Return to Transcripts main page


Have Social Security and Medicare Been Forgotten About? FBI Investigates Terror Involving Americans in Iraq

Aired March 27, 2008 - 17:00   ET


Happening now, they are promising housing help and more jobs. The candidates offering competing plans to try to fix the economy. But what about Social Security?

The talk show host Glenn Beck says that's like a $53 trillion asteroid headed for Earth right now. He's standing by to share his nightmare vision with us.

Guess who's stealing the fallout from Barack Obama's pastor problem? You might want to guess again. A new survey offering some surprises.

And "CSI Iraq" -- the war zone is one big crime scene and FBI agents are risking their own lives to investigate terror attacks and crimes involving Americans there. We have a CNN exclusive coming up.

I'm Wolf Blitzer. You're in THE SITUATION ROOM.

The Democrats focusing in on issue number one today. Both presidential candidates took time out from their bickering and laid out their own plans to boost America's ailing economy. Barack Obama got an introduction from New York City Mayor Michael Bloomberg.

Bloomberg stressed he's not endorsing anyone, but says the November election -- and I'm quoting now -- "might be the most important decision of our lives." The centerpiece of Obama's plan, an additional $30 billion economic stimulus package.


SEN. BARACK OBAMA (D-IL), PRESIDENTIAL CANDIDATE: If we can extend a hand to banks on Wall Street when they get into trouble, we can extend a hand to Americans who are struggling, often through no fault of their own.

As most experts agree, our economy is in a recession. To renew our economy and to ensure that we are not doomed to repeat a cycle of bubble and bust again and again and again, we need to address not only the immediate crisis in the housing market, we also need to create a 21st century regulatory framework and we need to pursue a bold opportunity for the American people.

John McCain recently announced his own plan. And, unfortunately, it amounts to little more than watching the crisis unfold. While this is consistent with Senator McCain's determination to run for George Bush's third term, it won't --


OBAMA: -- It won't it won't help families that are suffering and it won't help lift our economy out of recession.


BLITZER: So guess who's feeling the fallout from Barack Obama's pastor problem? You might want to guess again.

And all the back and forth bickering taking a toll on the party's chances in November -- is that the actual case? A new survey offers some surprises.

CNN's Dan Lothian brings us up to date -- Dan?

DAN LOTHIAN, CNN CORRESPONDENT: Wolf, it's a controversy that just won't go away.


SEN. HILLARY CLINTON (D-NY), PRESIDENTIAL CANDIDATE: But I think given all we have heard and seen, he would not have been my pastor.

LOTHIAN (voice-over): That may be the case, but it appears the provocative words of former Barack Obama pastor, Jeremiah Wright, are not hurting the Illinois senator's bid for the White House. A new NBC/"Wall Street Journal" poll suggests there's been no change in the battle between Obama and New York Senator Hillary Clinton in the two weeks since the story made headlines. And most of those registered voters who saw Obama's speech on race appear satisfied with his explanation.

OBAMA: My former pastor said some very objectionable things when I wasn't in church on those particular days. And I have condemned those outright.

LOTHIAN: In fact, if anybody has been hurt by this story, it could be Clinton. Her positive ratings appear to be dropping.

WILLIAM SCHNEIDER, CNN SENIOR POLITICAL ANALYST: Voters in general, and Democrats in particular, seem to be blaming Senator Clinton for the negative tone of the campaign.

LOTHIAN: The increased bickering between the candidates and their campaigns seems to be taking a toll on Democratic voters. One in six Obama supporters in a CNN/Opinion Research Corporation poll say they are not likely to vote in November if Clinton wins the nomination. One in six Clinton supporters would feel the same way if Obama is the nominee.

KEATING HOLLAND, CNN POLLING DIRECTOR: If the Obama stay at home voter is largely black, that will affect Democrats down the ballot in a number of Southern states. And it could take states like Virginia off the table in the presidential election. And if the Clinton stay at home vote is largely female, that will hurt Democrats' chances everywhere.


LOTHIAN: But these polls are a snapshot of what people think now. If the Democrats can come together and agree on a nominee, all of this could just be a memory by November -- Wolf.

BLITZER: All right, Dan.

Dan Lothian with the CNN Election Express.

Democrats talk about their dream team -- Barack Obama and Hillary Clinton on the same ticket. But they also have a nightmare, highlighted by polls that show many supporters of the losing Democratic candidate might actually jump ship and vote for John McCain in November.

Senator Clinton was asked about that just a short while ago.


UNIDENTIFIED FEMALE: My question is regarding some polls that were released yesterday and some polls that said supporters of Obama would vote for McCain if he wasn't the nominee and some of your supporters would vote for McCain if you weren't the nominee.

What would you say to those people that were undecided still or those people that were the 19 percent that were going to go to McCain's side in the general election?

CLINTON: Please think through this decision. It is not a wise decision for yourself or your country.


CLINTON: You know, first of all, every time -- you know, every time you have a vigorous contest like we're having in this primary election, you know, people get intense. You know, Senator Obama has intense support. I have intense support. And that's exciting, because, you know, people want to be involved.

But the differences -- and there are, in my view, significant differences between Senator Obama and myself -- but those differences pale in comparison to the differences between us and Senator McCain. And I intend --


CLINTON: -- I intend to do everything I can to make sure that we have a unified Democratic Party when this contest is over and we have a nominee. We're going to close ranks. We're going to be united. I have no doubt about that, because the most important for us to put a Democrat back into the White House next January. (APPLAUSE)


BLITZER: Amid all of this, there seems to be a looming crisis that could impact tens of millions of Americans and it could happen within years. It's not, though, getting a whole lot of mention out on the campaign trail. That would be Social Security and Medicare and their futures.

Let's go to our senior correspondent, Allan Chernoff. He's watching this story for us.

All right, what's the bad news? How bad is it -- Allan?

ALLAN CHERNOFF, CNN SENIOR CORRESPONDENT: Wolf, no question, we are facing a major squeeze here. And it's a problem that clearly could hurt many more Americans than the housing crisis that's getting so much attention now -- that financial squeeze on Social Security and Medicare.


CHERNOFF (voice-over): By the time one of the presidential candidates becomes the 44th president of the United States, the worst of the housing crisis may have passed. But the funding problems confronting Social Security and Medicare will still be around and growing in urgency, particularly for Medicare.

CLINTON: Our real challenge is Medicare, which is much more in crisis and deserves closer attention.

CHERNOFF: The Medicare Trustees reported this week that in 2010 -- less than two years from now -- spending on Medicare hospital insurance will exceed the program's income. And by 2019, 11 years away, the Trust Fund will be depleted. The Social Security Trust Fund will be exhausted in 2041, according to the program's board of trustees.

Senators McCain, Obama and Clinton say they'd avoid politically unpopular benefit cuts. The answer, they say, is controlling health care spending. The Democratic candidates claim they can save billions by improving efficiency and relying more on high technology.

EUGENE STUERLE, URBAN INSTITUTE: None of the candidates have really posed solutions for these problems. They've recognized the problem, to some extent. But none of them have come close to proposing an adequate or a meaningful solution.

CHERNOFF: John McCain supports partial privatization of Social Security -- the plan President Bush proposed but failed to gain Congressional approval.

SEN. JOHN MCCAIN (R-AZ), PRESIDENTIAL CANDIDATE: We don't have time to waste. We don't have eight years. We don't have eight years to fix Social Security or Medicare. CHERNOFF: Senators Clinton and Obama are against partial privatization. Clinton proposes new retirement accounts to supplement Social Security, while Senator Obama says the answer is to increase Social Security taxes on the wealthy and the super rich, like Warren Buffett.

OBAMA: He is paying payroll tax on less than -- on a fraction of one percent of his income. Now that is not fair.


CHERNOFF: The money has to come from somewhere -- either raising taxes on millions of Americans, not just the Warren Buffetts of the nation -- or cutting benefits. But trying to make Americans swallow that pill is no way to get elected -- Wolf.

BLITZER: And some are talking about raising retirement age. That could solve some of the problem right there.

All right, Allan. Thanks very much.

Part of the problem with Social Security is the ratio between the number of workers paying into the system versus the number of people drawing from it. Back in 1955, there were more than eight workers for every retiree. By 2004, the number had fallen to just over three workers for every beneficiary. And the government says by the year 2035, the ratio will drop about two to one.

Let's go back to Jack Cafferty. He's got "The Cafferty File" -- Jack.

JACK CAFFERTY, CNN ANCHOR: Wolf, the number one U.S. telephone company says it's having a tough time finding enough skilled American workers. Say what?

Reuters reports that AT&T chief executive Randall Stephenson says his company is coming up short in finding enough Americans capable of filling 5,000 customer service jobs that AT&T promised to bring back to the United States from India. So far, about 1,400 of these positions have been filled. The company set a goal of 5,000 jobs in 2006 and says it plans to stick to that target. But they're not having much luck.

Stevenson is particularly worried about the state of education in this country, pointing to some parts of the U.S. where the high school dropout rate is as high as 50 percent. He says this: "If I had a business that half the product we turned out was defective or you couldn't put it on the market, I'd shut that business down."

The U.S. economy lost 63,000 jobs last month -- the largest cut in five years. And if the American public isn't educated enough to handle customer service jobs at AT&T and probably thousands and thousands of others with different kinds of employers, then these companies will have little choice but to continue to ship the jobs overseas. So here's the question: What does it suggest about the state of this country when AT&T says it's having a hard time finding enough skilled American workers?

Go to You can post a comment on my blog -- Wolf.

BLITZER: Jack, thank you.

A $53 trillion asteroid headed for Earth -- that's how Glenn Beck views the looming Social Security crisis. I'll speak about it with the best-selling author and talk show host. He's standing by live.

Two big states stripped of their convention delegates. Is it time to get rid of small state primaries? How about tossing out the Electoral College? You'll hear one U.S. senator's plan for reform.

And Democrats blasting John McCain for sounding like President Bush on Iraq. But there are also some differences. We're going to get a Reality Check this hour.

Stay with us. You're in THE SITUATION ROOM.


BLITZER: The candidates are all talking about fixing the U.S. economy. But what about Social Security and Medicare? My next guest compares that looming crisis to what he calls a $53 trillion asteroid headed for Earth.

Glenn Beck is the author of "An Inconvenient Book. " it's a huge "New York Times" best-seller. It's still on the best-seller's list. He's also the host of "THE GLENN BECK SHOW" on our sister network, Headline News.

Glenn, thanks for coming in.

GLENN BECK, HOST, "THE GLENN BECK SHOW": You bet, Wolf. How are you?

BLITZER: Let's talk about it -- a $53 trillion asteroid. How did you come up with that?

BECK: I mean because that's what it is. It's this giant asteroid that is hanging out there and coming at us and everybody is -- and we can practically see it in space now.

It's coming at us and nobody is doing anything, except all of the politicians on both sides are out in space saying I wonder if we could make it bigger? And they're making this thing that is going to be our destruction bigger instead of addressing the issue right now.

BLITZER: All right, how did you come up with $53 trillion?

BECK: Fifty-three trillion is easy. We've got three separate books. The last set of books is our liability for Medicare and Social Security. David Walker, who was our chief bean counter at the GAO, the head of the GAO, that just retired, has been ring this bell now for a while, saying it's $53 trillion that Social Security has borrowed -- has taken out of that lockbox that didn't exist -- and with Medicare.

BLITZER: And what about -- because you're beginning to sound like Ross Perot a little bit, in terms of the national debt. Right now the national debt is, what, $9 trillion.

BECK: Yes.

BLITZER: It was $5 trillion or so when President Bush took office. Is that what your fear is, that we're not going to be able to afford to pay all the bills?

BECK: You know what, everybody is talking about oh, the earmarks. And the earmarks are a problem. That's what John McCain keeps talking about -- oh, the earmarks, the earmarks, the earmarks. That's not -- that has nothing to do with it. We -- our deficit -- the -- on the books, that everybody sees, is $9 trillion. This is $54 trillion. And to give you an idea of how --

BLITZER: Over how many years are you talking about now?

BECK: At the very end, it's 2045, I think, something like that --

BLITZER: And that assumes...

BECK: But our first hit is --

BLITZER: ... that assumes that the benefits stay the same in terms of Medicare and Social Security, right?

BECK: Yes. Exactly right. But our premiums have already gone up a substantial amount. The debt has gone -- this debt that is sitting out there -- our liabilities, in the last five years, has increased from $20 trillion to $54 trillion. So it's not going...

BLITZER: So it's a lot of money.

BECK: It's not going down. The it's going up at a rapid pace.

BLITZER: What do you think of the possibility of what some say could be a Republican dream ticket -- John McCain and Mitt Romney? They're having their fundraisers out in Utah and Denver today. We've got some pictures we'll show our viewers. What do you make of this potential team?

BECK: I don't think that's a Republican dream ticket. Well, maybe it's a Republican dream ticket. I don't know if it's a conservative dream ticket. John McCain gets the war. Mitt Romney gets the economy. That's good.

But I think we need somebody that really understands -- I mean, you know, when John McCain said he understands the economy, he said, well, you know, I really don't -- I really don't get it. It's not that I think -- but I haven't read Alan Greenspan's book. Alan Greenspan's book -- you're probably going to need that and the stay at the Holiday Inn Express to be able to turn this thing around.


BECK: What people don't really understand, Wolf, is there has been a run on the bank. It's just the bank that the American people have -- aren't allowed to go to. The run has been on the Fed. And all of these banks have run to the Fed, they've got their money and now they're hording it. And we are on -- what we've had happen to us in the last few days -- I mean "The Wall Street Journal" had it on the front page of their paper today -- "Ten Days That Has Changed Capitalism." And most people aren't aware.

Capitalism itself has changed. And there is a run on the bank. They got their money. Do you have yours?

BLITZER: He's the author of "An Inconvenient Book." He's got a lot of inconvenient truths he's trying to tell us, as well.

Hey, Glenn, thanks very much.

BECK: Thanks a lot, Wolf. You bet.

BLITZER: Glenn Beck joining us.

A plan to change everything we know about U.S. elections. We're going to have details of what may seem like a radical plan and why there's so much resistance to it.

Plus, you're going to find out why some say it could be a surprise reason behind one city's massive weight gain. We'll tell you what's going on right here in THE SITUATION ROOM.


BLITZER: Carol Costello is monitoring some other important stories incoming into THE SITUATION ROOM right now -- Carol, what's going on?

CAROL COSTELLO, CNN CORRESPONDENT: Well, Wolf, hundreds of flights canceled for the second day in a row. American Airlines and now Delta Airlines are taking planes out of service for voluntary inspections of that wiring that has raised safety concerns. Both airlines say impact from the cancellations will carry through tomorrow, but both say their schedules will be back on track by this weekend.

A major new development in a racially charged death row case. A federal appeals court has ruled that former Black Panther, Mumia Abu- Jamal, cannot be executed without a new penalty hearing. The court found the jury that sentenced him to die nor the 1981 killing of a Philadelphia police officer received flawed instructions. Prosecutors are now considering their next move.

Researchers say New Yorkers gained a collective 10 million pounds between 2002 and 2004 and some are wondering whether the city's smoking ban played a role. A study finds obesity and diabetes increased 17 percent among city residents around the time the ban took effect, compared to six percent nationally. City health officials say there is no evidence of a correlation.

And new numbers from the U.S. Census Bureau show Southern cities are absolutely booming. Six of the 10 fastest growing metro areas are in the South, with Dallas leading the way, followed by Atlanta, Phoenix, Houston and Riverside, California. Charlotte, Chicago, Austin, Las Vegas and San Antonio round out the top 10. The four Texas metro areas alone added more than 400,000 new residents. Back to you -- Wolf.

BLITZER: Interesting that Chicago was in that list.

COSTELLO: Yes, it's cold there.

BLITZER: It's not exactly the sunniest -- it's a windy city. I don't know if you ever noticed.


BLITZER: All right, thanks, Carol, very much.

Americans fed up with the way we vote.


UNIDENTIFIED FEMALE: I would eliminate the Electoral College.

UNIDENTIFIED MALE: And I feel like I was robbed of my voice.

UNIDENTIFIED MALE: It should be decided by the people.


BLITZER: Now there's a new plan to try to change everything we know about the elections. You're going to find out, though, why there is a slim chance it will actually come to light.

And Karl Rove has got some advice for Barack Obama. You're going to find out what the Republican strategist says the Democratic candidate should do to "look like a leader."

Plus, Democrats accusing John McCain of sounding like President Bush when it comes to the war in Iraq. You'll find out just how vulnerable the presumptive Republican nominee might be.

Stay with us. You're in THE SITUATION ROOM.


BLITZER: To our viewers, you're in THE SITUATION ROOM.

Happening now, the entire U.S. military is under orders now to conduct a full inventory of all nuclear weapons and all related material. It's a direct result of a mistake in which fuses for nuclear missiles were mistakenly sent to Taiwan instead of helicopter batteries.

The Puerto Rico governor is now under indictment. Anibal Acevedo Vila is charged with 19 counts, including conspiracy and wire fraud stemming from his election campaigns.

And the British prime minister, Gordon Brown, says his country will not boycott the opening ceremonies of the Beijing Summer Olympic Games. He made the announcement at a news conference with the French president, Nicolas Sarkozy, who stressed he hasn't made up his mind about the boycott over China's crackdown in Tibet.

I'm Wolf Blitzer. You're in THE SITUATION ROOM.

There's a growing call underway for change in the way we elect our politicians, with one new plan that would toss out almost every aspect of the current system. Some already say, though, it doesn't have a chance.

Carol Costello has got the details. She's joining us now live.

Tell us what we know, Carol, because there's a lot of frustrated and angry people out there right now.

COSTELLO: Oh, we talked to some of them today, Wolf. You're right about that. Many Americans are wondering, here we are in the world's greatest democracy and this is the best system we can come up with?

I mean wouldn't it be nice if we got rid of the superdelegates and the Electoral College, et cetera, et cetera? Well, there is someone on your side -- Senator Bill Nelson.




Thank you.

COSTELLO (voice-over): Senator Bill Nelson has a dream -- election reform.

NELSON: The blessings of liberty cannot wait. I believe the time for reform is now.

COSTELLO: It's not like it's a radical idea.

UNIDENTIFIED MALE: There's the swinging door chad.

COSTELLO: After the hanging chads of Florida...


COSTELLO: The nasty court battle over Bush/Gore...


COSTELLO: Election reform is an idea whose time has come.

UNIDENTIFIED FEMALE: I would eliminate the Electoral College.

UNIDENTIFIED MALE: And I feel like I was robbed my voice.

UNIDENTIFIED MALE: It should be decided by the people.

COSTELLO: There are even popular Web sites set up to update the system, like this one called Why Tuesday?

UNIDENTIFIED MALE: Do you happen to know why it is that we vote on Tuesdays?

COSTELLO: Not many do. Why not Saturday, when most people have more time to vote? Even our presidential candidates wonder, why Tuesday?

CLINTON: I want to thank Why Tuesday?. I do believe our voting system is broken.

COSTELLO: Senator Nelson couldn't agree more, especially since his state, Florida, has no part in this year's Democratic primary process since Florida broke party rules by moving its primary up to January.

NELSON: The goal is simple -- one person one vote.

COSTELLO: Hence idea number one -- abolish the Electoral College. Whoever gets the most votes in a presidential election wins. He would also like to rotate interregional primaries between March and June, thus eliminating Iowa's and New Hampshire's lock on holding the first primary and caucus and early voting.

Bye-bye to voting on the first Tuesday after the first Monday in November. You can cast your vote any time before that date. All great ideas. But to actually adopt them would require a constitutional amendment.

THOMAS MANN, BROOKINGS INSTITUTION: Since small states are advantaged by the current Electoral College vote system, they're very unlikely to support a constitutional amendment, and given the super majorities you need, the chances of succeeding with that amendment are slim.

COSTELLO: Mann also says the system seems to be working in this year's primary contest. Many more Democratic voters are getting a chance to weigh in, except those in Florida and Michigan. And that's because they broke the rules.

(END VIDEOTAPE) COSTELLO: Senator Nelson is reaching out to other lawmakers for ideas. Some others he has on his mind, he says good-bye to touch- screen voting. Something they did in Florida. Something other states thinks works just fine. They like touch-screen voting.

Also, hello to absentee ballots -- absentee ballots on demand, I should say. Everyone likes that one. And the other idea, hello to Internet voting. Senator Nelson wants funding for that. There's now so many potential problems with security, that idea seems a long way off.

BLITZER: Lots of ideas tout there to try to fix what so many regard as a broken system.

COSTELLO: Get everybody to agree to the changes and it's going to take a lot of money.

BLITZER: Don't hold your breath.


BLITZER: Carol, thanks very much.

Let's talk about this and more with two guests. Our Democratic strategist and CNN political contributor James Carville. He is here in Washington. He's backing Hillary Clinton. And in Los Angeles, Congressman Xavier Becerra. He is an Obama supporter.

Gentlemen, thanks very much for coming in.

I'll start with the congressman. Is this system broken, and can it be fixed?

REP. XAVIER BECERRA, (D) C.A.: We always want to make sure that every vote counts. I think we have a process in place, at least through a delegate process, give us the votes and let them be worth something.

I think most of us believe we should let the process work through. In the end whoever has the most delegates should become the next nominee for president for the Democratic Party.

BLITZER: What do you think, James?

JAMES CARVILLE, CLINTON SUPPORTER: I think first of all you can't say that. Because the Obama campaign did everything they could to stop people from voting in Florida and Michigan. We wanted to have a revote. I was willing to raise the money to pay for it. That's nine percent of the Democrats in the country, and I'm sure the congressman doesn't want to disenfranchise nine percent, however I do think we will have a process.

I think it's flawed but I think in the end we'll end up with a nominee and we will all be behind that nominee. But what we need to do is let the system play out as is. When it finishes we'll see where it is. But the Obama people still have to explain why that want to disenfranchise nine percent of the Democrats. That doesn't seem like a very smart move on my part.

BLITZER: Congressman?

BECERRA: Wolf, I think the -- not only Senator Obama, but all of the Obama campaign supporters say we want to make sure that all of Florida's and Michigan's delegates get seated. But we have rules. And we want them seated under the rules. We have no problem with that. We don't think the next president should be the first one to start to break the rules as he or she becomes president.

CARVILLE: Let me point out that Senator Clinton did not break the rules. What we call for is a revote. We said all right, those were against the rules. Let's have a revote. It was the lawyers and lobbyists in the Obama campaign in the legislature in Michigan that stopped this. In spite of the fact that myself, Governor Rendell, Governor Corzine, other people have said we have raised the money to pay for it. That's just a simple fact. And I understand --

BLITZER: Congressman, Karl Rove, the president's former top political adviser who is no longer in the government. He says he has a gutsy idea for Barack Obama and what he should go. He should let the delegates be seated from Michigan and Florida. Let them be seated as the election turned out, which would give Hillary Clinton maybe a net gain of 50 some pledged delegates.

He says this, "It makes him look like a leader, referring to Barack Obama. It resolves the situation. It helps him in the fall in these two states. And it probably gets a lot of the superdelegates to step forward and say that was a courageous move and I'm going to support him as a result of him doing that."

It would give her -- it would be risky, as Karl Rove says. What do you think about that idea?

BECERRA: It's tough for me to comment on Rove's strategy proposals. I've never been much of a Rove supporter. But I would tell you this. I think Senator Obama has said it many times. He's willing to sit down with Senator Clinton and all of the senator's supporters to try to come up with a process that lets us live by the rules we started with to make sure that all of the delegates get counted and have a voice at our convention. That's the most important thing.

So Florida and Michigan, all those Democratic voters that came out and voted should have a voice. We think there's a process that can be had if the two camps can sit down and make it happen in a way that follows the rules.

CARVILLE: We could have made it happen. All we had to do was have a primary in June. It would have been very exciting. Florida has been devastated by the subprime mortgage crisis. Michigan is so devastated by the policies of this administration. It would have been a wonderful thing to have democracy at work and allowed this to cam. And the fact is that the agents and lobbyists of the Obama campaign stopped it.

BECERRA: James. Stop it. You know that's not the way it happened.

CARVILLE: Of course it happened that way.

BECERRA: You know it's not the way it happened. We teach our kids to follow the rules. We want them to grow up respecting the rules. We want a president for the first time in eight years who respects the rules. There was a process.

There were rules. We could follow those rules and if those were broken we could a figure out a way to get all of the Florida and Michigan delegates counted. This isn't a thing where we need to be in the playground fighting. Let those votes count.

CARVILLE: We're not fighting, congressman. I'm just merely pointing out, sir, with all respect, that agents and lobbyists of the Obama campaign in Lansing did everything that they could to stop ...

BECERRA: Name the agents and lobbyists. Name names.

CARVILLE: People in the campaign were trying to do everything they could --

BLITZER: All right, guys. Hold on a second.

CARVILLE: I was trying to make a point. He doesn't want me to make a point because my point is valid.

BLITZER: James, is Nancy Pelosi, the House speaker, a neutral observer in the debate?

CARVILLE: I'm crazy about Speaker Pelosi. I think when this process gets through I think if we're going to have a nominee and we'll all get behind that nominee. But I think the best thing we can do is let the process go through.

The really best thing we could have done is allow the people of Michigan and Florida to have a say in this, but the Obama campaign stopped that. I understand they made a political calculation, but I don't think it was a very wise one.

BLITZER: All right. We've gone over this ground. I don't know if you have anything else to say, congressman. If not --

BECERRA: I do. I do.

Just saying it, James saying it doesn't make it so. There was a process. We could get these delegates seated. But you can't if you're going to have someone accusing agents and lobbyists without naming names. Talking about who is doing something. Let's get to this so that Florida and Michigan can have its delegates counted. There's a way to get there.

BLITZER: Let's see if there is. All right. We have got to leave it right there.

Xavier Becerra from California, James Carville, our CNN strategist. A Democrat. Thanks very much. Both of them Democrats, actually. Appreciate it, guys.

They're both strong proponents of the war. And Democrats are trying to link them together. But where do John McCain and President Bush differ when it comes to Iraq? We're checking the facts.

Plus chaos spiraling out of control in Iraq while the president praises progress. I'll talk to one of the lawmakers who says it's like Alice in Wonderland. Republican Senator Chuck Hagel. He is here in the situation room.

We'll be right back.


BLITZER: U.S. embassy workers in Iraq are warned to stay inside secure buildings after rocket and mortar attack killed an American government employee today in Baghdad's heavily fortified International Zone. That's the second American killed by the bombardments this week. Iraq's military has ordered a curfew in the capital as violence is spreading between government forces and Shiite militias.

Meantime, Democrats are criticizing Republican presidential candidate John McCain for sounding a whole lot like President Bush when it comes to Iraq.

CNN's Mary Snow is watching the story for us and is standing by with a reality check -- Mary.

MARY SNOW, CNN CORRESPONDENT: Well, Wolf, yes, they are similarities. That was evident today as President Bush today addressed Iraq one day after McCain gave a foreign policy speech. But there are some differences when it comes to how the U.S. should deal with its allies.


SNOW (voice-over): Two high-profile speeches. Two similar worldviews.

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: The surge is doing what it was designed to do. It's helping Iraqis reclaim security and restart political and economic life.

MCCAIN: Those who argue that our goals in Iraq are unachievable are wrong. Just as they were wrong a year ago when they declared the war already lost in Iraq.

SNOW: With President Bush's approval ratings so low, Democrats are trying to paint McCain as his policy soulmate.

OBAMA: All he wants to do is to continue on the George Bush failed policies of the past. And we don't need more Bush.

SNOW: Even some top Republicans are looking for a change in course. SEN. CHUCK HAGEL (R), NE: I think the next four years, the next president is going to have to do things dramatically different than what this administration has been doing. I think to really undermine our interest in the world.

SNOW: McCain agrees with President Bush that the Iraq troop surge is working. That Islamic extremism is a fundamental threat to America and that withdrawing from Iraq would allow militants to flourish. But there are also differences between the two in both style and substance.

MCCAIN: We need to listen. We need to listen to the views and respect the collective will of our democratic allies.

MICHAEL O'HANLON, BROOKINGS INSTITUTION: There's no doubt on the issues of global warming and on the issues of human rights and Guantanamo Bay and other such matters there's a huge difference between these two.

SNOW: Will those differences help McCain escape Bush's shadow.

MANN: After eight years of a Republican president it's going to be difficult for him to convince the American public to elect another Republican for four more years. But it's going to be hard for the Democrats to totally discredit John McCain on the area of Iraq and national security. He just has a reservoir of goodwill and credibility on the subject.


SNOW: Now, today a McCain adviser Carly Fiorino was asked about criticism from Democrats that McCain is nothing but a third term for the Bush administration. She says McCain differs fundamentally with Bush on a number of things including the treatment of detainees and the use of torture to name a few -- Wolf.

BLITZER: All right, Mary, thank you. Mary is watching this story.

In our news around the world right now, the FBI says it has identified the remains of two American contractors who had been missing for more than a year in Iraq. The bodies of two others were identified earlier in the week. The Iraq War zone is one big crime scene, as we all know, and now FBI agents are putting their own lives on the line to investigate terror attacks and crimes involving American citizens there.

Let's go to our justice correspondent Kelli Arena. She's got some exclusive access to this story.

What are the FBI agents doing over there, Kelli? What are they looking for?

KELLI ARENA, CNN JUSTICE CORRESPONDENT: Well, Wolf, clearly gathering intelligence is the number one priority. But there are so many other investigations under way that the FBI is involved with that most people are just not aware of.


ARENA (voice-over): The bombing of a U.N. building in Baghdad. The kidnapping of an American journalist. The ongoing hunt for terrorists.

ANDREW BLAND, FBI: Unquestionably. The security was the major impediment when it came to conducting investigations.

ARENA: Andrew Bland ran the FBI's Baghdad office for nearly two years. Speaking exclusively to CNN, Bland admits how scary it gets when investigations take agents outside the secure area known as the Green Zone.

BLAND: I'm a former Army Airborne Ranger, middle weight boxing champion at West Point, former SWAT team member, but the experiences that I went through in traveling from the Green Zone to the Red Zone were amongst the most fearful in my entire life.

ARENA: Another challenge, working with Iraqis. Once they're seen as collaborating with the U.S., insurgents mark them for death.

Bland remembers one woman from Iraq's intelligence agency who came to the FBI for training.

BLAND: She herself was abducted. Horribly tortured. And then killed. Her body was dumped just outside the Green Zone.

ARENA: Still FBI officials say there's no shortage of volunteers to serve in Iraq. And many officials say they bring much-needed expertise.

Chris Hamilton helped oversee the FBI's Iraq office from Washington.

CHRIS HAMILTON, FORMER COUNTERTERRORISM OFFICIAL: We were able to able to use forensics to identify terror cells, identify terrorist individuals from hairs and fibers and evidence that we would collect on the scene at all of these events.

ARENA: But some agents don't completely buy it. And privately tell CNN that they are limits to what the FBI can and should be doing in Iraq. They point to the Blackwater investigation as a prime example. That company's employees were allegedly involved in a shooting incident that killed 17 Iraqi civilians.

HAMILTON: By the time investigators got there it was after the event, conducting an interview, even being seen talking to an American would probably be very problematic for the Iraqi citizens.


ARENA: Some agents suggest that the investigation is merely a political cover for the U.S. and say putting agents in harm's way to play politics is flat-out wrong. FBI officials obviously disagree, Wolf. If you count the agents, the translators, the analysts, they are about 50 FBI employees on the ground there at any given time, Wolf.

BLITZER: What a story. All right, Kelli, thanks very much. Kelli is watching the story of the FBI in Iraq.

Coming up we're going to talk to Lou Dobbs. There's a new trailer for a film that takes a direct swipe at Lou Dobbs. We're going to talk to Lou about that. We're going to talk to Lou also about some record earnings for some Wall Street executives. We'll tell you what's going on.

Also, new revelations about how the Obama campaign is weather its first major crisis. We'll take the pulse of voters in Pennsylvania.

Stay with us. You're in THE SITUATION ROOM.


BLITZER: Let's check back with Jack. He's got "The Cafferty File" -- Jack.

CAFFERTY: Question this hour is: What does it suggest about the state of this country when AT&T says it's having a tough time finding enough skilled American workers? They vowed to bring 5,000 customer service jobs back from India to the United States a couple of years ago. So far they say they've filled 1,400 of those, but they can't find enough applicants for the other.

Mike writes this: "As usual, they've left out the other half of the sentence. 'We can't find skilled U.S. workers at the meager price we are willing to pay. If these companies would pony up a decent wage, they'll find all the U.S. workers they'll need. Instead, they let our country starve to fatten their bottom line."

Arnie writes: "I think it means AT&T is not looking hard enough. I am in my 20s, an unemployed American citizen, an education and five years of solid management experience and I've been looking for a job for several months with no luck. I know several others like me who need to pay our bills. We'd all work for AT&T."

Bruce writes this: "I'm a 57-year-old male whose parents made me sit down, do my homework when I got home from school when I went out to play. They were disappointed in grades less than a B. They held me back in third grade when I wasn't keeping up. Today I am an MBA and I'm doing OK. Let's wake up and realize that it's about he parents."

Michael says: "Mr. Cafferty, my son is a college graduate, has a good work record, 24-years-old, lives in Evansville, Indiana. He applied for a customer service job at the AT&T service center in Evansville. Needless to say, he is well qualified. Has yet to get a call, though, from AT&T to go to work. It's been several months since he applied and was interviewed so AT&T does not have the right to say they can't find enough workers in the United States." Tom writes: "They should call me. I've been without a full time job for the last two years. I graduated from college 2005, 3.5 GPA average. It's not that the talent isn't here. They aren't reaching us. Will you give me a job, Jack?"

Wish, I could, Tom.

And Bill in British Columbia says: "It means the writing is on the wall. It's just that nobody can read it" -- Wolf.

BLITZER: Jack, thank you.

It's a list carved in stone, but now for anyone with a computer. A new Web site lets viewers turn the Vietnam War memorial into a personal scrapbook honoring thousands of Americans killed in Vietnam.

Let's go to Internet reporter Abbi Tatton. She's looking at the story.

How does it work online, Abbi?

ABBI TATTON, CNN INTERNET CORRESPONDENT: Wolf, the names go on and on. More than 58,000 remembered at the Vietnam Veterans' Memorial Wall in Washington, D.C. And now on this virtual version, veterans, friends, family members are adding the stories behind those names.

Some of the most recent additions to the site that launched this week. Cynthia Lipsius who remembers her brother Michael. A brother who she never met. She told me she wanted to remember him online any way she could.

Then there's a woman who confines about Kevin McArdle: "He was my first kiss at age 13-years-old."

This is a new site from in collaboration with the National Archives, putting names and all the information behind them, information from the National Archives, and they will be adding 50,000 photos as well. Of course, there's also that opportunity for family members to add their own information.

And you're already getting messages online from people saying thank you. I never knew what happened to my friend. The site is They're saying bear with us a while. So many people are searching that your search may take a few minutes -- Wolf.

BLITZER: All right. Thanks - what a very significant site, indeed. Thank you.

An ad for a new Spanish language film takes a dig at our own Lou Dobbs. He's standing by to respond. That's coming up.

Plus my interview with Republican Senator Chuck Hagel. You are going to find out why he says President Bush's current assessment of the situation in Iraq is like a fairy tale.


BLITZER: Lou Dobbs mocked in a commercial for a new Hispanic film. Here it is posted on

Listen to this.



ANNOUNCER: "Time" magazine raves that Adrian Alanzo (ph) "Could melt Lou Dobbs' heart, if he had one." "Christian Science Monitor" asks, "Would Lou Dobbs get misty eyed?" And "Entertainment Weekly" proclaims "'Under the Same Moon' has an ending so touching it could make Lou Dobbs cry."


BLITZER: Let's ask Lou. I guess you have no heart. You never cry. What's going on, Lou?

LOU DOBBS, HOST, "LOU DOBBS TONIGHT": I think it's terrific. Are you kidding me? You say that's mocked. They're putting me up as a standard by which to judge their art. And I think that's flattering. I can't wait to see the movie.

Although I have to say I hope it has a happy ending. I don't mind shedding a few tears in a movie just so we can get to a happy ending.

BLITZER: Let's hope it does have a happy ending.

Let's talk about a happy ending for the chairman of Bear Stearns. According to our latest information he dumped 5.6 million shares, his entire stake in his investment bank, a day after JPMorgan quintupled its bid from two to $10 a share. He cashed in $60 million in stock. What do you think?

DOBBS: Well, I think first of all regulators have got some very serious questions to answer here. The Federal Reserve. This deal structured out over a 28-day period with the backing of the federal government. The Federal Reserve to be specific.

The reality is that given these issues. I can't imagine there being a window open to an insider, as James King would be, as the former CEO, that would permit this. Or any other insider to benefit.

There are a lot of questions to be answered now about the relationship between the government, Bear Stearns, and the way this deal was structured and the way its senior people and important key people were permitted to conduct themselves and transact sales of shares. I mean, this is really highly questionable, Wolf, a very serious question.

BLITZER: I guess the argument he'll make is if he had sold out a year earlier he could have cashed out with hundred of millions.

DOBBS: I really don't care about that argument because that isn't the issue. The fact is that that management team let this bank and its investors into collapse and for anyone of them to be taking advantage of this opportunity is to me, point blank, something that requires investigations of the SEC, the Federal Reserve should be examined on this issue very closely and carefully as well.

BLITZER: Lou's going to have a lot more coming up in one hour on his show. Lou, thanks.

DOBBS: Thank you very much, Wolf.