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CIA Drug and Rape Allegations; Plan to End Saturday Mail; Governor Asks to Speak at Trial; President: U.S. at Perilous Moment; Obama Look-Alikes Abound

Aired January 28, 2009 - 17:00   ET


WOLF BLITZER, HOST: I'm Wolf Blitzer.


ANNOUNCER: This is CNN breaking news.

All that coming up.

But first, we begin with some breaking news -- very serious allegations against an American CIA station chief working aboard. He's being investigated right now for rape and we're learning there's more than one victim.

Let's go straight to CNN's Kate Bolduan.

She's got the developing story for us.

What do we know -- Kate?


CNN has confirmed a former CIA station chief in Algeria is under investigation for allegedly drugging and raping at least two women while he held the post. According to a source with knowledge of the investigation, these allegations came to light last fall when two of the alleged victims -- Algerian citizens -- came forward to a U.S. government official. Now, this source says a search warrant was executed on the officer's official residence in Algeria, where investigators found pills and other evidence, including about a dozen videotapes showing the officer allegedly engaged in sexual acts. Some of the women appearing to be in a semi-conscious state.

Now, CNN's source has not seen the tapes, but has been briefed on the content.

Soon after the allegations surfaced, the man came back to the United States on a previously scheduled trip and was ordered not to return to his post. A CIA spokesperson, Mark Mansfield, would not comment on the specific allegations. He would only say: "I can assure you that the agency would take seriously and follow up on any allegations of impropriety."

Now, Wolf, I should add that CNN has not been able to locate or get comment from the officer or a representative at this time.


What a story.


BLITZER: Thanks very much, Kate Bolduan, with that.

We'll stay on top of that story.

There's another major story we're following and it involves the U.S. Postal Service.

Our senior correspondent, Alan Chernoff, is working this story for us -- a lot of us expect a lot coming in in the mail. But what -- what's going on right now?

ALLAN CHERNOFF, CNN SENIOR CORRESPONDENT: Well, Wolf, the postmaster general is asking for permission from Congress to eliminate a day of mail delivery. In testimony before a Senate subcommittee this afternoon, Postmaster General John Potter said the recession has led to a plunge in mail volume and has exacerbated what he called the Postal Service's acute financial crisis.

So he's asking Congress to change the federal law that requires mail delivery six days a week. That has been the law since 1983, even though we've six day a week delivery for decades.

The Postal Service says it could suffer a net loss this fiscal year of $6 billion this year after losing nearly $3 billion last year.

Of course, it's more than the recession that's hammering the Postal Service. As we all know, the proliferation of e-mail has supplanted letter writing for many Americans.

The postmaster general is also asking Congress to change a law that demands early prepayment of retiree health benefits. The proposal, according to the postmaster general, would not reduce those benefits. The Postal Service, Wolf, is one of the nation's biggest employers. More than 650,000 people working for the Postal Service -- Wolf.

BLITZER: Everybody seems to be affected by this recession, which is really deep and continues.

Allan Chernoff, thanks very much.

There's also another developing story we're watching in Springfield, Illinois right now involving the Illinois governor, Rod Blagojevich. There's been a major development in his impeachment trial.

Let's go to Springfield.

Susan Roesgen is standing by with details.

What's going on -- Susan? SUSAN ROESGEN, GULF COAST CORRESPONDENT: Wolf, who would have believed this, but it turns out that Governor Rod Blagojevich now says he wants to come here and he does want to talk to the state senate that is considering whether or not it should kick him out of office.

That was announced just a few minutes ago by the senate president, John Cullerton. He has asked the impeachment prosecutor to consider that request and make a recommendation as to whether the governor should or should not be allowed to speak.

What the governor wants to do is to talk, Wolf, for an hour-and- a-half. He wants an hour-and-a-half to give what he's calling a closing argument. Now, some of the state senators say that's ridiculous. We want to be able to cross-examine him. We don't want him to just get up here and make a speech.

So they've got to decide whether or not they will let him speak. He says whether they will let him or not, he will be here tomorrow morning. And I can assure you, Wolf, that will be here, too.

BLITZER: So he'll either speak in the chamber or he'll speak outside the chamber, is that what you -- what you suspect is going to happen?

ROESGEN: Oh, I'm sure he will, Wolf. I mean, you know, he's like the Wylie Coyote. Every time you think he's trapped, he comes back again. And if he can't speak inside in the senate chamber behind me, I'm sure he'll talk to all the reporters out here.

BLITZER: All right. Susie, stay on top of this story for us.

A new twist in this impeachment trial of the Illinois governor.

Let's go back to Jack Cafferty for The Cafferty File -- Jack.

CAFFERTY: In meetings to hammer out an economic stimulus package acceptable enough to pass an anticipated House vote later today, President Obama told Republicans he's not willing to compromise on tax rebates for nearly every working American. According to an aide, the president said: "feel free to whack me over the head, because I probably will not compromise on that part."

Every working American includes people who don't make enough to pay income tax. The president justifies his support for these folks because these people do pay payroll taxes, Social Security and Medicare -- and, therefore, they are taxpayers.

No matter how you look at it, the economy's bad. And that's true for everyone, whether you pay income tax or not. Jobs are disappearing by the millions. People are frightened. They're losing their homes. The Conference Board's Consumer Confidence Index fell to 37.7 this month. And that's an all-time low dating back to 1967.

No light at the end of the tunnel -- at least not yet. And President Obama might be giving a glimmer of hope to the least fortunate among us by standing his ground on this issue. Here's the question -- should people who earn too little to pay income tax be given tax rebates as part of the stimulus package?

Go to CNN the Democratic plan/caffertyfile, where you can post a comment on my blog -- Wolf.

BLITZER: Because the argument is they may not pay federal income tax, Jack, but they do pay property tax, sales tax, they have withholding tax and, as a result, they do pay some taxes.

CAFFERTY: They also pay into Social Security and Medicare.

BLITZER: Right. So that's why President Obama and Democrats want them to get this tax rebate.

All right, Jack.

Thanks very much.

President Obama, by the way, is getting ready to speak over at the Pentagon. He's been meeting in The Tank. That's the very secure, classified area, the briefing room. He's been meeting with members of the Joint Chiefs of Staff. This is the first time he's gone over to the Pentagon to speak to the top military brass.

He had some of them over in The Situation Room over in the West Wing of the White House a few days ago. But now he's gone across the Potomac River to the Pentagon. Once he starts speaking, we're going to share with you, our viewers, what he's saying.

The president is also, at the same time, on an aggressive charm offensive up on Capitol Hill. He's trying to win over skeptical lawmakers and secure bipartisan support of the stimulus plan.

But the question, is that charm offensive working?

I'll speak about that with James Carville and Bay Buchanan. They're both standing by live.

Also, what's it like being a White House dad?

A former president has some advice for the new first father. My one-on-one interview with Jimmy Carter. That's coming up.

And some candid images of the president and one of his favorite singers. President Obama and Beyonce back stage at the inaugural concert over at the Lincoln Memorial.

Stick around.



BLITZER: We've got some new video coming into THE SITUATION ROOM showing what happened over at the Lincoln Memorial concert during the inauguration -- what President Obama said to Beyonce. That's coming up. I think you'll be interested.

As the House of Representatives nears a vote on the massive economic rescue plan, President Obama's pressing for urgent action, saying the nation face faces peril and there's not a moment to spare.

Let's go to the White House.

Our senior correspondent, Ed Henry, is working the story for us.

The president, no doubt, is going to get a huge economic recovery plan.

The question -- Ed, is will Republicans back it?


What's interesting is that it was very telling today when he met with business executives here at the White House. A reporter shouted a question to the president: "Are you confident you're going to get Republicans to support this stimulus?"

He dodged the Republican part of the question and said, "I'm confident we're going to get a bill" or "I'm confident we're going to get it passed."

And what that means is that he realizes with an enhanced majority in the House after the last election, he can muscle this through the House tonight with just Democratic votes.

But he wants to go beyond that. He's not satisfied with that. He's all about trying to follow up on that campaign promise about changing the tone in Washington. That's why he went to Capitol Hill yesterday to meet with the Republicans and not Democrats. And he wants to show he can deliver on that.

And this very partisan vote tonight is not going to do that. So he's looking ahead more to what can happen in the Senate and beyond to show he can bring more Republicans on board.

And what he urged today was dramatic but also bipartisan actions.


BARACK OBAMA, PRESIDENT OF THE UNITED STATES: The businesses that are shedding jobs to stay afloat, they can't afford inaction or delay. The workers who are returning home to tell their husbands and wives and children that they no longer have a job and all those who live in fear that their job will be next on the cutting blocks, they need help now. They are looking to Washington for action -- bold and swift. And that is why I hope to sign an American Recovery and Reinvestment Plan into law in the next few weeks.


HENRY: That's right. Even after this vote tonight in the House, the president is immediately hosting bipartisan Congressional leaders -- Democrats and Republicans -- for a cocktail reception with the first lady, Michelle Obama, as well. It shows that he's trying to pivot off this vote and immediately reach out to Republicans and Democrats and say how can we improve on this bill when it goes to the Senate?

They're going to try to bring more Republicans on board -- Wolf.

BLITZER: And he's over at the Pentagon, Ed, right now, meeting with members of the Joint Chiefs of Staff. We're standing by to hear from the president -- hear what he's saying right now. But this was symbolically and substantively very significant that he decided to make that short across the Potomac over to the Pentagon.

HENRY: Absolutely, because it also follows up on what he did last week. On his first full day in office, you'll remember, here at the White House, he brought into The Situation Room the military commanders to say, look, I want you to change the mission in Iraq -- specifically bringing home all combat troops within 16 months.

What's significant about today's meeting is this is when he starts figuring out and listening to the -- to the various military brass about how he can actually implement -- what will be the impediment to actually delivering on that.

It's easy to say it, but it's going to be difficult, in some ways, for these military leaders to follow up on that and make sure that they don't pull troops out too quickly -- Wolf.

BLITZER: And we'll bring those remarks from the president of the United States over at the Pentagon to our viewers as soon as they come in.

Thanks, Ed, very much.

There's lots of questions -- especially Republicans are asking about wasteful spending in this $825 billion proposed economic recovery plan.

Brian Todd is looking at these allegations.

Wasteful spending -- it's a big charge.

BRIAN TODD, CNN CORRESPONDENT: That's right, Wolf. And what the White House is now calling, of course, a necessary injection to get the economy going right now, the Republicans are calling business as usual in Washington.


TODD (voice-over): At the core of what Republicans say is wrong with the president's bill -- what they call wasteful spending, like $50 million for the National Endowment for the Arts or $335 million for education programs to prevent HIV/AIDS or sexually transmitted diseases. But Democrats dispute the argument that that money doesn't stimulate the economy. One House Democratic leadership aide saying new HIV/AIDS infections are estimated to cost the U.S. about $56 billion in medical care and lost productivity.

But smoke money allocated to federal agencies for infrastructure that's supposed to generate jobs immediately is also being questioned. Like more than $2 billion for the Army Corps of Engineers for construction projects.

STEVE ELLIS, TAXPAYERS FOR COMMON SENSE: There's really very little specific as to how they're supposed to spend that money. And this is an agency that has been written up by the Army inspector general's office for wasting federal funds on non-economically justified projects.


TODD: Contacted by CNN, a spokesman for the Army Corps of Engineers says the Corps looks at all of its civil works projects very carefully and distributes funds based on a very detailed analysis of costs and benefits of those projects. One thing to remember here, technically, the money in this bill does not really constitute earmarks because it does not target specific groups of people or locations.

But, Wolf, if the group Taxpayers for Common Sense says watch out for that, because even though it doesn't target specific groups or locations right now, lawmakers can come in after it's passed and say, well, gee, I want this money to go to this project or this town. So be careful -- when it's all said and done, lawmakers could come in and start to target that like an earmark.

BLITZER: Interesting, because we saw Nancy Pelosi in that interview I did with her recently raise her hand...

TODD: Right.

BLITZER: ...and say there's not going to be any earmarks in the $825 billion spending bill that the House is getting ready to vote on.

TODD: Right.

BLITZER: And we're going to have coverage of that. That's coming up.

Brian, thanks very much.

A widely popular and young first family -- it's a marketer's dream come true.

But are some people crossing the line as they try to tap into the Obama brand?

Plus, he loves her work and even knows the words to her latest hit song. Now, we have some candid new backstage video of President Obama and Beyonce.

Stick around.



BLITZER: We're going to be showing you the interview that I did today with the former president of the United States, Jimmy Carter.

Stand by for that. That's coming up this hour. He's got lots, as you well know, he's got lots to say.

Let's go to Deborah Feyerick, in the meantime, though.

She's got a story that she's been working on.

Some people are trying to take full advantage of this very popular first family.

What's going on right now -- Deb?

DEBORAH FEYERICK, CNN CORRESPONDENT: Well, you'd better believe it, Wolf. You know, Madison Avenue is always looking for the next big thing, the next it girl. Well, now they have two it girls. And that seems to be creating opportunities for the image makers.


FEYERICK (voice-over): When it comes to fashion, there's nothing like a powerful brand to boost sales -- especially if that brand is a dynamic first family.

MARLENE WALLACH, WILHELMINA TEENS & KIDS: We have gotten several calls for look-alikes.

FEYERICK: Marlene Wallach is president of Wilhelmina Kids & Teens.

WALLACH: It's a trend because what little girl doesn't want to emulate the first kids?

FEYERICK: The modeling agency represents 6-year-old Arial Bins (ph), who recently scored big in a Benetton ad.

(on camera): Is that Tyra Banks?


FEYERICK (voice-over): She then scored as a first daughter look- alike to foe Obama Mama Tyra Banks in September's "Harper Bazaar."

(on camera): This could really open up a lot of possibility for your daughter for other different ad campaigns.

UNIDENTIFIED FEMALE: I think it will and I hope it does. FEYERICK (voice-over): Unlike a Bush twins or Chelsea Clinton, global branding experts say the appeal of the Obama girls is unique and infinitely marketable.

DAVID ROGERS, GLOBAL BRANDING EXPERT: Marketers are finally waking up to it. You know, black is beautiful. It's just going to become part of the fabric of -- of the fashion imagery of pop culture, which is a great thing.

FEYERICK: After the first kids appeared in their J. Crew outfits Inauguration Day, the company's Web site got so many hits, it crashed. But when a toy company recently tried sell unauthorized Sasha and Malia dolls, First Lady Michelle Obama's office called it inappropriate.

Still, many companies believe the look-alike effect will rub off.

WALLACH: You know, if all these young 'tweens are aspiring to be these girls, I would assume that that's their intention.

FEYERICK (on camera): And often that works. That's what they (INAUDIBLE)...

WALLACH: And often that works.

FEYERICK (voice-over): Which will likely mean more work for kids like Arial Bins (ph).

UNIDENTIFIED FEMALE: I actually have a go see for you guys to go to right now.


UNIDENTIFIED FEMALE: It's for Saks. They're looking for size six girls.


FEYERICK: And some branding experts say there's a fine line between positive marketing and tackiness.

But the feeling really is because of the Obamas, there will be an increase in the number of African-American models in fashion magazines and ad campaigns, taking diversity to a whole new level -- Wolf.

BLITZER: So here's the question -- is this exploitation?

FEYERICK: Well, you know, some people say yes, that selling dolls named Malia and Sasha, even if they don't look like the first daughters, can unnecessarily expose the girls and take away from their normal childhood experience. Still, ad experts say that, you know, these models may prove a great equalizer, better reflecting the face of the nation.

So a little bit good, a little bad.

BLITZER: All right. Deb, thank you very much.

It's no secret that President Obama is a big fan of the singer Beyonce, like a lot of us are. Back stage video from the inaugural concert on the National Mall shows that he even knows the dance from her hit song, "Single Ladies."

Let's go to our Internet reporter, Abbi Tatton, who has the video.

Show us the video -- Abbi.

ABBI TATTON, CNN INTERNET REPORTER: Wolf, this is video from singer John Legend's own Web site. It shows the stars lining up at the inaugural concert backstage, hoping for a few words with the then president-elect. There's John Legend, Beyonce, Mary J. Blige.

And listen carefully to what President Obama says to Beyonce in the following exchange. If you listen carefully, you will hear that it sounds like he's a fan of the "Single Ladies" dance.


QUESTION: Mr. President, you didn't tell Beyonce about "Single Ladies," your rendition?

OBAMA: But I'm not like Justin. I didn't put on the outfit. I didn't put on the outfit. But I didn't want my girls thinking that I couldn't, you know -- hey, I got a little something.

UNIDENTIFIED FEMALE: You got that part.

OBAMA: On this part, I can...



TATTON: Now, if you've somehow never seen that Beyonce single, "Single Ladies," here it is on YouTube. And this is the move that he is referring to in that video. And that's the outfit, as well -- an outfit that was famously done by Justin Timberlake for a "Saturday Night Live" skit. You heard President Obama say he hasn't gone that far.

That video, if you want to see it, is at the Democratic plan, where the artist blogs. No matter how famous the artists were that day, I think that everyone was star struck -- Wolf.

BLITZER: I wonder, how many hits did that video -- that YouTube video -- have?

Do you have any idea?

TATTON: Thirty-four million.

BLITZER: Well, get -- get ready. They're going to get a few more million right now.

All right, thanks very much, Abbi, for that.

He's another father and he's a former president of the United States who knows what it's like to have a kid in the White House.


JIMMY CARTER, FORMER PRESIDENT OF THE UNITED STATES: In the White House, they have a nice theater. And the first family can order any movie they want, as you know. So they had popcorn and Coca-Colas and so forth.


BLITZER: Jimmy Carter on his best advice for President Obama as a dad. Plus, what he thinks about the economy and the crisis in the Middle East and his critics.

Plus, President Barack Obama wooing the Republicans -- but does it ultimately really matter?

Can Washington change?

Candy Crowley, James Carville, Bay Buchanan -- they're coming up.

And a lot more right here in THE SITUATION ROOM.


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

Happening now, President Obama's economic recovery plan heading to Congress for a key vote in the next hour or so. Many Republicans aren't imposed. Some are calling the plan -- and I'm quoting now -- "insane."

Lawmakers aren't the only ones taking a hard look at the president's plan. CNN's Lou Dobbs is going through it line by line.

And a candid conversation with the former president, Jimmy Carter. He reveals what it was like behind-the-scenes at the inauguration.

I'm Wolf Blitzer.


President Obama is getting ready to speak to reporters over at the Pentagon. He's wrapping up a meeting with members of his Joint Chiefs of Staff -- the first time he's gone to the Pentagon to meet directly with the top military brass. As soon as we get his remarks, you'll here him and see him live. That's coming up here in THE SITUATION ROOM.

But I want to bring in Candy Crowley right now, our senior Pentagon correspondent -- Candy, a lot of people are having a hard time understanding such a lop-sided Democratic majority in the House and in the Senate.

Why is President Obama going all out to try to recruit Republican support?

He really doesn't need it to get passage.

CANDY CROWLEY, CNN SENIOR POLITICAL CORRESPONDENT: He doesn't. But he promised bipartisanship in Washington. Further, he also may need Republicans down the line when things get tougher. Beyond that, should the stimulus package not work -- and most people -- in fact, all Americans hope it will -- but should it not work, he can use the Republican cover.

One thing we know for sure right now is he's not going to get Republican support on the House side on that stimulus bill.


OBAMA: We had a wonderful exchange of ideas.

CROWLEY (voice-over): Despite all that attention from on high, most House Republicans are expected to vote no. They are all about bipartisanship -- but not about rolling over.

REP. JACK KINGSTON (R), GEORGIA: We can do better. And I would like to work with the Democrats and the president, as would all the other Republicans, and try to make a better craft -- a better package than what we're looking at today.

CROWLEY: What's their problem?

$825 billion for starters.

REP. JOHN DUNCAN (R), TENNESSEE: We simply cannot afford this so- called stimulus package. All it is is really a short-term fix for our addiction to spending.

CROWLEY: It is the post-Bush era and the Republican Party is in search of itself -- an identity crisis at play in the battle over the stimulus package. After an eight year run-up in the federal deficit, including approval of last year's $700 billion stimulus plan, House Republicans are returning to their Reagan roots. They want more tax cuts and less government.

REP. KEN CALVERT (R), CALIFORNIA: What will all this spending get the American people?

Will it truly provide more middle class jobs or improve infrastructure?

The answer, sadly, no.

CROWLEY: The House Republican Conference, which develops GOP policy, says the Democratic plan funds federal subsidies, pet projects and bureaucracy. Objections include $50 million for the National Endowment for the Arts, a billion for the 2010 Census, $400 million for NASA climate change right here, $150 million for building repairs at the Smithsonian.

Democrats say all those projects will create jobs.

But beneath it all, Republicans have a larger objection. They think this is the long time Democratic agenda disguised inside the urgency of a stimulus package.

REP. JOHN CULBERSON (R), TEXAS: This 647-paged bill represents one of the worst abuses of power we've probably ever seen in history of the congress.


CROWLEY: One of the things republicans look at as a possible Trojan horse inside these numbers, all the spending on health care they think is moving toward a bigger federal role in providing health care. All the spending on education, huge amounts if you look at all of the education they believe will increase the federal role in education, which you know republicans have felt to be left to state and local governments.

BLITZER: There's a major ideological battle underway I think it's fair to say. Thanks and we're standing by for the roll call vote in the House of Representatives. That should be coming up within the next hour or so.

Let's bring in our CNN political contributors right now the democratic strategist James Carville and the republican strategist, Bay Buchanan. Guys, thanks very much for coming.

I want to alert you, we might be getting the videotape. The president of the United States has just wrapped up a meeting with members of the Joint Chiefs of Staff over at the Pentagon and if I interrupt and say, let's go to the videotape to hear from President Obama over at the Pentagon, you will both certainly understand why.

James, let me start with you and talk about the president's charm offensive with the republicans. Going beyond all of what he's already done, he's now inviting them to come over to the white house for drinks and to socialize. Is he going too far? Is he doing it just right? What's going on?

JAMES CARVILLE, DEMOCRATIC STRATEGIST: I think he's trying to show the country he wants bipartisanship. He's trying to be cordial. I don't think the house republicans that there's a recession going on out there and this president's trying to do something about it and you have all these guys taking it to talk radio, giving speeches on the house floor. I think the country is watching and saying, I don't think these people got it when they're in power and I don't think they get it when they're in power. I think this strategy that he has is a very good one.

BLITZER: But you know republicans, you've been a republican for a long time, does it really work, the charming, inviting them over for lunch, going to the hill? Does that really have a result on these republicans?

BAY BUCHANAN, REPUBLICAN STRATEGIST: I think there's two sides. It's not going to change their vote with this bill. They're very opposed to it. They see this as huge government and they're not falling for it, so I don't think it's going to help in this vote, but I think in the long-term, Barack Obama is generally a warm person. It's very natural for him. He has charm. This is a great asset. I think the country sees a man who's inviting them in, giving them a chance to express their opinions and views. It cannot hurt when you feel a certain comfort level with the opponent, that you kind of like them personally, if you like.

BLITZER: How much of a setback would it be for President Obama, James, if he got this thing passed without any significant republican support, it was strictly a partisan vote?

CARVILLE: I think the president can say very honestly and truthfully, I did everything I could to work with republicans and they rejected it. I don't say this because I'm a democrat. Then you have Rush Limbaugh -- apologizing to Rush Limbaugh because he said something. I really think the country's watching, saying this guy's trying to end this era. We see the excerpts on our network talking against this and talking it down, not acknowledging there's a recession going on.

BUCHANAN: Wolf, I think that's totally wrong because the key here is that bipartisan doesn't mean you go over and get in line behind Barack Obama. What republican is all about, and they are opposed. They think the bill is lousy and it's not in the best interest of the nation. They know bloody well there is a recession. It will not create jobs. They have an obligation. If the bill does not work and history says it won't, then republicans will be on the right side and they'll be able to say, we didn't think it was going to work, we wish it did and now we'll go back to the other policies.

CARVILLE: What if it works? As Americans let's say it gets better, then what?

BUCHANAN: Look if it works James you can I both know there's nothing republicans can do. Barack Obama can turn this thing around in a couple of years. He will be president for eight years and democrats will be in charge, but unfortunately, history tells us it will not work. It is not a stimulus bill. It has all kinds of pork in there. They are not willing to debate these issues. They want to sneak it.

BLITZER: Let's not forget, if it passes, it goes to the senate where there will be different provisions. Then the members of the house and senate have to get together and come up with a compromise version. So there's still a long process to go. Thanks very much for coming in.

Former presidents come together to share insider tips with Barack Obama. What was it like inside that very rare white house luncheon? Jimmy Carter was certainly there, and now, he's in THE SITUATION ROOM. He's revealing new details.

Plus, the new commander in chief meeting with commanders over at the Pentagon has just wrapped up the meeting. We're getting ready to hear directly from President Obama on what happened.

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


BLITZER: We're getting word that the president just spoke to reporters over at the Pentagon following his meeting with members of the Joint Chiefs of Staff. We're getting that videotape. We're going to bring it to you shortly. Stand by for that.

In the meantime let's check back with Jack. He has the Cafferty File.


JACK CAFFERTY, CNN CORRESPONDENT: Question this hour, should people who earn too little to pay income tax be given rebates as part of the upcoming stimulus package?

Marieth in Chicago writes, "I really don't understand taxes as much as others, but if they can find billions for the banks why not for the little people."

Hugh in Tracey, California, "We bailed out Wall Street, home to the rich and powerful, how about a bailout for the poor and voiceless? The corporate elite will fight this tooth and nail, they think our taxes should only go to pay for their miserable failures. Give the less fortunate a break. At least it would be a change. People only call it socialism when you give money to the needy. They call it a stimulus when you give away billions to the corporations."

Rick in Pennsylvania, "I'm getting pretty sick of these holier than thou republicans. If you'll pardon the expression, I don't pay jack in income taxes. I'm self employed and write off everything I legally can. Though my income tax is low, I'll trade my self- employment tax bill of about $9,000 a year for most people's income tax bill. I'm sure I contributed enough to get a check even if I don't pay income taxes."

Keith in Cleveland, "This isn't a time for hand outs for those not filing returns or retired. The purge that we are going through will reduce some of our prices in time. We need to get people back to work, people paying their mortgages and corruption out of our financial system. The $300 rebate last year didn't do what was expected. Government needs to work with businesses to get our industries back. We need to make widgets that the world needs again."

Fran in Brimley, Michigan, "For many years the very rich had loopholes and barely paid any income tax. No one said a thing. Now it's time to give to our less fortunate and there's outrage because they didn't pay any taxes. What's wrong with this picture?"

And Julie writes, "Only if President Obama will agree to call it welfare instead of a tax rebate, which is what it really is."

If you didn't see your e-mail here, you can go to my blog at and look for yours there. There are hundreds of posted.

BLITZER: Jack, thanks very much.

Remember, we're standing by to hear from President Obama, he's at the pentagon just meeting with members of the Joint Chiefs of Staff. That videotape coming in, we'll play it for you shortly. Stand by.

He's one of only a handful of people at an historic meeting only a few weeks ago.


JIMMY CARTER, FMR. PRESIDENT: The night before we had the luncheon, I spent a long time with the president.


BLITZER: The one topic President Obama wanted to talk about most with Jimmy Carter. That's coming up.

Also, fixing up America's aging schools. Can it create hundreds of thousands of jobs?

Lots going on right here in THE SITUATION ROOM.


BLITZER: President Obama has now wrapped up a very important meeting at the Pentagon. He's met with the senior military command, members of the Joint Chiefs of Staff. He left the white house earlier today, drove across the Potomac River. He's been meeting inside what they call the tank. That's the secure briefing room at the pentagon and there's been an extensive back and forth. Clearly, no cameras were allowed inside. We are told they went through all the major military issues on the agenda. Not only the wars in Iraq and Afghanistan, but U.S. military readiness. The president had an opportunity to ask the military lots of important questions on this front.

There's also no doubt that as the president gets ready for his new administration, military matters are going to be uppermost on his mind. Throughout his administration, national security, priority number one. He's asked the Bush administration's secretary of defense, Robert Gates, to stay on the job. He was testifying yesterday in congress on a whole host of issues, saying there is going to be a major effort to move U.S. troops out of Iraq. He wants all U.S. combat troops out of Iraq over the next 16 months and move some of those troops to Afghanistan, which the new administration now regards as the central front in the war on terrorism.

Speaking to reporters just a few moments ago, here's what the president of the United States had to say. Let's go to the Pentagon and President Obama.

PRES. BARACK OBAMA (D), UNITED STATES: Sorry we're running late.

I want to first of all thank all the men and women in uniform who are represented here. They are the best that this country has to offer and the first thing that I said to joint chiefs in this meeting was how grateful we are for their service, the sacrifices that they and their families make, are responsible for our freedoms that sometimes we take for granted.

As commander in chief, one of my goals is going to be to make sure they have the resources and support they need to carry out the critical missions to keep our nation safe each and every day.

I had a wonderful discussion with the joint chiefs. We kind of lost track of time, about a range of issues facing our military as well as the threats that face this nation, both short term and long- term. We had discussions about Iraq as well as Afghanistan. We talked about some of the broader, global risks that may arise and the planning and coordination that's going to be required between our military and our civilian forces in order to accomplish our long-term national security objectives.

We also talked about making sure that the health of our force is always in our sights and I know that all the chiefs represented here as well as Secretary Gates, are constantly thinking about what we need to do to make sure that people who are in uniform for the United States are getting the kinds of support they need and their families are getting the support they need. That's something I'm absolutely committed to and I know that Vice President Biden is as well.

We're going to have some difficult decisions that we're going to have to make surrounding Iraq and Afghanistan, most immediately. Obviously, our efforts to continue to go after extremist organizations that would do harm to the home land is uppermost on our minds. I have every confidence that our military is going to do their job and I am going to make sure the civilian side of the ledger does its job to support what they are doing. We have, for a long time, put enormous pressure on our military to carry out a whole set of missions, sometimes not with the sort of strategic support and the use of all aspects of American power to make sure that they're not carrying the full load. That's something that I spoke with the chiefs about and that I intend to change as president of the United States.

So again, my first message was to say thank you and in addition, it's to say that you, all of you who are serving in the United States Armed Forces, are going to have my full support and one of my duties as president is going to be to make sure that you have what you need to accomplish your missions and we are grateful to you.

All right? Thank you, guys. I am going to shake more hands now.

BLITZER: He went on to do exactly that meeting the military and thanking them for their service. You saw the Vice President Joe Biden there as well. We'll have more on this part of the story in the next hour. But right now I want to go to the interview with a former president of the United States, Jimmy Carter. He has been outspoken about his successors and so was President Carter entering the lion's den when he went back to the white house before the inauguration. My one-on-one interview with former president Jimmy Carter.


BLITZER: What was it like, given the criticism that you had leveled against President Bush over the past eight years, was there an awkward moment?

CARTER: No. We were careful during the meeting and during the luncheon the things that happened in the last eight years.

BLITZER: Did he say anything?

CARTER: He was laid back and a genial host. We talked about things that applied to all presidents. One of the things that Obama was interested in was how did Amy get along in the white house? She was 9 years old, the same age as his oldest daughter and that was a subject of some conversation.

BLITZER: What did you tell him?

CARTER: I said let her act like a normal child. Amy brought kids from her school classroom home on Friday nights and sometimes they stayed up watching movies in the white house. They have a nice theater and the first family can order any movie they want. They had popcorn and coca-colas and so forth. There is a nice pool that Gerald Ford had install and a bowling alley that Harry Truman moved over. There is plenty to do for young people and teenage kids and younger in the white house.

BLITZER: He wants to spend a lot of time with his two young daughters.

CARTER: Hope he will.

BLITZER: Did you have a lot of time to spend with Amy?

CARTER: I went to work early in the morning. I got up at like 5:00 and do all my work if possible by 5:00 in the afternoon. I was an avid and fanatic runner back then, but I had almost every evening off and spend them with my family. We had a fairly large family at the white house and we would talk about politics and so forth.

BLITZER: It is possible for this new president to spend good quality time with his family even with the enormous responsibility of being president.

CARTER: Even during the workweek. Of the weekends when the situation clears up a little bit, I think going to Camp David was a delightful interlude.

BLITZER: The criticism leveled against you over the years was that you sort of did Jimmy Carter free lanced diplomacy even when it was inconsistent with the diplomacy. Are you familiar with that criticism?

CARTER: Yes but you have to remember, when I was in the white house, it's not possible for a president to do different things for the government that sets the policy. Nobody much thought I could be successful in bringing Began and Sadat together to orchestrate peace. By surprise, he was thought to be a former terrorist. He was branded in that suspect. He was a right wing radical who wouldn't accommodate anything. We worked out a peace treaty that was signed in 1979. 30 years ago, not a single word of which has been violated. The president sets a policy for the government. He can't set the policy for the congress, but they have to go along.

BLITZER: The notion that you have been asked by other presidents in office to do certain things. Has President Obama asked you to do anything, at least at this point? The Mideast is obviously for him a huge priority.

CARTER: It is. Not yet, but the night before we had the five president's luncheon, I spent a long time with President Obama. Just the two of us. David Axelrod took notes. We had four of us in the room. We talked about the projects, health projects and others I need not name to you. I would say he was mostly interested in the Mideast. I had been to that region twice in the previous year. I had met with people that others don't meet with. Like Hamas. He wanted to know about those events and I gave him the first copy of this book and he asked for it and I gave it to him. I gave him a summary of things I thought were crucial and I thanked him for promising during this campaign that he would not wait until the last year he was in office before he started working on the Mideast, but start immediately. Certainly he has done that.

BLITZER: That was the criticism against President Bush. He waited too long to really push hard on the Israeli-Palestinian.

CARTER: President Clinton did a heroic effort the last year.

BLITZER: The first year of his administration, he did bring them together in September of 1993 at the white house for that signing.

CARTER: Sure, but he didn't know about the negotiations. The negotiations was done by the Norwegians and the signing ceremony was at the white house.

BLITZER: He followed up with the Israeli, Jordanian peace treaty in 1994. He is really sensitive by the way I've heard from some of his associates when you criticize him for not doing enough early on in his administration, they point out to the Israeli PLO agreement and the Israeli-Jordanian peace agreement which has been enforced since 1994.

CARTER: I give him full credit for everything he claims.

BLITZER: You say you spoke with President Obama about Hamas. Here's what President Obama, then candidate Obama told me May 8th about Hamas. Listen to this.

OBAMA: They are a terrorist organization that we should not negotiate with them unless they recognize Israel, renounce violence and unless they are willing to abide by previous affords between the Palestinians and the Israelis.

BLITZER: Those are the three conditions that not only he, but the Bush administration and other Europeans have put forward to justify talking to Hamas. You don't accept that?

CARTER: Well, I explained this very well.

BLITZER: I read that chapter. You have a separate chapter just on Hamas.

CARTER: Hamas says they acknowledge the right to exist and accept the right to exist and live in peace.

BLITZER: They don't say that?

CARTER: They do. They said it publicly. They don't use the word recognize. Recognize implies diplomatic recognition. Hamas said they would not be prepared to recognize Israel's right to exist unless Israel is ready to recognize Hamas.

BLITZER: Here's what you write and we can have peace in the holy land. You said except for infrequent public statements and assurances based on the prospect of an Israeli PLO peace agreement, Hamas has not acknowledged Israel's right to exist and will not forego violence as a means of ending the occupation of Palestinian territory.


BLITZER: They have not acknowledged?

CARTER: They have done it publicly, yes, they have.

BLITZER: Why did you write that they didn't?

CARTER: I don't remember that particular part.

BLITZER: Right here. I highlighted that section over there.

CARTER: I explained the difference between acknowledge and recognize in the book too. Hamas also said as I quoted in the book that they will accept any peace agreement between Israel and the Palestinians negotiated by if it is submitted for a reverend up and if approved by the Palestinians by the West Bank and Gaza, they will accept it even though they disagree with the terms.

BLITZER: The U.S. government believes that Hamas is a terrorist organization. Do you believe it's a terrorist organization?

CARTER: They committed some acts of terrorism for which I have condemned them. Last April, my wife and I were in a little village --

BLITZER: In the southern part of Israel near Gaza.

CARTER: That's right. It's a little north and east of Gaza. It's inside of Gaza. You can stand on the hill and see Gaza. I condemned the act of terrorism, the flying of the rockets.

BLITZER: Because the Israelis make the point and you're familiar with it that over the past few years, they launched thousands of mortars and rockets and missiles from Gaza into Israel and at the end in mid-December they responded and responded in a very aggressive way.

CARTER: I am not familiar with that. When I was over there in April, I negotiated with the Hamas leaders on my own personal position. I wasn't a mediator between anyone. Three things I asked for. One was a letter from the corporal to his parents.

BLITZER: The soldier who has been held.

CARTER: And they submitted a letter to me later.

BLITZER: Do you believe he is alive?

CARTER: I believe he was alive then and I don't know his status since the Israeli bombardment. He was alive then because he wrote a letter and it was delivered to us and we delivered it to his parents.

The second thing I asked them to do was agree if we have already covered this once, if a peace agreement was reached between Abbas and Israel that they would accept it if it was approved by Palestinians in a referendum.

The third thing was to agree to a cease-fire just in Gaza. Because before that and now, the Israelis refused to consider a cease- fire in the west bank and Hamas before I went there refused to consider just a cease-fire for Gaza. They did agree to that.

BLITZER: Here's what you write in the book. I know you finished writing before the most recent violence in Gaza. Despite the recent lack of progress, I see this as a unique time for hope, not despair.

CARTER: That's correct.

BLITZER: Given what happened over the past month or six weeks, do you still see hope, not despair?

CARTER: I do. I do. And the basic change is - the biggest change is the inauguration of a new president.


BLITZER: The former president of the United States, Jimmy Carter, speaking with me earlier. More of that interview coming up in the SITUATION ROOM Saturday, 6:00 p.m. Eastern.