KING: A total of 39 analysts, pundits, and critics made the rounds on the Sunday talk shows this morning. Each week, one person gets the last word right here. Today it is Grover Norquist, president of Americans for Tax Reform and a leading conservative activist.

Welcome.

NORQUIST: Glad to be with you.

KING: You just heard the debate about the economy between Steve Forbes and Secretary Reich, senators who have been out all week long talking about this. It is a critical test for the new president, but it is also a defining moment for the conservative movement and the Republican Party.

What do they do with this new administration? You saw not one Republican voted for it in the House. Now the debate moves to the Senate. I want to read you something from humanevents.com this past Friday about the challenge here for conservatives and Republicans.

"It is much to be hoped that the Republicans in the Senate will display similar fortitude," referencing the House vote there. "That seems unlikely, given the number of senators who think the way to show sophistication and flexibility is to sell out. A sellout of this sort here will hurt the American people and seriously damage their own party."

So should Republicans just vote no?

NORQUIST: Well, Republicans should offer a real alternative as the Republicans in the House have, reducing those government -- those things the government does, which hurt job creation: high tax rates, long depreciation schedules; and offer instead of the spending programs, lower taxes and more pro-growth policies.

What Obama and Reid and Pelosi want to do is they show up at one side of a lake and put a bucket in and take a bucket of water out, then the three walk around to the other side of the lake, hold a press conference and pour three buckets of water into the lake and announce they're filling up the lake with water.

That's what Robert Reich believes will fill up the lake with water. If you look at that and say, wait a minute, you took three buckets out, you put three buckets in the lake is the same amount, you take $800 billion out of the economy in taxes or debt, then you wander over to the other side of the economy and throw the money up in the air and announce you're stimulating the economy.

Every dollar spent by the government only exists because it was taken out of the economy somewhere else. As pointed out, Japan did this for 10 years, and it was a lost decade. Argentina did it for 30 or 40 years. And it hasn't helped. You don't want to go that direction.

KING: And so as this debate unfolds in the Congress, your party has a new leader, at least at the Republican National Committee. George W. Bush is gone from town. The Republican National Committee had an election. Michael Steele, the former lieutenant governor of Maryland, and an African-American, is the new leader of the Republican Party.

I want you to listen to something he said after winning the election.

(BEGIN VIDEO CLIP)

MICHAEL STEELE, CHAIRMAN, REPUBLICAN NATIONAL COMMITTEE: Failure to communicate on the war, Katrina, the bailout. Yes, we'll stop there.

(LAUGHTER)

(END VIDEO CLIP)

KING: He is laying the blame there on George W. Bush. Failure to communicate on the war, Katrina, the bailout, we'll stop there. Is just -- getting George W. Bush out of Washington, is that enough to revive the conservative movement of the Republican Party?

NORQUIST: Well, it's step one. Because, as long as George Bush was president, he was the leader of the modern Republican Party. He spent too much money. He didn't get permanent tax cuts. He spent six years being mayor of Baghdad, rather than president of the United States.

That's problematic, in terms of then looking to him for leadership of the Republican Party or the conservatives.

KING: And so -- we only have a minute left. This moment, back in 1993, was, quote/unquote, "good" for conservatives and Republicans.

NORQUIST: Yes.

KING: Bill Clinton came to town, and then you had the Contract with America. Newt Gingrich came in.

In a condensed version, what you are doing now that, in your view, will bring that about?

NORQUIST: Yes, there are two models. In 1990 George Bush Sr. got together with the Democrats and they spent too much money. He lost the presidency in '92. That's the failed model: get together and do something bad bipartisanly.

The good model is to offer a solid conservative alternative, as Republicans did in '93 and '94, and as they're doing now in the House. In '93 and '94, they refused to join the Clintons in spending too much and taxing too much. They offered an alternative vision of limited government and pro-growth policies.

The Republicans, right now, are wisely moving in that path.

KING: The last word goes to Grover Norquist today. We'll have you back on the program, as this debate folds out.

And, up next, your voices and your struggles. We look at the state of the economy up close through the eyes of workers losing their jobs at a big manufacturer that had, until now, escaped the pain.

"State of the Union," from the floor of Caterpillar and the living rooms of devastated families, just ahead.

Senate Republican leader Mitch McConnell said Sunday the massive stimulus bill backed by President Barack Obama and congressional Democrats could go down to defeat if it's not stripped of unnecessary spending and focused more on housing issues and tax cut.

McConnell and other Republicans suggested that the bill needed an overhaul because it doesn't pump enough into the private sector through tax cuts and allows Democrats to go on a spending spree unlikely to jolt the economy. The Republican leader also complained that Democrats had not been as bipartisan in writing the bill as Obama had said he wanted.

"I think it may be time ... for the president to kind of get a hold of these Democrats in the Senate and the House, who have rather significant majorities, and shake them a little bit and say, 'Look, let's do this the right way,'" McConnell said. "I can't believe that the president isn't embarrassed about the products that have been produced so far."

[...]

"I am confident that by the time we have the final package on the floor that we are going to see substantial support, and people are going to see this is a serious effort. It has no earmarks. We are going to be trimming out things that are not relevant to putting people back to work right now," Obama said.

[...]

"Look, the important thing is getting the thing passed," Obama told NBC's Matt Lauer during a live pre-Super Bowl interview. "And I've done extraordinary outreach, I think, to Republicans because they have some good ideas and I want to make sure those ideas are incorporated."

[...]

Sen. Jon Kyl of Arizona, the No. 2 Republican in the Senate, said he was seeing an erosion of support for the bill and suggested that lawmakers should consider beginning anew.

"When I say start from scratch, what I mean is that the basic approach of this bill, we believe, is wrong," Kyl said.

Among the major changes Kyl said would be needed to gain Republican support in the Senate was the tax rebate for individuals and couples, which he criticized as going to too many people who didn't pay the tax to start with. He also criticized the bill for seeking to create nearly three dozen government programs and giving states far more money than they need.

Senator Kay Bailey Hutchinson, Republican of Texas, said on NBC’s “Meet the Press” that she wanted cuts to “social spending provisions” that total about $200 billion in the bill. Additional tax cuts, Ms. Hutchinson and other Republicans said, would be more effective than large-scale government spending programs.

“The whole idea is to stimulate the economy immediately,” she said. “I think we can do it more effectively with less money.