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Judd Gregg Opts Out; Should U.S. Troops Enter Pakistan to Fight Taliban?; U.S. Weapons Lost in Afghanistan; Karzai: Can Work with President Obama

Aired February 12, 2009 - 17:00   ET

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


WOLF BLITZER, CNN ANCHOR: And to our viewers, you're in THE SITUATION ROOM.

Happening now, breaking news -- President Obama may have scored a victory in Congress with his economic plan. But he's just suffered a stunning setback in his effort to put together a cabinet. The Republican nominee, Senator Judd Gregg, dropping out. Just a few minutes from now, he's going to be explaining why.

Thousands of U.S. weapons missing -- missing in Afghanistan.

Could they be in the hands of Al Qaeda?

Plus, should U.S. troops cross into Pakistan to attack Al Qaeda?

CNN's exclusive interview with the Afghan president, Hamid Karzai. That's coming up.

And Alaska's anti-abortion governor, Sarah Palin, gets thousands of thank you notes for donations made to Planned Parenthood in her honor. You're going to hear what she's saying about that and more.

I'm Wolf Blitzer at the CNN Center in Atlanta.

You're in THE SITUATION ROOM.

ANNOUNCER: This is CNN breaking news.

BLITZER: Let's begin with the breaking news this hour. The battle over the stimulus bill has cost President Obama another cabinet nominee. Republican Senator Judd Gregg of New Hampshire has just withdrawn, citing what he calls "irresolvable conflicts." That word came as President Obama was on the road touting the economic plan's potential payoffs in jobs.

This hour, Senator Gregg will be speaking out. We'll bring you his comments live. He's getting ready to speak in the Senate.

But first, let's bring in CNN's Jessica Yellin and Candy Crowley -- Jessica, take us behind-the-scenes. You have some new information on what took so many of us by surprise today.

JESSICA YELLIN, CNN NATIONAL POLITICAL CORRESPONDENT: Wolf, and it seems to have taken some at the White House by surprise, as well. The initial word came from Capitol Hill, not from the White House, that Gregg was withdrawing.

Multiple Democratic sources say that Judd Gregg, the senator from New Hampshire, campaigned for this job initially, that Senate Majority Leader Harry Reid approached Rahm Emanuel, the chief of staff in the White House, and suggested that Gregg be a good fit for the Commerce job.

We're told that Gregg actually sat with the president. In the White House's view, they understood that the two of them had an understanding about where each's views lay.

And Democratic sources say that Judd Gregg wanted the role knowing where the president's politics were. One person described it as "an erratic decision to withdrew" and it is shocking Democrats today.

There's certainly no love lost on the two sides right now and a lot of confusion. People are eager to hear what Judd Gregg has to say.

BLITZER: Candy Crowley, there were some Democrats, from the beginning, who thought this was a bad idea, weren't there?

CANDY CROWLEY, CNN SENIOR POLITICAL CORRESPONDENT: Absolutely. And, you know, the census, I'm told by a Republican source, was really the tipping point for Senator Gregg. Because that census, as you've been talking about, is highly political. And there are very important Democratic constituencies, in particular minorities -- and it's not just about the census getting the number of Congressmen that are going to go to Congress. It's also about government payouts -- how many people are in need in a certain district is used. And there's a formula for it and that money paying out. So it matters how people are counted and whether there's a formula.

So they knew from the get go because Judd Gregg voted in a budget bill that would have abolished the Census Department. He voted to cut the census -- sorry, the Census Bureau's funding. So he was not a huge fan of the Census Bureau and the way it did business.

So this was out there. But the issue itself sort of bubbled up this week when the White House let it be known -- went to these people who were protesting how Judd Gregg looked at the Census Bureau -- that he, that they -- the minorities came to them and said, listen, this is a problem here. So the White House said well, don't worry. There will be senior management overlooking him.

And it just sort of rolled from there because Judd Gregg, according to one sources, just sort of worried about how powerful his seat at the table would be.

BLITZER: In his statement, Candy, as you know, he saw -- he cited his "irresolvable conflicts" with the president not only on the census, which critically -- is a critical issue -- but also on the economic stimulus package, which he clearly couldn't support.

I want both of you to stand by.

We're going to get back to the story.

But there's other news coming in right now. Apparently, the United States military has lost track of thousands of weapons in Afghanistan -- weapons that potentially could be in the hands of Taliban forces or Al Qaeda.

Let's go to our Pentagon correspondent, Chris Lawrence.

He's working this story for us -- wow, Chris.

So what's going on?

CHRIS LAWRENCE, CNN PENTAGON CORRESPONDENT: Well, Wolf, it's more than thousands -- tens of thousands of American weapons are missing. And they may now be in the hands of the Taliban or Al Qaeda.

(BEGIN VIDEOTAPE)

LAWRENCE (voice-over): An estimated 87,000 mortars, machine guns and grenade launchers all unaccounted for in Afghanistan.

REP. STEVE DRIEHAUS (D), OHIO: Do we have any evidence that, in fact, these weapons are getting into the hands of hostile forces?

CHARLES JOHNSON, GOVERNMENT ACCOUNTABILITY OFFICE: Some of those reports have -- have some allegations have reported the theft of weapons and potentially weapons being sold to enemies.

LAWRENCE: According to a new government audit, through the middle of last year, the Defense Department bought about a quarter of a million weapons to equip Afghan security forces. But the Pentagon cannot account for more than a third of them.

JOHNSON: Placing these weapons at particular risk of theft and loss.

LAWRENCE: And here's the kicker -- they cost the government $120 million.

REP. JOHN DUNCAN (R), TENNESSEE: As far as I'm concerned, it's pouring money down a rat hole.

LAWRENCE: President Obama is expected to endorse his military commanders' plan to give Afghans more control of their country. That means adding roughly 50,000 men to the Afghan Army and buying even more weapons for them.

Will that increase the risk of them falling into enemy hands?

The Afghan ambassador says no -- some weapons were misplaced early on in a rush to get them into people's hands to fight the Taliban.

SAID JAWAD, AFGHAN AMBASSADOR TO U.S.: Today the approach is a lot more systematic and there has been a lot more measures being put in place. LAWRENCE: The Pentagon agreed with all of the audit's recommendations, which include tracking all weapons by serial number and conducting routine physical inventories.

(END VIDEOTAPE)

LAWRENCE: In fact, Pentagon officials tell us they've already implemented a lot of these safeguards and say: "The record will show that our performance has improved over time."

You know, but these problems have been going on a long time. You know, just a few years ago, the military couldn't account for more than half of the rifles and body armor that it had given to Iraqi security forces -- Wolf.

BLITZER: What a story.

All right. Thanks very much, Chris.

I want to alert our viewers, our Fareed Zakaria has an exclusive interview with Hamid Karzai, the president of Afghanistan. You'll see it here in THE SITUATION ROOM. That's coming up.

But let's check in with Jack, once again, for "The Cafferty File" -- Jack.

JACK CAFFERTY, CNN ANCHOR: With the U.S. economy hemorrhaging jobs, it might be a good to reconsider this country's immigration policy.

Just last month, you'll recall, our economy lost 600,000 jobs, our unemployment rate hit 7.6 percent. Since December of 2007, we have hemorrhaged 3.6 million jobs and almost half -- almost half of those losses came in the last 90 days alone.

Meanwhile, there are millions and millions of legal and illegal immigrants who have jobs in this country.

These job losses also come at a time when President Obama is under increasing pressure from Hispanic groups -- who helped to get him elected -- to loosen up on more aggressive immigration policies of the Bush administration. They want the new president to push for comprehensive reform that would balance law enforcement with new legal avenues to citizenship.

Some say that's called amnesty.

But some might wonder if now is the right time to make it easier for more people to get into this country, when millions of Americans are struggling to find work. Remember when all we heard was illegal aliens do the work that Americans are unwilling to do?

I wonder if that's still the case today.

Others insist it's the wrong time to close immigrants out. Tom Friedman writes in "The New York Times" about the importance of opening the U.S. economy to a smart and energetic immigrant workforce. Friedman says protectionism didn't cause the Great Depression, but did help to call it great. Quoting now: "When the best brains in the world are on sale, you don't shut them out. You open your doors wider. And we need to attack this financial crisis with green cards, not just green backs."

Tom Friedman in "The Times".

Here's the question then: Should the government change its immigration policy in light of the tremendous loss of American jobs?

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

BLITZER: Good question, Jack.

Tom Friedman also makes the point that some of those immigrants, especially out in Silicon Valley, they went ahead and created hundreds of thousands of jobs for folks. So it's two-edged sword, I guess, if you will.

All right. We're going to continue to watch this story.

Jack's e-mail and your response, coming up.

President Obama, meanwhile, has been very critical of the Afghan government. But now the Afghan president, Hamid Karzai, is responding in an exclusive interview with CNN.

Can they work together to fight Al Qaeda and the Taliban?

Also, a landmark court ruling on autism and alleged links to childhood vaccines. Our chief medical correspondent, Dr. Sanjay Gupta, he's standing by to explain what it all means.

Plus, hate mail, even death threats -- the mother of those octuplets now facing a growing backlash.

Lots of news happening today right here in THE SITUATION ROOM.

(COMMERCIAL BREAK)

ANNOUNCER: This is CNN breaking news.

BLITZER: All right, we're now getting more from Republican Senator Judd Gregg of New Hampshire, who just announced moments ago that he was asking the president to withdraw his nomination to become the next Commerce secretary.

Judd Gregg telling the Politico Web site: "I couldn't be Judd Gregg and serve in the cabinet. I should have faced up to the reality of that earlier."

He said the issue over the census was not the major factor in his decision. He said it was very difficult for him. He should have been aware that his background as a fiscal conservative and independent, that was even more important: "The fault lies with me," he says. Asked if he thought the decision would be an embarrassment to the president, Gregg said: "I may have embarrassed myself, but hopefully not him."

We're standing by to hear from him. He's getting ready to speak at a news conference up on Capitol Hill. Stand by.

And the White House press secretary, Robert Gibbs, has just released a statement, as well: "Senator Gregg reached out to the president and offered his name for secretary of Commerce," Gibbs says. "He was very clear throughout the interviewing process that despite past disagreements about policies, he would support, embrace and move forward with the president's agenda. Once it became clear after his nomination that Senator Gregg was not going to be supporting some of President Obama's key economic priorities, it became necessary for Senator Gregg and the Obama administration to part ways. We regret that he has had a change of heart."

All right. We're going to continue to stay on top of this story.

We'll stand by to hear from Senator Gregg. That's coming up. A huge surprise here in Washington. Back to the drawing boards right now to find a Commerce secretary in the Obama administration.

Let's get to a CNN exclusive right now. President Obama calls the situation in Afghanistan a big challenge. He also had some not so veiled criticism for President Hamid Karzai's government, calling it detached -- detached from the Afghani people.

CNN's Fareed Zakaria sat down with President Karzai.

We want to give you a preview right now.

(BEGIN VIDEOTAPE)

FAREED ZAKARIA, CNN ANCHOR: When you hear Barack Obama say the things he said about Afghanistan, what is your reaction?

You've met President Obama.

Do you think that you can work with him?

Do you think he understands the region?

PRES. HAMID KARZAI, AFGHANISTAN: Well, look, President Obama is a great inspiration to the world. He -- the people of America have proven that they really can be the -- the light holders for -- for change and the will of the people in the world. And his coming to power by the vote of the American people is a manifestation of that great power of the -- of the American people.

He has high moral standards. And that's why my expectation of him and those of people in the rest of the world are high, as well, of him. I can certainly work with him. I can certainly engage with him very, very, very positively. It's part of what has been said by him during his election campaign and it's part of the things that has been said recently. I consider him a remarkably great person. But I hope our friends in the West understand.

ZAKARIA: But you don't think he understands Afghanistan?

KARZAI: Surely he understands Afghanistan. Surely, he is a very intelligent person, as well. And given the right reporting by his administration given the right figures by -- by his administration, given the right figures figure by his administration, he'll figure out very quickly as to how things are in Afghanistan.

But I'd like to come to another thing here, too. People in our part of the world, we also have sensitivities. We also have morality. And some of us stand on a very high platform of morality in this part of the world.

When I complain about civilian casualties, it's because I expect that the -- our American friends, who I'm sure are standing on a high platform of morality, will understand that it's a human concern and that it has to be responded to by our friends in the United States.

ZAKARIA: Do you think that President Obama should follow through on something he said in the campaign, which is that if he found actionable intelligence that there were Al Qaeda elements in Pakistan, he would be willing to authorize American troops in Afghanistan to cross the border and strike at those camps?

This would benefit you enormously because, of course, a lot of those Al Qaeda elements in Pakistan use their bases in Pakistan to attack Afghans.

So do you think Obama has it right?

KARZAI: Well, attacking at Al Qaeda hideouts -- Al Qaeda sanctuaries, al Qaeda training grounds, Al Qaeda personnel is a legitimate target. I would fully back President Obama in attacking Al Qaeda wherever they are found.

And if they're found in Afghanistan, I would fully back him in doing that.

If they're found in Pakistan, I would fully back him in that. If they're found anywhere -- because we have to, as human beings, make our lives better and more secure. And we will not be unless we have eliminated Al Qaeda.

But on the question of crossing troops from Afghanistan into Pakistan in pursuit of Al Qaeda -- al Qaeda personnel or for the destruction of Al Qaeda hideouts or training grounds or sanctuaries, this is something that the government of Afghanistan and Pakistan and the United States must work together and agree upon together and then implement.

ZAKARIA: President Obama has announced that he's going to close Guantanamo. There are about 15 Afghan prisoners in Guantanamo.

What should be done with them? KARZAI: I fully support the closure of the Guantanamo prison. And I would want that those Afghans who are there must be returned to Afghanistan. And Afghanistan will then take up their cases in accordance with the Afghan law. That closure is a good decision. I have already backed that decision.

ZAKARIA: But you will take -- you will ensure that those people do not engage in terrorist activities?

KARZAI: The ones that are dangerous and criminally oriented, part of terrorist networks, part of Al Qaeda, yes, definitely. They will be kept in prison and not allowed. But the ones that we find innocent and victims of misjudgment, I will have them released.

(END VIDEOTAPE)

BLITZER: And you can see the full interview with President Hamid Karzai on "FAREED ZAKARIA GPS." That airs this Sunday, 1:00 p.m. Eastern, only here on CNN.

We're standing by for more on the breaking news we're following. Republican Senator Judd Gregg of New Hampshire withdrawing his nomination for Commerce secretary. We're expecting to hear from him live in just a few minutes. Stand by for that.

Also, celebrities down under rally amid the worst bush fires their country has ever seen.

(BEGIN VIDEO CLIP)

RUSSEL CROWE, ACTOR: You know, Australians -- you know, we're spread around the world, but when -- when things go down, everybody is on board.

(END VIDEO CLIP)

(COMMERCIAL BREAK)

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

DEBORAH FEYERICK, CNN CORRESPONDENT: Well, Wolf, Pakistan is, for the first time, acknowledging that the terror attacks that killed 164 people in Mumbai, India were partly plotted on its soil. Just a short time ago, Islamabad announced criminal proceedings against eight suspects, including three alleged ringleaders of the attacks. India is calling the news a "positive development."

Australian authorities say about a dozen large wildfires are still burning north of Melbourne. But for the first time since Saturday, no town is under direct threat. At least 181 people have died in the blazes and officials say the death toll is expected to rise as recovery crews sift through the wreckage. More than 5,000 people have lost their homes. As part of the relief efforts, several Australian celebrities are taking part in a telethon, including actor Russell Crowe.

(BEGIN VIDEO CLIP)

RUSSELL CROWE, ACTOR: And when I put the call out to Los Angeles, to a few people. And the people from William Morris jumped on board and they helped out. And, you know, obviously guys like you and Mel came on board. And I talked to Nicole. And it's just been great, man.

You know, Australians -- you know, we're spread around the world. But when things go down, everybody is on board to get together and help.

So it's been great the last couple of days hooking up with people and feeling the seriousness in their desire to help out.

(END VIDEO CLIP)

BLITZER: All right. Let's go right to Senator Judd Gregg of New Hampshire.

He's explaining his decision to ask President Obama to withdraw his nomination as Commerce secretary.

SEN. JUDD GREGG (R-NH), FORMER COMMERCE SECRETARY NOMINEE: ...to serve out in this cabinet or any cabinet, for that matter, and be part of the team and not be 100 percent with the team -- 110 percent with the team. You know, you can't have a blocking back who only pulls out for every second or third play.

And the president has been incredibly gracious. And none of this decision is related at all and in any way to his willingness to include diversity of thought and initiative within his cabinet. Just the opposite. He has been a person who has reached out -- and aggressively reached out across the aisle. And I immensely respect that and I immensely respect him. I know he's going to be a strong and effective and good president.

But for me, I just realized, as these issues started to come at us, that -- and they started to crystallize, that it really wasn't a good fit. You know, I wouldn't be comfortable doing this and that it wouldn't be fair to him to be part of a team and not be able to be 100 percent on the team.

So with that in mind, I said I'm going to withdraw from this process. And I realize that to withdraw at this point is really unfair, in many ways. But to go forward and take this position and then find myself sitting there and not being able to do the job the way it should be done on behalf of the president -- 100 percent -- that would have been an even bigger mistake.

So that is why I've made this decision. I do believe genuinely that I can be even more effective for this presidency in the Senate than maybe even in his cabinet. I still think I have a fair amount of influence in getting things down around here. And I suspect, hopefully, that that will be retained. In fact, from the comments I've received from my colleagues, that's -- that seems to be even more the case.

And there are going to be a lot of issues on which I'm going to want to jump in on and carry his water here in the Senate and hopefully be successful, because there are a lot of things that have to get done. And I'm willing to work to do that.

I want to especially thank a few people -- my wife Kathy, who has put up with me for all of these years, an incredible amount of time. And who, during this last week, has had an especially difficult tasks putting up with me, as we've sought -- worked through this issue.

Kathy and I want to thank the governor of New Hampshire, who has been gracious, fair and very open with me and with us on this. And he's gone the extra mile.

I want to thank Bonnie Newman. He was going to succeed me in the Senate -- a person of immense talent. You folks here in Washington don't know her, but we in New Hampshire know her well. She's -- whenever she's been called on to do a job, she's done extraordinarily well -- her last job being the president of University of New Hampshire. Actually, the Senate probably loses not having her here.

I want to thank the people of New Hampshire, who have allowed Kathy and I to represent them for all of these years and all these very interesting times. And, hopefully, we've done a good job of carrying the New Hampshire message of common sense and fiscal responsibility here to Washington. And we intend to continue to do that and do it aggressively.

And the bottom line is this was simply a bridge too far for me. The president asked me to do it. I said yes. That was my mistake, not his.

Well, maybe it was his. (INAUDIBLE). But it was my mistake, obviously, to say yes, because it wasn't my personality. And after 30 years of being myself, it would have been hard to assume another role that would've -- where I couldn't have been 100 percent all the time the team player that he needed.

Again, I want to express my admiration for this president. I think he has started off very aggressively to address some very important issues and I admire the people he's been able to attract around him and I'm sure he'll find somebody who's strong and effective to take on this job.

(CROSSTALK)

GREGG: Why don't we just...

(CROSSTALK)

GREGG: I'll get around to everybody.

QUESTION: (INAUDIBLE) and will you run for reelection? GREGG: The census was only a slight catalyzing issue. It was not a major issue.

Will I run?

Probably not.

QUESTION: Can you just -- can you just elaborate on the census as being an issue (INAUDIBLE)...

GREGG: Well, I don't need to elaborate. I know it was a slight issue. I mean it...

QUESTION: Well, what was the issue, from your perspective?

GREGG: It wasn't a big enough issue for me even to discuss what the issue was.

QUESTION: Senator...

(CROSSTALK)

GREGG: Jeff?

QUESTION: Will you (INAUDIBLE) on the stimulus?

And shat do you make of the administration's new plan for (INAUDIBLE) the financial crisis?

GREGG: Well, I think the administration is doing an extraordinary job of trying to manage this financial crisis. I think their decision to move quickly on the TARP and get the extra TARP money in place was very important. I believe that Secretary Geithner has put forward a very -- the outlines of an extremely comprehensive plan that I think will work when it gets the detail behind it.

I think as soon as the detail starts to flow in behind the plan that Secretary Geithner has laid out, people in the market are going to react to it positively. Because what they basically -- what they basically outlined is what we need -- a plan that first addresses real estate and stabilizing the price of real estate and secondly addresses the issue of how you continue to stabilize and build the financial system.

And I think their commitment the Fed's commitment in the area of (INAUDIBLE) of over a trillion dollars trillion is just a huge commitment which hasn't really been absorbed yet as for its implications for the market.

I genuinely before that once the market takes a look at what they've proposed, as the specifics flow in behind the outline, the market is going to react very positively to it.

BLITZER: All right, so there he is, the senator from New Hampshire, Judd Gregg, explaining why he decided to have the president withdraw his name for consideration as the next Commerce secretary. In a statement earlier, he said there were "irresolvable conflicts" over the economic stimulus package and the census issue differences that he strongly disagreed with.

Let's get some analysis of what's going on.

Hillary Rosen, our Democratic strategist, is standing by; Kevin Madden, a Republican strategist -- Hillary, this came as a huge surprise to a lot of us. He's taking personal responsibility, saying it's his fault, he should have never accepted this nomination to begin with.

HILARY ROSEN, CNN CONTRIBUTOR: This just looks, first of all, this is just fishy. And I think this reflects so badly on Senator Gregg. I don't think it reflects at all on President Obama. He -- he was called by Senator Gregg. He was asked to consider him for this job. And it feels to me like either there's a vetting problem that he has discovered himself and has -- avoiding it, or he just doesn't want to modernize schools or save jobs.

And it strikes me as probably the former. Look, the stimulus was pretty well baked when he had already accepted this gig, and he won't even talk about the census problem, which we all know the census is what creates congressional districts and there will always be a partisan fight between Republicans and Democrats over the results of the census, and therefore, we were going to have a Republican in charge of the census and he was going to have to deal with the Democratic administration.

BLITZER: All right, Kevin -- Kevin, in a statement earlier, he said, as a further matter of clarification, "Nothing about the vetting process played any role in this decision. I will continue to represent the New Hampshire people in the United States Senate."

What do you see happening? Let's -- what is your assessment of what has just occurred over the past hour?

KEVIN MADDEN, REPUBLICAN STRATEGIST: Well, with all due respect, I have to disagree with my good friend, Hilary Rosen. There's nothing fishy about somebody like Senator Gregg who's been a distinguished senator for many years, standing up and acting on his conscience.

I mean what you saw on display right there was the conscience of a fiscal conservative. And I also think he was absolutely gracious towards the president. If anything, President Obama may have been engaged in a little bit of tokenism and pageantry when it came to bipartisanship. He's been really good at cocktail parties, he's been really good at having people over to the White House to watch football games, but there has not been a practice of action put in place here when it comes to reaching bipartisan consensus.

ROSEN: You know the...

MADDEN: And...

ROSEN: It's not true. MADDEN: And if I may, Hilary, President Obama is going to need to build grand coalitions of bipartisanship up on Capitol Hill if we're going to tackle the challenges that the nation faces. And I think that Senator Gregg was very clear that he could not sit there and just be a spokesman for a party, I'm sorry, for a presidency that he fundamentally disagreed with when it came to economic policy and things like the census, which should not be politicized -- taken out of the...

ROSEN: He begged for the job.

BLITZER: All right.

MADDEN: Taken out of the Commerce Department and put into the White House.

ROSEN: He begged for the job.

BLITZER: All right, guys, hold on a second. I just want to point out, he would have been the third Republican in the Obama Cabinet. Ray LaHood, the transportation secretary, former Republican congressman, and Robert Gates, the defense secretary, asked to stay on.

Gloria Borger, our senior political analyst, is also here working the story. You've been speaking to sources close to these guys. What are you picking up, Gloria?

GLORIA BORGER, CNN SENIOR POLITICAL ANALYST: Well, I'm picking up that there are hard feelings on both sides of this, Wolf, as our colleagues have been reporting all afternoon.

Look, this was, as someone said to me today who's very close to the process, a victory of short-term tactics over long-term strategy. The White House decided it would be a great idea to have a Republican in the Cabinet, Judd Gregg really wanted this job. Harry Reid went to Rahm Emanuel and said, hey, you know, this might be, this might be a good idea.

Then what happened is reality started to intrude. Not only the fact that the White House decided to take away the major responsibility for the census, which is a big political job for the commerce secretary, and put it in the White House, which Judd Gregg saw as a real slap in the face, and then the White House got insulted because Judd Gregg couldn't find it within himself to vote for his stimulus package.

Lots of folks over there didn't feel that there was any need for an incoming commerce secretary to recuse himself on the president's major economic proposal so far. So in the end you had some real problems between these, between these two sides.

BLITZER: Hilary, why do you think he's belittling or playing down Judd Gregg, the whole census issue? Because it is a sensitive and politically charged issue. ROSEN: I think he's playing it down because I think the point that Gloria made, it's a partisan issue. And, you know, that Democrats legitimately did not want a Republican in charge of the census. The White House decided to take it out of having to worry about politicizing it, and moving it elsewhere. And that offended him. But -- so I don't -- I don't think the census was really that big of deal.

I think that, ultimately, he just decided that there was some reason why he couldn't be supportive here and...

BLITZER: All right.

ROSEN: And it was just an ungracious -- I disagree with Kevin, I think it was an ungracious weak on his part.

BLITZER: But when you -- when you move the census issue, Kevin, from the Commerce Department and the career professionals over there, the civil service professionals, to the White House, aren't you automatically further politicizing what is clearly a very important issue as far as congressional districting is concerned?

MADDEN: No, you're hyper-politicizing it. I mean you're putting it in the hands of folks like Rahm Emanuel who not only a few months ago was chairman of the DCCC, and his job was to get more Democrats elected and do so in a way that was, again, hyper partisan.

And I think that just the fact that you would have a Republican head of the commerce secretary doesn't automatically mean it would become a Republican partisan issue. Instead, there are careers, there are folks, like you mentioned, Wolf, inside the Commerce Department, who are professionals dealing with. Now you have it sitting right on the desk of the chief of staff to the presidency.

ROSEN: But you know...

BLITZER: All right, guys, hold on, hold on. We've got to leave it right there because we're up against the clock. But stand by, we're going to continue the breaking news. Judd Gregg announcing he no longer wants to be commerce secretary in the Obama Cabinet.

Also coming up, horror in the streets of New York. Caught by surveillance cameras. A pedestrian was struck down and then dragged for 17 miles.

Plus Alaska's anti-abortion governor Sarah Palin gets thousands of thank you notes for donations made to Planned Parenthood in her honor. What's she saying about that?

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

(COMMERCIAL BREAK)

BLITZER: I want to warn our viewers, we're about to show you some disturbing video of a man being dragged by a van. Let's go CNN's Deborah Feyerick. She's working the story for us. I've seen the video, and it is disturbing. Tell our viewers, Deb, what's going on.

FEYERICK: Well, it really is. And Wolf, this is one of those freak accidents too horrible to even imagine. But a man hit by a car then dragged by a van 17 miles to the streets of New York City, in this case, it was caught by surveillance cameras. And we do want to warn you, these are difficult images. Witnesses are just stunned when they realize that the body has somehow vanished.

(BEGIN VIDEOTAPE)

FEYERICK (voice-over): It happened near Shea Stadium in New York before sunrise Wednesday. The man in the light jacket heading to his car sees someone dart into the street and get hit by a black SUV. The pedestrian is dragged a short distance, a white car close behind swerving to avoid the body. But then a red van passes over the victim.

Police say the man's rib cage got caught on a suspension bar underneath the van. The van driver, unaware what's happening, later told police he thought the cars in front had swerved to avoid a pothole. The original witness grabs his head and the driver across the street stops to call 911.

Looking from another angle, the red van never slows down. But when police arrive, the body is gone. It's not until the van reaches Brooklyn almost an hour later that a pedestrian flags down the driver and the mangled body is discovered.

COMM. RAY KELLY, NEW YORK POLICE: He did stop once during his trip, he reported, but he didn't see anything unusual and got back in the car and, again, people were signaling him to stop the vehicle. He stops his vehicle, and that's when the body is discovered under his car.

FEYERICK: The van driver calls 911 and police realized it's the missing victim, 17 miles away from the scene of the original accident.

(END VIDEOTAPE)

FEYERICK: Now police say the man was identified by a cousin as 26-year-old Guido Salvador Carabajo-Jara from Ecuador. He celebrated his birthday a day earlier. And an autopsy is under way to try to determine if he died on impact or later during in this tragedy. Police say neither driver is being charged -- Wolf?

BLITZER: What a horrible, horrible sad story. Thanks, Deb.

FEYERICK: Terrible.

BLITZER: Deb Feyerick working that story.

There's another story we're following right now. Want to bring in Brian Todd. It involves satellites actually colliding in space with debris fragments. Brian, they could pose some significant problems?

BRIAN TODD, CNN CORRESPONDENT: That's right, Wolf. That's according to some new information we're getting. We are told that three main orbits of earth, as illustrated by this graphic, are jam packed with satellites and debris. Still, officials say they could not have predicted a violent incident recently in space that we are getting some new information about.

(BEGIN VIDEOTAPE)

TODD (voice-over): U.S. officials tell CNN, this collision between an American and a Russian satellite in space, illustrated here with CNN's own animation, brought together the force of two objects, each weighing more than 1,000 pounds at a speed of more than 20,000 miles an hour. That's around six miles a second. An outside expert tells us just how violent this silent impact was.

CHARLES VICK, GLOBALSECURITY.ORG: It would have created thousands of pieces of debris that would have scattered in many different directions within a general orbital plain.

TODD: U.S. and Russian officials tell us Tuesday's incident, the largest accidental collision ever, took place about 500 miles above Siberia and produced two large clouds of debris. The American vehicle was operated by Iridium, a satellite phone company. CNN is one of its clients. The Russian military satellite had been nonfunctional for 12 years. A Russian analyst was asked about the odds of this happening.

ALEXANDER GOLTS, RUSSIAN MILITARY ANALYST (Through Translator): I think it's about 1/1,000 but nevertheless it did happen.

TODD: Officials say the debris poses an elevated risk, but not a serious threat to the International Space Station which now carries two Americans and a Russian. One reason the risk is not more serious is because the collision took place several hundred kilometers above the space station's orbit. But experts say all orbital paths around earth are getting far too crowded.

VICK: The debris in space is far greater than I think a lot of us perceive. And we are certainly learning that lesson now because, in fact, you live with the fact that closing the earth's orbits, there are many more spacecrafts, you're moving far more rapidly, there's a far greater potentiality of collision.

(END VIDEOTAPE)

TODD: We're talking tens of thousands of pieces of debris plus satellite and rocket parts strewn all over the earth's orbit and the impact of any collision could be devastating. One U.S. military official told me a piece of debris the size of a paint chip could significantly damage a space shuttle because of the speeds involved, Wolf. And as you can see, they are all over the earth's orbit.

BLITZER: What a story. All right, thanks very much, Brian, for that. It's been the subject of rumors and speculation for years. Now a definitive ruling on the alleged link between childhood vaccines and autism. Our chief medical correspondent Dr. Sanjay Gupta's, he's standing by live. He'll explain what's going on.

Plus Sarah Palin inundated with tens of thousands of thank you letters from Planned Parenthood. She says she's not happy about it. What's going on with the former vice presidential nominee?

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

(COMMERCIAL BREAK)

BLITZER: The Alaska governor Sarah Palin calls the thousands of thank you notes she's been receiving from Planned Parenthood political theater, but she says they don't change her stance against abortion.

Let's bring in our Internet reporter Abbi Tatton. Abbi, why is she getting all of these notes?

ABBI TATTON, CNN INTERNET REPORTER: Wolf, it was because of e- mails like this. An e-mail that went viral last fall during the campaign pushed on liberal blogs, passed around. It said, essentially, "Donate to Planned Parenthood, but when you do it, do it 'in honor' of Governor Sarah Palin. Fill in her address when you make the donation, and that way Planned Parenthood sends out a thank you note thanking Sarah Palin for that donation."

Well, 42,000 thank you notes later and it doesn't sound like Governor Palin is amused.

(BEGIN VIDEO CLIP)

GOV. SARAH PALIN (R), ALASKA: I have boxes of thank you notes from people associated with Planned Parenthood thanking me for the donations. Same with some anti-hunting groups. They're doing the same thing right now. And it's political theater, it's great theater, I guess, for some.

(END VIDEO CLIP)

TATTON: That was Governor Palin at a press conference yesterday where she was asked about those thank you notes. Planned Parenthood says they have nothing to do with that e-mail that went around. They don't know where it came from, but it doesn't sound like they're complaining. The organization netted more than $1 million in donations because of those e-mails -- Wolf?

BLITZER: Abbi, thank you very much. I want to bring in our chief medical correspondent Dr. Sanjay Gupta now.

Sanjay, there's been some significant developments on the alleged link between autism and childhood vaccines. What happened today?

DR. SANJAY GUPTA, CNN CHIEF MEDICAL CORRESPONDENT: There are three test cases out there, Wolf, that sort of a special court ruled on today, trying to establish whether or not there is a link between certain vaccines, childhood vaccines, the MMR vaccine, in particular, and autism. This was a ruling that a lot of people are waiting for for sometime. The answer came back as no, no, no on all three of those test cases. No link was established.

One of these families we've been following along for sometime. Her name is Michelle Cedillo. She's 14 years old. She lives in Yuma, Arizona. Take a look.

(BEGIN VIDEOTAPE)

GUPTA (voice-over): There's no doubt that Michelle Cedillo is a sick child. The 14-year-old diagnosed with autism can't walk without help. She receives nourishments from a feeding tube and needs constant monitoring for seizures. Her mother Theresa says her daughter became sick after receiving the measles, mumps, and rubella vaccine at 15 months of age.

THERESA CEDILLO, MICHELLE'S MOTHER: You think you're dealing with something that's going to come and go and you get your child back.

GUPTA: The ruling in the Cedillos' case, which was written by a tax lawyer appointed to the court as a special master, concluded the Cedillos, "have not demonstrated either that the thimerosal-containing vaccines can harm infant immune systems in general or that such vaccines did harm Michelle's immune system."

Bottom line, they concluded the vaccine did not cause Michelle's autism.

Dr. Paul Offit is director of the Vaccine Education Center at the Children's Hospital of Philadelphia. He's also author of "Autism's False Prophets." He says cases like Michelle's are unfortunate coincidences.

DR. PAUL OFFIT, CHILDREN'S HOSPITAL OF PHILADELPHIA: About 20 percent of children with autism will regress between often the first and second birthday. So statistically it has to happen where some children will get a vaccine, they would have been fine, they get the vaccine, then they're not fine anymore.

GUPTA: Even before the court's ruling, the medical establishment had passed judgment on the vaccine autism claim. More than a dozen large studies in prestigious medical publications like "The New England Journal of Medicine" finding no link between vaccines and autism.

With their suit, Theresa and Mike Cedillo say they were simply hoping to receive an award big enough to take care of Michelle when they're gone.

(END VIDEOTAPE)

GUPTA: Now these special masters, specifically with the Cedillo case, said look, they feel deep sympathy as to what's happened to Michelle, but they simply did not think it was entitled to a reward.

You know, Wolf, we called the Cedillo family as well after this ruling came down today. And they said look, we're very disappointed. They're talking to their lawyers. They're going to weigh their options. They don't think this is over yet. But this is obviously a huge blow for them.

BLITZER: So is this decision final, no?

GUPTA: Well, you know, the way it works with the vaccine court is you can appeal just like any other court. You can appeal to a federal claims court, for example. They may hear this case. But the vaccine court has been handing down decisions for over 20 years now and they've given money in the past. Over 1,500 cases, they've given money, $1.18 billion was a total that we investigated today. But these three cases they simply thought an award was not justified.

BLITZER: You don't really hear much about this vaccine court. I've never heard about it but it's out there, I see.

GUPTA: You know what's so interesting about this is when vaccine makers started coming to this country and so many lawsuits were -- been waged against them, they said we simply can't continue to do this. It's just not profitable. So what they said is we'll set up a special court, we'll take 75 cents on excise tax, if you will, off every vaccine, put it into this fund and make it available if they think that there is some damages that should be awarded. That's what the vaccine court is for. That's why it's paid out over $1 billion over 20 years.

It is sort of something that you don't hear that much about. And again, as we point out, you can appeal if you're not happy with the decision.

BLITZER: Interesting stuff. And very controversial, I'm sure.

All right, Sanjay, thanks very much.

GUPTA: Thanks, Wolf.

BLITZER: Dr. Sanjay Gupta is our chief medical correspondent.

Weeks after the inauguration, former secretary of state Colin Powell still gets very emotional about America's first African- American president. The exclusive interview here on CNN. That's coming up.

And she's been sharply criticized for using fertilization treatments to bear 14 children. But why is the mother of octuplets now getting death threats?

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

(COMMERCIAL BREAK)

BLITZER: There's a new and disturbing development involving the mother of those octuplets out in California.

Let's go there. Thelma Gutierrez is standing by with more. What's going on? Death threats, Thelma?

THELMA GUTIERREZ, CNN CORRESPONDENT: Yes, hard to believe, Wolf. But the more exposure that, in the media, Nadya Suleman and her octuplets get, the more outrage it seems to be unleashed against her. In fact, her spokeswoman says that the mother of 14 has not only received hundreds of angry e-mails and calls, but also some death threats.

(BEGIN VIDEOTAPE)

GUTIERREZ (voice-over): The Suleman octuplets. Eight babies struggling to survive in a hospital neonatal intensive care unit. Their photos are posted on a family Web site. Their 33-year-old single mother, Nadya Suleman, calls herself a proud mother of 14. Fourteen children she had as a result of the in vitro fertilization treatments.

On the Web site, you can leave a comment, even make an online donation. But instead of well wishes for the new mother and her babies, Nadya has been deluged with angry e-mails, even death threats.

JOANN KILLEEN, NADYA SULEMAN'S SPOKESWOMAN: It's very frustrating to get somewhere between 100 and 200 of these every couple of hours into our company. People are just very angry and upset.

UNIDENTIFIED FEMALE: The travesty that this woman has unleashed on the public.

GUTIERREZ: Joann Killeen is Suleman's spokeswoman. She said she's working pro bono to help her navigate all the media requests. But Killeen says she never expected to also be targeted for helping Suleman.

KILLEEN: Paparazzi have popped out of bushes, taking pictures of me. They have followed me. I've gotten death threats. One gentleman called, and I think he was from Fargo, said that people like me should be put in a wood chipper.

GUTIERREZ: The backlash comes amidst reports that Nadya Suleman is unemployed and her children could cost taxpayers money. Even though she says she's getting a masters degree then a job.

NADYA SULEMAN, MOTHER OF OCTUPLETS: I feel as though I've been under a microscope because I've chosen this unconventional kind of life.

GUTIERREZ: Suleman told NBC's Ann Curry she only wanted one or two more children. But when her fertility treatments resulted in multiple embryos, she and her doctor decided to transfer them all, resulting in eight live births.

GREGORY ROSEN, FERTILITY SPECIALIST: Well, the reason, I think, for the backlash is people didn't understand how this could have occurred.

GUTIERREZ: There are no federal or state laws that can limit the number of embryos that can be transferred. But IVF specialist, Dr. Gregory Rosen, says there are guidelines. That for women under 35 like Suleman, that number should have been no more than two.

G. ROSEN: It's below the standard of care. This never should have happened.

GUTIERREZ: But Suleman's spokeswoman says now that they're here, she hopes the anger towards the babies and their mother will begin to ease and that the physical threats will stop.

(END VIDEOTAPE)

GUTIERREZ: And Suleman's spokeswoman also says that they're taking all those threats seriously and they've alerted Los Angeles police. As for the fertility doctor experts say he face disciplinary action if the California medical board determines that too many embryos were transferred that resulted in octuplets because it would have been considered below the standard of care -- Wolf?

BLITZER: Getting stranger and stranger.

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

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

CAFFERTY: The question this hour: Should the government change its immigration policy in light of the tremendous loss of American jobs? We have lost 1.8 million jobs in this country in just the last three months.

Marcus writes: "Halt all immigration until the unemployment rate falls below 3 percent. Also impose a 50 percent tax on money sent back to home countries by non-citizens."

Russell -- pardon me, Russell in Little Rock, Arkansas: "It's easy to blame immigrants for taking jobs that rightfully belong to American citizens, but the companies and individuals that employ undocumented and illegal immigrants are more to blame. Those companies that have chosen to offshore jobs are equally at fault and have contributed as much or more damage to the economy and the job situation as have the immigrants who buy goods and services, pay sales and payroll taxes and pay rent in order to stay in this country."

Jim writes from Reno, Nevada: "Jack, no, immigration policy should not be changed in an attempt to save more jobs for Americans. I agree with Tom Friedman. We need new blood and energy, not to mention a dose of old world ethics and honesty. Maybe some new immigrants will start the next Microsoft."

Andy says: "A moratorium on immigration is needed. It's driven by corporations' control of Congress to have access to cheap labor and the Democrats' desire to gain votes." Doug in Dallas: "I wonder how many illegals have lost their jobs that nobody knows about. Changing our immigration policy in light of the current problems makes no sense. Instead, the government should adopt a fair and balanced policy that works regardless of the economic climate. Of course, that would require thought and planning, both of which are in short supply inside the beltway."

And Tom in Florida says: "This is long overdue. While I am unemployed, I know someone who is here illegally, holds a part-time job, goes to college, and is piling up thousands in student loan debts. Now you go figure that."

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

BLITZER: All right, Jack, thank you.

Happening now, the breaking news we're following. Another Cabinet nomination explodes in the president's face. Senator Judd Gregg reveals why he doesn't want the top job at the Commerce Department after all.

Is there more to the stunning turn than he's saying? The best political team on television is standing by.

Plus President Obama sells his economic rescue plan at a factory that has a huge stake in whether it's passed.