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Feds Warn of Right-Wing Threat; First Family Releases Tax Returns; "Tea Party" Targets Taxes, President; President Obama's Immigration Morass

Aired April 15, 2009 - 17:00   ET

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


WOLF BLITZER, CNN ANCHOR: Also, an Iranian-American journalist on trial for spying in Iran, even as the U.S. reaches out to that country.

So what's going -- what's going on right now?

What is likely to be her fate?

I'll ask another American journalist who's been in her shoes.

And an official at a major university admits -- and I'm quoting now -- "we blew it." The school is under fire for denying President Obama an honorary degree. Donna Brazile and the former White House chief of staff, Andy Card -- they're here to discuss that and more.

I'm Wolf Blitzer.

You're in THE SITUATION ROOM.

We're going to get to the president's tax returns shortly.

But first this -- conservative outrage over a red flag from the Homeland Security Department warning of a potential threat from right- wing extremists. The response to that so intense that now the Homeland Security secretary herself is trying to quell the answer.

(BEGIN VIDEO CLIP)

JANET NAPOLITANO, U.S. HOMELAND SECURITY SECRETARY: We do not exist to infringe, impinge or invade anybody's Constitutional rights of free speech, of free assembly or anything else like that. We exist to protect the country against the homeland consistent with the United States Constitution. And so in there is -- is where that product was created and what it was designed to do.

(END VIDEO CLIP)

BLITZER: All right. Let's go right to our homeland security correspondent, Jeanne Meserve.

What else is Secretary Napolitano saying and doing?

JEANNE MESERVE, CNN HOMELAND SECURITY CORRESPONDENT: Wolf, the big question is whether or not her efforts to quell the firestorm will do the job. (BEGIN VIDEOTAPE)

MESERVE (voice-over): Political conservatives are fired up.

RUSH LIMBAUGH, CONSERVATIVE TALK SHOW HOST: This is an effort to criminalize political dissent -- standard ordinary, everyday political dissent.

MESERVE: This fury a reaction to an assessment from the Department of Homeland Security saying right-wing extremist groups could exploit fears about the economic downturn, gun control and the election of an African-American president to attract new recruits. It says groups dedicated to a single issue, such as opposition to abortion or immigration, may fall within the definition of extremists.

LIMBAUGH: We are not extremists. They are the extremists.

MESERVE: To make its case, DHS cites a surge in purchases of guns an ammunition and the recent shooting of three Pittsburgh police officers by a man reportedly influenced by racist ideology and fears of gun confiscations.

An organization that tracks extremist groups says DHS has the picture at least partly right.

MARK POTOK, SOUTHERN POVERTY LAW CENTER: The election of Obama certainly has played, for these groups in the last six, seven, eight months. The economy, I think, is much more questionable. We really don't know if that is having an effect.

MESERVE: A homeland security official says DHS is not trying to squelch free speech, there is no link between extremists being talked about in that report and conservative political thinkers, activists and voters.

But conservatives aren't buying it.

ROGER HEDGECOCK, CONSERVATIVE RADIO TALK SHOW HOST: If the Bush administration had done this to left-wing extremists, it would be all over the press as an obvious trampling on the First Amendment rights of folks and dissent.

MESERVE: In fact, in January, there was a warning about left- wing extremists. It was issued by the Obama administration, but both reports were begun under President Bush.

(END VIDEOTAPE)

MESERVE: This latest DHS assessment says right-wing extremists may try to radicalize disgruntled veterans to exploit their military knowledge. That got a lot of people upset.

Today, Secretary Napolitano said she regrets that the report could be interpreted as an insult to veterans. She expects to meet next week with the head of the American Legion to clear the air and make it clear she respects veterans and their service -- Wolf. BLITZER: Jeanne Meserve, thanks very much.

All right. We now have the president and the first lady's tax returns for the year 2008.

Let's go to our senior White House correspondent, Ed Henry.

You're going through the numbers.

What are we seeing -- Ed?

ED HENRY, CNN CONGRESSIONAL CORRESPONDENT: I've got pages and pages here, Wolf, for both the first family, as well as the vice president.

What's interesting, some eye-popping numbers for President Obama and the first lady, reporting adjusted gross income of $2.65 million in tax year 2008. Obviously, that largely coming from royalties on books for the president, both "The Audacity of Hope" and "Dreams of My Father," obviously many, many copies -- very popular books.

That's what they essentially had in adjusted gross income.

They paid $855,323 in federal income tax, over $77,000 in state income taxes in Illinois. Last year, it should be noted, they paid about $1.4 million in federal taxes -- much more, because they had about $4 million in adjusted gross income because the book sales were even higher in the 2007 tax year.

But quite interesting, the book sales are obviously still doing very well for this president. That is the large sum of where their adjusted gross income came from.

A final point I'll make about the first family. They reported donating $172,000 -- about 6.5 percent of their adjusted gross income -- to 37 different charities. The largest gifts were $25,000 apiece to Catholic Relief Services, as well as the United Negro College Fund -- each getting $25,000 from the first family -- Wolf.

BLITZER: And they paid state income tax, as well. I'm looking at these numbers over here. They reported $77,883 in state income tax.

HENRY: Right.

BLITZER: So there's, what, close to a million dollars in taxes alone, if you add up the $855,000 in federal income tax...

HENRY: Right.

BLITZER: ...another $77,000. You're getting close to -- you're getting more than $900,000 in taxes that the Obamas have paid.

HENRY: Absolutely. And, again, that coming largely because the president was obviously not making as much, you know, all that money as a United States senator -- under $200,000 for that salary. Now, he's got a salary of $400,000 as president of the United States. This money is clearly coming, instead, from those book sales -- still both very popular.

The president recently signing a book deal for a sort of a children's version of one of those books.

Also worth nothing, Wolf, we're now getting the tax returns Vice President Biden and Dr. Jill Biden. Their 2008 federal and state income tax returns -- a much smaller adjusted gross income, about $269,000 for the second family, primarily salaries from Joe Biden, when he was a senator, obviously, as well as the teaching that Dr. Jill Biden does.

They -- they paid about $46,952 in federal income taxes, over $11,000 in state income taxes back in Delaware. And the Bidens contributed $1,885 to charity -- much less than the Obamas. In a press release, the vice president's office saying that the second family doesn't just use their checkbook, they also donate a lot of their time to their church and other causes. But from their checkbook, $1,885 to charity.

BLITZER: Yes. That's a sensitive issue, I'm sure, because I see on their release, they say they -- as you point out, they paid -- they declared $1,885 in charitable contributions. But then the press release that the Bidens released goes on to say the charitable donations claimed by the Bidens on their tax returns are not the sum of their annual contributions to charity. They donate to their church and they contribute to their favorite causes with their time as well as their checkbooks.

So there's some sensitivity, clearly, because people are always looking to see how much charity the president and his family and the vice president and his family give. But...

HENRY: Absolutely.

BLITZER: But it's clear that the -- the Bidens paid a whole lot less. I mean, he's the United States -- he was a United States senator. And the salary there is limited. And she was a teacher and so the salary there is limited. They're not making the kind of money that the Obamas make.

HENRY: That's right. The Bidens did report income from the audio sales -- for the audio portion of the vice president's book. But obviously, much, much smaller than what the president has made with both of his books. That has brought in, obviously, millions of dollars in recent years.

But in this past tax year, again, the first family reporting just about $2.65 million in gross adjusted income. That largely coming from those book sales -- Wolf.

BLITZER: Yes. That's -- that's a good point.

All right, we'll continue to watch this story.

Ed, thanks very much for rushing out to the lawn and bringing us that information.

Meanwhile, it's happening on this day when there are a lot of tea parties nationwide channeling anger at the president and some of his policies.

Let's go to one of those tea parties up in Boston.

Mary Snow is working the story for us.

How does it look behind you -- Mary?

What's going on?

MARY SNOW, CNN CORRESPONDENT: Well, Wolf, we're expecting, momentarily, a re-enactment of the original Boston Tea Party. And what we've seen here today is some rallies, as you mentioned, anger being voiced against the president on a number of issues, as well, that go far beyond taxes. That includes anger Janet Napolitano that Jeanne Meserve was just talking about, to members of Congress.

This specific event that we're at right now is being hosted by a conservative radio talk show host. And it has been talked about leading up to today's event, in part, driving up the attendance. As I said, a lot of venting on a number of issues.

What brought people here?

Take a listen.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: I just don't like the direction that the country has been taking for the last couple of months.

SNOW (on camera): Tell me about that.

UNIDENTIFIED MALE: It's -- that's the kind of spending that -- that is going on in this country is just out of control. It's really -- it's true, it's a generational transfer. It's -- people are going to be born broke because of the spending that is occurring -- that has occurred in the last couple of months.

UNIDENTIFIED FEMALE: I'd like most of those people in Congress to be taken out. And we need fresh blood. They've been in there for too long. They need to have term limits. They need to lower taxes. They need to get rid of these stimulus packages. They need to stop the bailouts.

(END VIDEO CLIP)

SNOW: And, Wolf, talking to a number of the people in the crowd today, a lot of them describe themselves as either conservative or libertarian. And many of them said that they oppose bailing out private companies. So that's one thing that they have really stressed. As for solutions, not really a lot of talk about solutions. Some people said that they would rather see money going directly to taxpayers rather than being spent in the stimulus package -- Wolf.

BLITZER: All right. Mary, thanks very much.

Mary is in Boston.

And stay with CNN this week to get the real deal on your taxes. We're digging deeper to get the facts about what you're paying and where the money is going.

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

He made $2.5 million or so, the president of the United States -- and the first lady.

And they paid -- when you add up the federal and the state income tax, they paid close to a million dollars in taxes.

JACK CAFFERTY, CNN ANCHOR: What is that, about 35 percent?

BLITZER: Yes.

CAFFERTY: I'm not good at math.

BLITZER: It's about a quarter.

CAFFERTY: And they gave 6.5 percent to -- to charity.

BLITZER: Right.

CAFFERTY: Which is, you know, that's -- I think the bible said you're supposed to tithe 10. But they gave 6.5 per percent. That's pretty good. The Bidens, on the other hand, did not fork over a lot of money to charity, did they?

BLITZER: Well, at least not in their declared -- what they declared. But they say they just sort of give money at church every week and do some other charitable work.

CAFFERTY: Yes.

BLITZER: But they're -- you know, the amount of money -- he didn't make $2.5 million. He had a little bit more than $250,000.

CAFFERTY: No, no. I understand.

Did you -- do you get a refund?

BLITZER: Yes.

CAFFERTY: How much?

BLITZER: A lot.

(LAUGHTER)

BLITZER: But I paid a lot, too.

CAFFERTY: I bet it is, too.

BLITZER: Yes.

(LAUGHTER)

CAFFERTY: All right. New York could become the fifth state to legalize gay marriage. Governor David Paterson is expected to introduce legislation tomorrow that would make marriage between same suss cuckles -- same-sex couples, he tried to say -- legal here in New York.

Paterson has previously said that he's committed to bringing "full marriage equality in New York State," adding it's a problem that gays and lesbians who live in a civil union are not entitled to around 1,300 civil protections that are available to married couples.

Former New York Governor Eliot Spitzer introduced the same bill back in 2007. It passed the assembly and died in the Senate. It's expected that this bill, if it's introduced, will once again get through the assembly, but it's unclear what will happen in the senate. It's going to need some Republicans to vote for it in the senate and that's probably not going to happen.

Supporters are hoping that the momentum is there for the bill to pass this time. That's because Iowa's Supreme Court recently overturned a ban on same-sex marriage. Vermont's legislature also just voted to allow gay couples to marry.

Same-sex marriage also legal in Connecticut and Massachusetts, but so far not in New York or California. Although these four states have legalized gay marriage, polls suggest the majority of Americans remain opposed to this idea. A CNN/Opinion Research Corporation poll from December showing 55 percent of those surveyed don't think gay marriages should be recognized by law as valid. Forty-four percent think they should.

Here's the question then, what would it mean if New York becomes the fifth state to legalize gay marriage?

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

BLITZER: Jack, thank you.

President Obama is heading abroad again -- this time to Mexico and the Caribbean.

Will we see the same Obama mania that gripped Europe when he was there or will this trip be a little different?

I'll ask our senior political analyst, David Gergen. He's here in THE SITUATION ROOM. Also, Afghan women protest strict new laws, including one that critics say legalizes spousal rape. But the protesters are outnumbered by supporters of the law -- including women.

Plus, it's literally a must-see TV or else -- we're monitoring the bizarre programming North Koreans are forced to watch, including a birthday blowout you have to see to believe.

(COMMERCIAL BREAK)

BLITZER: President Obama travels to Mexico tomorrow on his way to a Pan American summit in the Caribbean. His stop in Mexico City puts a spotlight on the still unsolved issue of immigration -- an issue the president clearly wants to tackle.

But can he right now?

Let's go to CNN's Brianna Keilar.

She's joining us -- Brianna, where does the issue of comprehensive immigration reform stand right now?

BRIANNA KEILAR, CNN CONGRESSIONAL CORRESPONDENT: Wolf, Congress will begin talking about it here very shortly.

But do not expect to see a vote here in the next few months because Congress already has its hands pretty full.

(BEGIN VIDEOTAPE)

KEILAR (voice-over): Immigration reform -- President Obama says it's a top priority.

BARACK OBAMA, PRESIDENT OF THE UNITED STATES: I think what we have to do is to come together and say we're going to strengthen our border. So we've got to deal with that at the same time as we deal in a humane fashion with folks who have put down roots here, have become our neighbors, have become our friends.

KEILAR: But President Obama has filled Congress's to-do list with reviving the economy, reforming health care and moving toward energy independence. That leaves little time for immigration reform -- an extremely divisive issue.

(VIDEO CLIP)

KEILAR: This is what happened last time Congress took up the subject -- despite strong support from President Bush, conservative critics helped scuttle reform in Congress, calling a proposed path to citizenship for illegal immigrants amnesty.

On the campaign trail, Senator John McCain, a strong supporter of overhauling immigration laws, acknowledged the backlash in his own party.

(BEGIN VIDEO CLIP) FROM AUGUST 20) SEN. JOHN MCCAIN (R), ARIZONA: We failed because the American people didn't believe us when we said we would secure the borders.

(END VIDEO CLIP)

KEILAR: Former Congressman Tom Tancredo, an outspoken critic of efforts to grant citizenship to illegal immigrants, says the recession will make reviving reform even more difficult.

TOM TANCREDO, FORMER REPUBLICAN CONGRESSMAN: We've got 10 percent unemployment and it's going northward. And you want to bring in still more illegal immigrants. You want to give those people who are here illegally the jobs that otherwise would go to American citizens.

(END VIDEOTAPE)

KEILAR: But Democrats in the Senate say they are going to be pressing ahead, announcing hearings here later this month. They're aiming for a vote on immigration reform some time in the fall -- Wolf, though we may not see a vote in the House until later or moving into next year -- and, Wolf, let's remember, it's sort of unclear how these votes are going to shake out. There is no proposal yet on immigration reform.

BLITZER: All right. Brianna, thanks very much.

Brianna is up on the Hill.

Let's assess what's going on.

We'll bring in our senior political analyst, David Gergen.

Is it likely, this comprehensive immigration reform, which President Bush tried?

He was working with -- he was working, a couple of years ago, with John McCain and Ted Kennedy. He couldn't do it then.

Is it likely that, maybe not this year, but eventually, this new president will have the votes to get it passed?

DAVID GERGEN, CNN SENIOR POLITICAL ANALYST, FORMER PRESIDENTIAL ADVISER: Wolf, I think the chances have gone up since last year. And that's because President Obama is in office, is more committed and you also have more Democrats in the Congress. And I think that's -- that helps the chances for passage.

And there is a strong incentive here for the Democratic Party. You know, they -- they've gained -- they made great inroads with the Hispanic voters in 2008. If they can bring the Hispanic voters in in 2010 and 2012, it could be the makings of a long-term Democratic majority.

But he has his work cut out for him. Wolf, one thing that happened today that was very important, and that is the president appointed Alan Bersin to be "the border czar."

I know Alan Bersin. He's former FBI California. He ran the San Diego schools. He now works for Governor Schwarzenegger on education reform. He's top notch and he's tough.

I think putting someone like that in charge on this issue gives them time to maybe make some progress on the border issues so that when they get to the tough political fight next year, as they're going to. -- and it is going to be a tough fight -- they may be able to show some progress on the border question themselves.

BLITZER: And this whole discussion comes on the eve of the president's departure tomorrow for Mexico and then to the Caribbean, to Trinidad and Tobago, for a Summit of the Americas, as it's called. And there's no doubt that immigration, borders, the economy, trade -- all that's going to be atop the agenda.

GERGEN: All that and more, Wolf. You know, when Anderson Cooper was down there just a few days ago, as you know, on the border with his programs, the situation down there with drugs and guns is -- it is extraordinarily violent. It is threatening the Mexican government. President Calderon is -- is battling hard. It is an unpopular fight, in some ways.

And so one of the hard things for President Obama is what's he going to do to shut down the supply of guns that are coming from the United States and can he help Mexico in some way by reducing the demand for drugs in this country?

Hillary Clinton, when she was there, you know, acknowledged that the U.S. is part of the problem. And what's going on in Mexico -- Mexico is a -- is a country increasingly under threat.

BLITZER: Because a lot of people are really worried. They've seen what's happening, the lawlessness and the violence right across the border in Mexico. And they're deeply concerned it's going to spill over not only across the border in Arizona and places along the border with Texas, but even further inside the United States.

GERGEN: Well, absolutely. And, you know, Wolf, the State Department itself has put out advisories for students who went down for spring break, you know, to be very careful about -- about traveling across the borders with Mexico.

This is a place now where Americans can be quickly endangered if there's -- if they're not -- if they're careful.

And so it is a -- this is a problem -- you know, we've been -- we've had our attentions elsewhere. But I think over the course of the next two or three years, we're going to be paying a lot more attention to Mexico.

You know, way back before, in the early George W. Bush administration, Mexico was right at the top of his agenda and then a long came 9/11 and his attentions got diverted. I think we're going to go back and start paying more attention to Mexico in the next few years.

BLITZER: David, thanks very much for coming in.

GERGEN: Thanks, Wolf.

BLITZER: A top university is now under fire for refusing to give President Obama an honorary degree. And now a new e-mail has surfaced shedding new light on the scope of a public relations disaster for Arizona State University.

And a story to make your skin crawl -- growing bed bug infestations. It's so bad that the federal government is now weighing in.

(COMMERCIAL BREAK)

BLITZER: Fredricka Whitfield is monitoring some other important stories incoming into THE SITUATION ROOM right now -- Fred, what's going on?

FREDRICKA WHITFIELD, CNN CORRESPONDENT: Hello again, Wolf.

A deadly ambush in Iraq -- police say a car bomb exploded as a bus filled with police officers passed by in the northern city of Kirkuk. At least 10 people were killed. Twenty-two were wounded, many of them civilians. The targeted officers were providing security for the state-owned gas company. They were on their way home from work when the bomb went off.

A rare admission today from Russia. In a meeting with human rights activists at the Kremlin, Russian President Dmitry Medvedev conceded Moscow has unfairly restricted the work of non-governmental organizations, known as NGOs. He blames officials who view NGOs as a threat to their hold on power. Medvedev insists changes must be made.

(BEGIN VIDEO CLIP)

PRES. DMITRY MEDVEDEV, RUSSIA (through translator): It's not a secret that the idea of human rights activity is seriously distorted in our country. It comes from our history and certain ideological foundations. One needs to understand one simple thing -- the state itself and people who are interested in rights should be responsible for protecting those rights.

(END VIDEO CLIP)

WHITFIELD: In another seemingly conciliatory move, Medvedev gave his first newspaper interview since becoming president to a publication consistently critical of the Kremlin.

The Environmental Protection Agency is holding a conference on a growing problem in the U.S. -- bed bugs. Infestations of the tiny nocturnal parasite have tripled since 2005. Experts art sure why. They're advising people to check hotel sheets and to wash all clothes after returning from trips because the bugs often travel in and on luggage. It kind of gives me the creeps right now -- Wolf.

BLITZER: Ooh, gross.

WHITFIELD: Yes, very gross.

BLITZER: All right. Thanks very much.

Let's hope they find the -- the cause of this.

WHITFIELD: Yes.

BLITZER: Coming up, presidential -- former President George W. Bush gathers some of his closest White House aides for a strategy session.

What's in the former president's future plans?

And an unusual honor for the comedian, Stephen Colbert, courtesy of -- get ready for this -- NASA. We'll tell you what happened right here in THE SITUATION ROOM.

(COMMERCIAL BREAK)

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

Happening now, Somali pirates seeking revenge attack another U.S. cargo ship. They fired grenades and automatic weapons at the Liberty Sun yesterday, but the ship got away using some evasive maneuvers. Pirates are vowing to target U.S. ships to avenge the deaths of three pirates killed during a U.S. rescue mission on Sunday.

Also, President Obama's tax returns -- they've just been released.

How much did he and the first lady make?

How much did they pay in taxes?

How much did they give away to charities?

We have all the numbers for you.

And Wall Street wrapping up a Wednesday in positive territory. The Dow rose 109 points, closing at 8029.

I'm Wolf Blitzer and you're in THE SITUATION ROOM.

April 15th: tax day across the United States. Lots of tea parties going on; people gathering to protest taxes, government spending, all sorts of bailouts.

Let's bring in our senior political correspondent Candy Crowley; she's taking a closer look. What's going on, Candy?

CANDY CROWLEY, CNN SENIOR POLITICAL CORRESPONDENT: Well, it's tax day, first of all. Who likes taxes? Nobody. Who likes lower taxes? Everybody.

So we need to start this day with the president.

(BEGIN VIDEOTAPE)

CROWLEY (voice-over): April 15th is not the best time to ask Americans whether they think taxes are too high but a perfect day for the president to remind them.

OBAMA: We passed a broad and sweeping tax cut for 95 percent of American workers.

CROWLEY: The average tax cut is somewhere between $10 and $13. While the president talked up his tax cut, an assorted group of tax protesters held tea parties meant to echo the Boston Tea Party tax revolt.

UNIDENTIFIED FEMALE: For me, that's the whole issue, I'm paying too much in taxes already.

CROWLEY: From Boston to Pittsburgh, Chicago to Oklahoma City and across the street from the White House, protesters showed up with a variety of signs and messages. They were anti-spending.

UNIDENTIFIED FEMALE: We are spending money we don't have on social programs we don't need, to fix problems that you have caused.

CROWLEY: They were anti-tax and they were anti a tax system that redistributes wealth.

UNIDENTIFIED MALE: When you take a dollar from people who earned it and give it to people who didn't, you did not increase the number of dollars, you didn't increase income, you didn't increase jobs, you didn't increase wealth, you certainly didn't increase opportunity.

CROWLEY: And there was as well a dose of anti-Obama rhetoric.

The agenda -- fewer taxes, less spending, smaller government -- certainly mirrors Republican Party orthodoxy. Several organizations mostly fiscal or socially conservative groups promoted and helped arrange the protest but insist this is about issues not party.

Not many high-profile Republicans were in evidence though former house speaker Newt Gingrich and former Republican leader Dick Armey are expected to make appearances.

In Naperville, Illinois, Pat Fine says she's president of the Republican Women's Organization.

PAT FINE, PRESIDENT, REPUBLICAN WOMEN'S ORGANIZATION: Our taxes are going up. Our state is in trouble, they're expecting more and more of us as the everyday citizens. And I think people are just getting really upset about it.

We were promised transparency; there is no transparency. And stimulus packages are passed, nobody read them. (END VIDEOTAPE)

CROWLEY: While these tea parties were not sponsored in any organized way by Republican political leaders or the national party, certainly they have been supportive. And if today is deemed successful, Republicans will see it in a way as a way to begin rebuilding their base, unless of course it's the beginning of building a third party -- Wolf.

BLITZER: It's interesting you say that because there was an interesting column in the "Wall Street Journal" on that very point.

Let's expand this conversation, Candy. Don't go away.

Joining us are Democratic strategists, CNN contributor, Donna Brazil and Andy Card, the former White House chief of staff under President Bush.

I'll read to you Andy what this writer in the "Wall Street Journal" says today under the headline "Tax Day Becomes Protest Day: How the tea parties could change politics."

"The mainstream Republican Party still seems limp and disorganized. This grassroots effort may revitalize it. Or the tea party movement may lead to a new third party that may replace the GOP, just as the GOP replaced the fractured and hapless Whigs."

What do you think?

ANDREW CARD, FORMER WHITE HOUSE CHIEF OF STAFF: We're not quite there yet. I do think that the tea parties are conscious-raising. They're telling people to pay attention to the spending because the spending will mean higher taxes. That's what these rallies were all about and I think it's appropriate for people to ring the bell.

You know, right now, Washington is kind of giving everyone their wants. And they should be focused on the needs of the country, not funding everyone's wants. If you start to fund everyone's wants, people won't work hard for them.

We want to just pay attention to getting the needs addressed so that we can grow the economy so people will work hard for their wants and hopefully the political arena is where people will argue for their wants and that's where the debate should take place, it shouldn't just be a grab bag of stimulus opportunities.

WOLF: You know, Donna, and I'm sure you agree, there is a lot of outrage across the country involving the bailouts. The trillions that have gone especially to some of the banks, Fannie Maes, the Freddie Macs, the AIG, the insurance company; there's a lot of concern about all this money that's being thrown on it.

DONNA BRAZILE, CNN CONTRIBUTOR: The public is wary about all of these spending, but since 2001, we have grown our deficit, we have tripled the national debt. This is an opportunity with this new president to try to push back on a fiscal path that will lead to shared prosperity.

Forty percent of Americans in this recent Gallup poll believe that their taxes are just about right. And with this new stimulus package, 95 percent of workers in this country are receiving something back in their paychecks. Maybe not enough to satisfy everybody, but it's enough, I think, to get us back in the right direction.

BLITZER: The Obamas just released their own tax returns as the presidents always do every year. The made adjusted gross income $2.65 million and between federal income tax they paid $855,000 in federal income, another $77,000 almost $78,000 in state income tax. They're paying nearly a million dollars in state and federal taxes, so I guess no one can complain that the Obamas are paying their fair share.

CROWLEY: No, they can't complain, but the Obamas are very well blessed with money. I don't think they're complaining either; they have a lot of cash still left over even after they...

BLITZER: This could be a political boost for him, the amount of money he pays in taxes?

CARD: I don't think it will be a political boost. I think people are going to be paying attention to the spending.

Tax rates today are not oppressive, but the tax rates that will come tomorrow will be oppressive.

BLITZER: But they say they're not going to increase anybody's tax rates at least until 2011.

CARD: They're spending money and they're going to have to put some money back in the trough. And I tell you, they're spending money at such a huge rate that they're going to have to increase taxes. And that's what is not smart for America.

I don't think it's right to burden the next generation with huge debt but I also don't think it's right to burden the economy from its opportunity to grow with irresponsible tax increases.

BRAZILE: Well, clearly we want to remain a competitive society. And in order to do that the country has to invest in critical infrastructure needs, education, health care, energy independence and also we have two wars. And Andy as you well know, that costs a lot of money.

CARD: Let's fund that which is needed. We need some things, let's not fund everything that people are putting in there, all the stimulus package went far beyond...

BLITZER: But you know from your years working in the White House, that's a lot easier said than done.

CARD: Yes, but it takes discipline and the president should be leading the discipline not abusing it.

BLITZER: Let's move on and talk about Arizona State University and the controversy surrounding their invitation to the president to deliver the commencement address but then their refusal at least so far to say, "We're going to honor you with an honorary degree at the same ceremony."

Terry Shafer, I guess she's the associate vice president of ASU, says in the "Arizona Daily Star," "We blew it, we have learned a big lesson and we are taking steps to make sure it doesn't happen again in the future."

Can they still fix this, do you think, and decide -- you know what, not only let him give the commencement address but really honor him with an honorary degree?

CROWLEY: There's two questions here, could they still give him an honorary degree? They could. Can they fix this? Probably not, time will fix this. I think we'll move along. I probably should recuse myself, I had a son that went to the University of Arizona, big rival of Arizona State.

But nonetheless, look, they made a mess of it, they really did and I don't think you can -- you can't unring that bell. They could if they wanted to but my guess is they won't because it's just yet another day and a story.

BLITZER: The president of the university said they're naming one of their big scholarships in honor of president.

CARD: I think they should treat with the president with respect. And they made a mistake when they started this whole debate. It's kind of an irrelevant debate that has become a problem for ASU. But treat the president with respect. He's our president. He may not be the president that I wanted, but he's our president right now and...

BLITZER: When you were the White House chief of staff, President Bush delivered a lot of commencement addresses.

CARD: He did.

BLITZER: Did he ever get invited to give a commencement speech and not get an honorary degree?

CARD: Not that I'm aware of. There were some protesters who showed up occasionally but the president was treated with respect at every venue he went to.

BLITZER: That's what you would expect.

BRAZILE: It's an extreme embarrassment for the school, Wolf, b but I hope that the nominating committee in the future decides who should receive an honorary degree before the commencement committee decides who should give the commencement. Clearly they were not communicating inside...

BLITZER: These are two separate committees at the university and that faculty committee that doles out the honorary degrees, they have autonomy as you know. CROWLEY: Right.

BLITZER: They take their academic freedom very, very seriously.

CROWLEY: Absolutely. I love that -- we want to make sure this doesn't happen again in the future, I'm thinking well, I don't know. Are they going to have him again and give him one or the next president?

CARD: There's a lot of politics in the academic community.

BRAZILE: Oh, I know, I just love them...

BLITZER: We know that.

CARD: And it's not partisan politics.

BLITZER: You guys have given commencement addresses over the years, I know all of you have. Do they usually give you an honorary degree when you do so?

CARD: They do. Generally, the expectation is that you'll get an honorary degree.

BLITZER: Donna, you too?

BRAZILE: I have been honored to receive a few, myself. And I will receive one a couple of weeks from the Xavier University in New Orleans. I'm giving them a (INAUDIBLE).

BLITZER: What do you think of the reunion this week in Dallas?

(CROSS TALK)

BLITZER: Because you weren't there. I was wondering -- let me just set the scene, the former president brought in some of his top advisors, Karen Hughes, among others Condoleezza Rice to do what?

CARD: I actually think they were there to talk about the institute and the library and kind of bring new energy to the debate over what will the institute be like and what should the library be like. And this was a great opportunity for them to get together.

I had a contractual obligation in Pennsylvania so I couldn't be there. And I felt very bad.

But this is not about a coming out party for the former president. I think that he is still going to stay on the sidelines, he's going to be very responsible in the activities that he undertakes, but he wants President Obama to succeed in getting the economy straight, protecting this country and I don't think you'll find him taking shots at the President of the United States.

BRAZILE: I talked to somebody who was in the room and he said the focus was on the library itself. That the president wants to promote democracy, he wants to promote educational reform and fight AIDS and malaria in Africa and other places.

BLITZER: He's going to do a lot of that stuff just like his predecessors Bill Clinton, Jimmy Carter and all the others, Ronald Reagan. They very devoted to their libraries and their post presidential work. We wish him a lot of good luck.

Thanks very much for coming on.

CARD: Thank you.

BLITZER: A law that some say legalizes spousal rape, drawing protesters to the streets. But they're outnumbered by people who support the law, including women. So what's going on.

Plus, they're some of the most bizarre television programs you'll ever see. But this is standard fare in North Korea. We're going to show you North Korean TV -- what it's like.

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

(COMMERCIAL BREAK)

BLITZER: Hundreds of women on the streets of Afghanistan's capital today protesting a law that they and other critics around the world say supports marital rape.

Let's get some more details from CNN's Atia Abawi; she's in Afghanistan -- Atia.

ATIA ABAWI, CNN INTERNATIONAL CORRESPONDENT: Wolf, many women in Afghanistan are in danger of moving several steps and several years back when it comes to their basic rights by a law that was passed a few weeks ago by the parliament and then signed by the president. But hundreds of those women gathered in the capital today to voice their opinions.

(BEGIN VIDEOTAPE)

ABAWI (voice-over): Nearly 300 women from provinces all over Afghanistan gathered in the capital of Kabul Wednesday protesting a Taliban-style law that strips Shia women of basic rights, some as simple as being able to leave home without the permission of a male relative. Critics say that one article in the law even condones spousal rape.

The women made their way through the capital in hopes of having their voices heard; Sunni and Shia women alike marching in unity.

SIMA GHANI, ACTIVIST: We actually see this as a law that's limiting women's rights and the Shia law is essentially even if it's a minority, we don't want to worry about that. No matter what religion we belong to, what sect we follow, we all stand against this law. We want a reform of the law. We want a revisit of it, an overturn of it.

ABAWI: The women were met by anti-protesters while passing a Shia mosque and a Shia school run by conservative cleric Mohammad Asaf Mousani (ph). Mousani is said to be a backer of the law and helped to push it through parliament. His students, men and women, outnumbered those opposing the law; some reportedly pumping the ladies with gravel stones.

QUDSIA FEROTAN, LAW SUPPORTER: Muslim women have the rights which is stated for them in the Koran in Islam, not the rights that the other countries set for them. We want the rights which have been set based on the Koran and Islam. We accept this law by our own desire, not because it has been set by the men in our society.

(END VIDEOTAPE)

ABAWI: The international community has condemned the law, President Obama calling it abhorrent and the president of Afghanistan Hamid Karzai stating that the condemnation is based on improper translation. But nonetheless, he'll have his minister of justice review the law to ensure that it provides equality for both men and women as Article 22 in the Afghan constitution states -- Wolf.

BLITZER: Atia thank you. Atia Abawi reporting for us from Afghanistan.

Pirates step up their brazen attacks against ships traveling near the coast of Africa and now the United States is promising to bring what Secretary of State Hillary Clinton is calling "Gangs at Sea" to Justice.

And as President Obama prepares to head to Mexico tomorrow, we'll get an up close look at the challenges of controlling one of that country's most dangerous cities.

Stay with us, you're in THE SITUATION ROOM.

(COMMERCIAL BREAK)

BLITZER: Let's head back to Jack Cafferty for the "Cafferty File" -- Jack.

CAFFERTY: The question this hour is: What would it mean if New York becomes the fifth state to legalize gay marriage?

Deb writes from Pennsylvania: "From a local perspective, it would mean Pennsylvania would have to consider the question of recognition of these unions, since New York is a bordering state. It's an issue that we have pretty much handled with the ostrich formula. Bury your head and hope it can't find us.

Ron in Florida: "So what? Do you think the majority of the American people really care about this? Think about it. It applies and is of concern to gays and their supporters. There are too many more important issues to worry about for my nickel."

Nancy in Tennessee: "New York will just be one more state allowing gay marriages that the rest of the country will have to recognize or challenge. When a gay couple resides in a state that does not recognize gay marriage, what marital laws apply to that couple? The laws of the state of residence or the laws where they were married? It's a complicated issue."

Nora in Florida writes: "It shows New York is throwing off the shackles of the Dark Ages and joining this century. As a straight, married woman, I truly don't understand the hullabaloo. How can recognizing a legal union of two people in a loving, committed, relationship be anything but good?"

Chad in Los Angeles: "It means people on both sides of the issue are wasting money on this legislation. There are 100 more important issues going on right now. Is this really a critical issue when we are trying to recover from the worst president in history?"

And Bill in Florida writes: "Jack it would finally allow Californians to refer to New Yorkers as "Those Wackos Back East."

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

BLITZER: Jack stand by. We're getting right back to you.

President Obama tomorrow begins a trip Mexico, Trinidad and Tobago. What issues would you like to see him address while he's abroad? Submit your video questions to ireport.com/situationroom. We'll use some of them on the air tomorrow.

New threats to slaughter Americans as the U.S. vows to bring Somali pirates to justice. The Secretary of State Hillary Clinton is speaking out about what "Gangs at Sea."

Plus, Comedy Central's Stephen Colbert wins a NASA contest. But is the space agency pulling a bait and switch? Details of the new prize.

(BEGIN VIDEO CLIP)

STEPHEN COLBERT, HOST, "THE COLBERT REPORT": Please move them. They're blocking in...

(END VIDEO CLIP)

BLITZER: Fans of Comedy Central host Stephen Colbert won an online poll to name a room in the International Space Station after him, but NASA is scaling down the prize.

Our Internet reporter Abbi Tatton is here. Abbi, Colbert's name, will it be in space?

ABBI TATTON, CNN INTERNET REPORTER: It will be, but not exactly as they thought. This is what Colbert fans were aiming for; a room in the international space station named Colbert.

But as astronaut Sunita Williams explained to Stephen Colbert last night, NASA was thinking of something slightly smaller like a treadmill, but a treadmill with a very special acronym.

(BEGIN VIDEO CLIP)

COLBERT: The Combined Operational Load Baring External Resistance Treadmill, the COLBERT?

SUNITA WILLIAMS, ASTRONAUT: The COLBERT.

COLBERT: Will be in the space station?

WILLIAMS: That's right.

(END VIDEO CLIP)

TATTON: A COLBERT Treadmill, that will be in the space station from August, in order to keep the astronauts active. It's actually not a bad trade-off, because the room that Colbert fans are actually hoping to name after Colbert houses amongst other things a high-tech sewage system. That room will now be called tranquility.

BLITZER: Very cool. Can we get that logo, Abbi? The words, what does COLBERT stand for, c-o-l-b-e-r-t?

TATTON: The combined operational load bearing external resistance treadmill and put it altogether and it's COLBERT.

BLITZER: We have the newest acronym out there, COLBERT. Who knew?

TATTON: It will be up there.

BLITZER: Thanks very much, Abbi, for that.

North Korea, a closed society, its people shut off from the rest of the world. So what do North Koreans see and learn when they turn on their televisions?

CNN's Kristi Lu Stout with a story that's quite bizarre.

(BEGIN VIDEOTAPE)

KRISTI LU STOUT, CNN INTERNATIONAL ANCHOR (voice-over): This is the ultimate birthday bash, over-the-top dramatics mark the day of the sun, the birthday of North Korea's founding leader, Kim Il-Sung. The band (ph) of the eternal leader would have turned 97 years old. He died in 1994 and then succeeded by his son, Kim Jong-Il.

Children mark the occasion with song and dance. And this announcer asks, "Is there another gracious leader who walked all the way to the farms and factories even in snow and rain for the happiness of the people?"

It's rhetorical, of course.

(on camera): Here at CNN, we monitor North Korean television every day from our newsroom. For us, it's a fascinating and sometimes bizarre glimpse inside the secretive state, but for North Koreas, it's must-see TV, quite literally. (voice-over): TV sets in North Korea are pre-tuned to official stations that constantly stream out propaganda-led Korean Radio and Television or KRTV. It usually starts the day with a test pattern and then kicks into gear at an arbitrary time, sometimes not until the early evening.

But for Kim Il-Sung's birthday, it starts early and serves up a slew of tributes.

Yes, six-party talks have been scrapped and, yes, U.N. inspectors have been kicked out, but no talk of that. On KRTV, the star is the cult of Kim.

Current leader, Kim Jong-Il is the leading light of the network. He regularly appears touring factories or giving guidance to farmers. And when KRTV aired video of the recent rocket launch, Pyongyang watchers said the event was to solidify Kim's standing ahead of his re-election.

Now, this is what you won't see on North Korean TV: famine, poverty, or questions about life after Kim Jong-Il. And yet, North Korean TV inadvertently raise the issue when it screened the first video of Kim since last August. He looks thinner, gaunt, and has more gray hair; a dramatic change from last year, which bolsters the suggestion that he may have a serious health problem.

In his younger days, Kim is strolling with his father in Pyongyang. Today, it's the son at the top, and yet it appears the son still needs to invoke the father with the birthday blowout that was televised.

Kristi Lu Stout, CNN, Hong Kong.

(END VIDEOTAPE)

BLITZER: And happening now -- pirates seek revenge against Americans and the U.S. stepping up its fight against bandits at sea.

This hour, why a dramatic hostage rescue happened and stopped pirates their tracks.

Inside the Obamas' finances, what their just-released tax returns tell us about their wealth and their donations to charity.

Plus, are celebrities getting away with being taxed deadbeats?