TAPPER: You've made some news over this weekend. You gave a speech on Friday talking about -- on the 15th anniversary of the Oklahoma City bombing which is coming up. How public officials have a responsibility to be careful with their words. This prompted a response from -- from Rush Limbaugh

Rush Limbaugh: "With this comment you have just set the stage for violence in this country. Any future acts of violence are on your shoulders, Mr. Clinton."

TAPPER: Do you have any response?

CLINTON: Doesn't make any sense. The only point I tried to make is that when I went back and started preparing for the 15th anniversary of Oklahoma City, I realized that there were a lot of parallels between the early '90s and now, both in the feeling of economic dislocation, and the level of uncertainty people felt. The rise of kind of identity politics. The rise of the militia movements and the right wing talk radio with a lot of what's going on in the blogosphere now.

And in the right wing media, and with Oath Keepers, the 3 percenters, the -- all these people, you know, who are saying things like, "If Idaho wants to succeed from the union," the militia group out there says, you know, "We'll back them." One leader of one of these groups said that all politics was just a prelude to civil war. And then the politicians of course have not been that serious, but a lot of the things that have been said, they -- they create a climate in which people who are vulnerable to violence because they are disoriented like Timothy McVeigh was are more likely to act.

And the only point I tried to make was that we ought to have a lot of political dissent -- a lot of political argument. Nobody is right all the time. But we also have to take responsibility for the possible consequences of what we say. And we shouldn't demonize the government or its public employees or its elected officials. We can disagree with them. We can harshly criticize them. But when we turn them into an object of demonization, you know, you -- you increase the number of threats.

But I worry about these threats against the president and the Congress. And I worry about more careless language even against -- some of which we've seen against the Republican governor in New Jersey, Governor Christie.

I just think we all have to be careful. We ought to remember after Oklahoma City. We learned something about the difference in disagreement and demonization.

TAPPER: You said that this time reminds you of -- of that time. Politically does this year remind you of 1994?

CLINTON: A little bit. We passed the bill which reversed trickledown economics by one vote. Close like the healthcare bill. And it led to an enormous flowering of the economy in America. And that bill was responsible for, take is more than 90 percent of the weight of the balanced budget. But people didn't realize its benefits.

I think the same thing is happening now with the healthcare bill. Where people are still reading into it all manner of dark things. And they haven't felt the benefits of it yet. But America is a different country now. We are culturally a different country. We are more diverse. We're more communitarian. That is, we understand we have to solve a lot of these problems together.

So I think that the dissent is just as intense, if not more intense. But I think the outcome of the election is likely to be far less dramatic than it was in '94.

TAPPER: So no Republican revolution -- no take over?

CLINTON: I don't think they will win either house. No. I think they'll -- you know, if history is any guide they should make a few gains. But I -- I don't expect them to win in either house. No.

TAPPER: Let's talk a little bit about why you're here. CGIU -- Clinton Global Initiative University -- what is different about it that changes on the previous models for national service for young people that -- that already exist?

CLINTON: Well what we did is to try to construct a college version of the Clinton Global Initiative that happens at the opening of the U.N. every year. Where we've brought in the college presidents and the student group leaders, and philanthropists and celebrities with college students. And try to create a network where these students could learn from each other and all make very specific commitments to make changes.

So we're trying to increase the number of people engaged in service. We're trying to increase the sophistication of their projects. And we're trying to create a -- a forum in which what they do will influence every campus in America so that more and more young people will be involved.

TAPPER: You have more than 950 commitments for projects for young people. Explain what a commitment is?

CLINTON: Well a -- a commitment is the very specific pledge to undertake and implement a project either on the campus, in the community, in the country, or half way around the world.

We've had commitments, to give you some examples, as diverse as a pledge by students at Brown to set up a micro credit program in Providence Rhode Island, because Rhode Island has the second highest unemployment rate in the country. That is going to help people to start again. A commitment in Syracuse to help promote nutrition and -- and learning. In inner city Syracuse because they have problems with childhood obesity.

We've had commitments to help empower Native American tribes -- still the poorest Americans -- to pull themselves out of poverty. And we've had commitments around the world. The commitments in West Africa to use the unique software to help the West Africans at very low cost keep out adulterated drugs. Sometimes as many as 30 percent of the drugs that are shipped in to very poor countries have been contaminated or diluted and they're not worth anything.

And this software will allow people without contracting with some big expensive group to preserve the purity of their drugs. In Haiti we've had commitments that help people start the chicken operations to feed themselves. Start urban gardens to feed themselves. Reconstruct the universities. We've had all kinds of commitments like that. And in a raft of commitments in America and around the world to help on the environment. Everything from improving recycling and improving the efficiency of buildings on American college campuses, to installing solar lanterns and getting rid of kerosene in Indian villages.

TAPPER: You've had success getting corporate America to do some remarkable things -- Pfizer for instance gave your global health initiative sixty percent discount on the super Tuberculosis drug that can be taken by people with HIV.

But it's got to be a challenge to convince corporate America and businesses just to give. What do you -- what advice do you give these young people on how they can get for instance the money to provide micro credits to poor people in Rhode Island?

CLINTON: I think they should go to people who would benefit if grass roots people in Providence were more prosperous. Local banks should support this. Local businesses that need those folks to be able to come in and buy their products would be more successful. And the more we understand that you have to keep widening the circle of opportunity, the more this becomes a business strategy as well as just compassion.

If you look at Pfizer, it's a good example. People who have Tuberculosis and AIDS are very ill. The traditional Tuberculosis treatment combined with the AIDS drugs makes them so sick they can't function. Pfizer is the only company in the world with a drug that allows them to function normally. So I said to them, "Why are you becoming our first big pharmaceutical partner? Why are you giving me this 60 percent reduction?"

And the president said, "Because I realize that by fighting the generic trend to lower drug cost, we were trying to get a huge percentage of only 15 percent of the population of the world. I decided we should go to the other 85 percent."

When all these generic drug companies changed their strategy, they were still charging a lot of money because their payment was uncertain, and they were -- had a few customers, so they had to have a big profit margin. I just asked them to change their business model. Now they have a low profit margin, but they have many, many more customers in certain payments. When Wal-Mart convinced its supply chain to cut the packaging by 5 percent, they changed the business model. It had the global warming effect of taking 211,000 trucks off the road but it also cut the supply chain cost $3 billion a year. So you've got to -- you have to find ways to argue that in the end, being philanthropic, being large-minded, being compassionate is also, in an interdependent world, good economics.

TAPPER: One of the challenges for philanthropies is that when you're dealing in impoverished areas, there's often a lot of corruption. I know it's a situation and I know the Global Health Initiative has a no corruption rule. You've talked in the past about one country you had to pull out for the Global Health Initiative because they were not going to uphold the no corruption rule.

CLINTON: That's correct.

TAPPER: Of course, that I'm sure to a degree upset you because you wanted to be in that country --

CLINTON: I desperately wanted to do it.

TAPPER: What advice will you give them to help negotiate that terrain? To do good, but at the same time, avoid some of these bad actors that are almost inevitably in impoverished areas.

CLINTON: Rampant corruption normally accompanies incapacity. That is, in poor countries where a few people have a lot of money and money changes hands, it's because nobody expects there to be a good universal health care system. Nobody expects there to be a good universal banking system. Nobody expects there to be a good universal education system.

So what I would advise them to do is just to say that in their projects, whatever their project is, there can be no corruption. You change the world a step at a time. And when I go into countries, you know, I don't examine the whole banking system or look at how the energy contracts are done, I just say, if you want us to operate here in economic development, in energy, in health and education, we have a no corruption policy. That I think is what they should do. Now when you take responsibility, as I did when I worked with the U.N. in the tsunami areas, in Indonesia and Aceh for example, or as I'm doing now, the Haitian parliament yesterday authorized the establishment of the commission that Prime Minister Bellerive and I will co-chair in Haiti. We have a higher responsibility. We have a responsibility to make sure all the donors money goes from their pockets to the intended object without corruption.

TAPPER: Switching to some of the political issues going on, President Obama now has a Supreme Court vacancy to deal with. It's almost impossible to believe, looking back on it, but your first justice, Ruth Bader Ginsburg, who will be likely, the most liberal member of the court once Stevens resigns, she was confirmed 96 to 3. Senator Orrin Hatch, who is the leading Republican in the Senate Judiciary Committee, has credited you with really bringing him into the consultation process. What advice would you give President Obama? Because Republicans are saying he's not including them in this.

CLINTON: Well, I think for one thing, I had to do a little more of that because I never had a filibuster-proof Senate. And now there are 41 of them, although I think that a lot of those who come from more progressive states, the two Maine senators, the new senator from Massachusetts, a lot of them may think they already gave it the store on the health care deal or whatever they're doing on financial reform. I think it will be very difficult to just outright block a Supreme Court nominee that's otherwise qualified. Especially after the Democrats confirm, allowed a vote on Clarence Thomas, and Justice Scalia and a lot of other people who were -- Justice Roberts, Chief Justice Roberts.

My advice to him would be to first of all see what the court is missing. Does it matter if he puts a Catholic or a Jewish person or someone of another faith on a court, there mightthere would be no Protestants on the Supreme Court. Does that matter? Does there need to be another woman on the court? Should there be some other group represented? Because Justice Stevens was part of the four-person progressive block, he will of course nominate someone who will be part of that. We've seen the hard way in the Citizens United case and campaign finance and in Bush v. Gore, during the most bizarre rulings in the history of the Supreme Court and I think one of the five worst, what the consequences of that are.

But I would also not -- I don't expect him to intentionally pick a fight with the Senate, but he can't avoid it. If he finds somebody that he thinks is just the best person, but the most important thing is he needs to be really proud of the people he puts on the court. The two people I put on the court have made me proud. I haven't agreed with every decision they've made. That's not the important thing. The important thing is that you think they're smart and they're competent and they understand the lives of ordinary people. Now one thing I think he should think about is have we gotten -- have we gone too far in this process that assuming only judges can be elected? That somehow you're not qualified if you weren't a judge.

Some of the best justices in the Supreme Court in history have been non-judges, people that  as Hugo Black once famously said, had been sheriffs and county judges, people that have seen how the lofty decisions of the Supreme Court affect the ordinary lives of Americans. You know, I tried to persuade both Senator Mitchell and Governor Cuomo to accept appointments to the court and for different reasons, neither one wanted to do it. I think they would have been fabulous justices. And -- George Mitchell had been a judge, but he was also a senator. I think that -- I hope he'll take a look at somebody who hasn't been a judge.

TAPPER: William Howard Taft, eight years after his presidency, went to the Supreme Court. I've heard some Democrats say why isn't Bill Clinton on any of these short lists? Would you enjoy doing that?

CLINTON: I think I would enjoy it, but I don't think it would be a good idea.

TAPPER: Why?

CLINTON: Because I'm already 63-years-old, I hope I live to be 90. I hope I'm just as healthy as Justice Stevens is. But it's not predictable. I'd like to see him put someone in there, late 40s, early 50s, on the court and someone with a lot of energy for the job. And I don't think that'd be a good choice. I also -- I love what I'm doing now and what I'm doing now is something that I'm uniquely qualified to do, whereas there are many people who could be good on the court.

TAPPER: Senator Hatch raised the subject of a different justice Clinton, your wife, do you think she'd be good at that?

CLINTON: Oh, she would be great at it, but  and I think at one point in her life she have might been interested in it. But she's like me, you know, we're kind of doers. We like being out there and doing things, rowing our own boat and making changes we could see happen, and again, I think if she were asked, she would advise the president to appoint someone 10, 15 years younger.

TAPPER: You mentioned financial regulatory reform. One of the things that President Obama is pushing for is regulation of derivatives, and also with a thing called the Volcker rule, he's trying to separate commercial banking interests from investment banking interests. These were things that were the opposite policies of Treasury Secretary Rubin and Summers at that time, do you think in retrospect they gave you bad advice on these issues?

CLINTON: Well, I think on the derivatives  before the Glass-Steagall Act was repealed, it had been breached. There was already a total merger practically of commercial and investment banking, and really the main thing that the Glass-Steagall Act did was to give us some power to regulate it  the repeal.

And also to give old fashion traditional banks in all over America the right to take an investment interest if they wanted to forestall bankruptcy. Sadly none of them did that. Mostly it was just the continued blurring of the lines, but only about a third of all the money loaned today is loaned through traditional banking channels and that was well underway before that legislation was signed. So I don't feel the same way about that.

I think what happened was the SEC and the whole regulatory apparatus after I left office was just let go. I think if Arthur Levitt had been on the job at the SEC, my last SEC commissioner, an enormous percentage of what we've been through in the last eight or nine years would not have happened.

I feel very strongly about it. I think it's important to have vigorous oversight. Now, on derivatives, yeah I think they were wrong and I think I was wrong to take it, because the argument on derivatives was that these things are expensive and sophisticated and only a handful of investors will buy them.

And they don't need any extra protection, and any extra transparency. The money they're putting up guarantees them transparency. And the flaw in that argument was that first of all sometimes people with a lot of money make stupid decisions and make it without transparency.

And secondly, the most important flaw was even if less than 1 percent of the total investment community is involved in derivative exchanges. So much money was involved that if they went bad, they could affect a 100 percent of the investments, and indeed a 100 percent of the citizens in countries not investors, and I was wrong about that. I've said that all along. Now, I think if I had tried to regulate them because the Republicans were the majority in the Congress, they would have stopped it. But I wish I should have been caught trying. I mean, that was a mistake I made.

TAPPER: You've come closer than any president in recent history in brokering a mid-east peace plan. President Obama is in a situation right now where he is getting a lot of conflicting advice. Do you think it's time for President Obama to put a peace plan on the table?

CLINTON: Well, first of all, I'm reluctant to give him public advice. I talk to the president and the secretary of state and Mr. Emanuel and others privately. But let me answer you this way because I don't want to do anything to foreclose their options. The argument against doing that is that the current Israeli government with its current coalition almost certainly would reject it.

And the argument is that that makes us look weak. I think it's the -- it may be -- they may decide it's more important to have clarity. And to do something that will be an action forcing event to put them back to the table.

And if he decides to do it, I will support it. And I think if he decides to do it, he should acknowledge that they may come up with a deal that's slightly different than the one he proposes. But we need to do something to deprive both sides of any excuse not to engage in serious negotiations.

Look at the ramifications of this. Half of the energy coming out of all this organization and money-raising for terror comes out of the allegations around the unresolved Palestinian issue. If there were a Palestinian state working in partnership, with the policies Mr. Fayyad's following on the West Bank, it would be a whole different world.

All the Arabs would identify with Israel. They'd have a political and economic partnership. The whole economic basis in the Middle East would shift from oil to ideas. Look at what the Saudi Arabians are doing -- building six new towns. The -- the UAE wins the international competition for the clean energy agency. And they're going to build a carbon neutral city in the UAE. And nobody thinks about this.

Dubai is the only country with huge amounts of imported workers that's actually passed legislation to give these immigrant workers a better deal in the Middle East. And they've got women in the government. They have a joint public-private decision making process. Nobody knows anything about it. Why? Because of the Palestinian-Israeli thing.

How could the Syrians stay out there alone cooperating with the Iranians and letting Hezbollah people travel through Syria and doing all the things they do. If they were at peace with the Palestinians, they would have to come along with the rest of the Arab states. There would be a peace between Israel and Syria. This is a huge deal.

So the fact that the president is putting new energy into this, taking personal responsibility for it, and trying to get them back to the table, that's the most important thing. If this is the tactic he decides to adopt, I will strongly support it.

TAPPER: When you were watching healthcare reform finally pass after having tried it yourself, did you -- did you see it as something like, "I'm glad we stormed the castle in '93-'94, because that paved the way for this?"

CLINTON: Absolutely. You know, before I did it President Nixon had tried, President Truman had tried. President Johnson who had the biggest congressional majority didn't even try for universal healthcare. He did two important things -- Medicare and Medicaid. But he thought even with that Congress he couldn't get it.

We were the first administration that ever got a bill out of committee. We got two or three bills out of committee. And once I saw William Kristol's memo to Bob Dole, I realized we never had a chance. Because we couldn't pass it without five or six Republicans. They -- they -- I had an obstacle President Obama didn't have. They had an absolute, clear filibuster number. That is, they had 45 Republican senators. They could have lost four and still defeated me.

I felt like the -- Teddy Roosevelt would have felt if he'd still been alive in the 1930s seeing his cousin Franklin being able to sign legislation in areas that he had advocated. And you know that took two decades. And this took less time. So I actually -- I was thrilled by it. And worked hard. Hillary and I lobbied people all over the weekend before the vote. And she and I were ecstatic.

It's -- it's -- sometimes takes a long time to change a country. And you -- and I think frankly now they will keep changing this bill. They'll have to keep working on it and putting more cost drivers in it to take the cost down. But it's a big, big step. And it's a wonderful thing for the country.

TAPPER: President Clinton, thanks so much for joining us. Congratulations on the third anniversary of CGIU.

CLINTON: Thank you.