that reduces our dependence on foreign oil, makes key investments in the areas of alternative energy so America leads in that space, and deals fundamentally with the environmental degradation that happens from carbon pollution.

And so that's what his goals are. He is trying to find a consensus working with members of both parties. And the good news here, unlike in other past theories (ph), there obviously will be Republicans with a set of ideas, like Senator Lugar who has introduced his legislation. There are good parts of that. Senator Alexander on the Republican side. Senator Kerry and Lieberman, Senator Bingaman.

So all of those ideas will be at the table to try to build that bipartisan consensus and finally get an energy policy that has America on a different course. And it will strengthen this economy. And most importantly, make it the most competitive when it comes to alternative energy.

TAPPER: Your portfolio is a lot larger than just energy and the oil spill. I want to move on the Afghanistan. We recently have two grim milestones in Afghanistan. More than 1,000 U.S. service personnel have died in there in service to their country. And this war became the longest in our nation's history.

EMANUEL: Yes.

TAPPER: The president set a July 2011 deadline for the beginning of troop withdrawal. But there is some confusion as to what it means, exactly. In Jon Alter's new book, here's Vice President Biden, he says, quote: "At the conclusion of an interview in his West Wing office, Biden was adamant. 'In July of 2011 you're going to see a whole lot of people moving out, be on it,' Biden said as he wheeled to leave the room, late for lunch with the president. He turned at the door and said once more, 'Bet on it.'"

But here is General Petraeus testifying before Congress this week.

(BEGIN VIDEO CLIP)

GEN. DAVID PETRAEUS, COMMANDER, CENTCOM: ... said that it was very important that it not imply a race for the exits, a search for the light to turn off or anything like that.

(END VIDEO CLIP)

TAPPER: So what exactly does the July 2011 deadline mean? Is it going to be a whole lot of people moving out, definitely, as Vice President Biden says? Or could it be more nuanced, as General Petraeus says, maybe just a couple of people leaving one province?

EMANUEL: Well, no, everybody knows there's a firm date. And that firm date is a date -- deals with the troops that are part of the surge, the additional 30,000. What will be determined at that date or going into that date will be the scale and scope of that reduction.

But there will be no doubt that that's going to happen. And I know actually -- I look at both of those, and they're not inconsistent. But remember where we were on Afghanistan policy, that war had waxed and waned. And there really hadn't been a focus on how to bring that war to -- and the effort (INAUDIBLE), even with al Qaeda and Taliban, to a point given what was going on in Iraq.

The president raised the troop level and civilian participation to 30,000. This was creating a window of opportunity for Afghanistan. We are now at that point in Afghanistan, and in fact for the first time in eight years, nine years, they're actually meeting their police recruitment requirements as well as their army recruitment requirements. So they themselves can take more and more responsibility for the security of that country.

Second is we're also -- about a half of al Qaeda has been eliminated in this last 18 months. So we're taking the pressure to al Qaeda, taking the pressure to the Taliban. And we're making progress as it relates to, as you know, after the president's meeting with President Karzai, went back to Afghanistan, held a peace jurga.

There is also progress being made on that side. All of this has been predictable in the sense that we knew once we created this window of opportunity, we were going to focus on what are the resources that are necessary, where are we going to be making progress. But the July '11 date, as stated by the president, that's not moving. That's not changing. Everybody agreed on that date. General Petraeus did. Secretary Gates did. As also Admiral Mullen agreed.

And the goal is to take this opportunity, focus on what needs to get done, and then on July 2011, is to begin the reduction of...

(CROSSTALK)

TAPPER: But it could be any...

EMANUEL: ... troops.

TAPPER: But it could be any number of people.

EMANUEL: That's what you'll evaluate based on the conditions on the ground. That is -- but what had to happen prior to that was having a date that gave everybody, the NATO, international forces, as well as Afghanistan, that sense of urgency to move.

TAPPER: The prime minister of Israel, Benjamin Netanyahu, was supposed to visit the White House earlier this month. He had to cancel that because of the incident with the flotilla. Has that visit been rescheduled?

EMANUEL: Yes. The president has offered the dates of July 6th, where the prime minister, Netanyahu, will be coming back to the White House to reschedule. That will be the fifth visit by the prime minister to the White House to work on a series of issues that are from the peace process, the security of the state of Israel, also dealing with the other issues in and around the region.

TAPPER: Do you believe that Prime Minister Netanyahu is the kind of leader who is willing to take big risks to make peace?

EMANUEL: Yes. But it's not important what Rahm believes. I mean, he has been clear about what he intends to do, what he needs to do. And the president has been clear of what we need to do to seize this moment of opportunity here in the region to finally make peace. Peace that -- where Israel feels secure and peace that's in balance with the Palestinians' aspirations for sovereignty.

That is possible. It was close in the Camp David of 2000. It is now the time, given where we are, to basically find that proper balance that gives Israel that sense of security it needs, and the firm commitment it needs on security. And measure that up with what the Palestinians need for their own sovereignty.

TAPPER: You've said that the administration has broken the back of the recession. And yet unemployment continues to hover around 10 percent, 1.2 million Americas are scheduled to lose their unemployment benefits this month. And the president, in addition, has been pushing for $50 billion in emergency spending for states and cities that Congress at this point seems to have ignored.

Steny Hoyer, the House majority leader, refers to spending fatigue that Congress has. And Republicans and some Blue Dog Democrats are pushing for spending cuts to offset these spending programs, the $50 billion, the unemployment. That doesn't seem so crazy, does it? Should these spending programs be paid for and offset with cuts?

EMANUEL: Well, first of all, it's important to remember, Jake, when we had to -- came to office, the economy was shrinking by a little over 6 percent. Today it's growing by 3 percent. In some cases, a little more.

Second, we're losing on average 700,000 jobs. The last three months we've been adding on average about 140,000 jobs. Those are dramatic swings in 12 months. Now we have broken the back of the recession, but what we haven't -- what we don't have is a fast enough, strong enough recovery. And that's the focus of the president's agenda on a going forward basis.

We took decisive action, as the president indicated, break the back of the recession, the spin (ph) that it was getting close to something more precarious. But this recovery is not strong enough for the American people, not adding jobs quick enough. As you saw, the president spoke just the other day about 10,000 construction project that will going on.

What are the steps that are necessary? First and foremost, pass a comprehensive energy bill. Second, we're in the closing days of getting comprehensive, sweeping financial regulatory reform to give the markets certainty.

Third, the House has passed just this week, and he has called on the Senate to take it up, which they will in due time, is a small business lending bill. And third, one of the headwinds for the economy is the fact that state and local governments are facing their financial situations, are laying off teachers. And it is the president's view that it's better to have teachers in the classroom than on the unemployment line.

We have to help those communities in this particular window of time to get -- help teachers stay in the classroom, not make those cuts. They add to the unemployment when they have a responsibility in that classroom. And in the long-term basis, the president said, and this was a matter of sequencing, we have got to deal with our fiscal condition as a country -- our a long-term fiscal situation.

We have taken certain steps like instituting a pay-as-you-go rule that had been in absence for 10 years in Washington, which was responsible for -- one of the reasons we added the largest amount of debt in the nation's history in the shortest period of time.

But day (ph) steps what the economy needs is to take critical steps and making sure that we're dealing with our energy policy, small business lending, and making sure teachers stay in the classroom rather than on the unemployment lines.

TAPPER: I know your time is valuable, I just have a couple of more questions. A National Public Radio poll this week of voters in 60 competitive Democratic-held congressional districts, by Stan Greenberg, who did the polling for you when you took back the House in 2006, had some bad news.

"Which statement comes closer to your own view? President Obama's economic policies helped avert an even worse crisis and are laying the foundation for our eventual economic recovery: 37 percent. President Obama's economic policies have run up a record federal deficit while failing end the recession or slow the record pace of job losses: 57 percent."

How many Democrats are going to lose their seats because of the president's policies?

EMANUEL: Jake, first of all, midterm elections are always bad for the party in power. Second of all...

TAPPER: Those are some bad numbers.

EMANUEL: Yes. But I will tell you this. I do know politics well enough to say this. Anybody that tells you sitting here in the middle of June how many the number is, doesn't know anything about politics. It's as simple as that. Because there's a lot to happen here.

By way of example, elections are choices, OK? There is a choice that Joe Barton has offered the American people, a philosophy for the Republican Party, which is that BP is the aggrieved party. Rand Paul in Kentucky, other members of the Republican leadership.

Some members of the Republican leadership think that we don't need any reforms on Wall Street. Now that they've gotten back some of their financial health, we don't have to change any of the rules, we don't have to bring in another level of transparency as well as enforcement.

That's a governing philosophy. In the coming weeks you'll see the president speak to the country about these competing different philosophies. That is, do you have only the energy executives in the room, or do you have energy executives, environmentalists, and other people from the venture capital community to come to a consensus on energy policy?

Do you think that BP is the aggrieved party here? Do you think that Wall Street should be left alone and not have any reforms? Elections are about choices. Those are what is fundamental. There is a difference in our philosophies. And not only in our philosophies, how we make sure that American strengthens its economy.

Joe Barton and the Republican -- major voices in the Republican Party just told you their view. And in case you forgot what Republican governance was like, Joe Barton reminded you. In the coming weeks, the president is going to lay out a competing agenda, one that talks about an energy policy, one that talks about the essential needs of passing financial -- of reform for Wall Street, one that makes sure that small business companies are getting the capital they need to grow and expand, and one that is also -- that talks about the need that we also have of a rebuilt America, so the workers that the president was with yesterday don't have just this blip of a recovery, but that we have a rebuilt America and major investments in our infrastructure so that we're the most competitive economy going into the 21st Century.

TAPPER: Finally, sir. House Republicans introduced a resolution of inquiry on Thursday night to find out more about the jobs floated to Andrew Romanoff and Joe Sestak as part of a pitch for them not to run in contested primaries, Colorado and Pennsylvania respectively.

I know the White House position is that nothing illegal happened, nothing improper happened. But do you at all worry that you and the political arm of the White House have undermined the president's pledge to change the way Washington works?

EMANUEL: First of all, the White House -- it's also Bob Bauer, introduced and did a report, made it public that said nothing inappropriate. Two of George Bush's attorneys, one that worked at OLC in the Justice Department, one that worked in the White House, said nothing inappropriate happened here. There is nothing that -- more that needs to be added to that.

TAPPER: All right. Rahm Emanuel, thanks so much for joining us.

EMANUEL: Thank you.