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President Obama Heads to Capitol Hill; Hillary Clinton Visits Mexico

Aired March 25, 2009 - 18:00   ET


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

Happening now: President Obama as traveling salesman. He travels to Capitol Hill with a multitrillion-dollar pitch. Can he close the deal, especially with members of his own party?

The president wants to help the needy out, but could those who rely on charities get hurt by something the White House wants?

And even amid history right here in the United States, a new report says many other African-Americans are not nearly doing as well. So, one group urging the president right now to do something about it -- all that plus the best political team on television.

We want to welcome our viewers in the United States and around the world. I'm Wolf Blitzer. You're in THE SITUATION ROOM.

Right now, it's an all-out presidential press. The White House is sending the president to campaign personally for a top priority, the stakes, a $3.6 trillion proposal, the turf, Capitol Hill. And the fight could pit the president against some Democrats, with Republicans smelling political opportunity.

Let's go straight to Capitol Hill. Our senior congressional correspondent, Dana Bash, has the details -- Dana.

DANA BASH, CNN SENIOR CONGRESSIONAL CORRESPONDENT: Well, Wolf, all day long, the White House and Democratic leaders here on Capitol Hill have been trying to minimize their differences over the president's enormous budget proposal. But clearly the differences are significant enough that the president had to come here to make a personal appeal.


BASH (voice-over): A trip down Pennsylvania Avenue to rally support for his budget, going behind closed doors with fellow Democrats, wary of big spending and soaring deficits.

SEN. KENT CONRAD (D), NORTH DAKOTA: He asked the caucus what he asked me: Preserve my priorities, education, energy, health care. Reduce the deficit substantially.

BASH: But even as President Obama made his case, Democrat-led House and Senate committees were writing their own budgets and scaling back some of the president's plans, most prominently, the signature tax cut he campaigned on, $400 for most individuals, $800 for couples.

The Senate budget would eliminate funding for that in two years, unless the White House finds a way to pay for it. Congressional Democrats are also slashing $250 billion the White House set aside for more Wall Street bailouts. The Democratic budget chairman called the changes critical to taming the exploding deficit.

CONRAD: In light of the new reality, those are the fundamental differences. We have had to insist that things be paid for. And I make no apology for it.

BASH: CNN is told that some conservative Democrats used their private Obama meeting to question the wisdom of his plans for big spending on health care, education, and energy in difficult economic times.

Meanwhile, Republicans are trying to exploit Democratic differences. Listen to this GOP appeal to Blue Dog conservative Democrats.

UNIDENTIFIED MALE: You hold the cards. You have the votes that can make the difference in this. You can stop this. I'm asking you, join us to stop this fiscal train wreck.


BASH: Meanwhile, the budget that congressional Democrats are writing, it doesn't account for two major Obama priorities that does have some of those conservative Democrats worried. That is health care and energy reform. It simply doesn't talk about those issues.

And what it basically means, Wolf, is that if and when Congress does write legislation on those massive, massive issues, they're just going to have to find a way to pay for it over at the White House.

BLITZER: All right, Dana, thanks very much.

Let's bring in our senior political analyst, David Gergen.

David, you have advised a lot of presidents. Are you surprised that, this early in the new administration, this president has a fight on his hands with some fellow Democrats?


I think it's surprising to all of us who have watched this to have a fight this early. But once we saw that budget from the president late February with the sticker shock that came with that, and then the Congressional Budget Office came along after that and said, we're going to have deficits of nearly $1 trillion for 10 years if we enact this budget, then I think we all knew there was going to be a pushback.

And it's been echoed a little bit in the markets today. The Treasury issued these five-year treasury bonds today. It had an auction and not a lot of people showed up. And that sort of rattled the markets temporarily during the day today. So, I think there is pushback. And I think that -- I think the president will get most of what he wants, but there's maybe some significant...


BLITZER: Because he seems to have a bigger fight, and he seems to be more personally involved right now in getting this budget through, as opposed to his economic stimulus package.

GERGEN: He does. That's exactly right. And he's switched tactics. And I think that's smart.

He's going to have more control in the end. But it's also because he has more of a fight on his hands in his own party. But my sense is we have got a very popular president. You reported earlier today, what, 40 million people watched that press conference last night, a remarkable number of people. He had big, huge audiences for "60 Minutes."

So, he's got a lot of people behind him. But what I think is, these deficits are unsustainable. There are a bloc of Democrats, in the Senate in particular, who won't go with him. I think the most important thing they're doing is casting a shadow, as Dana just reported in the end of her piece, over the health care reform and energy reform.

The president wanted a reserve in this budget of over $600 billion as a down payment on health care reform. They're saying, we're not going to put that in there. You have got to come back to us with your big plan, and then, in order to enact that plan, you have either got to find the tax increases or spending cuts to pay for it.

That's a big hurdle to climb for health care and there's a similar hurdle in this for energy reform. So, there are some shadows over his long-term plans.

BLITZER: I suspect, though, we're going to see a lot more of him going around and trying to talk...

GERGEN: Absolutely.

BLITZER: ... around Congress, going out there doing more "Jay Leno"-type things, "60 Minutes," prime-time news conferences.


GERGEN: "Wolf Blitzer."


BLITZER: Thanks very much.


BLITZER: Who's to blame for the brutal drug war violence now spilling out of Mexico? The secretary of state, Hillary Clinton, is in Mexico City right now, suggesting America itself must take a very hard look at what's going on inside this country.

Listen to what she told reporters on the way there -- and I'm quoting -- "Our insatiable demand for illegal drugs fuels the drug trade. Our inability to prevent weapons from being illegally smuggled across the border to arm these criminals causes the deaths of police officers, soldiers, and civilians." And she adds, "I feel very strongly we have a co-responsibility."

Our foreign affairs correspondent, Jill Dougherty, is traveling with the secretary in Mexico City -- Jill.


JILL DOUGHERTY, CNN FOREIGN AFFAIRS CORRESPONDENT: Wolf, Secretary Clinton has a balancing act here in Mexico, talking about drug violence, but also talking about the broader relationship.

(voice-over): Just as Secretary of State Hillary Clinton arrives in Mexico City, the Mexican government announces a high-profile arrest, the kingpin who allegedly runs a drug cartel in Monterey, where Clinton is to visit Thursday, a rare victory in a violent drug war that's bleeding over the U.S. border.

HILLARY RODHAM CLINTON, U.S. SECRETARY OF STATE: The Obama administration, working closely with Congress, intends to provide more than $80 million in urgently needed funding for Black Hawk helicopters for Mexican law enforcement. These aircraft will help Mexican police respond aggressively and successfully to the threats coming from the cartels.

DOUGHERTY: Her visit is a show of solidarity with Mexican President Felipe Calderon, who has staked his presidency on battling drug cartels.

But the criminals, Clinton says, are outgunning his law enforcement. Clinton agrees with Calderon that U.S. guns, money laundering, and drug use are fueling the violence, which is why the Obama administration will push hard to get more equipment and more law enforcement to the border.

BARACK OBAMA, PRESIDENT OF THE UNITED STATES: We are going to continue to monitor the situation and if the steps we have taken do not get the job done, then we will do more.

DOUGHERTY: But there's another battle brewing, a possible trade war that began with a trucking dispute. The Mexican economy is hurting, and some here fear the U.S. might resort to protectionism.

(on camera): Thursday, Secretary Clinton flies to the industrial city of Monterey to meet with students and business leaders and also visit a clean-energy plant, all part of her message that the U.S.- Mexican relationship shouldn't be overshadowed by drug violence -- Wolf.


BLITZER: All right, Jill -- Jill Dougherty in Mexico City.

Here's some fast facts on drugs coming into the United States. Arizona appears to bear the brunt of smuggling-related violence. Some 60 percent of illicit drugs found in the U.S. enter through the Arizona border.

Not all of the drugs make it through. In 2007, U.S. authorities seized more than three million pounds of marijuana along the U.S.- Mexico border, moreover, almost 22,000 pounds of cocaine, more than 3,700 pounds of meth, and almost 800 pounds of heroin.

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

JACK CAFFERTY, CNN ANCHOR: At last night's news conference, the president said his $3.6 trillion budget is inseparable from economic recovery.

But not everybody would agree with the president on that. Republicans have been highly critical, House Minority Leader John Boehner calling Mr. Obama's budget -- quote -- "the most irresponsible piece of legislation he's ever seen." And, hey, he's seen some. Boehner's calling for a do-over.

It's not just Republicans either. A group of centrist Democratic senators took the red pen to the president's budget, making hundreds of billions of dollars in cut. North Dakota Senator Kent Conrad and others have raised concerns about the long-term impact of the president's spending plan on the deficit.

Conrad says their version, which saves $608 billion over five years, would help reduce the deficit, while also maintaining the president's priorities on education, energy, and health care. The plan cuts out money that was set aside for future bank bailouts, provides only a temporary fix for the alternative minimum tax, and does not account for some major health care and energy initiatives. Republicans also critical of Conrad's plan, saying it's stripped out some items that may have to be funded anyway.

Mr. Obama said last night they never expected Congress would simply Xerox his budget and then vote on it. And White House officials tried to play down differences with Democrats, saying that they're satisfied with the plans coming out of Congress.

Here's the question, then. When it comes to the budget, should President Obama get what he's asking for?

Go to and post a comment on my blog.

I wouldn't bet against him. He may have to take some cuts, but I will bet he gets most of it.

BLITZER: Yes, well, we will know soon enough, because votes are coming up. Jack, thank you.

Could charities take a big hit under President Obama's tax plan?


OBAMA: What we have said is, let's go back to the rate that existed under Ronald Reagan. People are still going to be able to make charitable contributions.


BLITZER: Why contributions could drop by as much as $4 billion. That's what some are suggesting.

Is the economy starting to rebound? Some surprising signs that may indicate a turnaround? Our chief business correspondent, Ali Velshi, is standing by.

And the Postal Service warning it may run out of money -- why your mail deliveries may be at risk.


BLITZER: Wall Street had another up day today, but the market's recent rally isn't the only positive sign for the economy.

Let's bring in our chief business correspondent, Ali Velshi.

Ali, there are some other signs as well.

ALI VELSHI, CNN CHIEF BUSINESS CORRESPONDENT: Sure. And, Wolf, as you know, we always don't want to look at the market as the only indicator of the economy. There are some real things going on out there that are making things a lot better for Americans.

Let's take a look at that. The first one and probably the most important one is mortgage rates. Last week, the Federal Reserve dropped more than $1 trillion into the economy, three-quarters-of-a- billion going to Fannie Mae and Freddie Mac. And that goes to your bank. It makes it easier to give mortgages.

Take a look at the effect on mortgage rates, dropping to 4.63 percent for a 30-year fixed mortgage if you have good credit and you can put 20 percent down. That's making a big difference, but, even before that, mortgage rates have been particularly low.

Take a look. In February, compared to January, existing home sales were up 5.1 percent. We divide home sales into existing and new. Existing is about 90 percent of the market. Let's call them used homes. But new homes were up, too, up 4.7 percent in February vs. January. Why is that important?

Because we have about a nine-month stock of new homes that hasn't been sold. We have been working that stockpile down. And as we get closer to the bottom on that, we can start building new homes when there's a market for it. And construction workers, who have been laid off, can get back to work.

And we have a measure of the economy called durable goods orders. These are the orders for things that last more than three years, big machinery or appliances for your home, things like that. And that was up in February compared to January. It takes us a while to get these numbers. That's why we're reporting all these February numbers today.

But durable goods had been down for six months in a row, and guess what? We were expecting them to be down again. So, Wolf, all of these things are positive that have to do with things that aren't just about sentiment and how people feel about the economy. They are real measures of things that are going that indicate that there's some hope, there's some silver lining around this cloud that still keeps hanging above us -- Wolf.

BLITZER: Ali Velshi, thank you.

If the wealthy take a big hit under the Obama administration's proposed tax plans, will charities also take a big hit?

We asked our national political correspondent, Jessica Yellin, to take a closer look.

What did you find out?

JESSICA YELLIN, CNN CONGRESSIONAL CORRESPONDENT: Wolf, the bottom line is that right now people in the highest tax bracket get the biggest write-off for charitable gifts. President Obama wants to change that. They want to reduce the deduction for the wealthy. Now the administration is defending its plans.


YELLIN (voice-over): President Obama insists his plan to change the tax rules for wealthy donors won't hurt charities.

OBAMA: What we have said is, let's go back to the rate that existed under Ronald Reagan. People are still going to be able to make charitable contributions.

YELLIN: But White House officials admit if the tax changes go through, contributions are likely to fall. They point to a study showing donations would be down about $4 billion. Other economists call that a conservative estimate.

In an op-ed, Harvard economist Martin Feldstein argues that if this tax change passes, in the year 2011, donations will be down by more than $7 billion.

Charities like Bread for the City in Washington, D.C., can't afford those losses.

UNIDENTIFIED MALE: We're hoping that nothing happens to the tax code that really sort of reduces incentive for individuals, and corporations, and other private groups to support our work.

YELLIN: Like many charities, his is already having a tough time making ends meet. Demand is up, about 20 percent at its food pantry and 100 percent for basic social services. UNIDENTIFIED MALE: The kind of services that Bread for the City provides now, the food, the clothing, the basic services, they have never been more in demand than they will be over the next 12 months.

YELLIN: But the Obama administration says charities don't have to worry; this tax change wouldn't go into effect for another two years, when it expects the worst of the recession to be over.


YELLIN: Now, the administration also says that they would make up for any falling donations by tweaking the estate tax, passing health care reform, and improving the overall economy. They say, taken together, those three factors would reduce demand on charities and promote giving.

And, of course, there's also a very good chance that, Wolf, this provision might not even make it into the final budget.

BLITZER: Because some Democrats -- a lot of Republicans, but some Democrats, don't like this provision.

YELLIN: Exactly.

BLITZER: All right, we will see what happens during the legislative process, as they say. Thank you, Jessica. Good report.

A new study shows African-Americans aren't doing well, and some of you have opinions about that.


UNIDENTIFIED MALE: The vast majority of black America is doing just fine. That said, while our justice system needs to address the fact that black males are punished much more harshly, these kids must be kept out of the system in the first place.


BLITZER: The state of black America coming up, including your I- Reports.

And some of America's bravest have yet another moment to remember, the unannounced visit from President Obama. That's coming up.

And look who's telling the former vice president to be quiet -- why Condoleezza Rice says Dick Cheney needs to stay silent.



BLITZER: The president defending against an idea from China to replace the U.S. dollar as the global currency. Does his treasury secretary disagree with him? China's military muscle is getting stronger, so strong, it apparently would now be able to hold the U.S. Navy at bay.

And a new report says African-Americans are hurting far more than whites. So, the National Urban League wants the president to do something about it. I will speak with the head of the National Urban League, Marc Morial.


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

Happening now: A $140 million top-of-the-line fighter jet crashes in the California desert, an F-22 down near Edwards Air Force Base during a training mission -- no word yet whether the pilot ejected.

The Pentagon is casting a wary eye at China's growing military might. A new report says it's shifting the military balance in the Asia Pacific region and could be used to force Chinese claims on disputed territories, including Taiwan.

Plus, they're frantically filling sandbags in North Dakota right now, as Fargo braces for what's forecast to be a record flood. The Red River is expected to crest Saturday at 41 feet, more than 20 feet above flood stage.

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

Can the same environment that put the first African-American president in the White House also erase racial discrimination, division, and inequality right here in the United States?

No, at least, says a new report, not so far. The National Urban League says, even amid history, African-Americans have a 71 percent status gap against that of whites. It also says blacks are twice as likely to be out of work compared to whites, three times as likely to be poor, and more than six times as likely to be in prison.

What can be done? The group is offering the White House some advice.

Let's turn to CNN's Kate Bolduan for more specific details -- Kate.


Well, the National Urban League is references Charles Dickens, calling this the best of times and the worst of times. And they're looking to the president to help.


MARC MORIAL, PRESIDENT, NATIONAL URBAN LEAGUE: All Americans are losing ground economically. It is abundantly clear and perfectly clear that African-Americans are faring much worse. BOLDUAN (voice-over): Following the historic election of the country's first African-American president, the Urban League is now demanding President Obama pay special attention to the struggles of African-Americans. Mr. Obama says he's focused on the bigger picture.

OBAMA: I think that the last 64 days has been dominated by me trying to figure out how we're going to fix the economy, and that affects black, brown and white.

BOLDUAN: The Urban League is calling on Mr. Obama to specifically take on disparities in education, health care, home foreclosures, and unemployment.

MORIAL: As a part of the opportunity to earn, we're calling on the president and the Congress to make sure that African-Americans participate in the green jobs revolution.

BOLDUAN: But, with some already saying the president's ambitious agenda is too much, too soon, can he do more?

UNIDENTIFIED FEMALE: I think he needs to fix the issues with the economy. I don't think anything can be done until you fix the broader issue of everybody struggling.

UNIDENTIFIED FEMALE: People have got to be patient. It took us a while to get here, and it will take us a while to move on back up.


BOLDUAN: Now, when asked specifically about this report, White House Press Secretary Robert Gibbs said the president agrees the country has a long way to go. But Gibbs also says getting the economy moving again is one of the best ways of getting there -- Wolf.

BLITZER: All right, Kate.

Kate Bolduan reporting.


BLITZER: And joining us now, Marc Morial the president and CEO of the National Urban League, the former mayor of New Orleans.

Mr. Mayor, thanks for coming in.

MARC MORIAL, PRESIDENT & CEO, NATIONAL URBAN LEAGUE: Good to be with you, Wolf, as always.

BLITZER: This is it -- "The State of Black America

2009." I get this book every year. And you guys do an excellent job...

MORIAL: Thank you.

BLITZER: ...reviewing what's going on. But stuff doesn't seem to change. We're not seeing an improvement. Explain.

MORIAL: It's glacial. Progress is glacial. But I think the import of this report this year is that in the last eight years, we've lost ground. And because of the way we do the index, we've lost ground, but interestingly, the numbers also show that white Americans lost ground in the last eight years where the...

BLITZER: When the overall economy is in trouble...

MORIAL: The median income.

BLITZER: ...everybody goes down. But what I hear you saying and what this book says is that black people are hurting more, at least proportionately.

MORIAL: Even more, slightly more, particularly in the field of economics.

When you look at joblessness, when you look at the home ownership rate, there's been great increases in unemployment, great decreases in the home ownership rate. And those are areas of concern.

But, you know, Wolf, we also don't just focus on the diagnosis. We've got prescriptions in there, recommendations and suggestions that we ...

BLITZER: So, hopefully, a year from now, when we meet again, the next state of black America will be a little bit more hopeful.


BLITZER: We can only hope.

MORIAL: ...score a (INAUDIBLE).

BLITZER: We asked viewers to send us in some iReports -- video iReports, comments, questions -- knowing you were coming in and releasing this important document today.

Here is a guy named Egberto Willies.

Turn around.

We're going to play his iReport.

It comes to us from Houston, Texas.


EGBERTO WILLIES, CNN IREPORTER: The vast majority of black America is doing just fine. That said, while our justice system needs to address the fact that black males are punished much more harshly, these kids must be kept out of the system in the first place. While the education system tends to expect the underperforming of black kids, parents and civic organizations must prevent these kids from living down to those expectations. (END VIDEO CLIP)

BLITZER: All right.

What do you think, Mr. Mayor?

MORIAL: He's making some great points about the criminal justice system. But yet there are African Americans who are doing certainly far better than 40 years ago.

BLITZER: The vast majority of black America is doing just fine. That's what he said.

MORIAL: I don't think most people would agree with that -- with the subprime crisis, with the joblessness, because you could be doing OK and members of your family could be hurting, thereby placing additional responsibility. I don't know if I completely agree with that characterization in these difficult economic times.

BLITZER: Here is another iReport we got in.

Turn around.

This is Nino LaRocca of Queens in New York.


NINO LAROCCA, CNN IREPORTER: Why does it have to be a color issue here?

Why just can't you say what is your assessment of the state of America today?

Why does it have to be of black America?


MORIAL: You know, I think one of the things we have to respect as a nation is that while we do have and we seek one America, there is a black America, there is a Hispanic America, there is a Jewish America, an Italian America, an Irish America. That tapestry represents what we are. We are unique.

So in order to be one, we don't have to not be who we are. We've got to respect who we are, while at the same time embracing the notion of America being a nation that is a tapestry -- a mixture and a mosaic.

But why do we look at black America as distinct from the state of the union?

The president reports on the state of the union. We think it's important to report on the state of black America.

BLITZER: There is an African-American first family in the United States right now. And a lot of people are sitting back saying, you know what, it's over. The hard work is over with, we can now relax.

You don't believe that?

MORIAL: I don't think many fair-thinking people believe that. But we affirm, we celebrate President Obama and his wonderful family, his accomplishments and his achievements. And we believe it's a strong step in the right direction.

But our goal is for everyone to enjoy a positive quality of life, for the disparities that have historically existed to be gone. When we achieve that, we'll close shop and go home.

BLITZER: Marc Morial, thanks for coming in.

MORIAL: Thank you.

Thanks, Wolf.

As always, my pleasure.


BLITZER: And CNN continuing its award-winning black in America documentary series. "Black In America 2," by the way, airs starting in July.

And we want to thank our viewers from their iReports on this state of black America.

Here's tonight's assignment, for those of you who would like to give us some iReports -- when it comes to the budget, do you think Republicans are doing enough to explain how they would do things differently?

Submit your iReport -- your video comments to and watch us tomorrow to see if your video makes it on the air.

President Obama is giving a hard sell on his budget, but are Congressional Democrats hearing his message?

I'll ask the best political team on television.

Plus, out of office and now on the radio -- the former Illinois governor, Rod Blagojevich, has a brand new gig.



This is former Governor Rod Blagojevich.

How are you?



BLITZER: Let's get back to our top story -- the president goes up to Capitol Hill to make a pitch for his budget.

Let's talk about it with Jessica Yellin, our national political correspondent; our CNN political contributor, Steve Hayes of "The Weekly Standard;" and our CNN political analyst, Roland Martin,

Is it working, his new strategy to convince those reluctant Democrats?

Forget about the Republicans for now, Jessica, but the Democrats who are concerned about the price tag, is his strategy -- the president's strategy, working?

JESSICA YELLIN, CNN NATIONAL POLITICAL CORRESPONDENT: So far, yes, in the sense that he has gotten major -- the major initiatives he wants, Wolf. Look, he's got -- getting the war budgeted inside this budget. That was important to them. Health care is their top priority. That's going to be in there and some of these energy issues that matter to him.

The advantage he had in proposing a wildly ambitious budget was that he could compromise on things like cap and trade and on aspects of his middle class tax cut and still get a huge budget through the Congress.

BLITZER: You know, if the Republicans are unified -- that's always a big if. But if they are, as they were against the economic stimulus plan, Steve, and they wean over -- they bring over some of those moderate Democrats, they could thwart his -- his proposal.

STEPHEN HAYES, SENIOR WRITER "THE WEEKLY STANDARD": Right. And that will be the -- the key question, really, here, I think, is how many Democrats are going to go along with the president?

Apparently today he went up to Capitol Hill and gave something of a pep talk and talked about how the agendas of Congressional Democrats are the same as the agendas -- the agenda that the president has.

That's true only as far as it goes. I mean really the agenda of most -- most members of Congress is to get re-elected. And they are going to go with him only insofar as it furthers their own political careers. And it's unclear at this point that that will do that for -- for these conservative Democrats.

BLITZER: Because these are politicians, Roland, when all is said and done. And they look at those polls, especially in their home states and districts, as closely as anyone.

ROLAND S. MARTIN, CNN POLITICAL ANALYST: Oh, of course. I mean, look, they all want to get re-elected. That's why there's no Democrat or Republican Party, it's the re-election party.

But at the same time, you also -- if you're a Democrat, do you really want to chance the possibility, frankly, of having the Democratic Re-Election Congressional Campaign Committee, the senatorial Campaign Committee, also look at your support for the president?

Because they also are going to want a very popular president visiting their district. And so they're going to be very -- they'll pick and choose in terms of their battles, but they don't want the White House on their bad side, because that could pose a problem when they are running for office.

BLITZER: Because there is -- there is some anger already on the left at some of these Democrats for the positions they've taken.

Listen to this sound bite.

I want to play it -- what the president said about the U.S. dollar as the international -- the global currency.

Listen to this.


BARACK OBAMA, PRESIDENT OF THE UNITED STATES: As far as confidence in the U.S. economy or the dollar, I would just point out that the dollar is extraordinarily strong right now. And the reason the dollar is strong right now is because investors consider the United States the strongest economy in the world, with the most stable political system in the world.


BLITZER: Having said that, especially the Chinese, Steve, they're worried about the dollar right now. They're talking about some new sort of international currency. There's been some conflicting -- some confusing messages, maybe, coming out of Washington.

HAYES: Yes, very mixed messages, I think, coming out of the Obama administration itself.

Yesterday on your show, Austan Goolsbee signaled, I think, his openness to this kind of new global currency. And then this morning, Secretary of the Treasury, Timothy Geithner, suggested that he, too, might be open to such a currency, although he qualified it a little bit. And it sent the dollar plummeting, at least temporarily.

I think, you know, in the midst of all of this, in the midst of selling his budget on Capitol Hill and in the midst of this economic crisis, it's going to be important for the Obama White House to really come out and all be on the same page about what they want to do with respect to the currency and not send these mixed messages to -- to, you know, fragile and jumpy markets.


MARTIN: And, Wolf, I probably would advise Austan, as well as Geithner, that you listen to the big dog. You know, when the boss says, this is where I stand, you don't come back and say, well, sure, we're open to it because, as Steve said, you're going to cause all kinds of problems. And so this is where, if the boss has made it clear where he stands, you might want to get in line.


YELLIN: And some...

BLITZER: It's always important to listen to the big boss.

But quickly, Jessica.

YELLIN: Well, the downside here is that he's got a lot of eggheads in his cabinet who like to muse about interesting ideas.


YELLIN: And sometimes they happen to do it on TV.

BLITZER: And these are Democrats, remember. Let's not forget about that.

All right. Listen to Condoleezza Rice. She was on Jay Leno's show last night.

And I want to play this little clip.


CONDOLEEZZA RICE, FORMER SECRETARY OF STATE: These are difficult questions and difficult issues. My view is we got to do it our way. We did our best. We did some things well, some things not so well. Now they get their chance.

And I agree with the president, we owe them our loyalty and our silence while they do it, because I know what it's like to have people chirping at you when they perhaps don't know what's going on inside.


BLITZER: All right. She was asked, Steve, about the vice president -- former Vice President Dick Cheney's criticism of President Obama. She took a very, very different stance, saying you know what, we had our eight years, now it's time to be silent.


Has Dick Cheney ever chirped?


HAYES: I'm not sure I've ever heard him actually chirp.

Yes, she did take a very different position. Look, I think, actually, it's interesting to watch the split. I think Dick Cheney is well within his rights to be out there making the arguments he's making. In a sense, it's -- he's extending his role as vice president or sort of the campaign role as a vice president as continuing to put the pressure on and make these arguments. Obviously, he feels very strongly about these issues, particularly national security issues.

MARTIN: That's funny, Wolf...

BLITZER: (INAUDIBLE) she took the high road.

MARTIN: Wolf, it's funny, because a lot of Republicans did not like Bill Clinton coming out speaking his mind when President George W. Bush was in the White House. And so, look, if it was time for Clinton to be quiet when it came to Bush, maybe Cheney should shut up when it comes to Obama.

YELLIN: Oh, finally...

BLITZER: It was interesting...

YELLIN: ...Condi gets her say.

BLITZER: Yes, Jessica, it's interesting she picked "The Tonight Show with Jay Leno" to go out and have some fun, if you will, without criticizing the president of the United States.

YELLIN: A very big audience and a chance for Condi Rice to show what we already know, which is that she has a very different style from Dick Cheney. The two of them -- no love lost there.


BLITZER: All right. We're going to talk about that a little bit more in the coming days.

Guys, thanks very much.

New developments, meanwhile, involving North Korea. The country has placed a rocket on its launch pad.

Also, Rod Blagojevich goes from governor to radio rookie.

Jeanne Moos is standing by to take a Moost Unusual look.



BLAGOJEVICH: Hi. This is Rod Blagojevich. And I've got to tell you, I sure do love Elvis.



LOU DOBBS, HOST, "LOU DOBBS TONIGHT": Coming up at the top of the hour tonight, President Obama on Capitol Hill trying to sell Democrats his $3.6 trillion budget. And tonight, more good news about the economy and the housing market. If only it can break through the doom and gloom from the administration and the national media.

Also, new safety concerns tonight about a nail care craze that involves -- are you ready -- flesh eating fish.

It doesn't get much better than that, does it?

And among my guests tonight, Congressman Brad Sherman and Senator Judd Gregg. We'll be talking budgets and stimulus.

Join us for all of that and more at the top of the hour.

THE SITUATION ROOM continues in a moment.


ANNOUNCER: This is CNN breaking news.

BLITZER: The secretary of State, Hillary Clinton, now warning -- according to the Associated Press, warning North Korea that a missile launch would be, in her words: "Provocative and carry consequences" -- a new warning from the secretary of State to North Korea.

Let's bring in our Pentagon correspondent, Barbara Starr -- Barbara, they're getting ready, by all accounts, to launch a powerful missile.

BARBARA STARR, PENTAGON CORRESPONDENT: Wolf, the signs are growing. New missile imagery that has come to the United States now shows -- I think we're going to put it up in one second -- that there is now a North Korean missile on the launch pad. U.S. officials confirming the missile is in place.

North Korea is saying that they plan to launch between April 4th and April 8th. They say, that what is on this launch pad that you see in this circle, they say it's a satellite on the front end of a missile body, but that it is a commercial satellite.

That is what now poses the problem for the Obama administration.

If it's a commercial satellite, the U.S. does not shoot down commercial satellites.

What do they do about this, because it is a missile body. The U.S. does not want North Korea to launch. They don't want them to gain that military expertise.

BLITZER: If they're so sure it's a commercial satellite, they should let international observers come in and confirm that. Then we'd have a better understanding if, in fact, they're telling the truth or if they're lying.

Barbara, thanks very much.

STARR: Sure.

BLITZER: Let's go to Jack Cafferty right now.

He's got The Cafferty File -- Jack.

CAFFERTY: The question is -- when it comes to the budget, should President Obama get what he's asking for -- all $3.6 trillion worth?

Steve writes: "Give President Obama a chance to fix the country. Change doesn't come slow -- change doesn't come quickly. It took President Bush eight years to mess things up. Maybe it will take another eight years to turn things around and get back on the right path. I like how Obama is spending the money here, in this country. All President Bush did was spend money overseas."

Al in Connecticut writes: "There's certainly one budget item that the president should not get. He's requested $75 billion this year, $130 billion next year to fund the disasters in Iraq and Afghanistan. While there may be arguments on both sides of the debate over whether we need to press on with these failures, there can be no debate about whether or not we can afford almost an additional quarter of a trillion dollars to continue these wars."

Sandy in Arkansas: "Maybe President Obama will have to do what the majority of us have done regarding our personal budgets -- and that's make do with less, which means cutting something. You make choices. Cut down on the heat, eat lots of dried beans or peas, shop in thrift stores or at garage sales, drop insurance, raise deductibles, take a second job, etc. Very few of us can get what we ask for and we're all just doing our best to survive."

James in Texas: "The question is not if President Obama gets what he wants, but if the American people get what they asked for when they overwhelmingly elected Barack Obama as president."

Mike in Korea: "The president ought to get what the Congress thinks he ought to get and that's that. The separation of powers is there for a reason."

And Bill in Maine says: "Jack, if we don't give him what he's asking for, we'll only have ourselves to blame if he doesn't accomplish all that we expect."

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.

BLITZER: And for our viewers who are anxious to get a copy of your brand new book...

CAFFERTY: Yes. There you go.

BLITZER: ...remind them out there, Jack, the name of the book and what this book is about.

CAFFERTY: It's called "Now or Never." And it's focused on restoring what's left of the American dream. It hasn't died, but it's on a resuscitator and there are some things that, you know, I think ought to be done to try and get us back to where we can promise the next generation a little better lifestyle than we can right this minute.

It's available in bookstores near you. It's available online. I'll come by your house with one, if you like. You know, however you want to pick it up is good by me.

BLITZER: I like the picture.

CAFFERTY: But there's the cover and -- you've read it, right?

BLITZER: A nice picture. Excellent book. Excellent book. A great cover. "Now or Never." It's available and our viewers should go get it.

Thanks for...

CAFFERTY: A handsome fellow on the cover, don't you think?

BLITZER: Very handsome.


BLITZER: All right, Jack.

Thank you.

See you tomorrow.

Forced from office, but not from the airwaves -- the former Illinois governor, Rod Blagojevich, hosts a radio show. Jeanne Moos finds it Moost Unusual.

And a 12-year-old boy helps build a dike to hold back the flood in North Dakota -- just one of our Hot Shots -- pictures often worth a thousand words.


BLITZER: Here's a look at some Hot Shots coming in from our friends at the Associated Press -- pictures likely to be in your newspapers tomorrow.

At Arlington National Cemetery, President Obama hugs Medal of Honor recipient, Thomas Hudner, next to the Tomb of the Unknowns.

In North Carolina, a Marine hugs his girlfriend after returning from a seven month deployment. Welcome home.

In Fargo, North Dakota, mud is splattered on the face of a 12- year-old boy as he helps build a dike along the flooding Red River.

And in L.A. a figure skater performs during a competition.

Some of this hour's Hot Shots -- pictures worth a thousand worlds.

Ousted Illinois Governor Blagojevich may have been forced from office, but people in Chicago are still hearing his voice.

CNN's Jeanne Moos has a Moost Unusual look at a Moost Unusual radio host.


JEANNE MOOS, CNN CORRESPONDENT (voice-over): Imagine being asked...


UNIDENTIFIED MALE: Wls News time, 7:04.

MOOS: host, clear your throat, a radio talk show for the very first time.


UNIDENTIFIED MALE: It's former Governor Rod Blagojevich filling in for Don Wade and Roma on the Big 89.


MOOS: It was enough to make Blagojevich twitch with nervous energy as he prepared to go on.



BLAGOJEVICH: Good morning.

This is former Governor Rod Blagojevich.

How are you?


MOOS: The former part of governor seemed to stick in his throat -- not once, but twice.


BLAGOJEVICH: Hi. This is Gov -- former Governor Rod Blagojevich.


MOOS: Like any radio rookie, he was a little hesitant.


BLAGOJEVICH: We're turning it over to -- commercials.

UNIDENTIFIED MALE: Southwest Airlines announces...


MOOS: His studio sidekicks got their kicks.



UNIDENTIFIED MALE: Are those headphones going to mess up your hair?

That's my concern for you.

BLAGOJEVICH: I bought my -- brought my brush.


MOOS: Blagojevich chatted with guests like comedian and CNN contributor, D.L. Hughley.


BLAGOJEVICH: Yes. I'm writing a book. I'm on page three.

D.L. HUGHLEY, HOST, "D.L. HUGHLEY BREAKS THE NEWS": You're probably four pages further than George Bush is on his, so.



MOOS: They kept coming back from breaks with Blagojevich's favorite singer.



BLAGOJEVICH: This is -- if you just tuned in, this is not Elvis. This is Rod Blagojevich.


MOOS: Lyrics apropos for a guy accused of pay for play.



BLAGOJEVICH: Hi. This is Rod Blagojevich.


MOOS: There were a few slow moments. At one point, a microphone... (VIDEO CLIP)

MOOS: ...picked up snoring.


UNIDENTIFIED MALE: He's a quitter and (INAUDIBLE) very well. But I think...


MOOS: As for the high point, perhaps it was the interview with the guy who plays Blago in a musical called "Rod Blagojevich Super Star."


UNIDENTIFIED MALE: Oh, you must pay to play.


MOOS: The actor in his wig and the former governor posed.


UNIDENTIFIED MALE: I feel like Laurence Olivier meeting Hamlet.


MOOS: Senator Roland Burris, appointed by Blagojevich, is portrayed in the musical.


UNIDENTIFIED MALE: Don't be so scared now, Burris. It's not like they're taping this.


MOOS (on camera): The real Blago's radio show performance got good reviews.


UNIDENTIFIED MALE: You're doing great.

BLAGOJEVICH: Do you think so?


MOOS (voice-over): Though you'd probably fumble with your headsets, too...


MOOS: ...if you had that hair to protect. Late night just hasn't been the same without those woman-eating hair jokes.


MOOS: Jeanne Moos, CNN, New York.


BLITZER: That's where you see these reports. Jeanne Moos is right here in THE SITUATION ROOM.

Good luck with the radio gig.

I'm Wolf Blitzer in THE SITUATION ROOM. See you back here tomorrow.

Let's go to Lou.

He's in New York -- Lou.