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THE SITUATION ROOM

DNA Clears Ramsey Family; Iran's Missile Warning; Senator Ted Kennedy Casts a Vote; Jesse Jackson Apologizes to Barack Obama

Aired July 9, 2008 - 17:00   ET

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.


WOLF BLITZER, CNN ANCHOR: I'm Wolf Blitzer.
You're in THE SITUATION ROOM.

More than a decade after a murder that made headlines around the world, there's now been a dramatic development. New DNA tests have cleared the family of the child beauty queen, JonBenet Ramsey, in her 1996 killing.

Mary Snow is following this story for us.

She's watching it.

A lot of us remember all the drama, what was going on, the accusations, the finger-pointing at the parents specifically. You're looking at this.

What is going on?

MARY SNOW, CNN CORRESPONDENT: Well, Wolf, prosecutors are now ruling out the little girl's family as suspects and also they're offering an apology. This comes nearly 12 years after JonBenet Ramsey's murder.

The Boulder County district attorney has said new DNA evidence points to a male, but does not belong to anyone in the Ramsey family.

Now, the case lifts the cloud of suspicion that has hung over the girl's parents, John and his late wife Patsy, and their son, Burke.

John Ramsey found his daughter's body in the basement of their home on the morning after Christmas in 1996. Patsy Ramsey said she found a ransom note. The couple insisted an intruder entered their home. But Boulder police had declared at one point the couple was under an umbrella of suspicion.

And John Ramsey spoke to KUSA today after learning his family was cleared.

Here's what he had to say.

(BEGIN VIDEO CLIP)

JOHN RAMSEY, FATHER OF JONBENET RAMSEY: Well, we're certainly grateful for the effort that they've put into this case, continuing effort. The most significant thing to me was the fact that we now have pretty irrefutable DNA evidence, according to the D.A.'s office. And that's the most significant thing to me.

And certainly we are grateful they acknowledged that we, you know, based on that, we certainly could not have been involved.

But the most important thing was we now have very, very solid evidence. And that's always been the hope, at least in the recent past, that that's -- that will lead us to the killer eventually.

(END VIDEO CLIP)

SNOW: The Boulder County district attorney, Mary Lacy, today sent a letter to the Ramseys acknowledging the ongoing suspicion of them created a "ongoing living hell for the Ramsey family and their friends." And she offered an apology, saying: "To the extent that this office has added to the distress suffered by the Ramsey family at any time or to any degree, I offer my deepest apology."

Patsy Ramsey died in 2006 without ever knowing who killed her daughter.

Asked why there are so many suspicions, John Ramsey told KUSA said people found it hard to accept people would come into a home and murder a child this way. And he says he feels the case became an entertainment event for the media -- Wolf.

BLITZER: What a tragedy these -- this family has gone through. Not only do they lose their daughter, but then they're widely suspected, at least by a lot of people out there in the news media, among others, as being involved in her actual death.

All right, thanks very much for updating us on this DNA clearing the entire Ramsey family of any involvement whatsoever in the death of JonBenet Ramsey.

Other news we're following right now: A surprise missile launch with major implications. Iran testing ballistic missiles in a warning to the region and to the West.

Brian Todd is working this story for us.

We woke up. It was a pretty dramatic shock to see what was going on.

BRIAN TODD, CNN CORRESPONDENT: Right, Wolf.

The Iranians are believed to have tested nine ballistic missiles today. They come in three categories. The Fateh has a range of about 105 miles. That could hit the financial center of Dubai. The Zelzal can travel about 250 miles. But it's the missile called the Shahab-3 that has Western officials worried. It can travel about 1,250 miles. We're going to show you that range here. And that could hit -- that means that Israel is within range of that, as well as U.S. bases in Turkey. And a U.S. intelligence official tells CNN that the Shahab-4 ballistic missile, still being developed, could someday be able to hit parts of Europe.

Now, each of these missiles could, before long, be outfitted with the deadliest of weapons.

(BEGIN VIDEOTAPE)

TODD (voice-over): Its name in Farsi means "shooting star" and it could someday carry a nuclear warhead as far as Israel. Iran's test of the Shahab-3 ballistic missile a clear signal to its enemies -- if you threaten us...

GEN. HOSSEIN SALAMI, IRANIAN REVOLUTIONARY GUARD (THROUGH TRANSLATOR): Our finger is always on the trigger and we have hundreds, even thousands of missiles, ready to be fired against predetermined targets.

TODD: Words likely meant for U.S. and Israeli consumption. The missile firing comes a month after Israel flexed its muscle toward Iran's nuclear program, testing warplanes and aerial tankers over the Eastern Mediterranean.

Still, the Israelis and Americans condemned the Iranian test.

ROBERT GATES, SECRETARY OF DEFENSE: We've been saying, as we've talked about missile defense in Europe, that there is a real threat. And it seems to me that the test this morning underscores that.

TODD: Analysts say this also could be a signal to Iran's other rivals in the region.

JON WOLFSTAHL, CENTER FOR STRATEGIC & INTERNATIONAL STUDIES: And I think the Iranian missile test is a tool that Iran can use to send a message to its immediate neighbors -- Saudi Arabia, UAE, Jordan, Egypt -- that Iran's military strength is growing as well as its political strength, and that these countries would be well served to maintain good relations with Iran.

TODD: Another ominous signal here about Iran's leverage -- oil prices that had fallen more than $9 a barrel over the past few days shot back up right after the missile firing. They quickly stabilized. But analysts say the fact that the war games took place near the mouth of the Strait of Hormuz is worrying.

MIKE FITZPATRICK, ENERGY ANALYST: A very large portion of the world's oil, especially most of it coming from the Persian Gulf region, will have to transit through there to get out into the open ocean.

(END VIDEO TAPE)

TODD: Now, the Strait of Hormuz is 20 miles wide. But analysts say there are only two mile wide channels that can accommodate oil tanker traffic there -- traffic that brings roughly 40 percent of the world's oil to market. So any military activity in this area causes real jitters in the market. Wolf, that's where you and I feel the pinch of these missile tests just about right away.

BLITZER: So that, I assume, would benefit Iran, as well? TODD: It does. Iran has got a faltering economy. They are the second largest oil producer in OPEC. Anything that drives prices up even temporarily benefits them. And you'd better believe they know it.

BLITZER: And they're making money right now.

TODD: Right.

BLITZER: Brian Todd working the story for us.

Stand by.

Iran's elite Revolutionary Guard Corps conducted those test launches. The Guard was formed in the wake of the 1979 Islamic Revolution, designed as a force loyal to the Ayatollah Khomeini, with many believing the existing Iranian Army could simply not be trusted.

Current president, Ahmadinejad, joined the Guard back in 1986, starting his rise to national prominence. Late last year, the U.S. labeled the Guard a specially designated global terrorist group in response to its activities in Iraq and Afghanistan.

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

Lots going on today -- Jack.

JACK CAFFERTY, CNN ANCHOR: A busy day.

The economy issue one for American voters this election year. That sent both presidential candidates scrambling to describe what they would do to fix our nation's economic problems.

John McCain is vowing he'll balance the budget by the end of -- by 2013, by the end of his first term in office. He says he'll do that by keeping taxes low, cutting back on spending. McCain's plan includes a one year freeze on domestic spending, entitlement reforms and reducing growth in Medicare spending. He also says he will veto any bills with earmarks.

Well, a lot of economists suggest that there is just plain no way that John McCain can balance the budget in four years. Remember, McCain wants to keep President Bush's tax cuts and make those permanent. He's committed to staying in both Iraq and Afghanistan. One group estimates even if U.S. troop levels in Iraq were cut by 80 percent, McCain would still face an annual deficit of $450 billion.

The Arizona senator also says he plans to create jobs by doing things like building nuclear power plants and he says he'd make a bipartisan push to fix Social Security.

But by his own admission, you'll recall, when it comes to the economy, McCain is not at his best. Take Social Security. This is how McCain answered a question earlier this week about how he'd fix it.

(BEGIN VIDEO CLIP) SEN. JOHN MCCAIN (R), PRESIDENTIAL CANDIDATE: And Americans have got to understand that. Americans have got to understand that we are paying present day retirees with the taxes paid by young workers in America today. And that's a disgrace. It's an absolute disgrace and it's got to be fixed.

(END VIDEO CLIP)

CAFFERTY: Senator, older workers' benefits have always -- always been paid by the taxes put into the system by younger workers. That's how it's worked since day one with Social Security. You're young, you're working, you pay into the system so that older, retired people can then collect their benefits. And when you get older, younger people come along and that's how it works.

You'd think a guy who spent 20 years in the United States Senate would be more aware of how that system operates.

Here's the question: How confident are you in John McCain's ability to solve our economic problems?

Go to CNN.com/caffertyfile and you can post a comment on my blog -- Wolf.

BLITZER: Thanks, Jack, very much.

Here are some of the stories we're working on in THE SITUATION ROOM this hour.

A new divide between Hillary Clinton and Barack Obama over a major anti-terror bill.

We'll talk about it with our political contributors, James Carville and Bill Bennett. They're standing by.

And the mystery behind this dent. What on Earth did this to a passenger jet?

Also, Ted Koppel right here in THE SITUATION ROOM right now, taking us inside The People's Republic of Capitalism.

Plus, the latest high tech ATM scam -- how crooks are trying to get your password.

Stick around. Lots going on right here in THE SITUATION ROOM.

(COMMERCIAL BREAK)

BLITZER: It was a dramatic moment on the floor of the U.S. Senate just a little while ago when Senator Ted Kennedy, suffering from a cancerous brain tumor, actually returned to cast a vote in favor of Medicare funding. And shortly thereafter, Ted Barrett, our producer up on Capitol Hill, had a chance to speak with the ailing Senator.

(BEGIN VIDEOTAPE) TED BARRETT, CNN CONGRESSIONAL PRODUCER: Is it good to be back, sir?

SEN. EDWARD KENNEDY (D), MASSACHUSETTS: It's great to be back.

BARRETT: How are you healing?

KENNEDY: I'm just glad to be back in the Senate (INAUDIBLE).

BARRETT: How important is this vote?

KENNEDY: It's enormously important. The whole issue for our seniors to be able to be protected is a key defining issue for this Congress and for this country. And I didn't want to miss the opportunity to be able to express my voice and my vote.

BARRETT: And how are you feeling, sir?

KENNEDY: I'm feeling fine.

BARRETT: Are you coming back here full-time, sir?

KENNEDY: (INAUDIBLE) once in a while. Otherwise, I'm pretty good.

BARRETT: Coming back full-time soon?

KENNEDY: Hopefully.

BARRETT: Thank you, sir.

KENNEDY: Thank you.

(END VIDEOTAPE)

BLITZER: It's certainly good to see Senator Kennedy back in Washington where he belongs. We wish him a very, very speedy recovery.

Let's move to another story we've been following. The Reverend Jesse Jackson making some very crude remarks today about Senator Barack Obama. Reverend Jackson expressing his deep distress at what he said. The remarks so crude, we can't even tell you here in THE SITUATION ROOM precisely what he said. Suffice it to say they were not -- not very nice.

He's apologizing profusely to Senator Obama.

But I want to bring back Donna Brazile and get her reaction -- Donna, you've worked long -- many years ago, you ran his presidential campaign, Jesse Jackson.

There was an open mike. He said stuff about Barack Obama that he certainly should not have said.

What do you think? DONNA BRAZILE, CNN CONTRIBUTOR: Well, Wolf, first of all, when I heard about the remarks, I was somewhat dismayed. Look, Reverend Jackson is a passionate supporter of Senator Obama. He has done everything to help Senator Obama. Of course, Congressman Jesse Jackson is actively out there also supporting Senator Obama. So I was somewhat dismayed. And I think Reverend Jackson has expressed his remorse and his regrets. And Senator Obama should accept his apology.

This is a very important campaign, and not just for African- Americans, but the entire country. And Senator Obama has addressed many of the issues that Reverend Jackson allegedly talked about in this hot mike, so to speak. He has attended conventions where he's spoken out on the problems facing the inner cities. He has spoken passionately about trying to repair some of the problems in the black community.

But he is now a presidential candidate that must address and reach out to all Americans. And I think he's doing a great job doing that.

BLITZER: So you think Senator Obama should forgive and forget?

BRAZILE: Oh, no question. This is going to be a very important election season. And Reverend Jackson's support will continue to be very valuable to Senator Obama. But Senator Obama is his own candidate. And on Monday, he will address the 99th convention of the NAACP in Cincinnati. And that will be another opportunity for Senator Obama to not just talk to the NAACP, but to all Americans who support equal justice under the law.

BLITZER: Donna, thanks very much.

Let's move on now. It's China as you've probably never seen it before in a brand new Discovery Channel special.

Ted Koppel takes us in and around, under The People's Republic of Capitalism, as he calls it.

Let's watch a little clip.

(BEGIN VIDEO CLIP)

TED KOPPEL, DISCOVERY CHANNEL (voice-over): When they chant that slogan about safety being important, it is -- to them, and certainly on this occasion, to me. They're allowing my crew and me to accompany them down to the coal face. We've been assured and reassured that this is one of the safest mines in China and so it appears to be.

(on camera): This is one of those beginner ski lifts. So instead of going a thousand feet up, we're going a thousand feet down.

(END VIDEO CLIP)

BLITZER: Ted Koppel is here in THE SITUATION ROOM.

Ted, I've known you for a long time. You're a lot more courageous than I am.

I'm not sure I would have gone a thousand feet down in that mine.

KOPPEL: It's actually about -- by the time you get down there, it's about 3,000 feet but...

BLITZER: So were you sweating profusely?

Were you scared out of your mind?

KOPPEL: Not at first. But I'll tell you, where the miners actually work, you know, you're there in about -- it's less than four feet. So you kind of crab walk your way into the last -- the last part of the tunnel. It's...

BLITZER: Because if you're at all a claustrophobic, you could get a real panic attack.

KOPPEL: You could do that and it wouldn't do you much good at that point so.

BLITZER: What were you thinking?

And why -- give us the important -- why is it important for Ted Koppel -- and you've done an amazing documentary on China.

KOPPEL: Thank you.

BLITZER: Anybody who sees it will learn a great deal.

Why was it so important, at this stage in your career, to go ahead and literally, given the safety -- or the lack of safety in China's mines -- to go ahead and risk your life?

KOPPEL: I think if -- well, first of all, I don't think I was risking any life in any serious way. But I think it's important to go places that you report about. If you report about it simply based on what other people tell you -- we have to do that a lot of the time. We can't be everywhere. But here was an opportunity where they said yes, if you want to go down in the mine, we'll take you down. So, absolutely.

BLITZER: You've suggested that of the 1.3 billion people in China, 300 million now have actually emerged from poverty...

KOPPEL: Yes.

BLITZER: And there's a significant middle class. That's about the same number of Americans.

KOPPEL: It is. And they're bootstrapping -- they're trying to bootstrap that remaining billion people out. And the extraordinary thing is, I think Americans believe that if only capitalism takes hold in China, democracy can't be far behind.

BLITZER: What do you think? KOPPEL: Capitalism has taken hold in China. There's no question about it. But I think democracy is a long way behind.

BLITZER: How worried should Americans be that this China economic bonanza will represent a major threat to the United States?

KOPPEL: It is going to represent a major threat in terms of competitiveness. The question is, are we going to deal with that threat confrontationally or are we going to deal with it collaboratively?

There is a new study out that indicates by 2035, the Chinese economy will surpass that of the United States. That's only, what, 20 some odd years from now.

BLITZER: That's an amazing situation.

You know what else is amazing?

I learned from your documentary that the elite in China, the car they want is not a Lexus or a Mercedes Benz...

KOPPEL: A Buick.

BLITZER: It's a Buick.

KOPPEL: A black Buick.

BLITZER: All right. Help me. Explain why they love Buicks in China.

KOPPEL: The Buick has been a major brand in China going back to the old emperor 80 years ago. He drove a Buick. Chou En-Lai, the former prime minister of China, drove a Buick.

The Chinese think the Buick -- and a black Buick in particular -- is just the quintessentially elegant car. And the real kicker is you can't sell Buicks in the United States...

BLITZER: But they love them in China.

KOPPEL: They're selling more Buicks in China than they are in the United States.

BLITZER: What about the opening ceremony for the Olympic Games?

KOPPEL: Right.

BLITZER: President Bush is going. He'll represent the United States.

KOPPEL: Right.

BLITZER: Senator Obama says he's not sure that's a good idea, given what's happening with Tibet and freedom in Tibet. He wouldn't do it, he says, if he were president. What do you make of this?

KOPPEL: I must tell you, with all due respect to Senator Obama, I think if he were president, he would do it.

BLITZER: Why?

KOPPEL: Because the U.S. national interest is in maintaining as good a relationship with China as it possibly can.

BLITZER: Who needs who more?

KOPPEL: We both need each other extraordinary -- I mean to an extraordinary degree. Let me give you one example. The war in Iraq, the war in Afghanistan. The Bush administration has not raised a single dollar in additional taxes to pay for those wars. Those wars are being paid for by U.S. Treasury bills that have been bought by Japan, China, Saudi Arabia, England. The Chinese hold somewhere between $600 billion and $1 trillion of our Treasury.

BLITZER: And so the threat is, if they want to call in that debt, they could do that.

KOPPEL: They don't want to do it. I mean we are, in effect, holding guns to one another's head. If they called in those bills, it would mean a huge inflationary spiral here in the United States. It would mean we would not be able to buy all the goods from China that we're buying right now. They need us. We need them.

BLITZER: You're going to have this documentary released over four nights on the Discovery Channel.

KOPPEL: Tonight through Saturday night.

BLITZER: Right. And you spent a lot of time in China, going back many, many years...

KOPPEL: Many years.

BLITZER: ...when you were a correspondent for ABC News, as a lot of us old enough to remember your excellent work then.

KOPPEL: There aren't many of you left, though.

BLITZER: What is the single most important nugget of news or information that you've personally learned as a longtime China watcher?

KOPPEL: They have a huge problem with corruption. And they try to deal with that by arresting every corrupt official they can find. And they have thousands of them in prison. And if a corrupt official takes -- I think the cutoff point is about $14,000 -- then the punishment is capital. It's death.

The problem is the people who are giving the bribes, presenting the kickbacks to the officials, they're not prosecuted. And I had a long and somewhat contentious interview with the head of the anti- corruption unit in the City of Chongching. And, finally, in frustration, he said to me, in effect, you just don't get it. Those people, they're the ones who are -- they're the goose laying the golden egg. They're the ones making the investment in our city.

If we start arresting those people, all these new buildings, all these new industries, all these plants aren't going to get built.

So they arrest half the problem. They arrest the officials. They throw them in prison. They execute some of them. But they don't arrest the other half.

BLITZER: And a...

KOPPEL: So corruption is a huge problem.

BLITZER: As everything Ted Koppel does, it's excellent, excellent journalism and I recommend it very highly.

KOPPEL: You're very kind.

BLITZER: Thanks, Ted, very much for doing this.

KOPPEL: Thank you, Wolf.

BLITZER: Anybody who wants to learn something about what's really going on in China has to watch this documentary.

KOPPEL: Thank you.

BLITZER: A worrisome milestone in that nationwide salmonella outbreak, now one of the worst in recent memory.

And Hillary Clinton and Barack Obama split on a controversial vote. Political contributors James Carville and Bill Bennett, they are standing by to discuss.

Stay with us.

(COMMERCIAL BREAK)

BLITZER: Carol Costello is monitoring some other important stories incoming into THE SITUATION ROOM right now.

Carol, what do you have?

CAROL COSTELLO, CNN CORRESPONDENT: Well, Wolf, the U.N. is condemning a fierce gun battle in Darfur that killed seven peacekeepers. The U.N. says a heavily-armed militia launched a two hour firefight with the U.N. African Union peacekeeping force. Twenty- two people were injured. The peacekeepers are trying to protect civilians from Arab Janjaweed militias, which target black Africans. The militias have the Sudanese government's support.

A Mississippi congressman wants answers on how millions of dollars worth of supplies meant for Hurricane Katrina survivors ended up being given away as surplus. A CNN investigation revealed the goods sat in a warehouse for two years before the Federal Emergency Management Agency, or FEMA, gave it all away to agencies in 16 states. Representative Bennie Thompson calls it a debacle and wants a Congressional hearing on exactly how it happened.

It is now the worst food poisoning outbreak in years. More than 1,000 people are confirmed sick from the salmonella outbreak linked to tomatoes. And federal health officials say raw jalapeno and Serrano peppers, as well as fresh cilantro, are also being investigated. But they still don't know where that was coming from -- Wolf, back to you.

BLITZER: They'd better find out pretty soon. That would be important.

Carol, thanks for standing by.

COSTELLO: Sure.

BLITZER: Jesse Jackson now apologizing for what he said about Barack Obama -- very crude remarks that Jesse Jackson thought were private but caught on an open mike. James Carville and Bill Bennett, they're looking at the fallout.

It's a high flying mystery -- what left a huge dent in the nose of a passenger jet?

Plus a new ATM scam -- how you and your bank account could be vulnerable. Information you need to know, right here in THE SITUATION ROOM.

(COMMERCIAL BREAK)

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

Happening now. Beware the hot microphone. Jesse Jackson now apologizing to Barack Obama for a private remark that went public. A very, very crude private remark.

Something in the air. No one knows what crumpled the nose of a Northwest Airlines jet.

And bracing for Bertha. Forecasters now warning Vermuda to get ready for strengthening hurricane.

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

Jesse Jackson unknowingly caught on an open microphone making very crude remarks. Himself calls the remarks not only crude, but hurtful about Senator Barack Obama. Remarks for which Jesse Jackson is now apologizing profusely.

Let's discuss this and more with our CNN political contributors, the Democratic strategist James Carville, and the CNN political contributor Bill Bennett. He is the host of the conservative radio talk show "Morning in America." He's also a fellow at the Clairmont Institute. Guys, thanks very much for coming in.

Not the first time, James, Jesse Jackson has said something crude. But I can't even report exactly what he said on that open mike. We can't report it on -- here in THE SITUATION ROOM. Suffice it to say it was disgusting. And he's expressing his deep distress. What do you make of this?

JAMES CARVILLE, DEMOCRATIC STRATEGIST: You know, anybody that's been on microphones as much as we are in one sense, you can sympathize with the guy. But from what I know about this, and I don't know everything, because I've been miked up, and hadn't heard exactly what was said, but my sense is this is not going to be hurtful to Senator Obama politically at all. And, you know, if I got -- if I was miked up and every off-guard moment I said about people, I would probably be embarrassed by some of it anyway. I tend to go a little bit easier on Reverend Jackson.

BLITZER: In this private remark, Bill, and I'll just sort of paraphrase what he was saying, he was suggesting that Senator Obama was speaking down to black people, given some of the recent statements he's made. And then he went on to utter a crude comment about what he alleged Barack Obama was doing to fellow blacks.

BILL BENNETT, REPUBLICAN STRATEGIST: Let's get out of the crudeness and get away from the crudeness into the substance. The Jackson moment and the Jackson approach is down. The accusation here that Obama's talking down to blacks is I just think is representative of the change that's occurred.

You know, I've just finished Barack Obama's book about his father, "Dreams of my Father," about his autobiography. It's a very different book than "Up from Slavery," "Black Like Me", "Native Son" and "Invisible Man."

This guy grows up in Hawaii with a Kansas mother. His life is different. He doesn't suffer in the way that many blacks growing up in this country have suffered. You don't have that intensity. That is the model, the paradigm out of which Jesse Jackson spoke, and often spoke eloquently, often not, about the black experience in America. Obama represents something else. And I think to most people in America, black and white who support him, what he represents is a different view, not talking down to blacks, but talking to everybody, which is, I think, the broad source of his appeal. It sounds like I work for the campaign.

I'm just agreeing with you, Wolf. I don't think this hurts Obama at all. What it represents is the end of the Jesse Jackson style, at least at this stage in America's life and the emergency of a whole new way of style and way of approach.

BLITZER: Just to be precise, Jackson issued a statement and we spoke with him in THE SITUATION ROOM in the last hour and he said, "It was a very private moment," what he said. "If any hurt or harm has been caused to his campaign, I apologize." He was extremely, extremely regretful over what he said. You want to just button this up before we move on, James?

CARVILLE: Well, like I say, I have some empathy for somebody that says something and gets caught on mike, because I'm miked up a lot myself. But this is not at all political news for Senator Obama. And, you know, I think that Reverend Jackson is right to get out front and apologize profusely and deeply. I can't blame him. I know the guy feels terrible.

BLITZER: James, what about this surveillance legislation that passed the Senate today. Barack Obama supporting what president bush wanted. Hillary Clinton voting with some other Democrats against this legislation. There's a clear split now between Hillary Clinton and Barack Obama on an important element in the so-called war on terror.

CARVILLE: But I think if you took the senator to be fair here, took Senator Obama and Senator Clinton's voting record, my guess is they would be 90 percent alike. This is an issue that people have deep feelings on both sides about. But it's interesting we should note there's a difference on this vote. But we also should note that on a vast majority of votes, they vote alike.

BENNETT: This is a big thing it seems to me. It's indicative of a big thing. Look at the campaign as it went on, and toward the end, Hillary Clinton was moving to the center, center right. Trying to appeal to those audiences, getting those votes. Obama was on the left. Now they flipped. Barack Obama taking a lot of heat from the left wing of his party for this vote and other votes. He's giving Bob Herbert of "The New York Times" whiplash he said. And other liberals.

And Hillary votes on the liberal side against this FISA legislation. Is this a new positioning for Hillary Clinton? Too soon to tell, but I find it fascinating and a bit confusing.

CARVILLE: Like I said, I think it's worth noting, but it's also worth noting on the vast majority of things that they vote alike and also worth noting I think she's doing two fund-raisers for Senator Obama today.

BLITZER: James, does the fact that they split on this important vote, what, if anything, does that say about her prospects of being his running mate?

CARVILLE: I don't know. I suspect that it probably is not much. And I would suspect, you had President George H.W. Bush, then picked by Governor Reagan, as I understand changed his position on abortion in one phone call. You've had any number of conflicts. I think that Vice President Cheney had a different opinion on some gay issues than Governor Bush had. But what you do is follow the line and say, I accept the views of the nominee. That's not uncommon. That's something like this that happens.

BLITZER: I raise the question, Bill, because we've learned they were flying to New York together, Hillary Clinton, Barack Obama, for a fund-raiser tonight. Guess who was joining them, Caroline Kennedy, who is one of the vetters, one of those searching for a running mate for Barack Obama. BENNETT: Well, it would be a powerful ticket, that's for sure. James said he doesn't know -- Since I know more about the Democrat Party than James does -- that's a joke -- I don't think it's going to happen. I think they're still oil and water. She will work hard for him. She'll campaign for him. I think she's going to use him as a triangulation point. She's going to support him when she has to, otherwise she's going to start marking out differences.

BLITZER: Is it still realistic -- How unlikely is it, James, that he might tap her?

CARVILLE: Look, it's happened before. It happened with Senator Kennedy and Senator Johnson. It happened with Governor Reagan and Bush 41. It happened with Senator Kerry and Senator Edwards. You know, more often than not it doesn't happen, but it's not unprecedented. I've looked at the polling and that says it would help him a lot. I think it would make a statement on Senator Obama's part that he is willing to surround himself with strong-willed people.

And I think in some ways, it would be reassuring that they disagreed on a few things. But there are other people, too. I never have said that I think that Senator Obama and Senator Clinton would work hard to reconcile their differences. But there are bruised feelings out there.

BLITZER: We've got to leave it there. Unfortunately I know Bill is anxious, but there will be plenty of opportunities down the road. Guys, thanks very much for coming in.

BENNETT: Thank you.

BLITZER: James Carville and Bill Bennett.

It was a vote so important to Democrats, that ailing Senator Ted Kennedy came from his recovery from cancer treatment to take part. Now lawmakers have narrowly averted what many have charged would have been a Medicare crisis. Our chief medical correspondent Dr. Sanjay Gupta is joining us

now. Sanjay, explain to our viewers what's going on.

DR. SANJAY GUPTA, CNN CHIEF MEDICAL CORRESPONDENT: This is a pretty big deal, a Medicare bill to try to address the short-term and long-term costs of Medicare, it has significant impact on certainly thousands of doctors and millions of families, including the elderly as well as military families, military members and their families. Here's what we found.

(BEGIN VIDEOTAPE)

DR. WILLIAM RICH, OPHTHALMOLOGIST: We have a crisis. I can't get, if the patient comes in to see me now, I can't get them to see a primary doctor if it's a new Medicare patient.

GUPTA (voice-over): Last week physicians' payments for Medicare patients were slashed by 10.6 percent. Historically Congress has always swooped in at the last minute to stop cuts before they went into effect. But budgets are tighter than ever. And Medicare cuts are part of a federal program to rein in escalating health care costs. If the cuts remain, some doctors say they may be forced to take drastic measures.

RICH: Next Monday we will close our practice to new Medicare beneficiaries. Obviously we are going to continue to provide care to all Medicare patients who are under our care now and to emergencies but elective new patients we'll unfortunately not be able to care for.

GUPTA: Dr. William Rich is just one of many doctors around the country who accepts Medicare insurance from elderly patients. He said it's getting harder and harder for doctors like him to pay their bills, his rent, insurance, employee salaries. They all keep going up, and Medicare is not keeping up. Advocacy groups like the AARP, many medical organizations including the American Medical Association, have been lobbying their members and the public to put pressure on Congress to avoid the cuts from being permanent. The AMA called this the brink of a Medicare meltdown.

DR. WILLIAM HAZEL, AMERICAN MEDICAL ASSOCIATION: We know that 60 percent of physicians in this country will have to reduce the availability to see seniors, dependents of military families, and other people affected by this if the cuts go through.

(END VIDEOTAPE)

GUPTA: Right now, that bill that everyone's talking about, Wolf, is heading to the white house. If it does get signed there. Even then it's going to be a relatively short reprieve. By January 1st, 2009, those cuts are going to come up for a vote again. This is a cycle that continues on and on.

BLITZER: As you noted, as all of our viewers know, so many millions of Americans are affected by Medicare. The ramifications are simply enormous.

Absolutely. And, you know, you're balancing that with trying to preserve this federal entitlement. So it's a tough act to sort of balance. But for the time being, it looks like this particular bill has passed and the cuts are going to be reversed.

Sanjay will continue to work this story for us, as he always does. Sanjay, thanks.

GUPTA: Thanks a lot.

BLITZER: American interests under attack overseas. Gunmen try to storm part of a U.S. consulate. Why officials believe they were inspired by al Qaeda.

An aviation puzzle. A huge one. It wasn't a bird, so just what caused the nose of an airliner to crumple?

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

(COMMERCIAL BREAK)

BLITZER: Six people dead in a shootout outside the U.S. consulate in Istanbul, Turkey. And now the U.S. ambassador is calling it an obvious act of terror. Turkish officials say a car full of gunmen simply pulled up and opened fire at a security checkpoint at the consulate entrance. The ensuing gun battle with police last as long as five minutes, killing three police officers and three assailants. It's not yet clear who was behind the attack.

It's still a mystery as to just what crushed the nose of a Northwest Airlines Boeing 757 on Monday. At first, a bird was blamed. But the federal officials now say the incident happened at 18,000 feet. That's too high for a bird to fly. Our Miles O'Brien is working this story for us.

Lots of theories out there, Miles. Who better than you to tell us what we know.

MILES O'BRIEN, CNN CHIEF TECHNOLOGY & ENVIRONMENTAL CORRESPONDENT: We've been working on it, Wolf.

It just plain looks like a punch in the nose. But the mystery of what damaged the nosecone of that Northwest 757 continues. The airline and the FAA still working on this nose job, if you will. At a hangar in Minnesota. The current thinking, the collapse was triggered by some sort of structural failure inside the nose cone.

But we suggest they took a look at the weather as well. Now take a look at this. This is the radar track coming up of the plane on the day of the event, Saturday afternoon. On its way Detroit to Tampa. About 180 on board. Notice how it veered to the left over central Florida. The flight crew heard a loud bang. And the onboard weather radar failed.

Now, take a look at this next video. We took the spot where it veered. That's where the bull's-eye is in the middle. We have here at the weather at the time. It shows lightning strikes in the area at the time. Meteorologist Dave Henan (ph) tells me, Wolf, the plane could very well have been hit by one of these bolts, or even triggered lightning itself by passing through a cumulus or so-called anvil crowd.

Now initially the FAA ruled out a bird strike as you said, suggesting they don't fly that high. But check this out, Wolf, this is 20-year-old pictures. This is a Pan Am 747 that hit a goose near Gander, Newfoundland. No kidding, a goose over Gander. That plane was at 33,000 feet at the time. That said, Wolf, bird strikes are normally pretty messy. Check out these images from the Southern Illinois University aviation public Web site. It shows the rather tell tale messy damage caused by a bird strike of an Air Tran flight in Philly.

Wolf, I hit a bird in my little plane about a month ago, and you know when you hit a bird. It is a bloody, feathery mess. They airline and the FAA say they will have an answer in a couple of weeks, we hope. BLITZER: The NTSB you say is investigating, is that what you're saying?

O'BRIEN: No, they're not on it. They say it's not a big enough deal for them. The nose cone is not a critical thing. Planes fly well without them. They're not investigating.

BLITZER: It must have scared a lot of people just to hear that.

O'BRIEN: Oh, yes.

BLITZER: Miles, thanks and thanks for filling in for me the other day, as always.

O'BRIEN: Well, those are big shoes to fill, Wolf.

BLITZER: Miles O'Brien, good guy.

It's a high-tech rip-off worth millions of dollars. Thieves got a hold of your money at the ATM, without even seeing the machines. We'll watch what's going on.

And Barack Obama suggesting parents should teach their kids Spanish. We'll talk about that with Lou Dobbs.

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

(COMMERCIAL BREAK)

BLITZER: Right back to Jack Cafferty with "The Cafferty File."

CAFFERTY: The question is: How confident are you in John McCain's ability to solve our economic things?

Among other things, he's promised to balance the federal budget by the end much his first term. A promise that a lot of economists think is just simply impossible.

Susan in California says: "Confident, no. Even a fifth grader can do the math. Realize you can't cut revenue and hope to balance the budget. The idea that it's all going to be fixed by cutting pork barrel spending while staying in a war we can't afford and hoping trickle down economics is suddenly going to work when it hasn't yet is delusional."

Mike in Vancouver: "John McCain thinks younger working people should not be supporting the retirement benefits of older individuals. This is a huge disconnect in his thinking. That is the way it has been set up since the beginning. It's not broken and it works quite well, I believe. If he wants to fix this one issue, he will undermine a core way of life in the U.S. There is something wrong with this boy. Mind you, Cindy will look after him in his retirement."

Troy writes: "I'm not confident with McCain or Obama's ability to fix the economy. I'm hoping one will have enough sense to pick a running mate with good economic sense, somebody like Ron Paul. If it's up to these two we're in a lot of trouble."

Jerry in Oklahoma writes: "Having experienced 60 years of presidents' economic policies, I think presidents don't fix the economy. They ruin the economy. I doubt either McCain or his wife have to worry about Social Security, Medicare or anything else. This is why McCain doesn't know anything about the rest of us folks or what to do about the economy. This is a sign that he'd be just another Bush."

Marie writes: "I don't doubt his good intentions but he clearly doesn't understand what he's proposing. The Republicans are using McCain as a Trojan horse. They get the maverick war hero onstage to promote policies that would make any overpaid CEO giggle."

And Will in Los Angeles says: "I am as confident as I am that Joan Rivers has never had plastic surgery."

If you didn't see your e-mail here, you can go to my blog, cnn.com/caffertyfile. Look for yours there among hundreds of others -- Wolf.

BLITZER: See you in a few moments. Jack, standing by.

A remote control killer. And we have exclusive access. The first look at the Air Force's new drone. It's changing the face of warfare.

Plus, we're standing by for a live news conference from the Reverend Jesse Jackson. He is now speaking out about what he himself is calling his very crude and hurtful remarks that he made about Senator Barack Obama.

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

(COMMERCIAL BREAK)

BLITZER: You may think you're being as careful as possible when it comes to using your ATM, but a major new theft has investigators trying to figure out exactly how thieves pulled it off. Let's go to Deborah Feyerick in New York. It's a pretty sophisticated operation and our money is at stake.

DEBORAH FEYERICK, CNN CORRESPONDENT: Absolutely, Wolf.

And you know, as a matter of fact, some people say it's a new kind of bank robbery. That hackers are breaking into ATM machines through holes in the computer software, they're stealing millions from a variety of bank accounts.

(BEGIN VIDEOTAPE)

FEYERICK (voice-over): It's something you probably take for granted. That when you use an ATM machine and enter your personal PIN code, that secret number stays between and you your bank. Think again.

DON JACKSON, SECUREWORKS: That's a sign we're at a tipping point. Where this is actually becoming a serious problem.

FEYERICK: It happened most recently at 7-Eleven stores across the country. Hackers broke into Citibank's network of ATM machines, snatched people's PIN numbers and stole some $2 million from a range of bank accounts.

KURT HELWIG, ELECTRONIC FUNDS TRANSFER ASSOCIATION: ATM crime has become more and more sophisticated. You see organized crime rings, for example, that are willing to sometimes invest large sums of money up front in order to compromise an account or accounts.

FEYERICK: ATM trade spokesman Kurt Helwig said it was an isolated event.

(on camera): Still, the question, how they do it. Sixty percent of ATM machines are owned by private independent companies. Prosecutors are investigating the possibility that the thieves hacked into the private ATM computer network owned by Cardtronics, scanning the PIN codes in transmission before they even reached the bank.

(voice-over): Citibank tells CNN, "The situation has been revolved and there have been no fraudulent transactions since March." Three people believed to be at the center of the theft have been indicted and Citibank says they've repaid anyone whose accounts may have been compromised.

(END VIDEOTAPE)

FEYERICK: And in the past, ATMs have been compromised by phony card scanners or cameras that record people punching in their PIN numbers. But this really raises the stakes because hackers can steal an unlimited number of codes electronically -- Wolf.

BLITZER: All right. We have all got to watch very, very carefully what's going on at those machines. Deb Feyerick, thanks very much.

I just want to remind our viewers, we're standing by. The Reverend Jesse Jackson about to hold a news conference. We'll go there live. He's going to explain some extraordinarily crude remarks he said before an open mike involving Barack Obama. He's apologizing profusely. But we'll go there to hear what he has to say.

In the meantime, let's go to Lou Dobbs. He's watching stories, including Senator Barack Obama suggesting, you know what, a lot of us Spanish.

What's wrong, if anything, with that one such?

LOU DOBBS, HOST, "LOU DOBBS TONIGHT": What he said was your children should be learning Spanish, not Chinese, not French, but Spanish. And in doing so, in a week in which he's pandering to every ethnocentric group in the country, LULAC, La Raza, MALDEF, you name it, it's really unfortunate, because this is a candidate who's supposed to be post racial, post partisan. And he is, if anything, seemingly trying to drive a wedge based on ethnicity as fast as he possibly can.

I don't know what the senator meant. We only know what he said. And what he said is utterly wrong-headed.

BLITZER: I know you're going to have a lot more on this story and other stories coming up in an hour from now, Lou, thanks very much.

DOBBS: You better believe it.

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