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President May 'Call Out' Mayors; Illinois Governor to Senator Burris: Resign; Clinton Softens Tone in China

Aired February 20, 2009 - 15:59   ET


WOLF BLITZER, CNN ANCHOR: Happening now, President Obama warns the nation's mayors that their stimulus money comes with strings attach. This hour, why he's threatening to call them out if necessary.

Plus, the top African-American in the House of Representatives sees opposition to the stimulus package as insulting. I'll ask Congressman James Clyburn why he thinks blacks are getting a "slap in the face" from some Republican governors.

And the feds finally track down a fugitive financier. Now they're searching the globe for billions he allegedly bilked from investors. So why is Allen Stanford still free?

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

President Obama's warning the nation's mayors that the American people are watching them and how they spend their cut of the economic rescue money. Mr. Obama making it clear he'll be watching as well. His own reputation is very much on the line with the stimulus package, 30 days into his presidency.

Let's go to our White House Correspondent Dan Lothian. He's got more on the president's meeting with so many of the nation's mayors today.

What happened, Dan?

DAN LOTHIAN, CNN WHITE HOUSE CORRESPONDENT: That's right, Wolf. Well, as you know, the president is moving quickly at a rapid pace as he tries to jump-start the economy, and he's still stressing the importance of transparency and accountability.


LOTHIAN (voice-over): One month in office, and the Obama administration is patting itself on the back.

BARACK OBAMA, PRESIDENT OF THE UNITED STATES: We've done more in 30 days to advance the cause of health care reform than this country has done in a decade.

JOSEPH BIDEN, VICE PRESIDENT OF THE UNITED STATES: We've won passage of the largest economic recovery effort since World War II in a month. In a month.


LOTHIAN: Speaking in the East Room to the nation's mayors, the president put them on notice. When it comes to spending stimulus money from his biggest initiative, waste, inefficiency and fraud will not be tolerated.

OBAMA: I will call them out on it and use the full power of my office and our administration to stop it.

LOTHIAN: The threat of being called out didn't appear to rattle these mayors.

MAYOR MANNY DIAZ (D), MIAMI: We get called out every day at the local level.


DIAZ: We have plenty of constituents who will be doing that before the president does.

MAYOR DOUGLAS PALMER (D), TRENTON: We welcome that kind of accountability.

LOTHIAN: As the mayors get ready to spend their share of $787 billion on shovel-ready projects, a new CNN/Opinion Research poll shows 60 percent of Americans support the stimulus and 49 percent consider it a major victory for the president. But it's not just one big love-fest. At least two Republican governors, Sanford of South Carolina and Jindal of Louisiana, are threatening to turn down stimulus aid, calling it bad for the economy. That complicates things for local communities since the state has to hand out the money.

New Orleans Mayor Ray Nagin says his governor's rhetoric is nothing but politics.

MAYOR RAY NAGIN (D), NEW ORLEANS: I think he's been tapped as the up-and-coming Republican to potentially run for president the next time it goes around, so he has a certain vernacular and a certain way he needs to talk right now.

LOTHIAN: The president still finding Republican resistance, even when it comes to handing out federal dollars.


LOTHIAN: Next week, the president continues to keep the pedal to the metal, if you will. He addresses a joint session of Congress, unveils the federal budget, and holds a fiscal responsibility summit. And, of course, he takes another road trip -- Wolf.

BLITZER: As you know, Dan, CNBC reporter Rick Santelli, he was on a tear this week in going after the home foreclosure package that the president has put forward. I'm going to play a little clip for you.

(BEGIN VIDEO CLIP) RICK SANTELLI, CNBC ANALYST: This is America. How many of you people want to pay for your neighbor's mortgage that has an extra bathroom and can't pay their bills? Raise your hand.


SANTELLI: President Obama, are you listening?


BLITZER: All right. I understand that hit a nerve over at the White House today.

LOTHIAN: That's right. You know, we saw something that we have not seen before, where Robert Gibbs really got personal. He mentioned Santelli's name several times, and he said the reporter simply didn't know what he was talking about.

Take a listen.


ROBERT GIBBS, WHITE HOUSE PRESS SECRETARY: I would encourage him to read the president's plan and understand that it will help millions of people, many of whom he knows. I'd be more than happy to have him come here and read it. I'd be happy to buy him a cup of coffee -- decaf.



LOTHIAN: So, Gibbs says that the plan will help responsible homeowners. But what this shows is that this administration is really being defensive about mounting criticism over the housing plan -- Wolf.

BLITZER: All right, Dan. We're going to have more on this part of the story coming up.

Dan Lothian, our man at the White House.

Thank you.

Another story we're following right now, an embattled senator who may feel he could use some friendly support instead gets another cold shoulder. Very cold. Right now, a new call for Roland Burris to resign, ramping up the pressure for the senator from Illinois to step down.

Let's go to Chicago. CNN's Susan Roesgen is standing by with the latest.

It keeps changing, this story, almost every day.

SUSAN ROESGEN, CNN CORRESPONDENT: It certainly does, Wolf. And now we've got Governor Pat Quinn, who, as you mentioned, says he's been a friend of Roland Burris' for more than 30 years. He said he respects the senator, he said it would be heroic if he were to resign, and then he urged him to do just that.


GOV. PAT QUINN (D), ILLINOIS: My view is, I thought it was a mistake from the very outset for Roland Burris to accept the appointment from at that time Governor Rod Blagojevich to be a United States senator. I said that very clearly, very publicly, in very many places in Illinois. I thought it was a mistake, a big mistake, a gigantic mistake for Roland Burris to accept that appointment.

I think what I said back those weeks ago has been proven out. There's just too much of a cloud of controversy over this appointment process for any person such as Senator Burris to truly carry out the duties that the people of Illinois need from a U.S. senator at this time.


ROESGEN: And Governor Quinn wants the Illinois legislature to pass a law immediately, Wolf, immediately, that would allow him to name a temporary replacement if Roland Burris is forced out or decides to resign. And then after that, there would be a special election here for the voters to choose the next senator -- Wolf.

BLITZER: Did he offer any names about a temporary replacement for the senator?

ROESGEN: You know, he didn't name any names, but he's a Democratic governor, so it's going to be a Democratic replacement, we can be sure. And Republicans won't really like that, Wolf, because the governor says it could take probably four months before that special election could be set up. And you know whoever is the incumbent, even for four months, is going to have the advantage when the election comes around.

BLITZER: That's certainly a fundamental political fact of life.

All right. Thanks very much, Susan, ,for that.

Let's check in with Jack Cafferty. He has "The Cafferty File."

That story in Illinois, it's an amazing story when you think about it.


BLITZER: Yes, go ahead.

CAFFERTY: Didn't the Senate Ethics Committee say there were going to look into this?

BLITZER: Sort of, yes.

CAFFERTY: Well, that ought to take care of it.

BLITZER: Well, it doesn't -- yes.

CAFFERTY: They looked at the Larry Craig thing, and he's still in the Senate. I mean, give me break.

It didn't take long at all. Bill Clinton is now in on the act a month after his wife was sworn in as secretary of state. The former president's out with some advice on how President Obama should handle his new job.

In an interview with ABC News, Bill Clinton gives the new president an "A" for his first month in office, yet says he should put on a more positive face when talking about the economy. Clinton says he likes the fact that Mr. Obama didn't come out with a bunch of happy talk about the economic crisis, but then added, "I just want the American people to know that he's confident" -- "he," meaning Obama -- "that we're going to get out of this and he feels good about the long run."

And Mr. Clinton had more pearls of wisdom. Clinton went on to say that President Obama should talk to the public in greater depth about the economic crisis, saying that he should lay out the full scope of what's going on, but end by saying he's hopeful and completely convinced that we'll make it out OK.

Here's the issue. It's exactly what a lot of Obama supporters feared would happen if he brought Hillary Clinton on board either as vice president or in some cabinet position, for that matter. It's the old two for the price of one when it comes to the Clinton, and it's probably just about the last thing Barack Obama needs right at the moment.

Here's the question. How helpful is it for Bill Clinton to publicly -- and that's the key word, "publicly" -- give President Obama advice on how to do his job?

Go to and post a comment on my blog.

Not to suggest that President Obama couldn't take counsel from former President Bill Clinton. He was a pretty good chief executive, in spite of his little foibles along the way. But to publicly come out on ABC News and start telling him how to run the White house, I don't know if that's a good idea.

BLITZER: Yes. Well, if you listen to the whole interview, he was pretty complimentary. He did say that one little piece of advice.

CAFFERTY: Oh, yes. No -- yes, but, you know, give him that in private.


CAFFERTY: Or don't answer -- I mean, you know, there's a delicate way to do this. Bill Clinton's ego is as big as the great outdoors. BLITZER: Well, that may be true too.

Thank you.

Two controversies right now involving race and insults. Did "The New York Post" apologize strongly enough for a chimp cartoon that critics blasted as racist?

And harsh words about Republican opponents of the stimulus package. Did they deliver a slap in the face at African-Americans? I'll talk to the man who made that claim, the highest-ranking African- American in the Congress, the number three member of the leadership in the House, James Clyburn.

And we'll take you to a quaint Virginia community, the hideout for a billionaire accused of a massive fraud scheme. It's where he still may be under wraps.

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


BLITZER: Secretary of State Hillary Clinton is not sounding very confrontational as she begins a trip to China. She says longstanding disputes with Beijing over human rights should not stand in the way of finding some common ground on pressing issues like the global economic crisis. It's a different tone than Clinton has taken toward North Korea during her first overseas trip on her new job.

Our Foreign Affairs Correspondent Jill Dougherty sat down with the secretary of state in Seoul, South Korea.


JILL DOUGHERTY, CNN FOREIGN AFFAIRS CORRESPONDENT: Madame Secretary, thank you very much for being with us.

You know, right now, the U.S. seems to be staying two things to North Korea. One would be, you're a tyrannical, unpredictable country that insults and threatens its neighbors, and your leadership is unclear, as you put it. And then the second thing it's saying is, you're a country that has the ability to act rationally, make commitments and follow through on them if it wants to.

Now, isn't this a mixed message? And does it mean that the United States really hasn't settled on a policy toward North Korea?

HILLARY RODHAM CLINTON, U.S. SECRETARY OF STATE: No, I don't think so, Jill. I think that the past history proves that North Korea can be either of those, depending on what it's attempting to achieve. And what is clear from the six-party process over the last years is that, when North Korea decides to cooperate and make agreements that it believes are in the furtherance of its own interest, it will do so. And when it doesn't, it is always seeking advantage, and it uses, you know, provocative words and threatened actions to try to get attention in order to make a deal in some way. You know, food and fuel and other kinds of assets.

I mean, South Korea basically, you know, keeps the North Korean economy going with all of the subsidies of food and fuel and medical supplies and the like. So I think it's calculated, and I think you have to respond in kind as you look at the behavior of the day, the week, the month and the year.

DOUGHERTY: The next stop is Beijing. China has not been as directly affected by this financial crisis worldwide as some other countries. And in fact, it's going around the world buying up natural resources -- oil, minerals, et cetera.

When this crisis is finally over, could it turn out that China would emerge stronger than it is now, with the ability to pose a direct challenge to U.S. interests?

CLINTON: You know, Jill, the way that I'm looking at China and anticipating our talks there over the next two days is that the rise of China is not in and of itself threatening to the United States. It's how China decides to act with whatever assets it has. But that's up to how we cooperate together.

I think that the Chinese economy is incredibly dependant upon the American consumer. That has been the source of a lot of the growth in China.

You know, they have 20 million migrant workers who are unemployed as of today. They are having to do their own stimulus package. So, you know, how China moves through this economic contraction is not determined yet, just like how we're going to move through it.

We've got to work together. We have a big stake in seeing the global economy recover. But I have infinite faith in the resilience and dynamism of the American company, and I think that President Obama has put us on the right track to be able to recover.

So are we going to have competition with China? Of course. You know, you have competition with all kinds of countries. I mean, that's nothing new. But we also hope for cooperation in a peaceful and productive manner on a range of issues where we think that China and the United States have comparable interests, whether it be global climate change and clean energy, the economic challenges we face, and shared security issues like Afghanistan and Pakistan, and so much else.


BLITZER: The secretary of state speaking with our Jill Dougherty today.

He's the highest-ranking African-American in Congress, and he's reportedly accusing Republican governors, at least a few of them, of giving African-Americans -- and I'm quoting now "a slap in the face." It involves the economic stimulus package. The House Majority Whip James Clyburn, he's standing by live to join us. He'll explain. And he was found in an unlikely place, the billionaire accused of a multibillion-dollar investment fraud scheme. His father has a special message for him.

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


BLITZER: The highest-ranking African-American in Congress is reportedly accusing some Republicans governors of a disrespectful act against blacks. According to South Carolina's WIStv, yesterday, the House Majority Whip James Clyburn mentioned that the governors of Louisiana, Mississippi, Texas and his own state, South Carolina, expressed opposition to the economic stimulus plan. Then Clyburn reportedly said this -- and I'll quote specifically -- "These four governors represent states that are in the black belt. I was insulted by that. All of this was a slap in the face of African-Americans."

The House Majority Whip James Clyburn is joining us now from Myrtle Beach, South Carolina.

Congressman, thanks very much for coming in.

All right. Explain what you meant by those provocative words.

Hold on a second, Congressman. We're having a little trouble hearing you. We're going to see if you can fix that. Go ahead and say something to make sure we can hear you.

No. We're having a technical problem.

All right. We're going to fix the problem, Congressman. We'll get that microphone going and we'll make sure all of our viewers can hear you. Stand by. We'll take a quick break.

We'll also follow some other stories.

The nation's mayors delivering a message to President Obama today. They want their stimulus money, and they want it fast. You're going to hear that, what the president is saying, at length, in his own words. He's giving words of warning to those mayors about spending the cash wisely.

And in our "Strategy Session," another provocative charge -- that most political figures haven't suffered enough financially to understand what so many Americans are going through right now.

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


BLITZER: We're back with the highest-ranking African-American in the United States Congress, Democratic Congressman James Clyburn of South Carolina.

You said those provocative words, Congressman, those four governors. You were referring to Haley Barbour, Mark Sanford, Bobby Jindal, Rick Perry -- "... represent states that are in the black belt. I was insulted by that. All of this was a slap in the face of African-Americans." You're referring to their opposition to the economic stimulus plan.

What was the point? What are you trying to make?

REP. JAMES CLYBURN (D), SOUTH CAROLINA: What I was trying to say is, let's take, for instance, Louisiana. Governor Jindal has been in my office a number of times, he's called me a number of times asking for billions of dollars in assistance to stand their community back up as a result of Katrina and Rita. Yet, he says there's something wrong with this money for the stimulus coming out of the same pot that he sees nothing wrong when he's trying to stand back up after Katrina.

What I was saying about that is, this is an insult simply because we have put money in the stimulus package to pay close attention to those communities that have been underserved for the last 30 years. That's what the language says.

If you have a community for the last 30 years, more than 20 percent have been living under the poverty level, then 10 percent of this money must be directed at them. Why do you not want to do that?

BLITZER: All right.

CLYBURN: Those are the communities that are hurting.

BLITZER: A spokesman for your governor, Governor Mark Sanford of South Carolina, a spokesman said this -- he said, "Representative Clyburn is no stranger to playing the race card, because he has no defense for the runaway spending and the deficits contained in this so-called stimulus bill that will hurt our economy. Spending money at the federal level that we do not have represents a future tax increase on all South Carolinians, regardless of their color -- and in the process of doing so, he's ripping off everyone he claims to represent."

A tough statement from a spokesman from Governor Sanford against you.

CLYBURN: Well, let's talk about South Carolina.

If you looked at the formula that we put together, there are 12 counties in South Carolina that would fit within this formula. Now, that means that 46 counties in our state, that means that more than 25 percent of our counties, are covered by the stipulation needing special attention. All 12 of those counties are along the I-95 corridor that's been dubbed the "Corridor of Shame" that all these people talk about but never want to do anything about.

We have legislation here now with the money to do something about the schools, do something about water and sewage along that corridor in these 12 counties. And now the governor says, I don't want to accept the money. That's why I called this an insult, that's why I said this is a slap in the face, because a majority of those counties are, in fact, inhabited by African-Americans.

BLITZER: So are you saying -- and we'll be blunt -- that these governors are racist?

CLYBURN: No, I never used that word in my life, and I will not use it now. I will say this -- that the majority of the counties, those 12 counties that are covered by this in South Carolina, are African-American counties. That's why I said this is an insult.

If you can accept money from the other parts of the federal government to do anything else that you want to do, but when it comes to doing something in these counties, where unemployment is so high, where health conditions are so bad, where education so low, we're trying to help those communities, and now you're saying you don't want to accept the money? That's what I'm saying. I stand by that because that's a fact.

BLITZER: So what I hear you saying -- and correct me if I'm wrong, Congressman -- is that the money that these four governors may or may not accept and may refuse, reject from the federal government, is money designed primarily to help lower-income communities in these four states, whether Texas, Louisiana, Mississippi, or South Carolina, and the primary benefit of this money would be African-Americans.

CLYBURN: Well, the last part of that is true. The fact of the matter is, no matter what state you are, you will be benefited by this stimulus package.

However, if you are in a state where there's been chronic unemployment for 30 years, that's -- you know, that's three decades. We are saying that we are going to spend closer attention to those communities, spend money there, get those people back to work, do something about their health problems, put water and sewage in those communities so that they can make themselves attractive. Let's fix up with schools.

Remember, the president's been talking about J.V. Martin School in Dillard (ph) County on the I-95 corridor, a school that was built in the 1850s, where they cannot even teach if there's a train coming by. We're trying to fix up all of that.

So the governor of South Carolina is saying, I don't want any money to fix J.V. Martin School. That's an insult to those students that are trying to learn in that dilapidated school that's 150 years old.

BLITZER: Do you think he'll accept the money when all is said and done, Governor Sanford?

CLYBURN: Well, he doesn't have to because we've put the stipulation in there so that the legislatures can get this money in all of the states in this country if the governor does not want to accept it.

And I have talked to enough legislators in South Carolina. They want to fix the problem. And this is not partisan, because every legislator I have discussed this with have been Republicans. And they want to do something about it.

And I applaud them for it. And I enjoy working with them, as I have worked with two Republican governors in the past. You know, Wolf, I spent almost 18 years working in state government, worked for two Democrats and for two Republicans. So, I have no problem working across the line. I have proved that I can do that. And, so, we're doing that in this instance, as well.

BLITZER: Congressman, thanks very much for coming in.

CLYBURN: Well, thank you so much for having me.


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

Happening now: a controversial proposal to tax people on the -- on the miles that they drive. It's been tested in Oregon. Now other states are thinking about it. How far can it go?

Plus, on the trail of the world's most wanted man. A geography professor and his students, they think they have an idea of where Osama bin Laden might be -- how they pinpointed what they believe is his most likely hideout.

And Washington's Mideast challenge -- a former prime minister could once again lead Israel, but how will the conservative Benjamin Netanyahu get along with President Obama?

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

President Obama tells American mayors he knows their cities are hurting and that help from the stimulus package can't come soon enough. But he's also laying down the law, warning he will have a zero-tolerance policy when it comes to wasteful spending.

Listen to President Obama's remarks today over at the White House.


OBAMA: We're remaking our cities with the largest new investment in our nation's infrastructure since Eisenhower built an Interstate Highway System in the 1950s. Ray LaHood is going to be busy, because we're putting 400,000 men and women to work rebuilding our crumbling roads and our bridges, repairing our faulty dams and levees, replacing our aging water and sewer pipes, and rolling out broadband lines to nearly every community in America.

We are going to unleash...


OBAMA: We're going to unleash the potential of all our regions by connecting them with world-class transit systems and high-speed rail, making our metropolitan areas more livable and sustainable in the process.

Because we know education is the single-best bet we can make to change the odds of our children and our cities, we are making the largest investment in education in our nation's history. It will prevent harmful education cuts and save jobs of tens of thousands of teachers, 14,000 just in New York City, and it will make a historic investment in early childhood education and upgrade classrooms and libraries and labs across America, so that millions of our children are prepared to compete in the 21st century.

Because we know that spiraling health care costs are crushing families and businesses alike and straining budgets across government, we're taking the most meaningful steps in years to modernize our health care system. We're going to computerize America's medical records, while maintaining rigorous privacy standards, saving billions of dollars and countless lives. We'll focus on prevention and keeping millions of Americans from having to set into the doctor's office in the first place.

Taken together with the earlier enactment this month of long- delayed laws to extend health care to millions of more children of working families, we've done more in 30 days to advance the cause of health care reform than this country has done in a decade.


OBAMA: And because we know we can't power America's future on energy that's controlled by foreign dictators, we're making an investment that within three years will double the renewable energy output its taken us 35 years to reach.


OBAMA: We'll provide tax credits and loan guarantees to companies that create this energy, allowing them to expand rather than lay people off. We'll fund the Energy Efficiency and Conservation Block Grant you conceived, saving our cities and our consumers money.


OBAMA: We'll build a bigger, better, smarter electricity grid that delivers clean energy from communities that produce it to the cities that need it. So these are the steps we're taking to help you turn this crisis into opportunity and bring our cities into the future.

Now, Washington can't solve all the problems facing our cities, and I know you don't expect us to.

So I want to be clear about this: We cannot tolerate business as usual, not in Washington, not in our state capitals, not in America's cities and towns. We will use the new tools that the recovery act gives us to watch the taxpayers' money with more rigor and transparency than ever. If a...

(CHEERING AND APPLAUSE) OBAMA: If a federal agency proposes a project that will waste that money, I will not hesitate to call them out on it and put a stop to it. I want everybody here to be on notice that, if a local government does the same, I will call them out on it and use the full power of my office and our administration to stop it.

We have asked for the unprecedented trust of the American people to deal boldly with the greatest economic crisis we've seen in decades and the privilege of investing unprecedented amounts of their hard- earned money to address this crisis. And with that comes unprecedented obligations to spend that money wisely, free from politics and free from personal agendas. On this, I will not compromise or tolerate any shortcuts.

The American people are looking to us, each of you, as well as myself and Joe and others in our administration, for leadership, and it's up to us to reward their faith.


BLITZER: All right, a tough statement from the president of the United States.

Let's bring in our senior political analyst, Gloria Borger.

Gloria, our new CNN/Opinion Research Corporation President Obama asked this question: Is President Obama tough enough to handle a crisis? And 73 percent said yes; 24 percent said no.

That's pretty impressive.


You know, during the campaign, particularly early on, the question about candidate Obama was, was he tough enough? And now it's very clear, Wolf, that the American people have decided that he is tough enough. And I think that's the result of the fact that they understand we're in a economic crisis. They see a president who is acting. And they like the fact that he's got ideas and that he's acting.

They also see him as able to manage the crisis. Our poll also shows that 80 percent of the public believe that he's a strong leader. And when you're president of the United States, that's the most important number you can have, because, if people think you're strong, they will give you the benefit of the doubt.

BLITZER: The other question, another question we asked was: Can President Obama bring the kind of change the country needs?

Now, back in December, it was 75 percent...


BLITZER: ... who said yes. It's now slipped a little bit to 69 percent. What do you make of that? BORGER: Well, I think it's a bit of a slide, and I think it's because people are more skeptical about whether the president can do everything that he had told us he was going to do during the campaign.

First of all, in terms of policy, they understand there has to be some limits, because we're in an economic crisis. And, also, in terms of politics, they understand that he wasn't able to get Republican support. Can't bring change to Washington that way.

BLITZER: Still, 69 percent is not bad.

BORGER: A bit of a slide, but very good, yes.

BLITZER: A little bit of a slide, yes. Still pretty good.

All right, Gloria, stand by. Thank you.

On the hunt for Osama bin Laden -- a possible hiding place found by, of all people, a professor in Los Angeles. He's tracking the fugitive al Qaeda leader in a surprising way.

Plus, what does Jesus have to do with the economic stimulus plan? An ad that presses some hot buttons, that's coming up in out "Strategy Session."

And the bullet was coming at her, but she was saved by her hair. We will tell you what happened -- right here in THE SITUATION ROOM.


BLITZER: It's an alleged investment fraud scheme that is causing alarm around the world, at the center, the billionaire financier Robert Allen Stanford.

Today, regulators in Antigua and Barbados took control of two of his financial institutions, this after the FBI found Stanford yesterday and notified him of serious allegations. But where Stanford was actually found has many people talking.

CNN's Jeanne Meserve has more -- Jeanne.


JEANNE MESERVE, CNN HOMELAND SECURITY CORRESPONDENT: Wolf, Fredericksburg played a prominent role during Colonial times and the Civil War, but recent events give the phrase "rich history" a new meaning.

(voice-over): Jet-setting billionaire Robert Allen Stanford seen on Sky News cavorting at a cricket match, but quaint Fredericksburg, Virginia, is where the FBI found him and served papers alleging he engaged in a $9.2 billion fraud scheme. His girlfriend's mother lives here.

At a Fredericksburg espresso shop, shocked locals speculated about why Stanford chose to hide out in this community, midway between Washington and Richmond.

LINDA WESTERMANN, LOCAL RESIDENT; You're near a lot of transportation. You know, you can hop a flight from three different airports -- or four different airports, actually. You're on a major artery.

MESERVE: Brothers Graham and Kenyan Coble found the case a sad commentary.

KENYAN COBLE, LOCAL RESIDENT: It's another story about another crook who has -- from what I understand, has walked off with a lot of people's money. That's disturbing. That's really sad.

GRAHAM COBLE, LOCAL RESIDENT: Kind of a sign of the times, though. There's more of these kind of people all the time. We're just now finding them. That's all.

MESERVE: The Securities and Exchange Commission alleges that Stanford sold certificates of deposit, promising improbable and unsubstantiated high interest rates. The news prompted a run on Stanford's banks in Antigua and Venezuela. And regulars in both countries have now seized control.

Stanford is surrendering his passport to the Department of Justice, but he wasn't arrest. There are no criminal charges against him. In Texas, his father, 81-year-old James Stanford, described his son as ambitious and highly aggressive, but said he knew nothing about any wrongful business dealings.

JAMES STANFORD, FATHER OF ROBERT ALLEN STANFORD: If I could tell him anything, Allen, call me and just do the right thing, whatever it is.

MESERVE (on camera): Where is Stanford now? If his girlfriend's relatives know, they are not saying -- Wolf.


BLITZER: All right, Jeanne, thank you.

And I want to just point out that federal law enforcement officials continue to stress that Stanford is in no way hiding, and they will be able to contact him if and when necessary. They're saying -- and I'm quoting now -- that, "We don't need to know where he is every minute." That's a direct quote.

What's going on in terms of all these people losing jobs is causing a lot of heartburn for a lot of American families. And a lot of men are losing their jobs. And they're leaving -- that's leaving the wives in rather difficult positions, as well.

Let's go to CNN's Mary Snow.

It seems like what is going on is causing some major ripples in the -- in the normal family life, should we say, Mary?

MARY SNOW, CNN CORRESPONDENT: It certainly is, Wolf.

An economist for the Center For American Progress has crunched the numbers. Since the recession began, in December 2007, men have lost 80 percent of the jobs that have been cut, meaning the dynamics are changing for millions of American families.




SHELTON: We will see you.


SNOW (voice-over): The economic crisis has shifted the ground for Susan and Michael Shelton.

SHELTON: My role is now, in addition to looking for a job, I'm a -- I'm a house dad. My wife is now -- instead of being the house mom, she's now the -- the breadwinner.

I guess we should go ahead and feed the dogs.

SNOW: Michael Shelton lost his job as a sales manager in January.

UNIDENTIFIED FEMALE: How was your day?

SCHWAB SHELTON: It was good.

SNOW: Susan, who used to work part-time, now works two jobs.

SCHWAB SHELTON: I will be, you know, out of the house six to seven days every week. So, that is very different, and -- and getting home much later.

SNOW: Michael is now running their home in Los Olivos, California, taking care of their two children and dogs.

SHELTON: All the things that, to be perfectly honest, I used to take for granted is now, you know, my responsibility. So, easing into that is -- is proving challenging for me.

SNOW: Michael scours job postings, hoping to find work soon.

DR. ELIZABETH WILSON, PHYSICIAN: Look, that's it. We're almost there.

SNOW: But ask another family in the same situation, and Adam Ostrow can tell you, be prepared for the long haul.

ADAM OSTROW, UNEMPLOYED: It feels a little bit like I'm swimming very much upstream. SNOW: Adam has been out of work for a year, an early casualty of the credit crunch in New York's financial industry. His primary job now is to take care of sons Isaac (ph) and William (ph).

And, Elizabeth, who is a physician, is the sole breadwinner, changing life as they knew it.

WILSON: I went in November once to pick up Isaac (ph) from school, and the teacher didn't know who I was.

SNOW: The family is now moving to Massachusetts, where Elizabeth could get a new job, and it will be more affordable to live.

What has happened to the Ostrow and Shelton family, says one economist, is likely to be happening to millions more.

HEATHER BOUSHEY, SENIOR ECONOMIST, CENTER FOR AMERICAN PROGRESS: You have seen more and more men lose their jobs. And you have seen some women lose their jobs, but not as many as men. And you have also seen that, once those men get out of work, they have had a very difficult time getting back into the -- the labor market.

SNOW: One reason men are harder-hit, male-dominated industries, like construction and manufacturing, have had big job losses because of the collapse in the housing bubble.


SNOW: And economists point out, Wolf, that, with more families depending on a woman's salary, they're also living on less money, since women, on average, lag behind men when it comes to pay -- Wolf.

BLITZER: Mary Snow reporting, thank you.

So, why would someone invoke the name of Jesus when talking about the economic plan? Wait until you see this unusual ad?

And the first lady, she is over at the Department of Transportation today. You're going to hear from Michelle Obama, in her own words -- all that coming up.


BLITZER: Let's get to our "Strategy Session."

Joining us now, the Democratic strategist Jennifer Palmieri, and CNN contributor the Republican strategist Leslie Sanchez.

I'm going to play a little ad that a conservative group called American Issues Project has released. Listen to this.


NARRATOR: Suppose you spent $1 million every single day starting from the day Jesus was born, and kept spending through today, $1 million a day for more than 2,000 years. You would still have spent less money than Congress just did.


BLITZER: All right. It's a pretty -- pretty significant ad, would you say?


I think that it is a clever talking point that probably makes Republicans feel better about having voted against the bill, but I don't know that it's a wise thing to open up. This is a debate that they took on and lost already.

They have already tried to argue that the stimulus bill was all spending. And they had some success with that early on, right, after the House passed the bill. And then Obama came back around and said, this is going to create three to four million jobs and showed how. And he turned public opinion around.

So, and I'm never sure that it's really advisable to use Jesus in a political ad.

BLITZER: Well, was that a mistake, to bring the name of Jesus into this kind of political ad?

LESLIE SANCHEZ, CNN POLITICAL CONTRIBUTOR: I think, for the people that it's speaking to, not at all. People -- you know, a lot of people use Jesus' name every day.

And this is a context of the debate. And it's interesting. In conservative circles, this is something we talked about. And it gave context to just how much our federal governor was spending.

PALMIERI: It's clever in that regard.

SANCHEZ: It's clever in that way, but there's two points.

With respect to that, I think Charlie Cook has a very good piece today where he's talking about, at what point do you stop blaming the Bush administration and Obama has to take ownership of this? He's taken ownership of the stimulus package. Thirty-eight percent, according to a Rasmussen poll, said that they don't -- or only 38 percent believe it's going to change in terms of economic stimulus.

And there's a fundamental disconnect between -- it's a good debate in terms of government, the role of government, tax and spend -- tax cuts or spending our way out of it. And -- and it's going to continue.

PALMIERI: But I think that -- I mean, what's interesting is, I think that it is -- I mean, I understand that's their strategy -- I think it's probably a flawed strategy, but what is so interesting to me is the Republican governors that want to refuse this aide.

I understand Governor Jindal said today that he wasn't going to take... (CROSSTALK)

BLITZER: Part of it. He will take some of it.

PALMIERI: But he's not going to take unemployment insurance?

BLITZER: But parts that would have some -- some -- he says he wouldn't take parts that have requirements on states to do things they shouldn't have to do. That part, he would like to reject. The part for infrastructure, roads, bridges, that part, he would very much like to accept.

PALMIERI: But I don't -- the idea that -- I think -- I mean, I understand what they think they're doing, in terms of being -- as a political strategy, but the idea that you would refuse aide, I think, as Congressman Clyburn spoke to, in this time, when things are so difficult, I -- I just don't think that's going to be received well.

SANCHEZ: But it's not aide that doesn't have strings attached.

I think there's many on the Republican side that believe this is the third New Deal, that three times is a charm. They don't believe, in terms of these federal, large programs, they don't believe they were particularly effective the first time.


BLITZER: All right.

PALMIERI: But this is all about -- this is all about 2012. This is all about the Republican presidential primary.


BLITZER: I want to read to you -- because there's a bigger question here. And Peggy Noonan raises it...


BLITZER: ... in her "Wall Street Journal" op-ed.

"Our political leaders for at least a decade, really more, have, by and large, been men and women who had fortunate lives, who always seemed to expect nice things to happen and happiness to occur. And, so, they could overspend, overcommit and overextend the military, and it would all turn out fine."

Basically, what Peggy Noonan is saying, you know, these people who -- who make these decisions aren't living in the real world, a world where people are struggling on a day-to-day basis.

SANCHEZ: To some extent, I believe that's correct.

PALMIERI: Yes, right.

SANCHEZ: I think we're going to both agree on that part. You know, at some -- at one point, 90 percent of the executive class in this country was white. I think that has changed very much. And to the extent that people understand their experiences, I would go back. You talk about the governor -- Governor Jindal, very good leader, very high rating, understands his community, and is trying to do the right thing for this generation and for future ones.

BLITZER: All right, very quickly.


PALMIERI: I agree with -- I mean, I agree with what she -- I agree Peggy Noonan's premise, but I think that what it shows -- I mean, that's why I think it's a mistake for governors to refuse aide when it's offered to them. They don't understand what it's like to not have unemployment, to not...


PALMIERI: I think -- that's why I think it's so risky.

SANCHEZ: ... every day. I think they are the most connected to their constituents.

BLITZER: Most of those governors will take all the money they can get.



BLITZER: All right, guys, thanks very much for that.

Bill Clinton has made and has acknowledged his share of mistakes. Here's the question. Should he be going public with his advice to President Obama? It's Jack Cafferty's question. He's getting tons of e-mail. Stand by.

Later, a rare behind-the-scenes look at a cyber-lab cracking down on Internet crime.

And it could be a boon for states and a nightmare for many motorists. What if you were taxed for every mile you drive?

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


BLITZER: Let's get right back to Jack Cafferty for "The Cafferty File" -- Jack.

CAFFERTY: The question this hour, Wolf: How helpful is it for Bill Clinton to publicly give President Obama advice on how to do his job?

Doug in Indiana writes: "Past presidents are a valuable, unique source of insight, advice and wisdom. If I were elected president, I would invite those guys over for a beer on a regular basis. Unless Obama is a bigger egomaniac than he is willing to admit, this won't be a problem for him."

Michael says: "Jack, Bill Clinton is the guy who retires from a company after 20 years of service, but still shows up every day just to let people know he can't be replaced. Bill, we get it. You were a great president. Now, can we all get back to work?"

Carol writes from Butte, Montana, "It can't hurt to put on a more positive face when talking about the economy, especially if his own -- Obama's -- "attorney general persists in upbraiding Americans as cowards."

Richard in Michigan writes: "The president already has enough trouble on his hands wondering what Biden is going to blurt out next. He doesn't need double trouble, which Clinton might give him at any time. Clinton's time has come and gone. Anything he has to say should be kept private."

Christopher says, "Since Clinton was the last successful president of the United States, of course Obama should take advice from him."

Mark says: "Bill just can't help himself. He has to be the center of attention. If he wants to help President Obama, pass the advice privately. I'm sure Hillary will take his call if he can't get Barack Obama's BlackBerry number. There is a reason we only have one president at a time. The job of ex-presidents is to go to funerals when the vice president isn't available. Earth to Bill: Shut up and go home."

Will in California: "Jack, how helpful would you find it if Wolf started telling you how to do your job?"

And E. writes: "Jack Cafferty is dumb and ignorant. He is so fascinated by Bill and Hillary Clinton, that he loses his mind. CNN, please fire Jack Cafferty. He makes your network stink."

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

BLITZER: I totally disagree with that last e-mail.



BLITZER: All right, but listen to -- I want you to listen to this for a second, Jack.

Listen to this.




BLITZER: That's my kind of music.

Earth, Wind and Fire, the group that was hot in the '70s, still hot as far as I'm concerned, it will be on fire Sunday night over at the White House. The president has invited the group to perform during his special dinner for the nation's governors.

Jack, what do you think?

CAFFERTY: That's -- they need that -- that kind of music and that kind of group to rock that place after the Bush infestation.


BLITZER: I -- I would -- I'm looking forward to that performance.

CAFFERTY: Oh, it's great.

BLITZER: Unfortunately, I don't think I will be invited.

CAFFERTY: Well, maybe you can get a recording.

BLITZER: I hope so.


BLITZER: Earth, Wind and Fire.

CAFFERTY: It's good stuff.

BLITZER: Good song.

All right, guys, thank you.