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President Obama Speaks in Peoria; Interview with Former Secretary of State Colin Powell; Interview with Afghanistan President Hamid Karzai

Aired February 12, 2009 - 16:00   ET


WOLF BLITZER, CNN ANCHOR: Good to be here, Rick. Thanks very much.

Happening now, President Obama sees firsthand House his economic rescue plan is playing in Peoria. We're standing by for his remarks over an Illinois factory depending, desperately depending on Washington to try to help save its jobs.

Plus, Colin Powell takes some credit for President Obama's victory and for a new era of race relations in America. An exclusive, an emotional interview with the former secretary of state. That's coming up.

And does President Obama understand what's going on in Afghanistan? President Hamid Karzai gives us a candid assessment of America's commander in chief in an exclusive CNN interview.

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

This hour a new stop in President Obama's traveling sales pitch for his economic rescue plan. We're standing by for his remarks in Peoria, Illinois at a Caterpillar machinery factory that has a huge stake in whether the stimulus is passed.

Let's go to our White House correspondent Dan Lothian. He's joining us now from East Peoria with more.

Set the scene for us, Dan.

DAN LOTHIAN, CNN WHITE HOUSE CORRESPONDENT: Well, Wolf, you know, the president comes to this Caterpillar plant just weeks after the company announced that it would be laying off more than 20,000 workers at several of its plants. Now the company says the stimulus bill could help some of those employees get their jobs back.


LOTHIAN (voice over): Even before President Obama visits the East Peoria Caterpillar plant, he's been pitching the stimulus plan as a lifeline for workers here who stand to lose their jobs.

BARACK OBAMA, PRESIDENT OF THE UNITED STATES: What's at stake here are not abstract numbers or abstract concepts. We're talking about real families that we can help and real jobs that we can save. LOTHIAN: The world's largest maker of mining and construction equipment with more than 112,000 employees has been hit hard by sinking profits. As management struggles to remain competitive, they're turning to layoffs to make ends meet.

MIKE BELVILLE, CATERPILLAR WORKER: We're all kind of worried here, we don't know what's going on.

LOTHIAN: Working with uncertainty. But Caterpillar officials say the stimulus bill could help to turn things around.

JIM DUGAN, CATERPILLAR SPOKESMAN: If there are investments that are made quickly and thoughtfully to improve the infrastructure system, that's something that in the long run, not tomorrow, but years from now will make Caterpillar more competitive.


LOTHIAN: So the CEO here says, while he does support the stimulus bill, he's concerned about the Buy American provision where any of these public works projects have to use materials made here in America. He's concerned especially because about 50 percent of what's made here is shipped overseas. He's concerned that this could lead to a trade war, Wolf.

BLITZER: And we're standing by, Dan, to hear from the president. That's coming up this hour, is that right?

LOTHIAN: That's right. The president has landed here in Illinois, and he will be speaking, we're about 10 minutes or so if he's on schedule, Wolf.

BLITZER: We'll be having a live coverage of that. Thanks very much, Dan Lothian, in Peoria for us.

Let's go to Capitol Hill right now. Our senior congressional correspondent Dana Bash is standing by. Dana, a lot of us thought that there would be a vote in the House of Representatives today on the huge nearly $800 billion economic stimulus plan. That vote has not occurred yet.

DANA BASH, CNN SR. CONGRESSIONAL CORRESPONDENT: That's correct, and I can tell you why. We just, in the last hour, Wolf, got this summary of what's actually in this nearly $800 billion spending bill. And that is one of the reasons why this is delayed. In fact, the actual legislation, we're told, is still held up because they're wrangling over language, precise language, especially over some controversial issues. And that is why House Democrats say they're not voting today.


REP. VIRGINIA FOXX (R), NORTH CAROLINA: Has the bill been made available to the Democrats in the chamber?

BASH (voice-over): Congresswoman Virginia Foxx knew full well the answer to her question was no.

REP. ED PERLMUTTER (D), COLORADO: I have highlights of the compromise. That's what I have.

BASH: For that reason, House Democrats forced their leaders to delay voting on a $789 billion stimulus bill until they can actually read it.

REP. DAN MAFFEI (D), NEW YORK: What I want to know is -- are the resources actually going to be used for what we say we want them to use? Are they actually going to create jobs? I think they will. But I want to make sure. And I want to make sure that these jobs are coming to my district.

BASH: House Democrats are most skeptical about money for education. The stimulus package sends some $50 billion to states to help prevent cutbacks in education and other services. But many, like Democrat Dan Maffei, wanted money targeted for school construction and he's not sure now if his district will get it.

MAFFEI: We, you know, are trying to build a new technical high school in my district. Precisely to do the kinds of things that would stimulate the economy and help get our economy into the 21st century.

BASH: Still, members of the Congressional Black Caucus who were very worried stimulus funds would not reach constituents who need it most say they're satisfied.

REP. MAXINE WATERS (D), CALIFORNIA: We're going to be able to take home some real, real help to all of those constituents who have been waiting for so long to get their government to just give them a hand up.

BASH: Stimulus programs they point to $4 billion for public housing projects, $4 billion for job training, and $7.2 billion to bring broad band Internet service to the underserved.

REP. JIM CLYBURN (D), SOUTH CAROLINA: That's very exciting for us and for our communities.


BASH: Now, assuming the tax the actual legislation of this massive bill is actually finally written today, Wolf, the House is expected to vote tomorrow but the Senate, they're not expected to vote now until Saturday.

BLITZER: All right. We'll wait until Friday and Saturday for what's going on. But Dana, before I let you go, what are you hearing about some phone calls the Senate majority leader Harry Reid is making to Republicans about this stimulus vote?

BASH: Very interesting, CNN has learned that the Senate majority leader is calling around to centrist Republican senators who voted no last time asking them to reconsider. And the reason, Wolf, is because we are told that Senator Ted Kennedy is not expected to return to the Senate for this final vote on the stimulus package and that would mean that there would be a hard 60 votes, that would be a yes and the Senate majority leader, we are told, is very worried about that because there would be absolutely no margin for error.

BLITZER: All right. We'll watch together with you, thank you, Dana. Let's check in with Jack Cafferty. He's got "The Cafferty File."

JACK CAFFERTY, CNN ANCHOR: Want to be stimulated? How does $13 a week sound to you? While the federal government is passing that $800 billion stimulus bill on top of the $700 billion financial bailout package of last fall, all of which translates to almost $5,000 for every man, woman, and child in the country, the average worker can look forward to seeing about an extra 13 bucks a week in his or her paycheck after taxes.

Now when I was a kid and I got my meager allowance I was often told try not to blow it all in one place. $13 a week. Think you can stave off foreclosure with that? How about Junior's tuition, room and board at college? Or maybe trade in the old car for one of those new fancy hybrids? $13 a week ought to handle that, right?

Or you can plan a lavish trip out to Las Vegas and make that whiny old mayor of that town happy. I'm no economist, but if 2/3 of our economy depends on consumer spending and we've lost three million jobs in the last year and we have five million people drawing unemployment benefits, wouldn't it make sense to put a little more jingle in the pockets of the people who are fortunate enough to still have a job?

President Obama should be embarrassed by this, and those clowns in Congress ought to be ashamed of themselves.

Here's the question: How stimulating is $13 a week? Go to and do whatever you want.

BLITZER: You'll be getting a lot of response for that, Jack. Thank you.

Several weeks after President Obama's inauguration, Colin Powell still gets choked up.


COLIN POWELL, FORMER U.S. SECRETARY OF STATE: It hit me, it hit me emotionally. I was expecting him, I supported him, I voted for him, but it was still an electric shock. And I just sat down in my chair. And my kids were crying, and I said to myself, we did it. We actually did it. What a great country.


BLITZER: The former secretary of state in an exclusive CNN interview on racial barriers being broken down.

Plus, Pope Benedict going to new lengths to try to reach out to Jewish leaders angered by a bishop's claim that the holocaust didn't happen.

And we're standing by to bring you President Obama's remarks about the economy. We're live in Peoria, Illinois. Stay with us. You're in THE SITUATION ROOM.


BLITZER: We're standing by to hear from the president of the United States. You're looking at these live pictures from that Caterpillar factory in East Peoria, Illinois. The president's getting ready to speak there. We'll go there live, hear what he has to say on the eve, we expect the eve of House passage of the economic stimulus package. Lots at stake were in Illinois and around the country.

But first I want to go to a special interview, an exclusive interview that our own Don Lemon had with the former secretary of state, Colin Powell. He still gets emotional when it comes to the victory of President Barack Obama in November.


DON LEMON, CNN ANCHOR: So how are you doing? It's good to see you.

POWELL: Fine. How are you?

LEMON: Thank you for doing this.

POWELL: My pleasure.

LEMON: It is my honor to be sitting here with you. So, you know, this thing called African-American First. You were a first in many ways. Right? What do you think about the new first that we have?

POWELL: Well, you can't really go any higher than this now. So we're going to have stop thinking about first and thinking about our fellow citizens, many of whom are African-American and Hispanic and rural kids who were coming along see this first -- first secretary of state, first chairman, first national security adviser, and now we see the first president who happens to be African-American.

But we can't think that, well, everything is well now. We've got it. We've got a black president. We've got to think about the other members of our society, many African-Americans especially who are still in need and they are not first. We have 50 percent of our young black kids who are not going to be first anything because they haven't graduated from high school. They're dropping out, particularly in our inner cities.

And so we should be so proud of how far we have come in the last 50 years so that we now have a man who is president who is African- American. But let us not rest on that pedestal. Let's recognize we have a long way to go.

Not too long ago I spoke at the Ole Miss University of Mississippi, which 46 years ago they stood in the doorway and wouldn't let James Meredith, a former Air Force sergeant, come into the school. And it took the president of the United States, the 82nd Airborne Division and the 101st Airborne Division get this one black man through the doors of Ole Miss and they had to guard him for a year.

And then some 40 odd years later, they celebrated that event by doing it again and having James Meredith walk right through the door accompanied by the leadership of the school. And when you see Ole Miss, as I spoke to this audience, black, white, Hispanic, Asian, all of the colors and diversity of our great country, and so we've come a long way, but can't rest.

LEMON: What does that mean to you personally, though, to see that? Do you feel like that you, in some way, contributed to where we are now that moment, this new president?

POWELL: Yes, I think I did, but I'm not bragging about it because hundreds of thousands contributed. I contributed in a visible way by becoming the first secretary and first national security adviser and chairman who was black. But I was given that opportunity. I'm more impressed by those who came before me who could have done the same thing I did, but they didn't have the opportunity because of racism and segregation, but they still fought.

LEMON: Like who?

POWELL: They still the best they could. I'll give you the perfect example. We recently buried a wonderful lady, Martha Putney, who was a lieutenant, a black lieutenant in the Woman's Army Corps in World War II. And she insisted on being treated as a lieutenant in the United States Army, and she fought for her rights, and she demonstrated just by her performance what that black woman could do.

And that little microcosm of what's been happening across our society, by showing the rest of Americans that we are just like anyone else, you give us the education, you give us the opportunity, you open up the avenues, and we're coming along. My fear is that we don't have enough kids coming along who have got the education and the determination to take advantage of what's been created for them.

So yes, I think what Mr. Obama was able to achieve, many people helped him get there. But not just visible people like me, hundreds of thousands of African-Americans who did what they could in their time over our history.


ANNOUNCER: This is CNN Breaking News.

BLITZER: We'll have more of the exclusive interview with General Powell coming up, but we're just getting word now from Senator Judd Gregg of New Hampshire, the Republican, that he's withdrawing, withdrawing his name for consideration as the next secretary of commerce.

Here's the statement from Senator Judd Gregg. "I want to thank the president for nominating me to serve in his Cabinet as secretary of commerce. This was a great honor and I had felt that I could bring some views and ideas that would assist him in governing during this difficult time. I especially admire his willingness to reach across the aisle."

"However," the senator goes on to say, "it has become apparent during this process that this will not work for me as I have found that on issues such as the stimulus package and the census there are irresolvable conflicts for me. Prior to accepting this post, we had discussed these and other potential differences, but unfortunately we did not adequately focus on these concerns. We are functioning from a different set of views on many critical items of policy."

He goes on to say, "Obviously, the president requires a team that is fully supportive of all of his initiatives. I greatly admire President Obama, know his -- know our country will benefit from his leadership, but at this time I must withdraw my name from consideration for this position."

He goes on to thank others. Wow, that's a pretty important development coming out of left field. A pretty significant surprise, specifically referring to the census issue. The Obama administration wanted to move part of that census operation, not just to the Commerce Department, but move it to the White House where many people, especially Republicans, thought they were going to politicize the Office of the Census.

Our chief national correspondent John King is watching all of this unfold.

This takes me by surprise, John, but what do you think? What's your immediate reaction to this?

JOHN KING, CNN CHIEF NATIONAL CORRESPONDENT: Well, Wolf, it is stunning to have a Republican who is just named to the Obama Cabinet now saying he is stepping aside because of differences with the president and with the administration on some of the biggest issues he would have to deal with in his department.

You mentioned the census issue. For starters, the White House did want to take some of the responsibilities for the census out from the Commerce Department, which would be standard procedure. There is also a debate every 10 years when the census issue comes up between many Democratic interest groups and more conservative interest groups about just how to do the count, especially in urban areas, inner city areas where many liberal organizations have argued for sometime that African-Americans, Latino Americans are undercounted and undercounted significantly in their view.

There's been a philosophical divide over that question for some time and it comes up more intensely as they prepare to have the census taken every 10 years. But the fact that these issues did not come up in any great detail, whether it's the spending issues in the stimulus bill or the census issue in the command and control, if you will, over the census issue, the fact that they were not discussed in detail is quite stunning because, remember, Senator Gregg himself was a replacement.

They had had -- Governor Richardson of New Mexico had withdrawn, there was a great deal on scrutiny on Obama Cabinet picks because this was all done at the same time former senator Tom Daschle was stepping aside from health and human services secretary. So they knew about this increased scrutiny. And to not have what will become -- you'll hear in Washington, Wolf, a thorough vetting process, I think both the administration and from his own statement, Senator Gregg seems to accept some of the blame, as well. But it's quite stunning.

BLITZER: It looks like a major difference on substantive policy issues, not only the census, but on the economic stimulus plan for Senator Gregg to make this decision. He says, by the way, in his statement, John, he says as a -- further matter of clarification, nothing about the vetting process played any role in this decision. I will continue to represent the people of New Hampshire in the United States Senate.

So clearly, he doesn't believe anything in his background, taxes, or anything along those lines caused him to withdraw his name. But he's focusing in on his inability to go along with the president on the economic stimulus package and his inability to accept what the Obama administration wants to do, at least moving some of the responsibilities of the census operation to the White House.

And let's explain, John, in some detail now why this census issue is so significant. In part, as you point out, because the census is responsible for determining how many people live all over the country and in which districts and as a result, they can determine the make-up of the House of Representatives, and that's the result of the census.

And so there are really significant political overtones involving, who does the census, the career professionals, the Civil Service Department, and the Department of Commerce, or those in the White House where there are political operatives?

All right, John, hold that thought. The president of the United States, President Obama, has just started speaking in Peoria, Illinois at that Caterpillar factory. Let's listen into him and then we'll continue our coverage of the breaking news.

OBAMA: I want to thank Peoria's own Ray LaHood who is doing outstanding work as my transportation secretary. You know Ray comes from a long line of Republicans I love starting with Bob Michael, and you know, there are just -- I think there's a common sense Midwestern can do bipartisan attitude that Ray represents. And I am so pleased that he's in my Cabinet.

Now, his successor, Congressman Schock, where is he? He's right here. He's back here. Stand up, Aaron. This is...


OBAMA: Aaron's still trying to make up his mind about our recovery package.


So, you know, he has a chance to be in the mold of Bob Michaels and Ray LaHood and so we're -- we know that all of you are going to talk to him after our event because he's a very talented young man. I've got great confidence in him to do the right thing for the people of Peoria.

I also want to thank Jim Owens who I've gotten to know and is one of the top CEOs that we have in the country. And the...


You know, Jim is obviously confronted with some tough choices, like every CEO is right now. But what I'm absolutely confident in is he's thinking about the company's long-term growth and he cares about his workers, he cares about the long-term, and not just the short- term.

And, you know, I appreciate him agreeing to serve as one of our economic advisers during this process. And I think this company is going to be in good hands with him at the helms. So thank you very much, Jim, for being a part of this event today.


Well, you notice I've been traveling a little bit. I had to come to Peoria. You have to see how things are playing in Peoria. We come together today, as Jim said, at a difficult moment for our country. You know what? I know I'm already in my speech, but there's one other thing I forgot to do. There's a guy here who I served with in the state Senate, he's just a good buddy of mine. I love him to death. Give George Shadid a big round of applause. I just thought of him.

Stand up, George.


I like his wife more. But George is OK.


We come together today at a difficult moment for our country and for this great American company. In recent weeks, there's been a lot of talk in Washington about how to address our economic crisis with a lot of back and forth about dollars and numbers.

But here's the thing. When we say we've lost 3.6 million jobs since this recession began, nearly 600,000 last month alone. And we talk about the 22,000 layoffs announced here at Caterpillar, a company that has sustained this community for more than 80 years and that had one of its banner years just last year.

And you know this isn't about figures on a balance sheet, it's about families. Many of you probably know. It's about folks like Dan all across this state and all across this country. Folks who are losing their jobs and their health care and their homes that were their footholds on the American dream.

And it's about the ripple effects across this community from restaurants with fewer customers because folks can't afford to eat out anymore, to shop, they can't sell their goods because people can't afford to buy them. So the companies that do business with Caterpillar but now find themselves cutting back because Caterpillar's cutting back.

So what's happening at this company tells us a larger story about what's happening with our nation's economy, because in many ways you can measure America's bottom line by looking at Caterpillar's bottom line. Caterpillar builds the equipment that moves the earth. Your machines plow the farms that feed our families, build the towers that shape our skylines, lay the roads that connect our communities, power the trucks that deliver our goods and more.

So those 22,000 layoffs aren't just a crisis for those families or for the communities like Peoria and Decatur and Aurora, they are an urgent warning sign for America. Because when a company as good and successful and efficient and lean and mean as Caterpillar is cutting back production and shutting down jobs, that means we're not building up this country. It means we're not building new homes and offices, or rebuilding crumbling schools and failing infrastructure.

In short, it means we're standing still. And in this new global economy, standing still is the surest way to end up falling behind. Standing still is not an option. It's not who we are, it's not who we have to be. Right now, we have a once in a generation chance to act boldly to turn adversity into opportunity, and use this crisis as a chance to transform our economy for the 21st century.

That is the driving purpose of the recovery and reinvestment plan that I put before Congress. The plan that will save or create more than 3.5 million jobs over the next two years. That will ignite spending by businesses and consumers, and make the investments necessary for lasting economic growth and prosperity.

Now these past few weeks, we've had a spirited debate in Washington about this plan. And not everybody shares the same view about how we should move forward. At times our discussions have been contentious. But that's a good thing. The first viewpoints are the life blood of our democracy. Debating them is how we learn from each other's perspective, we temper each other's excesses, we make better decisions.

But the debate is now coming to an end. The bill has passed the House and it's passed the Senate. It's been reconciled and now it's going back to those two chambers so it can get on my desk. It is time for Congress to act, and I hope they act in a bipartisan fashion. But no matter how they act, when they do, when they finally pass our plan, I believe it will be a major step forward on our path to economic recovery.

And I'm not the only one who thinks so. Yesterday, Jim, the head of Caterpillar, said that if Congress passes our plan, this company will be able to rehire some of the folks who were just laid off. And that's a story I'm confident will be repeated at companies across the country. Companies that are currently struggling to borrow money selling their products, struggling to make payroll, but could find themselves in a different position when we start implementing the plan.

Rather than downsizing, they may be able to start growing again. Rather than cutting jobs, they may be able to create them again. That's the goal at the heart of this plan, to create jobs, and not just any jobs, not just make-work jobs, but putting people to work, doing the work that America needs done. Repairing our infrastructure, modernizing our schools and our hospitals, promoting the clean alternative energy sources, that will finally help us declare independence from foreign oil.

So once Congress passes this plan, and I sign it into law, a new wave of innovation, activity and construction will be unleashed all across America. We'll put people to work building wind turbines and solar panels and fuel efficient cars. We'll upgrade our schools, creating 21st century classrooms and libraries and labs, for millions of children across America.

We'll computerize our health care system, to save billions of dollars and countless lives. Lay down broadband Internet lines to connect rural schools and small businesses so they can compete with their counterparts anywhere in the world. Rebuilding our crumbling roads and bridges, repairing our dangerous dams and levees so we don't face another Katrina.

Think about all the work out there to be done. And Caterpillar will be selling their equipment to those that work. And in addition to saving and creating jobs, we'll also ensure that folks in places like Peoria who've lost their jobs through no fault of their own can receive greater unemployment benefits and continue their health care coverage. Here in Illinois, that'll mean an additional $100 per month to more than 820,000 workers who've lost their jobs. It means extended unemployment benefits for another 145,000 folks who've been laid off or are out there busy looking for work, but haven't found a job yet.

It's not just our moral responsibility to help them; it also makes good economic sense. If you don't have money, you can't spend it. And if people aren't spending, our economy will continue to decline.

And for that same reason, the plan will provide badly needed middle-class tax relief, putting money back into the pockets of just about everybody here, nearly 4. 9 million workers and their families here in Illinois, so you can pay your bills and meet your family's needs during a downturn.

In the end, that's what the recovery plan is about. It's about giving people a way to make a living, support their families, and live out their dreams.

Americans aren't looking for a handout. They just want to work. They're meeting their responsibilities; you're meeting your responsibilities. But when you start seeing an economic crisis of this magnitude, everybody's got to chip in. Everybody's got to pull together. Politics has to stop. We've got to get the job done.

Passing this plan is an important step, but it's just one step. It's only the beginning of what we're going to have to do to turn around our economy.

So to truly address this crisis, we're also going to need to address the home mortgage crisis. We're going to have to get credit flowing again. We need to reform our financial markets, both to restore trust and ensure that a crisis like this can never happen again.

And whether it's rebuilding our schools or reforming our health care system or investing in clean energy, much work remains to lay the foundation for long-term economic growth and fiscal responsibility. We've got to spend some money now to pull us out of this recession.

But as soon as we're out of this recession, we've got to get serious about starting to live within our means instead of leaving debt for our children, our grandchildren, and our great-grandchildren. That's not the responsible way. That's not how folks here in Peoria operate in their own lives, and they should expect the government is equally responsible.

So the road ahead is not an easy one. Some of our plans might not always work out exactly the way we'd like. Our recovery will likely be measured in terms of years and not months.

But to anyone who might feel doubtful or discouraged, I urge you to think about the history of this company. As some of you know, about 60 years ago, shortly after the end of World War II, Caterpillar decided to build its new offices somewhere other than East Peoria, but the people of this city had other ideas. They were hard at work rebuilding and modernizing, and they were determined to make East Peoria an ideal home for companies like Caterpillar.

But Caterpillar's leaders were impressed, and ultimately changed their minds. They decided to go ahead and build offices right here in East Peoria, to be, as a former chairman of the company put it, no less willing to get in step with the march of progress.

Throughout the 20th century, this company has helped lead that march. From working far beyond capacity during World War II, even with 6,000 workers on military leave, to surviving the recession in the 1980s and emerging stronger and more competitive, to seizing the promise of today's green economy by leading the way with clean diesel engines, Caterpillar has shaped the American landscape, shown the world what a great American company looks like.

I know the past few months have been hard for this company, but that they -- I also know that they have been among the worst in a generation, but here's what else I know. Here in America, even in our darkest moments, we've held fast to a vision of a better future. We've been willing to work for it and struggle for it and sacrifice for it. That's how it's going to be again. I have the fullest confidence that, if we think boldly and we act quickly and fully devote ourselves to the work at hand, than out of this ordeal will come a better day and a brighter future for our children and our grandchildren.

That's the history of this company; that's the history of this city; that's the history of this state; and that's the history that we're going to make, you and me together.

Thank you very much, everybody. God bless you. Thank you. Thank you.


BLITZER: The president of the United States in East Peoria, Illinois, speaking at that Caterpillar factory, making the case for his economic stimulus package.

The House of Representatives didn't vote on it today. They're now expected to vote on it tomorrow, the Senate expected to follow suit on Saturday -- all of this happening as the breaking news continues to unfold.

Senator Judd Gregg, the Republican senator from New Hampshire, announcing just a few moments ago he's withdrawing consideration of the president's nomination of him to become the next U.S. commerce secretary, saying that there are significant differences -- significant differences -- over the economic stimulus package, as well as the census, which is part of the Department of Commerce, that do not him allow him now to go forward with this nomination.

Our chief national correspondent, John King, is watching all of this unfold.

John, you were out there in East Peoria just the other day, looking at the same Caterpillar factory where they're clearly hurting right now. What the president said to these workers out there, to these folks in Illinois, clearly will reassure them, but they need action, don't they?

KING: They do, Wolf.

And it's interesting. I was on that very factory floor, and I also spoke to a half-dozen workers who lost their jobs and were told when I was there that their final day was the Friday I was in Peoria, Illinois. Most of them union workers. Most of them voted for Barack Obama. And most of them are confident that his administration will ultimately turn the economy around.

And they share his view that this stimulus spending could, in fact, help Caterpillar, because it makes the big earth-moving equipment, some of the backhoes and front hoes you see on transportation projects, like highway projects, across the country, although I will tell you, Wolf, some of them also raised concerns that there's a buy-American provision in the stimulus bill. And it has survived -- a version of it survived in the compromise legislation. Caterpillar was protected from this recession for the longest time, because more than half of its products are sold overseas now, to China and to mining operations in South America. And many of the workers worried that buy-American provision could actually hurt them in the long run, if it sparked a trade war.

So, they do believe that most of the union workers, again, were for President Obama, believe he wants to help them, but the specific issue of foreign trade was of concern because of Caterpillar's, not unique role, but a very robust role, as an American company that had been protected, unlike the auto industry in the United States, unlike other manufacturing in the United States.

It was only in recent months that Caterpillar started to suffer, when the U.S. recession became much more of a global recession. So, I would say, for the most part, they agree with the president, but they do have some concerns about a potential trade war.

BLITZER: Stand by, John. We're going to be getting back to you.

We're following the breaking news right now.

First, Bill Richardson, the governor of New Mexico, said he doesn't want to be considered for commerce secretary because of some problems he had. And now the Republican senator from New Hampshire, Judd Gregg, just moments ago announcing he no longer wants to be considered for commerce secretary because of irreconcilable differences between himself and the president over the economic stimulus plan, as well as the Census Department moving at least some of its responsibilities over to the White House, something he strongly opposes.

We will get more on the breaking news in a moment, also more of the interview coming up, the exclusive interview with General Colin Powell. He still gets very emotional when talking about the victory of President Obama.

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


BLITZER: Big surprise here today: Judd Gregg, the Republican senator from New Hampshire, says he wants the president to withdraw his nomination to become the next commerce secretary, because there are, in Judd Gregg's words, irresolvable conflicts between himself and the president over the economic stimulus package that the president wants signed into law, as well as the census, which is the part of the Department of Commerce.

Our chief -- our senior congressional correspondent, Dana Bash, is up on Capitol Hill.

I guess there are a lot of stunned people right now over this decision by Senator Gregg, Dana.

BASH: That is an understatement. And we actually have a statement from the Senate leader, the Republican leader, Mitch McConnell, who is quite happy.

He says: "Senator Gregg made a principled decision to return. And we're glad to have him. He is among the smartest, most effective legislators to serve in the Senate, Democrat or Republican, and a key adviser to me and to the Republican Conference. It's great to have him back."

That's from the Republicans.

Now, I should tell you, we're going to hear from Senator Gregg himself in about an hour. But, already, John King and Jessica Yellin are getting some word from Democrats, Democratic sources, Wolf, who are making clear that this was a big, big surprise, and they're not happy about it, because what they're saying is that Senator Gregg actively campaigned for this.

He asked the Senate majority leader, Harry Reid, to talk to the president. And according to Jessica Yellin -- Jessica Yellin -- one of her sources say that -- says that he erratically dropped out, and it really did stun -- stun the White House.

BLITZER: It's -- it's a significant, significant development. And Judd Gregg says he will remain in the Senate.

Bonnie Newman, who the -- the governor, Governor Lynch of New Hampshire, was going to name to replace him, she's obviously not going to be a United States senator, at least not now. Senator Gregg stays in this.

Jamal Simmons, our Democratic strategist, is watching all of this unfold right now.

Jamal, I assume you were, like all of us, totally taken aback by this announcement.


I heard about it on my way over here to the studio, and made a couple phone calls. But, you know, Democrats have been talking about this for a while. There are a lot of Democrats that weren't really very happy with the Judd pick -- Judd Gregg pick for the commerce secretary.

So, you know, while it's a blow to the administration, I think there are some people, particularly Barbara Lee at the Congressional Black Caucus, who was advocating against this choice.

BLITZER: I was always surprised. I don't know about you, Jamal. When the role call was being tallied in the Senate on the economic stimulus package, he had made a decision that he was going to recuse himself, and not vote yea or nay, because he's -- his nomination was going forward as commerce secretary. Given the fact that he was going to be the president's point man on a lot of commerce and economic issues, I assume he naturally would have voted yea, since he was going to be on the team, just like Arlen Specter and those two senators from Maine. But that was -- that was his decision.

Let me bring in John Feehery, our Republican strategist.

You heard the news, John. What do you think?

JOHN FEEHERY, REPUBLICAN STRATEGIST: It's all about the census, I think.

I think Judd Gregg decided that he wanted to do the census, and the White House said, no, they want to do the census. This is a big issue for redistricting. And I think it's a huge issue and a huge point of contention between the two.

This is really not much of a surprise, given the fact that Judd Gregg and Barack Obama have such differing philosophies. I think it's probably a surprise -- and big news -- about where the future of this administration goes.

But, if you look at the -- the big picture here, it really can't surprise you that Judd Gregg doesn't fit in very nicely in an Obama administration.

SIMMONS: Well, Wolf...

BLITZER: I guess Democrats will say, Jamal, better now than later, after he were -- he was going to be confirmed as commerce secretary.

But the argument the Republicans make -- and I want our viewers to understand why the census issue is so significant, Jamal -- is that they were accusing the president and his top advisers of going to new lengths to politicize what surely should not be any political part, how -- how the nation's population is determined, and the -- and the role of the Census Bureau.

And they were saying, by moving some of those responsibilities from the Commerce Department and the career civil service officials, over to the White House, they were politicizing this issue.

SIMMONS: Well, Wolf, I was at the Commerce Department in 2000, in 1990 -- well, in 2000, going on 2001 -- when this debate was happening before, the last census.

And this is a very big deal, because how you count and whether or not you actually go into cities, do you knock on doors, do you circle back and knock on doors -- there was a question about, do you use statistical modeling for places where there may be low census counts?

All of these things are very important, because what happens two years after the census is we do -- redistrict, and we figure out how many states get which members of Congress. And that's a huge deal, whether or not a conservative state, like Alabama, would get more -- another member of Congress, or a state like Michigan, that's traditionally Democratic, will lose another member of Congress.

So, I think this -- this is inherently a political process. And I think the Republicans are really kind of howling, because they may have liked the fact they were going to have a Republican there that was going to manage that process.

BLITZER: Well, go ahead, John.

FEEHERY: Well, he's right. Jamal is absolutely right.

The big issue is statistical modeling and basically guessing. Republicans in 2000 and in 1990 -- '90 -- always wanted to have an accurate count and have every person count, where Democrats were thinking, well, there's always going to be a low count because people don't always live in this location, and we need to have statistical modeling.

That's always been a huge political issue. And Jamal's absolutely right about where the actual seats end up going. Do they keep going to the Sunbelt, do you keep going to Arizona and California, or does Michigan or traditionally Democratic states keep more -- more seats?

So it's a big issue. And I think that this is one of the big points of contention between Judd Gregg and Barack Obama.

BLITZER: And we're going to be hearing a lot more of this when he speaks. We're standing by to hear from the senator. That's coming up in the next hour. We will go there live once he makes his statement.

Guys, thanks very much.

FEEHERY: Thank you.

SIMMONS: Thank you.

BLITZER: We're also standing by, more of our exclusive interview with the former Secretary of State Colin Powell.

Also, we have another exclusive, an exclusive interview with Hamid Karzai, the president of Afghanistan. He spoke with our own Fareed Zakaria.

All that and a lot more coming up -- right here in THE SITUATION ROOM.


BLITZER: We will get back to the breaking news on Judd Gregg announcing he no longer wants to be President Obama's commerce secretary, also more of our exclusive interview with the former Secretary of State Colin Powell. He gets emotional on some sensitive issues. Stand by for that. But let's check in with Jack once again for "The Cafferty File" -- Jack.

JACK CAFFERTY, CNN ANCHOR: Wolf, the question this hour is, how stimulating is $13 a week? That's the amount most American workers are expected to realize after taxes from the stimulus package.

Andrew in Carmel, California, says: "While I agree it's not that stimulating, it helps. It's a student loan payment, a credit card payment, or maybe helps with the rent. Stimulating? No. Helpful? Yes."

Marge in New Port Richey writes: "It does sound rather ridiculous when you put it like that, but think about it in another way. It's definitely not enough money to save and make a difference in anybody's life, so all of those people will immediately spend it. And with millions of people spending an $13 extra every week, I would imagine it could stimulate the economy as a whole and give it a well-needed jolt."

Arlene writes from Iowa with a different view: "I have already been stimulated," she says. "That's about how much my Social Security went up for this year. Can you spell J-O-K-E? As usual, we the people get screwed. Isn't it just stimulating?"

Eileen in Chicago: "Well, isn't this a myopic view of the stimulus package? If I didn't get $13 a week, I would still want the stimulus package, because the country will bode better economically over the next few years with it. This isn't just about the amount of money in my purse, or my checking account, or my 401(k). It's the economy for the country, stupid."

Sebastien in Philadelphia: "You're right, Jack, you're no economist. Neither am I. The problem with giving Americans a wad of money right now is there's no guarantee they will spend it. I know I would try to save whatever I got, even if it was just $13 a week."

Sam says: "I guess, with the extra $1.86 a day, I will be able to supersize my lunch."

And Sandi says, "It means I can get my medications refilled. It doesn't mean much to the economy, but it will mean a lot to me."

And Duncan says: "Thirteen dollars per week will easily buy a 12- pack of domestic beer. What better way to drown our collective sorry over this economic disaster?"

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

BLITZER: Thank you, Jack.

I want to get back to Don Lemon's exclusive interview with the former Secretary of State Colin Powell.

Listen to this. General Powell still gets emotional over President Obama's victory back in November.


LEMON: There are those who say, you know, it's over. You know, we don't need certain sorts of programs, affirmative action, what have you, that racism is over in this country because of the election of Barack Obama.

POWELL: It isn't. Racism is not over. We have to be candid.

I was so happy that Americans came to the polls, went to the polls, and a lot of people said, oh, you know, those white folks, they will -- they will say they're going to vote for Obama. They will go in the booth, and they won't.

Well, it turned out most of them did. Ten million more Americans voted for Mr. Obama than did for my dear friend Senator McCain. But there were places in our country where white folks voted for Mr. McCain up to 88 percent of them. So, there is a racial element of that. And black folks voted up to the 98 percent for Mr. Obama.

So, we have not become a raceless, classless society yet, not when you go into our inner cities and see young African-Americans who don't have good schools, don't have job opportunities, are in need of health care, in need of better housing. And so we should use Mr. Obama's presence -- President Obama presence as an indication of how far we have come, but also as inspiration to go even further.

LEMON: That was a very personal moment for you. Did you cry?

POWELL: Yes, we all cried. Did you cry?

LEMON: You cried?

POWELL: Yes. Did you?

LEMON: I was busy working. I was emotional. I can't say that I did cry, but there was a moment where it hit me...


LEMON: ... when I was -- I was here in Washington, when he got out of the car and walked with his wife.


LEMON: But you cried. Tell me about that moment and why.

POWELL: I was in Hong Kong. I was not in the United States. I had voted early, and I was in Hong Kong.

And it was morning in Hong Kong when it was evening here in Washington. And, so, I'm getting up, getting ready for the meeting I'm going to in Hong Kong. And I'm watching the -- the news, all of the broadcasters giving results. New Hampshire's done this. New York's done this. The exit polls from Maine say this. And, as I'm getting dressed and watching television, I'm talking to my wife, who is in Fairfax County, Virginia, with my son and daughter-in-law. And I'm texting with one of my daughters in New York. So, the whole family's watching this, even though we're 8,000 and 9,000 miles apart.

And we saw the results start to come in. And I remembered 2000, where it took five weeks. And I remembered 2004, where it took all night. And, as I'm waiting for the results to come in, suddenly, one of your colleagues on another channel -- was the one I happened to surf to -- says, we have one more exit poll to report.

And he simply said, Barack Obama is the next president.

And it hit me. It hit me emotionally. I was expecting him. I supported him. I voted for him. But it was still an electric shock.

And I just sat down in my chair. And my kids were crying. And I said to myself, we did it. We actually did it. What a great country. What a great inspiration to all Americans, and what a great inspiration to the world, because many people in the world thought, Americans can't. They're not ready for this. They won't do it.

LEMON: You're emotional about it now.

POWELL: Yes, every day.

LEMON: You're almost crying. Why?

POWELL: I don't know why.

Maybe it's because I remember the days when a young black kid growing up in the Bronx could only look to a Joe Louis or Ralph Bunche or to a Jackie Robinson for inspiration. Maybe it was because, even though I grew up in an integrated neighborhood in New York City, I knew I was a second-class citizen.

I have been telling a joke recently to try to convince people of the changes we have gone through that I remembered, as a young kid in the Bronx, hearing one day in the early '50s. I forget exactly when it was. And I was a teenager.

And we all were sitting on the corner stoop. And we heard, "Hey, did you hear?"

"What, man?"

"Did you hear that" -- it was either Greyhound or Trailways. I can't remember which one.

"Did you hear Greyhound hired its first black bus driver to drive in the South. They're actually going to let a black man drive a bus down the interstate in the South."

And we said, "Whew."

And then we all kind of smiled and kidded, and said, "Lord, I hope he don't have an accident..."


POWELL: "... because you know what the white folks will say."

We felt that insecure about ourselves, because we were taught for 200 years to feel inferior and insecure about ourselves. But things were changing.

And I got an education that allowed me to not be insecure about myself. And I went into an institution, the United States Army, that was ahead of everybody else. And they said to me, the only thing we care about is performance. We don't want to hear about your immigrant background. We don't hear about -- hear -- want to hear about you being a poor kid. We don't want to hear about the fact that you're black. The only thing we care about is performance. You ready?

And I said, yes, I'm ready.

LEMON: What do you think of Lincoln, his 200th birthday, and this big celebration going on? The new president has this whole connection to Lincoln.

POWELL: Mm-hmm.

LEMON: Do you think -- do you feel that he was a great emancipator?

POWELL: Oh, there's no question that he was one of our greatest presidents, not just a great emancipator.

He had a more important role than just to emancipate the slaves. He had to keep the country together. And that was his first goal, to preserve the Union. And, in the process of doing that, he emancipated the slaves as part of his efforts to preserve the Union. And we should thank him for preserving the Union and emancipating the slaves.

It's unfortunate that we lost President Lincoln, because I think the whole Reconstruction period would have been entirely different. And one of the great tragedies of our country is that, after that war that preserved the Union and ended slavery, was able to slip back into a position of racism, Jim Crow, segregation, and all the other terrible things that happened for the next 100 years, until we had the second civil war, more peaceful civil war, led by Dr. Martin Luther King.

So, I think Lincoln will always be seen as -- as a great president. I regret that we lost him too soon. And we perhaps lost some opportunities to have avoided that second civil war, or at least had it earlier, so that all Americans could have become equal much earlier than we now are on the verge of doing.


LEMON: And we haven't romanticized his legacy, you think, at all... (CROSSTALK)

POWELL: No, I don't think so. I think he's very deserving of all of the tributes that he's getting, especially on the 200th anniversary of his birth. I'm a great admirer of President Lincoln.


BLITZER: And joining us now, Don Lemon, the man who conducted that exclusive interview with the former secretary of state.

Don, he -- he clearly still gets really emotional when he thinks about the history of what has happened in our country.

LEMON: He does.

And you heard him in that interview, Wolf. He said, "Every day, every day, I get emotional about this," when he thinks about the election of Barack Obama.

But -- and you have interviewed him a number of times. He was very comfortable, very candid in that interview, relaxed. You heard him laugh about, you know, the first African-American bus driver in his town driving the bus off the road.

I think he really has reached a place where he is quite comfortable with his life and with his legacy and working on America's Promise, which he started, and children. It's a good time for him.

And, during that interview, Wolf, I have to tell you, I asked him, I said, "Do you ever look at the new president and the first lady and say, you know, hey, that could have been me, that could have been my wife and I?"

He said, "No, not at all."

So, it was -- I enjoyed doing that interview. And he was a lot more comfortable, a lot more relaxed than I even thought.

BLITZER: He's an inspiration to a lot of folks out there...


BLITZER: ... a very good American, a really good guy, as well.


BLITZER: I want to alert our viewers, Don is going to have much more of the interview coming up on his program Sunday night, 10:00 p.m. Eastern, the interview with Secretary Powell. That's coming up, 10:00 p.m. Eastern Sunday night.

Don, thanks very much.

And, to our viewers, you're in THE SITUATION ROOM.