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Nuclear Ally "Back from the Brink"; President Obama: Block These Bonuses; Red Cross Hits CIA Torture; Tough Time for a Honeymoon

Aired March 16, 2009 - 17:00   ET


WOLF BLITZER, HOST: Happening now, from curious protests to celebrations -- under U.S. pressure, a nuclear-armed ally makes a major compromise and pulls back from the brink of disaster.

From the unemployment line to fixing windmills -- could green power jobs help pull America out of the recession?

We'll take you to the top of the mountain on the road to rescue.

And what set hundreds of top model wannabes fleeing and fighting for their lives?

A reality show tryout gets a lot more reality than anyone bargained for.

I'm Wolf Blitzer.


A nuclear-armed U.S. ally made a major concession today, heading off a massive showdown. Protesters in Pakistan who were ready to march on the capital were instead cheering today. That came after the Obama administration turned up the heat.

Let's go to our foreign affairs correspondent, Jill Dougherty.

She's over at the State Department with details -- Jill.

JILL DOUGHERTY, CNN FOREIGN AFFAIRS CORRESPONDENT: Wolf, ask almost anyone over here at the State Department and they'll tell you, Pakistan is lurching from one crisis to another. And now, with this latest one, Secretary of State Clinton is using the power of the purse strings to help resolve it.


DOUGHERTY (voice-over): An angry showdown in Pakistan -- activists, lawyers, political opponents take to the streets, demanding the reinstatement of a supreme court justice. President Asif Ali Zardari caves.

But was it U.S. pressure that brought the country, as the State Department puts it, back from the brink?

HILLARY RODHAM CLINTON, SECRETARY OF STATE: We are going to continue our very close working relationship with the government and a number of Pakistani leaders in the days and weeks ahead.

DOUGHERTY: A week of diplomatic arm-twisting. U.S. envoy Richard Holbrooke, the U.S. ambassador and, finally, Secretary of State Hillary Clinton herself, warning the Pakistani leader the U.S. Congress could cut off aid if the political turmoil distracted his government from the number one goal -- fighting Al Qaeda and the Taliban.

CLINTON: I think they understand what's at stake.

DOUGHERTY: Pakistan's ambassador claims the country is back on track.

HUSAIN HAQQANI, PAKISTANI AMBASSADOR TO UNITED STATES: Pakistan has gone from confrontation back to conciliation, which is what the entire nation wants.

DOUGHERTY: But some Pakistan watchers say President Zardari has been weakened and more crises are looming.

LISA CURTIS, HERITAGE FOUNDATION: You have parts of the Northwest Frontier Province that are falling to Taliban forces. The military is unable to -- to control some of these regions. That's alarming. Pakistan's economy is on the verge of bankruptcy. That's alarming.


DOUGHERTY: And all of this extraordinary dangerous in a country with nuclear weapons -- Wolf.

BLITZER: Jill, have things have been calm since this decision came down?

DOUGHERTY: No, actually, not really.

Let's look at this violence. There was a suicide bombing in Rawalpindi, killing at least a dozen people. And that home -- that is, by the way, the home to the general headquarters of the Pakistani Army -- Wolf.

BLITZER: All right, Jill.

Thank you.

Meanwhile, a giant company bailed out by billions of dollars -- your money, your taxpayer money pays out $165 million in bonuses. President Obama calls that an outrage to American taxpayers. But it remains to be seen whether the government can actually put a stop to it on the road to rescue.

Let's bring in our senior political correspondent, Candy Crowley.

This is a story that's generating lots of outrage.

CANDY CROWLEY, CNN SENIOR POLITICAL CORRESPONDENT: And from all over. You know, Wolf, New York Attorney General Andrew Cuomo wants names and information on who's getting how much in bonuses at AIG and whether any of them played a part in the mess that AIG has become -- just one of many politicians wailing on the company.


CROWLEY (voice-over): U.S. taxpayers own 80 percent of AIG -- one of the world's biggest insurers. So its decision to hand out $165 million in bonuses sends the president to the microphone.

BARACK OBAMA, PRESIDENT OF THE UNITED STATES: AIG has received substantial sums from the U.S. Treasury. And I've asked Secretary Geithner to use that leverage and pursue every single legal avenue to block these bonuses and make the American taxpayers whole.

CROWLEY: Unclear exactly what Secretary Geithner can do. He already tried to stop the bonuses. The AIG chairman, who did not get a bonus and was brought in to clean up after the bonuses were put in place, told Geithner no can do: "AIG's hands are tied," Edward Libby wrote. "Outside counsel has advised that these are legal, binding obligations."

Over the weekend, as the checks were being cut, the White House economic adviser told CBS the contracts were signed before any federal money was spent, so pretty much case closed.


UNIDENTIFIED MALE: We're not a country where contracts just get abrogated willy-nilly. And if we were to start doing that, there would be, potentially, very destabilizing consequences.


CROWLEY: Big banks and big companies getting big taxpayer bucks are bad business for politicians. Despite an almost 60 percent approval rating for the way the president's handling the economy, a CNN/Opinion Research Corporation poll shows only 47 percent approve of how he's handling the banks. They are numbers that have the White House worrying about blowback from the AIG bonuses. That's why the president is channeling Main Street.

OBAMA: And this is not just a matter of dollars and cents. It's about our fundamental values.

CROWLEY: Woe be to the politician that doesn't scream from the rooftops on this one.

SEN. HARRY REID (D-NV), MAJORITY LEADER: These executive bonuses are beyond even outrageous. I don't know what a term is that is more definitive than outrageous, but outrageous does the trick.

SEN. MITCH MCCONNELL (R-KY), MINORITY LEADER: This is absolutely appalling.

OBAMA: Excuse me, I'm choked up with anger here.

CROWLEY: Say this for AIG -- it's done a lot more bipartisanship.


CROWLEY: And one more note. In that letter, AIG Chairman Liddy said many top contract employees have limited their salaries and he will do more about, going forward, to look at those bonuses. Still, he warned that AIG can't attract and keep the best and the brightest if employees think their salary is subject to what Liddy called "arbitrary adjustment by the Treasury Department."

BLITZER: Yes, but if the U.S. government -- if we own 80 percent of this company, you'd think we -- meaning the American people -- would have a say in what the company does from here on out.

CROWLEY: Absolutely. And Liddy sort of acknowledged that in terms of look, we'll go back, we'll look at these bonuses. We continue do anything about the ones that are in place, for which they have already cut the checks. And he'll look at it going forward.

But they see a business reason why this might not help, because they want to bring in all these people to like bail out AIG.

So it's a -- you know, it's a fine line here. But, you know, the problem is that politically, you cannot stand behind these bonuses as a politician. There's just no way.

BLITZER: Yes. The only way would be if the people who were getting them were really the most productive people -- the saviors of this company, saving all of our taxpayer dollars. But apparently some of the people getting these bonuses...

CROWLEY: The cause of the problem.

BLITZER: ...were the ones responsible...

CROWLEY: Absolutely.

BLITZER: ...for causing this.

CROWLEY: Which makes it just double -- a double problem. Absolutely.

BLITZER: All right. Candy, thanks very much.

Let's go to Jack Cafferty.

He's got The Cafferty File -- Jack.

CAFFERTY: Can't attract the best and the brightest?

Best and brightest what?

The company is in the toilet. I mean I -- the people running it have run it into the ground and we're on the hook, us taxpayers, for hundreds of billions of dollars to these clowns and we're supposed to pay bonuses to these people? I mean you don't have to be a politician. That flies in the face of elementary logic that a third grader could understand.

Former Vice President Dick Cheney suggests President Obama is endangering the American people by reversing some of the Bush administration's anti-terror policies.

Speaking to CNN's John King, Cheney said that harsh interrogations of terror suspects and the use of warrantless electronic surveillance were: "absolutely essential" to get information that prevented more 9/11-like attacks.

Cheney says Mr. Obama is making some choices that in his, Cheney's mind: "will, in fact, raise the risk to the American people of another attack."

Since taking office, President Obama has announced plans to close the prison at Guantanamo Bay, halt military trials of suspected terrorists there and make CIA officers follow the Army Field Manual's rules on interrogations.

Critics of the Bush administration have said the so-called alternative interrogation techniques -- things like waterboarding -- amounted to torture and that the warrantless wiretapping violated laws that were specifically enacted after Watergate.

Meanwhile, a secret 2007 report by the Red Cross suggests treatment of Al Qaeda captives constituted torture. The report alleges detainees were beaten, doused with cold water, slammed head first into walls during interrogations. At other times, they were stripped of clothing, bombarded with loud music, exposed to cold temperatures and deprived of sleep and food for days at time. Some captives say they were forced to stand for days with their arms shackled, wearing only diapers.

The Red Cross would not comment on the authenticity of the report.

You may recall, the Bush White House repeatedly promised the United States: "does not torture."

Here's the question -- is former Vice President Dick Cheney right that President Obama's policies raise the risk of a terror attack in the United States?

Go to and post a comment on my blog -- Wolf.

BLITZER: You're about to be bombarded with comments, Jack.

CAFFERTY: I think. I think you might be right.

BLITZER: All right. Stand by.

Tough talk from President Obama today -- tougher talk from one of his advisers.


AUSTAN GOOLSBEE, WHITE HOUSE COUNCIL OF ECONOMIC ADVISERS: This AIG, it's almost like these guys should have gotten the Nobel Prize for evil.


BLITZER: A bailout recipient hands out millions in bonuses -- I'll ask the White House economic adviser, Austan Goolsbee, why the government is so angry at the insurance giant, AIG.

Plus, fixing windmills on a mountain top -- could green power jobs like this help put America on the road to rescue?

We're on the scene.

And terror at a reality show tryout -- why hundreds of would-be top models went running for their lives.


BLITZER: While America is on the road to rescue, one company is taking billions in bailout dollars with one hand and paying out huge bonuses with the other. That move by the insurance giant AIG led to a tongue-lashing by President Obama today and even tougher language from a top White House economic adviser. That would be Austin Goolsbee.

Here's joining us now from the White House.

Austan, here's what you said earlier today.

I'll play the little clip.


GOOLSBEE: This AIG, it's almost like these guys should have gotten the Nobel Prize for evil.


BLITZER: All right, explain.

GOOLSBEE: Well, what I was talking about was the financial products division, where AIG essentially was an insurance company that strapped a hedge fund on its back that ran wild and with the credit default swaps and other financial products, brought multi-hundred billion dollar obligations onto the American taxpayer.

And now, this same group have given themselves multi-million dollar bonuses. And boy, after the year that they have just had, I found that to be pretty -- pretty cheesy.

BLITZER: Can the president stop those bonuses from going forward, legally?

GOOLSBEE: Well, I'm not a lawyer, so I don't know what the exact answer to that is. But I know the president was pretty upset about it and Secretary Geithner was pretty upset. The president told the secretary to take every legal means that he has -- to put pressure on them, to examine how this -- how these things got into their contracts, what options is he allowed to pursue and that they're going to try to claw them back.

BLITZER: Well, if we -- if we own 80 percent -- 80 percent of the company, why can't we just tell them you can't do it?

And as opposed to, as you say, try to claw it back -- meaning the money has gone out and then try to get it back from these guys?

GOOLSBEE: Well, Wolf, as I say, I'm not a lawyer, so I don't exactly know. But my understanding is that the chairman of AIG says this was written into their contracts and that their hands are legally tied. So they're looking at all matter of influence and persuasion. They're looking at things like who put this into the contracts and when were they put in.

As I'm sure you remember, the bailout occurred under the last administration. And I think it's important that we know, did these things get put into the contract after that bailout occurred, so they were just trying to ensure that they were going to get this money no matter how they performed?

And, ultimately, this is about more than just being angry. This is just bad policy.

BLITZER: Well, let me interrupt for a second...

GOOLSBEE: I mean in the market system...

BLITZER: Let me interrupt, Austan.

GOOLSBEE: Yes, sure.

BLITZER: Explain -- because I get so many e-mails from people saying why give hundreds of billions of dollars or whatever it's been -- $160 billion or $170 billion to AIG?

Why not simply let it collapse, if they've done these horrible deals?

GOOLSBEE: Well, look, I wasn't in the administration, obviously, when they did that. But the financial rescues, they only ever grudgingly do them. And it's only to prevent the collapse of the financial system.

So in a circumstance like this, if you're going to do something to cover up for some huge blunder that these guys have committed, you've got to have some buy in on the part of the executives at these companies that they're going to play by the rules. I mean this seems like totally outrageous.

BLITZER: Let's talk about another story that's out there right now. You saw -- you probably saw it over the weekend, that the president may be open to doing something that he adamantly rejected during the campaign -- taxing individual's health insurance benefits from major corporations. If, for example, an employer pays $500 a month, let's say, for someone's health insurance, that would be about $6,000 a year. But it would be seen, under this proposal, as income -- taxable income.

Now is the president open to allowing this kind of proposal to go through?

GOOLSBEE: Well, Wolf, I saw the article that you mentioned, I thought it was highly overstated. That's not the president's proposal. It's not in his budget. He opposed that in the campaign. And the fact is what he said -- and an administration official was quoted -- they said all ideas are on the table and we will look at anything that forwards his goal.

His goal is quality, affordable coverage for all Americans. He's open to entertain any policy that backs that goal. And anything that doesn't, he's against it.

BLITZER: Well, just to be precise, if the Congress passed this proposal -- this hypothetical proposal to tax health insurance benefits that your company gives the worker, would the president veto it?

GOOLSBEE: Look, as I said, I'm not speculating about hypotheticals. He laid out he's open to consider all options, so long as they back his principles for health insurance. And this article claiming that this was, in some sense, a new presidential policy was -- was deeply misguided.

BLITZER: Austan Goolsbee coming to us from the White House.

Thank you, Austan, for coming in.

GOOLSBEE: Nice talking to you again.

BLITZER: An HIV/AIDS rate higher than some nations in Africa, but that's right there in Washington, D.C. . The nation's capital facing an urgent health crisis.

Plus, is the Obama administration leaving America unsafe?

The former vice president, Dick Cheney, here on CNN pulling no punches. Democratic strategist Paul Begala is here. He's not holding back, either.

Stay with us.



BLITZER: Zain Verjee is monitoring some other important stories incoming into THE SITUATION ROOM right now -- Zain, what's going on? VERJEE: Wolf, this just into THE SITUATION ROOM -- Bernie Madoff's mug shot. Take a look at this. CNN has obtained the mug shot from the U.S. Department of Justice. Madoff pleaded guilty last Thursday to operating an investment fraud. He faces up to 150 years in prison when he's sentenced in June.

The U.S. military says fighter jets shot down an Iranian drone aircraft over Iraq last month. Officials say two F-16 fighters trailed the drone as it flew inside Iraqi airspace for about an hour, before just taking it down. A Pentagon official tells CNN the unmanned plane had no weapons and was strictly for spying.

On Monday, Wolf, you're going to know a little bit more about where your apples were grown or where your chicken was raised. A new food labeling law requires the information on most fresh meats and fresh produce. Some meats would list where the animal was born, raised and slaughtered.

And, Wolf, 700 Australian swimmers were competing in a race. They were just rounding Shark Island when someone spotted two sharks. A helicopter hovered above and eventually they scared away the hammerhead shark, which was pretty close to the swimmers, and then another smaller shark, which was swimming underneath them. Most of the swimmers finished the race. They didn't even know that the sharks were around. They were unaware of that drama.

Sydney has had three shark attacks recently.

Have you ever swum anywhere, Wolf, and a shark was nearby?

BLITZER: No. I have not. I know you have, Zain.


BLITZER: You're much more courageous than I am.


BLITZER: I thank you.

VERJEE: Dolphins, not sharks.

BLITZER: Zain Verjee will be back with you shortly.

Meanwhile, beatings, waterboarding, sleep depravation -- a secret Red Cross report said to detail the torture of top terror detainees at CIA prisons. Those detainees were reportedly told they were being taken to the verge of death and back.

Let's bring in our homeland security correspondent, Jeanne Meserve.

She's working the story for us -- pretty tough stuff here.

JEANNE MESERVE, HOMELAND SECURITY CORRESPONDENT: It is. Wolf, you'll recognize this face. This is Abu Zubaydah. He is one of 14 high value detainees who described to the International Red Cross how they were treated by the U.S. at in secret overseas prisons.

Now that report appears to have been leaked.



MESERVE (voice-over): But a story published in the "New York Review of Books" quotes a confidential report by the International Committee of the Red Cross as saying ill treatment of 14 "high value" detainees at secret CIA prisons around the world constituted torture.

Writer Mark Danner obtained the report.

MARK DANNER, "NEW YORK REVIEW OF BOOKS": They were strictly kept apart. So the very fact that all of these accounts match minutely in what they describe adds a great deal of credibility to what they say.

MESERVE: The ICRC will not comment on the authenticity of the report quoted by Danner. In it, Abu Zubaydah, a senior member of al Qaeda, purportedly says: "One of the interrogators wrapped a towel around my neck. They then used it to swing me around and smash me repeatedly against the hard walls of the room."

Zubaydah also describes waterboarding, which simulates drowning, saying: "I thought I was going to die."

Another detainee, Walid bin Attash, allegedly assisted with planning 9/11. He describes being put on a plastic sheet: "Cold water was then poured on my body with buckets. I would be kept wrapped inside the sheet with the cold water for several minutes."

The ICRC fears that because confidentiality appears to have been breached, it will be tougher to win cooperation for other investigations.

BERNARD BARRETT, INTERNATIONAL COMMITTEE OF THE RED CROSS: When we are trying to get access to places, if people don't want to let us in, this could be used an excuse to bar us.


MESERVE: The CIA had no comment, but referred us to previous statements that its interrogation measures have been lawful, safe and effective -- Wolf.

BLITZER: Anybody raising doubts about the authenticity of this report?

MESERVE: Yes. We talked to one individual within the intelligence community. He said, listen, take this with a grain of salt. These are suspected terrorists we're talking about. But Mark Danner brings out, as you heard in that piece, their stories are consistent. He feels that gives it credibility.

BLITZER: Thanks very much, Jeanne.

Jeanne Meserve reporting.

Sarah Palin headed to Washington -- will she be making regular appearances here in the capital with an eye toward 2012?

Plus, what set hundreds of top model wannabes running for their lives?

A reality show tryout gets a lot more reality than anyone counted on.


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

Happening now, federal prosecutors go after Bernard Madoff's assets, including homes, cars, jewelry, everything else. The goal -- to give investors back some of the billions Madoff swindled from them.

The Russian military floating the idea of landing strategic bombers in Cuba.

What are the chances of a new Cuban missile crisis?

And in the skies over California, wind generates electricity and employment.

Are green collar jobs one way out of the economic blues?

We'll get the view from above.

I'm Wolf Blitzer.


On the road to rescue, what's the most important economic issue facing the country today?

According to our brand new CNN/Opinion Research Corporation poll, for 36 percent of the public, the biggest worry is unemployment. Others list inflation, the mortgage crisis and the stock market, in that order.

Let's bring in our CNN senior political analyst, Bill Schneider -- what else are we seeing, Bill, in these -- this new poll?


Isn't that what honeymoons are about?


SCHNEIDER (voice-over): It's a tough time for a honeymoon.

UNIDENTIFIED MALE: We've never had four straight months of job losses.

SCHNEIDER: And speaking of jobs, what do Americans think of the way President Obama is handling his job?

Sixty-four percent approval. That's down a bit from President Obama's post-inauguration peak, but it's higher than any of his four predecessors after 50 days.

Mr. Obama gets his highest ratings -- over 60 percent -- for helping the middle class, handling unemployment and taxes, usually not such a good issue for Democrats.

The president gets close to 60 percent approval on the economy.

His highest ratings are on issues that relate to people.

UNIDENTIFIED MALE: And I introduce to you our president of the United States of America, President Barack Obama.

SCHNEIDER: The public is divided over the president's handling of the deficit, problems facing banks and problems facing the auto industry. Those are institutions.

OBAMA: I believe the nation that invented the automobile cannot walk away from it.

SCHNEIDER: Taxpayers don't like to see their money used to bail out failed institutions.

How many Americans share this sentiment?

RUSH LIMBAUGH, CONSERVATIVE RADIO TALK SHOW HOST: I want Barack Obama to fail if his mission is to restructure and reform this country so that capitalism and individual liberty are not its foundation.

Why would I want that to succeed?


SCHNEIDER: Only 11 percent, 86 percent of Americans have high hopes for President Obama and great expectations. 64 percent believe Mr. Obama's policies are likely to succeed.


SCHNEIDER: More than 70 percent of republicans say they hope President Obama's policies do succeed. That's republicans. But only about a third of republicans expect the president's policies to succeed. Republicans are hopeful, but skeptical. Wolf?

WOLF BLITZER, CNN ANCHOR: All right, Bill, thank you.

Let's talk about this and more. But one of the subjects I really want to get into is the former Vice President Dick Cheney taking some heat for his interview yesterday with CNN's John King. During that one-on-one exchange, the former vice president strongly defended the Bush administration's anti-terror policies, its invasion of Iraq, its economic record. Let's discuss this and more with our democratic strategist and CNN political contributor Paul Begala and from Richmond, Virginia, Frank Donatelli. He's chairman of the GOPEC national organization dedicated to electing republicans to state and local offices. Guys thank you very much for coming in. Let me play this exchange that John King had with the former vice president.

JOHN KING, CNN CORRESPONDENT: Do you believe the president of the United States has made Americans less safe?

DICK CHENEY, FORMER VICE PRESIDENT: I do. I think those programs were absolutely essential to the success we enjoy, of being able to collect the intelligence that led us to defeat all attacks against the United States since 9/11.

BLITZER: Earlier today, our white house correspondent Ed Henry asked Robert Gibbs the press secretary this.

ED HENRY, CNN WHITE HOUSE CORRESPONDENT: Former Vice President Cheney was on the State of the Union yesterday and a lot of criticism of this white house. To boil it down, on national security, he said that the president's policies were making the country less safe. And on the economy, he was charging the president taking advantage of the financial crisis to vastly expand the government in all kinds of ways, health, education, energy. How do you respond to those allegations from the vice president?

ROBERT GIBBS, WHITE HOUSE PRESS SECRETARY: I guess Rush Limbaugh was busy. So they trotted out their next most popular member of the republican cabal.

BLITZER: You're laughing, Paul, its sounds like you could have written.

PAUL BEGALA, DEMOCRATIC STRATEGIST: Gibbs is a lot wittier than I am. I tell you that's the first time I have heard that tape. You know, he's right. I have to say as a political matter. Frank's old boss, Ronald Reagan, even after he retired and he was quite elderly then, every time he showed up it helped the republicans because he was Ronald Reagan. The country loved him. I didn't support his policies but we all loved the gipper. The truth is nobody loves Dick Cheney, and Gibbs or democrats like me, we're always happy to see Dick Cheney out there and to quote Mr. Cheney's old boss, bring it on. The more Dick Cheney is the face of the Republican Party, the more democrats are going to win elections.

BLITZER: All right. Frank, do you think Paul's right?

FRANK DONATELLI, FORMER DEPUTY CHAIRMAN OF THE RNC: Of course Paul's not right. We are not the party in power right now. So there are lots of spokesmen for the Republican Party. I'm glad the vice president is speaking out sometimes, but we have many other leaders, Bobbie Jindal, John McCain, there's lots of good republicans that are speaking out.

Let me just say this, Wolf, I know that the president's gotten a lot of criticism. The president got 9/11 right. It was under his leadership that after seven years we were never attacked again. And you can disagree with this policy or that policy, but the president, I think deserves a lot of credit for that.

The question going forward is, which of the policies is President Obama going to keep, and which is he going to discard? We really don't know right now.

BLITZER: What about the substantive point that the former vice president made, Paul, that President Obama is simply using this economic crisis right now as an excuse to make government bigger, to get, create health care, universal health care, that he's just taking advantage of this to secure what is a bigger democratic or liberal agenda?

BEGALA: It's really appalling. The vice president -- I wrote a commentary article about this for The notion that the vice president is comfortable with a federal government that can suspend free speech or arrest citizens without charges or can even torture, he's comfortable with the federal government having that power. But he doesn't think that the federal government has the power to write an insurance policy? Thank god he had government health insurance. That's why he's alive today, thank god for that. But it's spectacularly hypocritical for this man who thinks that the government should be so powerful that it can torture and suspend civil rights but not improve education or health care? It's really an incoherent and frightening frankly world view that Mr. Cheney showed in John King's interview.

BLITZER: On this economic issue, Frank, there are plenty of folks out there that say the president's simply going back to Ronald Reagan's playbook in the early '80s. There was an economic crisis underway then and he used that crisis to take advantage and to lower taxes sort of across the board, which was a much bigger economic agenda than he had as well. What's wrong with the president exploiting this agenda to secure his overall economic goals?

DONATELLI: Well, first off, Wolf, if the goal of the vice president was to suspend the constitution, thankfully he failed miserably because the constitution is very much in effect, just ask the president.

Now we come to this economy. Yes, President Reagan in 1981 felt that the way to get the economy moving again -- by the way in an economic situation that's worse than it is today -- is to shrink government, cut back spending and cut back taxes, and guess what? That worked.

We come now to this year, President Obama in my judgment, what he should have done was to try to fix the banks and get the credit system going again. Instead of that, he's come out with all these other programs. Cap and trade, healthcare bureaucracies, trillion dollar stimulus plan, you can say they're good or bad but I would just challenge you, what does that have to do with fixing the economy? It doesn't really have much to do it.

BLITZER: All right. Paul?

BEGALA: What President Obama believes, and I happen to think he's right, most Americans think he's right is that we have got to build sustainable growth. We have got to immediately staunch the bleeding, the hemorrhaging from the Bush Cheney economic policies and that means saving or creating three million jobs, cut taxes for 95 percent of folks, but then long-term, we have got to do something about energy, health care and education, or we will never have the kind of long-term prosperity we need.

Now Ronald Reagan had a plan and Frank just suggested one. This is what's different about the republicans today, they have no plan. They have a political strategy, but not an economic strategy and it's why I think the country is flocking to President Obama. He's got the only plan in town. The republicans have different ideas, they need to come forward and say, here's our proposed budget, here's our proposed economic plan and they won't do it. But John Boehner, the republican leader of the house, said our members have to get it out of their head that they are legislators. He wants them to simply be obstructionists opposing President Obama.

BLITZER: Very quickly Frank.

DONATELLI: I think that's wrong, the republicans did propose a different stimulus plan which focused on tax cuts and infrastructure as opposed to social policy and I think the republicans are going to come forward with other programs also. So we have an obligation to give an alternative and I think we are going to do that.

BEGALA: I bet you they won't, but I hope they listen to Frank, because we ought to have two different versions to choose from.

BLITZER: I think we'll have a great debate in the country. All right. Guys, thanks very much.

An HIV/AIDS rate worse than in some African nations, and that's right here in the nation's capital, Washington, D.C. facing a growing health crisis.

And the road to rescue reaching into California's mountains. Ted Rowlands is there.


TED ROWLANDS, CNN CORRESPONDENT: Wolf, we're on top of a wind turbine in California. We're talking green jobs. We're going to talk to a couple of jobs that lost their jobs that have new life in the wind industry. That's coming up.


BLITZER: Number of Americans are taking a crack at so-called green collar jobs as their new heading on their road to rescue, climbing and maintaining energy producing windmills for instance.

Let's go to CNN's Ted Rowlands right now. He's joining us from way, way up high. He's atop a turbine in South Central, California.

Ted, I take it there are some jobs available up there. But tell us, how high are you?

ROWLANDS: About 100 feet up in the air, Wolf, it's windy and for the novice, it's a bit scary, quite frankly. We're talking about becoming a wind technician. There are jobs out there around the country now and there are expected to be thousands of these jobs in this field in years to come with the investments in wind technology and wind energy especially with the upgrading of the energy grid. One guy that's been able to redefine himself is Mike Golds. He used to be a cabinet maker, you lost your job, Mike, tell us how you got here?

MIKE GOLDS: I got here because last spring I took the high school ROP program taught by Airstreams at their facility. I kept in touch with the instructor over the months and when I got laid off, I put a call into Mike and said, hey, if you guys know of anything up, let me know and they actually had an opening, and they offered it to me on the spot.

ROWLANDS: Jobs are available, right now, Wolf, they're saying in this industry around the country. Texas is a huge producer of wind energy, California, Iowa also a large producer, but the real jobs are coming in the future. And here's an example. This is Josh Gates. He just finished the training program to become a wind technician. He's from southern Utah and there's a wind farm going up where you were. You were a general contractor and you could not get enough work to sustain your family. You've got a young family, you've got one on the way and a two year old. Why'd you make this decision and you're happy you changed your life to get into the green world?

JOSH GATES, WIND TECHNICIAN: I made it just to, you know, like you said, I needed to support my family. I think that's most important. Tough times, and at first I was a little nervous, but it's really exciting. It's something that I didn't know too much about, but due to the national college in air stream, it's really helped me to get an understanding of what it's all about and it's exciting.

ROWLANDS: Are you planning on going back to Utah when the wind farm's up and running?

GATES: I hope so, maybe even help start building and who knows what the future will bring.

ROWLANDS: Good luck to Josh. Two examples of people that are redefining their lives, they lost their jobs, but they're finding new life in the green world. One thing, you can't be scared of heights. I definitely would not be cut out for this one.

BLITZER: How did you get up on top of that turbine?

ROWLANDS: We had to climb a ladder, what I'm dreading is climbing down. It takes a tough soul to do this.

BLITZER: The wind farms, maybe they could show us a wide picture. If the direction of the wind changes, can they pivot? ROWLANDS: Absolutely. They -- well, they can change the pitch of the blades and if the wind increases, sometimes it gets too hot, the wind is too strong, so they'll change the pitch of the blades to make it less, to let it spin less. It's amazing, the technology in all these and it's changing constantly, but yes the short answer is absolutely.

BLITZER: One thing we got a lot of is wind and solar power too. Let's hope it can work. All right Ted. Be careful climbing down that ladder over there. Good work. Thank you. He's one courageous reporter we have got. I don't think I would have done that.

A new report out today puts Washington, D.C. on alert. It says the nation's capital is under a health crisis of epidemic proportions, worse than in some African nations.

And a reality show audition turns dangerous. What could send 100 aspiring models on a wild stampede? We'll tell you right here on THE SITUATION ROOM.


BLITZER: There's new evidence of a rapidly growing health crisis right here in D.C. Let's go back to Zain. She's got details.

This is a very troubling report, Zain.

ZAIN VERJEE, CNN CORRESPONDENT: Yes Wolf. It's really a shocking report about HIV/AIDS ravaging Washington, D.C.


UNIDENTIFIED MALE: We are losing in the war against HIV and AIDS.

VERJEE: The rate of HIV/AIDS in the U.S. capital is higher than any other city in America and as bad or worse than some parts of Africa. Ron Simmons is HIV positive and says he's not shocked.

RON SIMMONS, AIDS ACTIVIST: We've been saying that D.C. has the highest rate in the country for years now. We just realized that it's much higher than we thought.

VERJEE: The new report by D.C.'s HIV/AIDS office, shows a 22 percent increase in cases since 2006, the worst ever in Washington, D.C. Three percent of residents are infected with HIV or AIDS and cases cut across race, gender, sexual orientation with the African American community hit hardest. According to the report, the highest incidence of HIV/AIDS resulted from men having sex with men, 37 percent. Heterosexual contact was blamed for 28 percent of the cases and drug use accounted for 18 percent.

SIMMONS: The important thing is to develop programs that will be effective for the people.

VERJEE: Some health experts say poverty's a key factor. JOHN BERMAN, MANAGEMENT SCIENCES FOR HEALTH: When you're a marginalized population, someone discriminated against, earning less than $10,000 a year, unemployed, so many things going on, you might not have access to services, you might not be getting the messages and communities may not be reaching out to you.


VERJEE: Some people may think three percent is a small number on the surface but the report compares it to cancer, saying of all Americans, less than one-half of 1 percent are living with cancer. 3 percent is pretty substantial.

BLITZER: Very substantial. What more can be done to deal with this crisis?

VERJEE: Among some of the things, experts say the government could manage resources better. They could be more testing and monitoring going on and community leaders also need to do a better job of just educating people. The report, too, points out that the infection rate in the capital may actually be even worse than they think because many people here may not even know that they're infected.

BLITZER: They would like to check a lot more of these people here. Thanks very much. Pretty shocking report. Zain Verjee reporting.

Let's go back to Jack Cafferty for "the Cafferty File."


JACK CAFFERTY, CNN CORRESPONDENT: The question this hour is former Vice President Dick Cheney right that President Obama's policies raise the risk of a terror attack in the United States?

I. writes, "Cheney is a power hungry, myopic zealot who wouldn't know the truth if it came up and bit him. Personally I wouldn't believe him if his tongue came notarized or if he was given truth serum and connected to a lie detector."

Diane says, "We probably lowered the risk of attack several notches since Obama took office. The terrorists do not have Gitmo or the use of torture to use against us for their public relations ammo like they did during the Bush era."

Bob in Kentucky says, "Why would anybody believe a thing this guy has to say after his proclamation that when we invaded Iraq we would be treated to parades with people strewing rose pedals? He should never be featured in the media again, unless it's when they take him to prison in handcuffs."

J.O. writes, "Quite the converse. It strikes me that Dick Cheney's comments are, in effect, an invitation to the terrorists to attack. He is still trying to be the bully. President Obama's civil approach to the world's problems will reduce the likelihood of future attacks."

Mike writes, "I don't know if Vice President Vader is right or not. I'm not that smart. What I do know is that to take liberty and freedom away from anybody in the name of 'security' is un-American. It is time for us to be Americans again and understand that freedom comes with a price and that price is risk."

Dana writes, "No, he's not right. He hasn't been right about anything in years. Worse, it's not that he's incorrect. It's that he's lying. The media should ignore this man. He's now become irrelevant."

And Judy writes, "I thought 24 was just a TV show on FOX, not a reality program. Dick Cheney is scarier than Jack Bauer."

If you didn't see your e-mail, go to my blog at, look for yours among hundreds of others. Not a lot of love notes for the former vice president in the e-mails I looked at.

BLITZER: I'm sure there's a lot more out there as well. Our viewers can read them if they want.

CAFFERTY: Yes, they can.

BLITZER: Jack, thank you.

Real estate, cars, jewels, you name it. While megaswindler Bernard Madoff begins prison life, the feds get to work stripping him of the trappings of the so-called good life.

And a shot at fame turns into a screaming mob. We'll fill you in on what triggered this wild stampede of hundreds of young women.

Stick around. You're in THE SITUATION ROOM.


BLITZER: The super model and TV host Tyra Banks expressing concern about a brawl Saturday outside auditions for her reality show, "America's Next Top Model." Abbi Tatton is here on what some are calling catwalk chaos.

What happened?

ABBI TATTON, CNN INTERNET REPORTER: Six people were hurt, two went to the hospital seeking treatment, three people arrested for unruly conduct and inciting a riot after these scenes caught on camera over the weekend for an open casting call for "America's Next Top Model" showing women breaking down police barricades, a brawl breaking out in the street as police arrived. One of the bystanders who posted a YouTube video tells me the girls went crazy when it seemed that a car broke down, it was smoking from the engine and that for some reason caused panic amongst the girls who started sobbing uncontrollably, running, fighting broke out as well. This was going on Saturday afternoon. The show's host, Tyra Banks, said in a statement we still don't know what triggered the incident. She said they will assist the New York police department but the YouTube videos you see of this casting call shows these women waiting for hours and hours, then the audition was shut down. Tyra Banks just said in a statement that to all the top model hopefuls affected by the casting, we are doing everything we can to make sure all the girls who weren't seen get an opportunity to audition. Hopefully they won't all lose out.

BLITZER: Let's hope. Amazing how many people showed up to that. Thank you.

TATTON: Hundreds and hundreds.

BLITZER: Thanks very much.

It's happened before and it's happening again. Rough economic times are translating to a boom over at the movie theater box offices around the country. CNN entertainment correspondent Kareen Wynter is taking a closer look at this phenomenon.


KAREEN WYNTER, CNN ENTERTAINMENT CORRESPONDENT: Hi Wolf. A trip to the movie has now turned into the ticket of choice for many looking for a break from the economic blues.


WYNTER: Even in the bleakest of financial times, it seems escapism has no price tag.

UNIDENTIFIED MALE: You're on a budget from now on.

WYNTER: Take this Clark Gable classic released in 1934. It was a box office hit in the midst of the great depression. Back then, cash-strapped consumers still enjoyed a seat at the cinema. Now, with the country in the midst of another severe economic downturn, experts say it's no surprise that movie ticket sales are booming, even as families tighten their expenses.

PAUL DERGARABEDIAN, HOLLYWOOD.COM: This is the biggest start to any box office year we have ever seen.

WYNTER: The first billion dollar January, according to box office expert Paul Dergarabedian. Led by Watchmen, Gran Torino and Mall Cop, revenues have spiked 17 percent over last year heading into this past weekend. Attendance was up 15 percent.

DERGARABEDIAN: What movies offer is an escape, a place where people can go for a couple hours to forget their troubles. For $10, that's a bargain, especially in this economy.

WYNTER: Box office revenues rose in five of the last seven recession years, according to the National Association of Theater Owners.

CARLA GUGINO, ACTRESS: Art always thrives in difficult economic times because that's an outlet for people and it's just in history, it's always been that way.

JEFFREY DEAN MORGAN, ACTOR: You get that two hours where you're not wondering how you're going to put food on the table or get your mortgage paid off, you know? It's a good way to disappear, I think.

WYNTER: Forget about all the bills that are due, say these newlyweds visiting from out of town. They are willing to spend a few bucks on a movie. Just not that costly bucket of popcorn.


UNIDENTIFIED MALE: don't think it's that bad.

THIBODEAUIt's to save money. We usually eat beforehand so we're not hungry there.


WYNTER: After the economy stabilizes, the industry hopes people will continue going to the movies. For those few affordable hours of entertainment. Wolf?

BLITZER: Thank you.