10 questions for Jon Huntsman, Joe Lieberman

Jon Huntsman and Joe Lieberman have illustrated with their careers the difficulty of clearing a middle path in American politics.

After serving as President Barack Obama's ambassador to China, Huntsman entered the 2012 Republican nomination race and lost badly. So did Lieberman in the 2004 Democratic nomination race, even though he had been Al Gore's vice presidential running mate four years earlier. The former senator from Connecticut was too conservative for most Democrats, and Huntsman, a former Utah governor, too liberal for most Republicans.

From those experiences they have joined to launch a movement called "No Labels," designed to pressure candidates and elected officials toward practical problem-solving that can bridge partisan divides. They sat down with me at Strange Brew, a bar in Manchester, New Hampshire, while preparing for a recent No Labels gathering. What follows is a condensed, edited transcript of our conversation.

HARWOOD: What's wrong with American politics?

HUNTSMAN: I think professional politicians have taken over. They've professionalized what used to be a pursuit in public service, serving your country to the point where money matters like never before. Your team affiliation matters like never before. And what outlets you go to for messaging, who provides your sound bites. It isn't the name on the jersey any more, it's the color. And that's a big problem.

LIEBERMAN: I was in the Senate 24 years. When I arrived in 1989, I was shocked at how partisan that Congress was. And over the 24 years, it got more and more partisan, so my last two years were the most partisan, most rigid, and therefore the least productive. We didn't get anything done. This is what No Labels is about. Too many people in government in Washington are more loyal to their labels — Democrat, Republican, liberal, conservative — than they are to the best interests of the country. And therefore they're not willing to work together to try to get some problems solved and achieve some goals.

HARWOOD: You're both no Donald Trump. Given the way he approached the campaign, the way he deals with issues, what he says — decode that. Why is it happening? What does it mean?

HUNTSMAN: He is a major protest vote. People look at Donald Trump, and he's saying he's against the establishment, against a dysfunctional Washington that has not delivered for the American people. The fact that for the how many years recently we put no points on the board. So my kids, they have not seen a man on the moon, they didn't see the end of the Cold War, they didn't see the coming to fruition of the human genome project. If you were to ask people on Capitol Hill what the strategy is for the United States, what the big transcendent goals are, I think you'd get 1,000 different answers. We're not focused.

He infuses the entertainment aspect of politics into the system. I'm not an entertainer. And I think the media allowed him to get away with a lot more.

LIEBERMAN: I'm sort of fascinated and amazed by it. The kind of dysfunction in our government has created a significant percentage of Americans who are just angry, and they're frustrated. They have disdain for government. Trump is not the only candidate for president who's trying to respond to that. But why is he doing so well? Because I think maybe this is where the celebrity comes in, because he seems to be breaking all the rules.

HARWOOD: When you ran on your own, you were every Republican's favorite Democrat. You were every Democrat's favorite Republican. Didn't work out too well — terrible primary candidates. Doesn't the experience that you had in the presidential campaign tell us that these No-Label things can't work?

HUNTSMAN: We go in very distinct historic cycles in politics. We're never constant in any one direction. And what we see today, which is a narrowing of the philosophical world view of my party, is bound to open up. It has to. If the Republican Party is going survive beyond 2016, it has to be larger, more inclusive, more optimistic.

I thought it would be a race to the top. It's been a bit of a race to the bottom. But, I mean, the good news is you've got some governors with some remarkable experience and record of accomplishment. And you've got some interesting personalities. Still early days, but I think there's a very real scenario in which we could get some pretty good thinking and ambition out of this crop of candidates before all is said and done.

LIEBERMAN: It is a central fact of American presidential politics that liberals have disproportionate influence in the Democratic Party, conservatives in the Republican Party. And so there is a partisanship built into this. Obviously the nominees then try to dance back to the middle to try to get people in the middle to vote for them so they can win.

But we're here in New Hampshire because New Hampshire does have this extra factor that 40 percent of the voters are undeclared, unaffiliated, or I'd say independent. We're on a march to say that every presidential candidate, Republican or Democrat who comes through here — don't just tell us what you're going to do, tell us how you're going to do it. American history says, "If you're going to get anything done, you've got to work across party lines to make it happen."

And this being the first primary is the perfect petri dish for this kind of experiment.

HARWOOD: Talk a little bit about the pressures on men and women running for president to adhere to the party line. John McCain, after the 2000 campaign, offered a confession of sorts and said, "I'm kind of embarrassed to say that when the issue of the Confederate Flag in South Carolina came up, I flinched. I told them what they wanted to hear." Did you do that in your campaign?

HUNTSMAN: I did it once — Fox News debate, when they asked about the 10-to-1 deal on taxes. I've forgiven myself since. But I was upset from that moment on that I didn't hold my ground. It was my first major debate. And I had never raised taxes as a governor. And we delivered the largest tax cut. So it's, how do you maintain your viability, your integrity, without sort of causing the one thing I do have that is perfectly pure on the conservative side, my tax record, from being questioned. I look back, and that was pandering. I shouldn't have done it. But we all make mistakes, don't we?

HARWOOD: People said after you were nominated as a vice presidential candidate, you flipped on affirmative action, school choice, and things like that.

LIEBERMAN: Basically I kept the same positions, but I really had to say Al Gore is the presidential candidate. He determines policy. He makes the final decision. I'm sorry you have such a good memory.

HARWOOD: Are we in the moment when the two-party system as we've known is breaking apart, or is it simply what we're used to?

LIEBERMAN: Our politics has been partisan and in some ways personal from the beginning. But this seems very different because it's created a dysfunction that has stopped us from solving problems that we people want us to solve, like creating more jobs, balancing the budget, protecting Social Security and Medicare. And so people are angry. The problems are not dealt with until they become crises that are really going to hurt the country. People more than ever before are turned off to the government. To really have a democracy like ours, you've got to preserve trust between those who govern and the people who are governed. An increasing number of people don't have that today. The best way to stop that is to show that the government could work sensibly and honorably. That's what we want to see happen.

HARWOOD: We all lived through the Ross Perot moment in 1992. He got 19 percent, the most by a third party in quite a long time. And then it fizzled. The lesson I learned or thought I learned was, yeah, people are disgusted with the system, third party's an interesting idea. But it's just not going to happen in our system. Do you think that's true, or do you think it could happen?

HUNTSMAN: If the established parties can't deliver something the American people want, it's like any other business. You're going to go out of business. You're going to go bankrupt. There's nothing that says political parties need to last forever. Imagine if Teddy Roosevelt had had the power of the Internet at his disposal. He probably would have won the election.

HARWOOD: If you look at it a little differently and look at demographic trends, you could say your party — the Democrats — they're in pretty good shape. It's the other side that's having problems because constituencies that support the Democrats are growing. Is that the case?

LIEBERMAN: I'd say it looks like it now. As you know, American politics can change very quickly. But you look at the growth of the Hispanic population particularly, the sense that the Republicans are anti-immigrant, on social issues that really affect younger voters — gay rights, choice. The fastest-growing political party in America today is no party. Now, the problem is how do you organize unaffiliated, independent people into a party? The system doesn't make it easy. But I will tell you that my own belief is that if the system continues to be as unproductive, dysfunctional, partisan, gridlocked as it's been, there's going to be a strong third-party movement in this country.

HARWOOD: We have a debate on CNBC. You were on stage for our last one. Tell me what you expect and how you see this race moving from here.

HUNTSMAN: I think you're going to have two lanes ultimately that will determine the outcome. I think one's going to be reserved largely for the outsider — likely Donald Trump.

If Trump blows up — which I don't think he's going to do — then I think Cruz is the recipient of most of that largesse. And then I think you've got sort of the traditionalist, Chamber of Commerce, big picture, bold foreign policy approach. I think it will be a governor — Kasich, Bush, Chris Christie.

HARWOOD: Not Rubio?

HUNTSMAN: We'll see. But I think at the end, people are going to defer to a governor. They've got a better story to tell, a better track record. And as we get closer to the big primaries I think people are actually going to look at folks' records to see what they've done, what they're capable of doing, their accomplishments. Rubio's terribly talented. He's exciting to be around. He's articulate. But I think his time in class would suggest that maybe, and probably, he'll have to do a little seasoning beforehand — goes back and runs for governor of Florida. But he's a guy to keep an eye on. There's no question about that.

Watch CNBC's "Your Money, Your Vote: The RepublicanPresidential Debate" on Wednesday, October 28. The debate will feature two setsof candidates discussing critical issues facing America today, including jobgrowth, taxes and the health of our economy. Coverage begins at 5pm E.T.