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Captain Risks Life for Escape; President Obama Sounds Hopeful About Economy; How to Fight Gangs of Pirates

Aired April 10, 2009 - 15:59   ET

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


WOLF BLITZER, CNN ANCHOR: Happening now, the pirate drama intensifying right now. The captive captain risks his life to escape but is recaptured. More U.S. warships heading toward the scene right now, and the pirates are calling for backup as well. They're seeking help from other pirates holding hostages.

Also, the audacity of hope. President Obama says the economy showing some glimmers of hope. Are we seeing the beginning of the end of this recession?

And caught on camera. Thieves try to burglarize a house, but they were no match for a woman and her webcam.

I'm Wolf Blitzer in CNN's command center for breaking news, politics, and extraordinary reports from around the world.

You're in THE SITUATION ROOM.

The situation is getting more dramatic and more worrisome off Somalia. The captain being held hostage makes his way to freedom. Captain Richard Phillips got away from four pirates, jumped out of the lifeboat where he's being held, and apparently tried to swim to the U.S. Navy warship that's nearby. That according to a U.S. official. But pirates jumped in after the captain, taking him hostage once again. Officials believe he's unharmed.

Meanwhile, the U.S. is sending in military reinforcements, but the pirates appear to be calling in some backup as well.

Let's go straight to CNN's Pentagon correspondent, Chris Lawrence. He's watching this situation very closely.

All right, Chris, what's going on?

CHRIS LAWRENCE, CNN PENTAGON CORRESPONDENT: Wolf, the Navy is still negotiating with the pirates, trying to convince them to end this peacefully, but sources are telling us that new elements are moving in that could complicate this entire crisis.

(BEGIN VIDEOTAPE)

LAWRENCE (voice-over): More pirate ships are on the move, trying to find their comrades who are locked in a standoff with the U.S. Navy. A defense official says the military has heard communication between pirates that they are searching for the lifeboat. Who's out there? The official says larger mother ships that the pirates use to launch small skiffs out to sea and foreign ships that pirates already hijacked and now control.

The USS Halyburton has also arrived in the area, a guided-missile frigate equipped with two helicopters. The USS Boxer and its onboard hospital remains a day away. And the USS Bainbridge sits just a few hundred yards away from a lifeboat like this one, where four pirates and Captain Richard Phillips have been stranded for more than two days.

CAPT. JAMES STAPLES, FRIEND OF CAPT. PHILLIPS: It's a covered boat, so during the day, I'm sure it's getting very, very hot in there. There's not a lot of ventilation. There is no sanitation inside that boat.

LAWRENCE: Overnight, Phillips jumped into the water to escape and tried to swim towards the Bainbridge. A defense official says the pirates fired several shots, either up in the air or towards water. Then at least one pirate jumped in after Phillips and brought him back on board.

(END VIDEOTAPE)

LAWRENCE: Now, we're told that all that happened in just a matter of seconds, not enough time for the Navy to intervene in the dark from a few hundred yards away. The Bainbridge has incredible firepower, but how to use that when the hostage is just a few feet away from these armed pirates?

Wolf.

BLITZER: Which raises the question, Chris, does the Navy have some specific rules of engagement on when to intervene?

LAWRENCE: Well, the military does have rules of engagement, Wolf, but those are used to guide combat troops into a combat situation. The Navy is telling us, this is not a combat situation, it's a hostage situation following a criminal act, which is the piracy. So this is a very unique situation in which rules of engagement don't really apply.

BLITZER: A very complicated situation that we're monitoring.

Chris, thank you.

There's another situation involving pirates. This one did not end all well. It involves the yacht that's seen here.

Today, the French military freed four hostages on that yacht, including a child. Pirates had been holding them for almost a week near Somalia, but one hostage and two pirates died in the operation. The office of the French president, Nicolas Sarkozy, says France's military acted against the pirates because they refused offers and increased their threats.

We're going to have a lot more on this story as it develops over the next several hours.

Meanwhile, another story we are following right now, the U.S. budget gap sees another eye-popping jump -- $956.8 billion, that's how much the budget gap grew the first half of this fiscal year, according to the government. Putting that in perspective, that's more than $500 billion above the gap for all -- repeat, all -- of the last fiscal year. This, as the president suggests we may be seeing the beginning of the end of the economic crisis.

Let's bring in our Senior White House Correspondent Ed Henry. He's here in THE SITUATION ROOM.

He sounded a little bit hopeful today.

ED HENRY, CNN SR. WHITE HOUSE CORRESPONDENT: That's right, Wolf.

This president has been walking that very fine line between talking the economy up, talking it down. Today he decided to tilt the balance towards upbeat.

(BEGIN VIDEOTAPE)

HENRY (voice-over): After weeks of facing allegations he was talking the economy down, President Obama is now offering his most optimistic assessment yet.

BARACK H. OBAMA, PRESIDENT OF THE UNITED STATES: What you're starting to see is glimmers of hope across the economy. Now, we have always been very cautious about prognosticating, and that's not going to change just because it's Easter.

The economy is still under severe stress. And obviously during these holidays, we have to keep in mind that whatever we do ultimately has to translate into economic growth and jobs and rising income for the American people.

HENRY: A striking change in tone from even just a week ago in London, at the G-20 summit, when the president was still emphasizing the negative.

OBAMA: The global economy is contracting, trade is shrinking, unemployment is rising. The international finance system is nearly frozen.

HENRY: Since then, the stock market has shown modest gains. And then Friday, The Wall Street Journal's latest forecasting survey came out, revealing economists now expect the recession to end in September.

OBAMA: We're starting to see progress. And if we stick with it, if we don't flinch in the face of some difficulties, then I feel absolutely convinced that we are going to get this economy back on track.

HENRY: The president cited a boost from infrastructure products in his stimulus plan and touted a 20 percent increase last month alone in the Small Business Administration's largest loan program.

OBAMA: What that means is that small businesses are starting to get money that allows them to keep their doors open, make payroll. And that is going to contribute to overall economic growth, as well as help make sure the people are able to keep their jobs.

(END VIDEOTAPE)

HENRY: But on the issue of jobs, the economists in that "Wall Street Journal" survey are cautioning that even if the recession ends this fall, it may not be until late 2010 that it actually kicks in enough that unemployment will finally start improving. Significant about late 2010, of course, the midterm elections, when voters are going to be demanding some economic progress from this president. So he's going to be watching that very closely.

BLITZER: People have been in pain for a long time.

HENRY: Absolutely.

BLITZER: We're going to have a lot more on this. Jared Bernstein, the top White House economic adviser, he's going to be joining us here in THE SITUATION ROOM. And we're going to try to pin him down on some specifics as well.

Thanks very much, Ed Henry, for that.

HENRY: Thank you.

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

JACK CAFFERTY, CNN ANCHOR: Wolf, it's not like he doesn't already have a lot on his plate, but now President Obama says he wants to tackle immigration reform and he wants to do it this year. In fact, he says he plans to begin as soon as next month. The president says he'll rely on a bipartisan and diverse group of experts to frame the legislation, but officials say immigration will not be on the same track as other key initiatives like health care and energy, and "Nobody's promising legislation or a vote this year."

Nevertheless, it looks like the president is going to try to make good on another campaign promise by working to fix the nation's broken immigration system during his first year in office. There are an estimated 12 million illegal aliens in this country. The number might even in fact be a lot higher than that.

The White House apparently wants to look for a path for illegal aliens to become legal. That's called amnesty, and a lot of people in this country are rabidly opposed, including those immigrants who took the time and trouble to come here legally.

The president also wants to remove incentives to enter the country illegally, beef up border security, work with Mexico to cut down on illegal -- blah, blah, blah. This is all stuff we have heard before, and at the end of the day, none of it ever gets done. Our economy is in the toilet. Is this the time to give millions of illegal aliens permanent access to American jobs, when millions of own citizens can't find work?

Mr. President if you want to begin to squander your incredibly high approval ratings with the American public, this might be a way to do it.

Here's the question: The White House wants to start tackling immigration reform this year. Where should they begin?

Go to CNN.com/caffertyfile and post a comment on my blog -- Wolf.

BLITZER: I guess they're going to begin by talking about it. They'll talk a lot about it.

CAFFERTY: Well, we're going to get another bipartisan commission together, and those always work well.

BLITZER: OK, Jack. Thanks very much.

Jack Cafferty will be back shortly.

It could be an amazing survival story that we're watching right now. After that earthquake in Italy this week, a person may have survived four days trapped under twisted metal and sharp glass.

And he's the leader of the free world, but apparently President Barack Obama doesn't have what it takes to earn one university's honor.

And surprise -- they're on Candid Camera. Thieves break into a home, but the owner was watching from her computer at work.

(COMMERCIAL BREAK)

BLITZER: The president, with some positive words about the economy today, echoing recent statements from some of his top economic advisers. So what's prompting the new, more upbeat tone?

(BEGIN VIDEOTAPE)

BLITZER: And joining us now from the north lawn of the White House, the chief economist and economic policy adviser to the vice president, Joe Biden, Jared Bernstein.

Jared, thanks very much for coming in.

JARED BERNSTEIN, CHIEF ECONOMIST TO VICE PRESIDENT BIDEN: Nice to see you again, Wolf.

BLITZER: The president says he sees some glimmers of hope that things are moving in the right direction. Be specific. What are some of those glimmers?

BERNSTEIN: Well, some of those glimmers have to do directly with some of the interventions that the president, the economic team and the Treasury have put in place. The president mentioned today, small business loans up 20 percent. That's a really important increase when you think about the difficulties that small businesses have faced in a tough credit market. But you could also talk about mortgage rates, the 30-year fixed rate well below 5 percent, an historic low, and that's since our housing plan was passed, so that's a really important indicator.

Refinancing, way up. That helps too. So those are the kinds of glimmers. But Wolf -- and the president made this point today -- you really have to temper any of this kind of optimism connecting it to some of our plans with a realistic sense of the challenges the economy still faces.

BLITZER: So you're not ready to declare "Mission Accomplished" yet?

BERNSTEIN: Oh, so far from it, Wolf. The point is this -- look, I told you about mortgage rates, I told you about small business lending, I can talk about refinances. The bottom line, jobs and incomes for American working families, for the middle class, for families throughout this country who are still struggling with a tough economy. Until we get that job market and those paychecks back with people's living standards rising with economy, mission nowhere near accomplished.

BLITZER: Because your boss, the vice president, told me earlier in the week that there would continue to be job losses throughout the rest of this calendar year.

BERNSTEIN: The forecast -- it's a good point and an important one, it's one that the vice president has made before. You know, if you talk about the forecast for the overall economy, GDP, gross domestic product, that starts to turn up towards the end of the year, and that's very positive. But, you know, let's face it, you don't exactly take GDP to the grocery market to buy your bag of groceries.

What matters, bottom line, jobs and income. And jobs and wages, that kind of thing, that lags the overall GDP. So we do expect unemployment to continue to rise.

BLITZER: Here's another point that the president made this morning. Listen to this.

(BEGIN VIDEO CLIP)

OBAMA: So we have still got a lot of work to do. And over the next several weeks, you will be seeing additional actions by the administration.

(END VIDEO CLIP)

BLITZER: All right. Explain what he means by additional actions. Is he talk about another economic stimulus package?

BERNSTEIN: No, he's definitely not. What he's talking about are just further steps in programs that are already underway.

So, for example, we know that the Treasury and, I should say, the Fed and the FDIC are engaged in diagnostic testing to determine the health of the banking sector. There are ongoing plans. This PPIP, or the Public/Private Investment Plan, to help get the bad assets off the balance sheets, that's a work that's coming on line.

You know, the Recovery Act, those pieces are still falling into place. Just a week ago or so, the Making Work Pay tax cut began to filter into people's paychecks. That's an important part of the boost too.

BLITZER: One other point the president made. He said things are moving in the right direction, but he added, "If we don't flinch."

What's your biggest concern right now? What does he mean by that, "If we don't flinch"?

BERNSTEIN: I think the idea there is that we have a set of plans that depend, in large part, on continued pressure from our side, from the Congress' side, in terms of implementing these plans, making sure they get into the system in a timely and efficient way. If you talk about shovel-ready infrastructure, that kind of spending from the recovery plan is getting out into the system as we speak.

But we have to monitor that to make sure that those dollars are efficiently and effectively spent so we can create and save 3.5 million jobs between now and the end of next year. Our plans for the financial sector, for the housing sector, we cannot flinch in the implementation of these plans. We have to monitor their actions as they go through the system, make sure that they're up and running the way we expect them to be.

BLITZER: Jared Bernstein, thanks for coming in.

BERNSTEIN: My pleasure, Wolf.

(END VIDEOTAPE)

BLITZER: This programming note. Tomorrow, here in THE SITUATION ROOM, on our Saturday edition, we're going to play the entire exclusive interview with the vice president of the United States, Joe Biden. We're also going to get brand new reaction from the former vice president, Dick Cheney's former national security adviser, John Hannah, tomorrow, 6:00 p.m. Eastern, right here in THE SITUATION ROOM.

It appears President Obama isn't worthy. He'll soon be visiting a major university that apparently doesn't think much of his experience. What's going on?

And how do you stop roving gangs of pirates? One military expert says take the fight right to where they plot their deeds.

(NEWSBREAK)

(COMMERCIAL BREAK) BLITZER: To our viewers, you're in THE SITUATION ROOM.

Happening now, a captain held by pirates tries to make a break for freedom, but his captors spoil his escape as more pirated ships are heading for the standoff.

A new Ponzi scheme is uncovered, this time in Denver. And the man allegedly behind it is a former church bishop.

And new fears about a virus that could be coming to your computer.

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

Apparently, the pirates holding an American captain hostage could get some help from other pirates holding hostages. These new criminals are now heading to the scene in ships they have already hijacked, according to a U.S. official. This comes as the United States will beef up its military presence off the coast of Somalia and after the American captain tried to escape earlier today but was recaptured.

Meanwhile, how do you fight against rogue incidents like these?

Brian Todd is here in THE SITUATION ROOM. He's been taking a much closer look.

These are complicated issues.

BRIAN TODD, CNN CORRESPONDENT: They are, Wolf. And some very strong ideas are being circulated right now because, essentially, we've now got a standoff between a gang of maritime thugs and the world's most powerful Navy, and it's not clear who's got the upper hand.

(BEGIN VIDEOTAPE)

TODD (voice-over): Somali pirates know they can wreak havoc on the high seas, extort major shipping lines, then speed back to a safe haven in Somalia. There's no functioning government there to go after them.

How do you stop this?

MAJ. GEN. TOM WILKERSON, U.S. NAVAL INSTITUTE: Deny sanctuary. You must find them and take the fight to where they live.

TODD: Major General Tom Wilkerson, head of the independent U.S. Naval Institute, says the American Navy and its allies have not been able to accomplish their mission of safeguarding the Indian Ocean and the Gulf of Aden. Given that it's an area five times the size of Texas, he says, that's not the Navy's fault. Wilkerson says military raids on pirate hideouts inside Somalia where they plan and launch hijackings would be more effective.

WILKERSON: It's where they get to go where no one comes after them. And as long as that exists, they have plenty of incentive to stay in the game of being a pirate.

TODD: But that conjures up the specter of Black Hawk Down, October, 1993, a fateful raid in Mogadishu aimed at capturing militants. American helicopters blasted from the sky. A chaotic firefight. Eighteen U.S. Army Rangers and hundreds of Somalis dead.

General Wilkerson believes raids on pirates could be different.

WILKERSON: In Mogadishu and in Black Hawk Down, it was my understanding that we were confronting a force that was fairly cohesive, whereas the pirates might be in separate enclaves of different "warlords or tribal leaders," not necessarily in communication with one another.

TODD: What would the risks be now?

STEPHEN MORRISON, CENTER FOR STRATEGIC & INTERNATIONAL STUDIES: One is civilian casualties. A second is the image that will be created by the United States, the lone superpower, striking a Muslim country. And the third is detainees and the uncertainty about how they'll be handled.

(END VIDEOTAPE)

TODD: And there's the psychological barrier. Stephen Morrison says that raid in Mogadishu still plays on the minds of American leaders. They all think about it when confronting any potential military action involving Somalia.

Wolf, 15 and a half years later, it weighs on the minds of those in Washington making these decisions.

BLITZER: Because a lot of people are really worried. A lot of experts you've spoken to, I've spoken to, are worried this could get messy.

TODD: That's right. There's no way that this won't be at least a little bit messy.

These are not going to be surgical strikes, there are going to be some casualties, likely civilian casualties. But one thing that's changed since Mogadishu, and even since 9/11, there are now U.S. Special Forces in that region. There's at least a fingerprint there to start with. They could possibly launch some successful raids.

BLITZER: All right, Brian. Thanks very much.

Brian Todd looking closely at this story.

Let's assess what's going on. Let's bring in two guests.

Tom Fuentes is a CNN contributor and former FBI assistant director, and James Christodoulou is head of Industrial Shipping Enterprises Corporation.

James, let me start with you. JAMES CHRISTODOULOU, INDUSTRIAL SHIPPING ENTERPRISES CORPORATION: Sure.

BLITZER: You've acknowledged paying ransom to free some of your people in the past. Is that right?

CHRISTODOULOU: That's right.

BLITZER: Why did you do that?

CHRISTODOULOU: Well, because the only concern that I had was to secure the safe release of my crew. And unfortunately, the only way that I could do that was to pay the ransom and make sure that my crew got out safely -- mentally, physically, emotionally intact.

BLITZER: And they -- did they get out?

CHRISTODOULOU: They -- they got out fine.

I mean, they were held for 55 days. I negotiated with the pirates several times per day to secure their release.

I will tell you, to the Somalis, this is a business. But they did get released OK. They were all reunited with their family. And -- and I did what I supposed to do, as the CEO of the company.

BLITZER: How much did it cost?

CHRISTODOULOU: You know, how much we paid is interesting, but, Wolf, it's not really important.

What's really important is, as we're seeing, this crisis still exists. It's threatening the lives of a very brave captain Phillips and 300 other sailors who are being held captive at this very moment.

BLITZER: Tom, does it encourage more of kinds of incidents to go ahead and pay the ransom?

TOM FUENTES, CNN CONTRIBUTOR: Yes, Wolf, of course it does.

BLITZER: So, what -- so, but -- but you just heard James. He makes a good point. His priority was to get his people out alive and well. And if it cost some money, he was willing to spend it. It's a dilemma that these -- these companies have to face right now.

FUENTES: Yes, it's absolutely -- and I didn't mean my comment to be critical.

No company wants to be the first one to not make the payment, and have a member of their crew or all of their crew murdered. So, this is -- this is the dilemma that they're in, and this is the dilemma that law enforcement is in right now with these negotiations.

All of the high-value commodities that have been taken in the past pale in comparison, as far as we're concerned, because we now have a U.S. citizen with a gun pointed at his head in that lifeboat. BLITZER: The situation now -- and let me go back to James -- is a little bit different, in that the U.S. Navy is in charge. I don't know if Maersk, the commercial cargo vessel, that company really has control over this situation right now, does it, James?

CHRISTODOULOU: From -- from what I am understanding, the -- the Navy has come in and kind of disintermediated Maersk, and has taken control over the situation, which is very different than how I had to deal with my situation.

Quite frankly, we wanted government support, but not really government involvement, because it was very much a private transaction between me and -- and the Somali pirates.

BLITZER: If they want $1 million or $2 million to free captain Phillips, Tom, who -- who's going to make that decision now? Would it be Maersk, or would it be the U.S. Navy, the U.S. government?

FUENTES: I think the company will still be in a position to decide. It's just that the Navy is also in the position to determine what tactics are available and to be coordinating the negotiating process right now.

BLITZER: Here was what Newt Gingrich, the former House speaker, just said in a Twitter out there. He says this. It's very critical of what's going on.

He says: "The correct answer to piracy is to destroy it, not negotiate with it. SEALs," referring to Navy SEALs, "can retake the lifeboat, track ever boat leaving Somalia."

What do you think about that, Tom?

FUENTES: Well, that's fine if you're prepared for the captain to end up dead in this situation.

CHRISTODOULOU: That's right.

BLITZER: You think that almost certainly the captain -- Navy SEALs couldn't go just under water or get this guy freed?

FUENTES: Well, the SEALs are in the best to assess what they're able to do with that particular lifeboat.

Seeing the pictures of it, it appears difficult, because it has a housing over the top of it. So, you don't have an open view -- open view of where that captain's being held or how many people are holding him or whether he's been tied up now, and that, even if he was to go into the water, he would end up drowning, compared to before, when he tried to swim.

So, there's many decisions that need to be assessed. A SEAL team in the area obviously would know their tactical capabilities and the likelihood of success, which is going to drive this.

But, again, no one wants this is captain to end up dead. Of course, certainly, the Navy can outgun those pirates, but the negative outcome is -- is looming large.

BLITZER: And what I hear you saying, James, if that, if you were in -- if this was one of your employees, captain Richard Phillips, you would pay the ransom once again?

CHRISTODOULOU: Look, I would pay the ransom.

But let me just remind everybody that there's not just captain Phillips, a very brave fellow American, being held hostage. There are 300 other people being held hostage still by the same pirate gangs.

And -- and, if we start to pressurize and escalate this situation, unfortunately, we may be jeopardizing those other 300 people. I think we have look a little bit more complexly at this whole situation. It's not just one guy in a -- in a -- in a lifeboat.

BLITZER: It's a very complex situation, and the life -- and, as you point out, the life not only of this captain, but potentially other hostages, right now on the line, very much so.

Guys, thanks very much.

(CROSSTALK)

BLITZER: Go ahead. Go ahead, James.

CHRISTODOULOU: Well, if I may say, the general is absolutely right.

We need to attack this situation. We need to defeat this crisis, but the way we need to do it is by pulling the root cause out and going to Somalia, where they're getting logistic support, safe haven, other men and supplies. That's really where the battle has to be waged. But let's not use the very brave men and women who work in the shipping industry as -- as -- as pawns in this game.

BLITZER: We will leave it at that note.

Guys, thanks very much for coming in.

CHRISTODOULOU: Thank you for having me.

FUENTES: Thank you, Wolf.

BLITZER: It's becoming increasingly common for office workers to remotely monitor what is going on at their homes on so-called nanny cams or doggie cams. But you won't believe what one woman witnessed when she logged in. We're going to show you.

Also, lawmakers trade jabs over Cuba, but would it be a mistake to normalize relations? Our "Strategy Session," that is coming up.

And a former bishop in the Mormon Church now being compared to Bernard Madoff -- we will tell you about the Ponzi scheme investigation.

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

(COMMERCIAL BREAK)

BLITZER: All right, there's a huge controversy that's erupted over a decision by Arizona State University not -- repeat, not -- to award President Obama an honorary degree when he delivers the commencement address at that university next month.

We ask CNN's Kate Bolduan to come in and take a closer look.

There's outrage developing in a lot of parts of the country.

KATE BOLDUAN, CNN CORRESPONDENT: Absolutely, Wolf.

ASU describes an honorary degree as a way to acknowledge people who have made contributions to society. And right now, it seems, President Obama doesn't make that cut.

(BEGIN VIDEOTAPE)

BOLDUAN (voice-over): Sandra Day O'Connor received one after serving on the Supreme Court for just three years of her nearly quarter-century on the bench. So did Barry Goldwater in 1961, before running for president. And even a former owner of the Phoenix Suns and the Chinese vice minister of education received honorary degrees from Arizona State University, but not so for President Obama.

ASU has reportedly decided against awarding the degree to the president when he speaks to its graduating class of more than 8,000 next month -- a spokeswoman telling the Associated Press -- quote -- "It's our practice to recognize an individual for his body of work, somebody who's been in their position for a long time."

She goes on to say: "His body of work is yet to come. That's why we're not recognizing him with a degree at the beginning of his presidency."

(CHEERING AND APPLAUSE)

BOLDUAN: It's tradition for presidents to choose a select few graduation ceremonies to speak at. And, in turn, colleges and universities often honor them with honorary degrees, leaving many, including presidential historian Bob Dallek, scratching their heads.

ROBERT DALLEK, PRESIDENTIAL HISTORIAN: Does it add more to the stature of Arizona State University or to Barack Obama's stature? I would think it adds more to the stature of Arizona State University having given this African-American president, the first in our history, a -- an honorary degree.

(END VIDEOTAPE)

BOLDUAN: We reached out to the White House, and they say no comment on this issue. It's -- and it's not the only commencement controversy they're dealing with right now. The president's planned speech at Notre Dame's upcoming ceremony has some devout Catholics protesting, outraged the Catholic school is welcoming a president who supports abortion rights.

And, Wolf, the president is getting an honorary degree at Notre Dame.

BLITZER: At Notre Dame.

And later here THE SITUATION ROOM, we're going to tell our viewers some of the others who have received honorary degrees at Arizona State University. This president not qualified, but people will be surprised to hear some of the folks who were qualified to get honorary degrees.

BOLDUAN: People are talking about it.

BLITZER: Kate Bolduan.

Kate Bolduan, congratulations to you.

She just got engaged. A lot of disappointed men are going to be watching this show.

Congratulations.

BOLDUAN: Thank you, Wolf.

BLITZER: Very happy for you.

BOLDUAN: Thank you.

BLITZER: Alabama Congress Spencer Bachus says some of his colleagues are socialists. But he's not naming names.

Let go to our congressional correspondent Brianna Keilar for details.

This is another story that's causing a lot of outrage out there. What's going on, Brianna?

BRIANNA KEILAR, CNN CONGRESSIONAL CORRESPONDENT: Well, and, Wolf, it's begging the question, is he serious or is this just name- calling?

(BEGIN VIDEOTAPE)

KEILAR (voice-over): Republican Congressman Spencer Bachus says socialists are walking the halls of the Capitol.

"Some of these guys I work with, the men and women in Congress, are socialists," he told officials at an event in his home district. Bachus also told a "Birmingham News" reporter there are 17 openly socialist members of the House, though he did not name names or define socialism.

But Senator Bernie Sanders believes he is the only member of Congress openly embracing socialism. He points to democratic socialist countries in Scandinavia, where citizens don't pay for health care or higher education. Sanders spent several years in the House with Bachus, and says his comments are a form of red-baiting.

(BEGIN AUDIO CLIP)

SEN. BERNIE SANDERS (I), VERMONT: What you want to do is not just frighten people. Let's debate the issues and not try to frighten people by pretending that socialism is communism and authoritarianism.

(END AUDIO CLIP)

KEILAR: Nonpartisan political observer Stu Rothenberg thinks Bachus; characterization is just rhetoric.

STUART ROTHENBERG, EDITOR AND PUBLISHER, "THE ROTHENBERG POLITICAL REPORT": I think he was tossing around this word as a way of kind of demonizing and defining some of his -- his colleagues. And this is the kind of thing that Republicans ought to avoid, because it becomes a big story, when they should be talking about health care and the war in Afghanistan and some specifics.

(END VIDEOTAPE)

KEILAR: And, Wolf, we wanted some clarification on Spencer Bachus' comments, so we called and e-mailed his Washington and Alabama offices. We didn't hear back, though, Wolf.

BLITZER: Brianna, if you do, let us know. Thanks very much.

Republicans hoping to score political points, might the video of the president greeting the Saudi king help them?

And what might it be like for that American captain held hostage by those pirates in that lifeboat? We will take you inside one of those lifeboats just like it.

(COMMERCIAL BREAK)

BLITZER: President Obama getting ready to head to Latin America.

We have some new poll numbers on American attitudes towards two of the hemisphere's hot spots.

Let's go to our senior political analyst, Bill Schneider.

All right, Bill, what's the public looking for when the president makes his trip to Latin America next week?

WILLIAM SCHNEIDER, CNN SENIOR POLITICAL ANALYST: Wolf, change, one word. And it's the word Obama ran on.

(BEGIN VIDEOTAPE)

SCHNEIDER (voice-over): Two flash points in Latin America, Mexico and Cuba. Violence in Mexico is generating pressure for more border security.

BARACK OBAMA, PRESIDENT OF THE UNITED STATES: There have been calls to increase National Guard troops on the border. That's something that we are considering.

SCHNEIDER: So are the American people. Seventy-five percent favor sending U.S. troops to the border. That includes hefty majorities of Democrats, as well as Republicans. A consensus is also emerging on Cuba.

Congressional Black Caucus members were in Havana last week to call for change in U.S. policy.

REP. EMANUEL CLEAVER (D), MISSOURI: We have deluded ourselves into believing that, if we isolated Cuba, that the government of Fidel Castro would collapse.

SCHNEIDER: Americans have long favored restoring diplomatic relations with Cuba. It's now over 70 percent, and, again, sizable majorities of both Republicans, as well as Democrats.

The Obama administration is considering lifting restrictions on travel to Cuba by family members.

SEN. CHRISTOPHER DODD (D), CONNECTICUT: Cuban Americans and others would like the opportunity to get to that country to see relatives, to see friends, to begin to open up that process. This is long overdue.

SCHNEIDER: Does the public agree? Yes, by nearly two to one.

Change is good, some Cuban American leaders say, but let it start with them.

SEN. MEL MARTINEZ (R), FLORIDA: What about change in Havana, in the condition of the Cuban government towards its people, in the way it treats its people?

(END VIDEOTAPE)

SCHNEIDER: Americans want a harder line on Mexico, a softer line on Cuba. In both cases, try something different, for a change -- Wolf.

BLITZER: Bill Schneider, thanks very much.

Let's bring in the Democratic strategist Mo Elleithee and Republican strategist Leslie Sanchez.

Guys, thanks very much for coming in.

Mona Charen, the conservative writer, said this: "Cubans who dare to oppose the regime pay a terrible price. Representative Barbara Lee, who led this delegation from the Congressional Black Caucus to Cuba, and has been a Castro apologist for decades, should be deeply ashamed. So should they all."

They're getting some backlash, members of Congressional Black Congress who went to Cuba and met, not only with Raul Castro, but with Fidel Castro, as well. MO ELLEITHEE, DEMOCRATIC STRATEGIST: Well, I think, as we just saw, the American people overwhelmingly want to try something different.

I don't think anyone really thinks that President Bush's executive orders back in 2004, which strengthened -- or which made it tougher for family members to see their relatives in Cuba, no one thinks that really worked.

So, I think, you know, especially, like, now, a time, during the holidays, people ought to be able to go and see their relatives. But, at the same time, we ought to be continuing to hold the Cuban government accountable and looking for their change as well.

BLITZER: Because there are plenty of younger Cuban Americans, a new generation, who are -- who agree that, you know, maybe it's time to open up the door a little bit and get a dialogue going.

LESLIE SANCHEZ, CNN POLITICAL CONTRIBUTOR: There's no doubt.

I think, collectively, we know people want more freedoms. That's what it fundamentally comes down to, freedom of the press, freedom for elections, freedom of those political prisoners.

And I think, if Raul Castro and that regime is willing to have some flexibility, there definitely is a desire -- a desire to do that on this side.

The problem is this mixed messages of, we're working to do that, but at what cost, in essence, having Raul Castro use us like a puppet for whatever -- to whatever extent he wants.

BLITZER: The argument was that members of the Congressional Black Caucus, when they went there, they should have used that to raise some human rights issues directly with the Cuban leadership.

ELLEITHEE: Oh, I think the American government has been very, very clear in its desire to hold the Cuban government accountable for its human rights violations. It's been very clear on calling on the Cuban government to change its attitudes towards human rights and giving its people more freedom.

But, at the same time, Cuban Americans living in this country who want to be able to interact with their family once again ought to have that right, too.

SANCHEZ: People -- but people want freedom. I mean, let's just -- let's -- the bottom line, people want freedom. And it's a distinct difference in how we think we're going to get that freedom.

BLITZER: Yes, I'm sure, by now, all of you -- and most of our viewers, I'm sure -- have seen that video of the president of the United States, when he met with the King Abdullah of Saudi Arabia, last week, during the G-20 summit -- and -- and there it is. You can see it right there. It certainly looks like he was bowing, even though the White House says he wasn't really bowing. He was just bending down because he's taller, much taller than King Abdullah.

The National Republican Senatorial Campaign Committee, which raises money to try to get Republicans elected to the Senate, they're now using this as an ad, saying this was totally inappropriate, for a president of the United States to bow to a Saudi monarch.

Is that good politics?

ELLEITHEE: No, it's silly politics.

I mean, frankly, where were these same people -- these were the same people that were crying foul when Democrats pointed out President Bush's holding hands with the king was inappropriate.

Look, there's a big difference between President Obama and President Bush. President Bush had a too-cozy relationship with the Saudi government, too-cozy relationship that led to our dependence on foreign oil and a lot of other problems. So, I think they're trying to be a little silly right now, and there's no clear message...

(CROSSTALK)

BLITZER: Because former President Bush not only held hands with then Crown Prince Abdullah, now King Abdullah, but he actually kissed him as well.

SANCHEZ: Sure.

But there's a distinct difference between that and protocols. I mean, in terms of protocols and what is adhered to in terms of policy relationship, that is very customary. There's a distinct difference between that and the bow. And I think most people, reasonable people...

BLITZER: But is it smart politics for the Republicans to try...

SANCHEZ: It -- it...

BLITZER: ... to use this now to -- to...

SANCHEZ: Yes.

BLITZER: ... to embarrass the president?

SANCHEZ: I think it's fair game. It's fair game, as much as I get e-mails from the Democratic Senatorial Committee talking about Governor Sarah Palin.

I mean, to the extent that this is very polarized, people see different things, want different things from their government and different types of strengths and controls with America, America comes first, it's a fair debate. ELLEITHEE: I would recommend to the Republican Senate committee that it work with its candidates to come up with an economic message right now, which is clearly where they are lacking. It's what the American people truly care about. Enough of the silliness. Let's fix our problems.

SANCHEZ: Well, you know, I will agree with the point. There's a lot of things people want to care about, but this is intensifying the base. It's a political move for that reason.

BLITZER: Activating.

All right, guys, thanks very much.

The U.S. Navy with some incredible firepower on hand at the scene of that piracy drama, are they getting ready to use it? Barbara Starr is standing by with a live report.

A woman watches on a Webcam -- a Web camera as thieves rob her home. We have the video and the 911 tape.

And protecting the public or -- or wasteful spending? We have an update on the volcano-monitoring controversy.

(COMMERCIAL BREAK)

BLITZER: It could be a sign of the times.

A Florida woman was able to watch by remote Webcam as burglars ransacked her home. We have just received access to the video and the 911 tape.

Wait until you see how this one ends.

(BEGIN AUDIO CLIP)

911 EMERGENCY OPERATOR: Nine-one-one.

JEANNE THOMAS, HOMEOWNER: Yes.

Hi. My name is Jeanne Thomas. I'm watching my home on live monitor. And there's a man in my house, and he is robbing it.

911 EMERGENCY OPERATOR: Where are you calling from?

THOMAS: I'm calling from my office. And I have a live video monitor. And he is in my home. And he is in my bedroom. And we have been robbed.

911 EMERGENCY OPERATOR: How long has he been in there, ma'am?

THOMAS: I don't know. I just called. I called 911 as soon as I saw it.

Oh, God, I can't believe this.

And there goes my cat. She's running. I have got three dogs in there.

911 EMERGENCY OPERATOR: OK.

THOMAS: And the cat is, like, freaking out.

And he is walking next to my stereo. He is looking at my son's video games. He's plummaging (sic) through the house.

Are they there?

911 EMERGENCY OPERATOR: They are on the way, ma'am. I just need as much information as possible. He's now where?

THOMAS: OK.

(CROSSTALK)

THOMAS: He's in the -- my living room in the main part of the house. He is looking around. He has a white shirt. He's picked up something in his hand.

Oh, he has picked up a Wii video game.

Oh, God, please hurry. Please hurry.

I can't believe this. This is unbelievable.

He doesn't even know I am sitting here watching him.

911 EMERGENCY OPERATOR: OK. Hold on just a second.

THOMAS: Oh, God. God. I can't believe this. This is unbelievable.

OK. Oh, he's running out the back door.

(CROSSTALK)

THOMAS: He's going out the back door.

911 EMERGENCY OPERATOR: He's running out the back door.

THOMAS: He's going out -- two people in the house. Oh, here comes another one, and a big one, another one in a big jacket. He's in the back there in the back.

911 EMERGENCY OPERATOR: She said another subject...

(CROSSTALK)

THOMAS: OK. Yes, now they are running into the back.

(CROSSTALK)

THOMAS: OK. They are looking out the back window. They are looking... (CROSSTALK)

911 EMERGENCY OPERATOR: Two subjects now.

THOMAS: OK. Here's just one. He is running to the front. The other one is trying to figure out which way to go. The cat is freaked out. The dogs are hiding.

My God. This is crazy. They have got things in their hands.

911 EMERGENCY OPERATOR: Ma'am, it's OK. Officers are surrounding your house. They're not going to get away with anything.

THOMAS: Oh, thank God they got there.

(END AUDIO CLIP)

BLITZER: According to a local affiliate television station, all four of -- of these suspects were taken into custody and charged with burglary.

Wow.

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

That's pretty -- pretty neat to have a little Webcam watching your house, your -- your animals...

(CROSSTALK)

(LAUGHTER)

BLITZER: ... and see what happens.

JACK CAFFERTY, CNN ANCHOR: I -- I -- I love it. She says, "The dogs are hiding."

(LAUGHTER)

CAFFERTY: She's got three dogs in the house, and they're hiding. It sounds like my place.

The question, the White House wants to start tackling immigration reform this year. Where should they begin?

Hugh in California: "Start by increasing fines and penalties for employers who knowingly hire illegal aliens. Suspend their license to operate, much like they do when liquor store or bar owners are found selling cigarettes or alcohol to minors. Without these changes, employers will continue to hire illegals in order to lower their operating costs, which only hurts the American worker."

Leonard writes: "Why don't we just follow the laws that we have in place and quit giving special treatment to Hispanics, or anyone else for that matter? What is the point of having laws you're not going to enforce?" Ray writes: "Kill two birds with one stone: Build an electric fence with ground sensors along the length of the border. Power the fence with solar or wind energy. It will create new jobs for Americans, keep out drug traffickers and illegal immigrants. Spend some of that TARP money on ICE and send them home. Invoice Mexico for health and welfare bills created by illegals. If someone's parents have to go, then they go. Want to stay in touch? Get a phone."

Jane in Minnesota: "Enforce E-Verify, first off. Penalize employers that employ anyone other than those who are in this country legally. The government needs to audit employers' payroll reports and actually physically investigate employers with employment report irregularities."

Pam in New York writes: "At the border is where you start. Unless we have control there, it does not matter what reforms are instituted. Going forward, mayors, governors, et cetera, should be prosecuted for providing sanctuary to illegal immigrants."

And Justin writes: One, close the borders. Two, start shipping illegals back. Three, pass a law that abolishes citizenship at birth for the children of illegals. Simple, no? Or will this affect Obama's reelection possibilities?"

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

Three dogs in the house, they're hiding -- Wolf.

(LAUGHTER)

BLITZER: Jack, thank you.

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