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Retirement at Risk; Should Airlines Bag Extra Fees?

Aired May 12, 2009 - 18:00   ET



Chances are, your retirement nest egg already has been devastated by the recession, and now this: new word just out today that the Social Security and Medicare trust funds will be wiped out a lot sooner than expected.

Let's go to our White House correspondent, Suzanne Malveaux.

Another huge crisis for this young administration, Suzanne.

SUZANNE MALVEAUX, CNN WHITE HOUSE CORRESPONDENT: Certainly a potential crisis, Wolf. You talk about this, and as people earn less money, the government takes in less money, and so it makes it much harder for them to save in the long term. So it is not surprising that you have the largest entitlement programs that are now in trouble.


MALVEAUX (voice-over): Brace yourself, more bad news.

TIMOTHY GEITHNER, U.S. TREASURY SECRETARY: The longer we wait to address the long-term solvency of Medicare and Social Security, the sooner those challenges will be upon us and the harder the options will be.

MALVEAUX: Another casualty from the worst recession in decades, your Social Security.

GEITHNER: These reports underscore the urgency of action.

MALVEAUX: A report released by the trustees reveals the country's Social Security and Medicare trust funds will run out of money even sooner than expected the, Social Security likely depleted by 2037, four years earlier than projected, Medicare out of cash by 2017, two years earlier.

KATHLEEN SEBELIUS, U.S. HEALTH AND HUMAN SERVICES SECRETARY: Today's report should trouble anyone who is concerned about the future of Medicare and health care in America.

MALVEAUX: The government partly blames the economic crisis, 5.7 million jobs lost since the recession began in December of 2007, unemployment now at a record 25-year high of 8.9 percent. Fewer people working and less tax revenue means less money going into the trust funds for both entitlement programs.

President Obama says Social Security can be fixed, not by raising the retirement age or cutting benefits, but increasing taxes for the wealthy.

BARACK OBAMA, PRESIDENT OF THE UNITED STATES: For wealthier people, why don't we raise the cap, make them pay a little more payroll tax?


MALVEAUX: The president says, as health care costs skyrocket and the population gets older, the greater challenge will be funding Medicare and Medicaid.

OBAMA: Those are the things that are really breaking the bank.


MALVEAUX: And, Wolf, that's why there is such a push from the Obama administration to try to reform the health care system and to make it more cost-effective. In the long term, obviously, it's going to be hard-fought legislation to fix the problem.

In the short term, Democrats and Republicans alike, they want this economy to turn around, so at least there is some sort of cash, some infusion of cash in this system in the pot -- Wolf.

BLITZER: Suzanne Malveaux at the White House for us -- thank you, Suzanne.

The potential collapse of Social Security could certainly have an enormous impact all across the country.

Our chief national correspondent, John King, is joining us with the CNN Express. He's down in Montgomery, Alabama.

John, this is a huge, huge problem down the road. But the question is, as it always has been, for decades, literally, is there the political will in Washington to get the job done?

JOHN KING, CNN CHIEF NATIONAL CORRESPONDENT: And, Wolf, that is the, the, the vital question. And at the moment, the White House is saying that it will deal with the Medicare crisis first and foremost through its broader effort at health care reform.

It does not want to deal this year with the issue of raising eligibility age or cutting benefits to people on Medicare. It has sent a strong signal it does not want to deal with Social Security and those same types of questions, raising the retirement age, perhaps cutting benefits or, as Suzanne noted in the piece, raising payroll taxes on more affluent Americans.

And I'm told that the most resistance on Capitol Hill to doing this, this year is coming from the House speaker, Nancy Pelosi, and her office, saying the administration should focus on economic recovery, on climate change, on health care reform, and leave these issues down the road.

Again, the administration hopes, Wolf, to make a down payment on the Medicare problem through health care reform, but there's a reason you see so many statements coming out from Republican leaders today. They say this is reckless, that the president is mortgaging the future of these two critical programs and that he should be dealing with them before almost anything else on his agenda, critical statements from Republicans, also somewhat critical statements from some Democrats.

Just a short time ago, Kent Conrad, who is the chairman of the Senate Budget Committee, put out a statement saying, yes, the administration is making some progress in its health care reform proposal, but that it doesn't do enough for Medicare, doesn't do anything for Social Security. He wants one of those bipartisan commissions like they did back in the Reagan administration to deal with this. But, Wolf, so far the administration has said no, at least not now.

BLITZER: John, tell us what's going on in Montgomery, Alabama, where you are.

KING: We're down here, Wolf, for part of our weekly travels for "STATE OF THE UNION." We're looking at more and more states that are dealing with the impact of this painful recession.

Again, it's part of the Medicare and Social Security story. We're in Montgomery now. That's the state capitol. You see the beautiful capitol building behind me. The unemployment rate in Alabama has doubled. It was 4.5 percent at this time last year. It's 9 percent now.

When we're done here, we're going west to Selma. That's Dallas County. That's 18 percent unemployment there, Wolf. People were hurting there to begin with. It's predominantly African-American. It's punishing now. Wilcox County is the next to where Selma is in Dallas County -- 22 percent is the unemployment rate, again, a predominantly African-American community.

We're looking this week at areas that were already suffering before the recession hit that are in quite dire straits now, trying to get a sense of whether they believe there's still more bad news to come, Wolf, or maybe if we have hit bottom.

BLITZER: All right, we look forward to your report Sunday morning, John. Thanks very much.

President Obama met today with top business leaders on ways to try to cut health care costs. He's reaching out to a wide array of people in hopes of finally making health care reform a reality. But -- there's always a but -- some angry members of the medical profession are demanding less corporate involvement and a bigger government role.

It was quite a scene up on Capitol Hill earlier today.

Let's bring in CNN's Elaine Quijano. All right, walk us through, Elaine, what happened.

ELAINE QUIJANO, CNN WHITE HOUSE CORRESPONDENT: Yes, well, Wolf, it is not something that you see every day, health care professionals protesting and even being arrested on Capitol Hill, because they say a critical view in the health care debate is being shut out.


QUIJANO (voice-over): The demonstrators protested quietly at first, 20 nurses in red scrubs wearing signs supporting a single- payer, government-run health care system. But then:


UNIDENTIFIED FEMALE: The people at this table have failed Americans for 30 years.

QUIJANO: Camouflaged within the crowd, other, more vocal protesters.

UNIDENTIFIED FEMALE: No more (INAUDIBLE) We want guaranteed health care.

QUIJANO: One by one, as Capitol Police moved in...

UNIDENTIFIED FEMALE: Why aren't single-payer advocates at the table?

QUIJANO: ... the demonstrators asked why the senators had no single-payer advocates at the witness table.

UNIDENTIFIED MALE: You have been entrusted in doing the people's work.

QUIJANO: Deborah Burger's group, the California Nurses Association, helped spearhead the demonstration.

DEBORAH BURGER, CALIFORNIA NURSES ASSOCIATION: It sends a message to us that it's a done deal. They're trying to cut out the nurses' voice in providing safe, healthy, effective health care reform.

QUIJANO: The head of the Finance Committee, Democratic Senator Max Baucus, told the group he respects all views and pledged this:

SEN. MAX BAUCUS (D), MONTANA: I will meet with anybody who wants to meet -- wants to meet with me.

QUIJANO: While the health care industry argues, many Americans don't want to completely do away with the current system.

JAY GELLERT, CEO, HEALTH NET: The American people say, well, I like some parts of it. I don't want you to throw out the parts I like. I want you to fix the parts I don't like. And that's what we're focused on doing. (END VIDEOTAPE)

QUIJANO: Now, the president and top congressional Democrats have said they want to build on the existing health care system, effectively ruling out a government-run system. But those behind today's protest said they will keep pushing to at least make single- payer part of the discussion -- Wolf.

BLITZER: And the president has made it abundantly clear he's not interested in a single-payer system. So, we will see where that debate goes. Thanks very much for that.

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

JACK CAFFERTY, CNN ANCHOR: Well, here's some more good news, gasoline prices up almost 10 percent in the last two weeks and have now hit a six-month high. AAA says nationwide the average price of a gallon of regular unleaded, $2.25, up 20 cents from just two weeks ago.

One of the main reasons gas price is going up, because crude oil prices are going up. They closed at their highest level of the year last Friday. The good news is, analysts say it's unlikely the prices will climb as high as they did last summer.

Remember the good old days, when we were all shelling out about four bucks a gallon for gasoline? In fact, while prices are going to go up now, they're still nearly 50 percent lower than the record highs which were set last July. And it's typical to see price increases ahead of the Memorial Day weekend. Happens every year, the unofficial start of summer, when more Americans hit the road.

AAA said they would be surprised, that's their word, to see prices reach $3.50 a gallon this summer, unless there's an unexpected supply disruption, something like a major hurricane, for example.

The slumping economy is also expected to keep prices down. That's because income's the biggest factor in determining how much people drive. And with unemployment nationally at 8.9 percent, it seems that more people likely will stay close to home this summer in order to save on the gasoline bill.

So, here's the question. How will rising gas prices and the recession impact your summer vacation plans? Go to You can post a comment on my blog, or not -- Wolf.

BLITZER: A lot of people will be posting comments, Jack, because they always do. Thank you.


BLITZER: When you pack for your next flight, you better pack some extra cash as well. You will likely have to pay for the extra bags, or any bags, you want to put on the plane. But, with fuel prices down, should the airlines still, still be charging those fees?

And an American journalist freed from a notorious jail in Iran -- what possibly could be next after her terrifying ordeal?


ROXANA SABERI, JOURNALIST: I don't have any specific plans for the moment. I just want to be with my parents and my friends and to relax.



BLITZER: Confusion, fear and frightening screams. Minutes before a doomed plane plunges to the ground, the pilots are fearful about what's happening, then hysterical at the moment they realize the plane is about to crash.

We're learning this from a transcript of the final moments released today as a hearing investigates how this plane fell from the sky.

CNN senior correspondent Allan Chernoff is in New York with details -- Allan.


ALLAN CHERNOFF, CNN SENIOR CORRESPONDENT: Wolf, the National Transportation Safety Board is questioning officials of Colgan Air, which operated Flight 3407. The board is trying to determine exactly why the aircraft crashed.

(voice-over): "Jesus Christ, we're down," exclaimed pilot Marvin Renslow. Then first officer Rebecca Shaw screamed as Flight 3407 crashed into a private home near Buffalo-Niagara International Airport.

Those are the final 20 seconds of the cockpit voice recorder. Only minutes before, Shaw told Renslow of her fear of crashing in icy conditions. That was a violation of cockpit rules, requiring all discussion to focus on landing the aircraft.

Why couldn't Captain Renslow save the plane? The National Transportation Safety Board is examining Renslow's training at Colgan Air, the regional carrier that operated Flight 3407. Renslow never received hands-on experience with the safety system in the Bombardier Q400 aircraft called a stick-pusher that activated to prevent the plane from stalling.

UNIDENTIFIED MALE: Do you know of any stick training or stick- pusher training that was done in the actual Q400 prior to the accident?

PAUL PRYOR, COLGAN AIR: In the simulator, no. In the ground school portion, it is covered. UNIDENTIFIED MALE: So, it's information that's not practical experience with handling anything, right?

PRYOR: Correct.

CHERNOFF: The airline doesn't have to provide that training, according to the FAA.

UNIDENTIFIED FEMALE: This should not have happened, no. These 50 people should be enjoying their lives right now.

CHERNOFF: Captain Renslow was fully FAA-certified, but he had failed five pilot tests, three of which occurred before he joined the airline. Colgan Air says Renslow revealed only one of those failures to the airline.

Those facts left the safety board to ask an official from the aircraft's manufacturer if a more experienced pilot could have saved the plane.

UNIDENTIFIED MALE: Do you believe this was a recoverable stall?

WALLY WARNER, BOMBARDIER: My opinion is yes.

(on camera): Pilot fatigue is another issue the NTSB is looking at. Captain Renslow had 22 hours off before reporting to work at Newark Airport, where the flight began, but he was seen sleeping in the crew room there.

And first officer Shaw commuted through the night to get to work at Newark -- Wolf.


BLITZER: All right, Allan Chernoff, thanks very much.

There's another story about air travel we're following right now. The next time you pack for a flight, pack some extra cash as well. You will probably need it to pay for your bags, if you want to check those bags, those few dollars adding up to big bucks for the airlines.

Let's go to La Guardia Airport in New York. Mary Snow is standing by with more on this story.

What are you learning, Mary?

MARY SNOW, CNN CORRESPONDENT: Well, Wolf, you know, you don't have to go far to hear the grumbling about baggage fees. The Department of Transportation tallied the numbers and airlines are collecting record amounts.


SNOW (voice-over): Fifteen dollars for a bag here, $25 to check a second bag there, for the airline industry, it added up to $1.1 billion last year. And, for some passengers, it's added up to aggravation.

ANGELA KING, AIRLINE PASSENGER: I think it's horrible that they are charging the fees, especially in this economy.

ANUBHAV JAIN, AIRLINE PASSENGER: It's frustrating, yes, because, you know, they -- they take over your choices, and so you have to eventually pay for. It doesn't matter who you fly.

SNOW: American, U.S. Airways and Delta top the industry list of collecting the most in baggage fees, fees that were put in place last year to offset record fuel prices. And, though fuel costs have since dropped, the airline industry defends the fees, saying they "have helped many carriers weather the economic downturn, high fuel prices and reduced demand for travel. This revenue stream has proven to be a critical and necessary means of working towards sustained profitability."

But one passenger advocacy group is furious.

KATE HANNI, FLYERSRIGHTS.ORG: They really did snow the flying public with this whole idea that they were only charging for baggage because of the rising cost of fuel. Clearly, that's not an issue now, so why don't they remove the charges?

SNOW: American Airlines, for one, says it never claimed the fees were tied only to higher fuel costs. And some airline analysts say the industry needs the income from these fees because the economic downturn is hurting both leisure and business travel.

HUNTER KEAY, STIFEL NICOLAUS: Bag fees and -- and other such ancillary fees like are -- are an absolute life-saver at this point, and they can't be understated. So, fuel has definitely declined substantially, but we're in a different demand environment right now than we were when they were first imposed.


SNOW: And, Wolf, a little bit of good news. Those who follow the industry say they don't expect these baggage fees to go up anytime soon. That's because consumers are already stretched. But don't expect those fees to go away either -- Wolf.

BLITZER: And, once they start them, they rarely reverse them.

All right, thanks very much, Mary, for that.

Mary is at La Guardia.

The fighting in Pakistan takes its toll on the people -- on people of all ages. We are going to have the story of the lost boys of the Swat Valley. Stand by.

And a U.S. soldier charged of rape, is it yet another case of the stress of battle run amok?

And images of damage done on liftoff to the space shuttle Atlantis. Will this make an already risky mission even riskier?


BLITZER: An Iranian-American journalist today is thanking everyone who helped win her freedom after four months in a Tehran prison.

Roxana Saberi spoke out in Iran for the first time since her release yesterday.


SABERI: I'm, of course, very happy to be free and to be with my parents again.

And I want to thank all the people all over the world, which I'm just finding out about, really, who, whether they knew me or not, helped me and my family during this period.

I don't have any specific plans for the moment. I just want to be with my parents and my friends and to relax.

Thank you very much.


BLITZER: Saberi's lawyer says she was convicted for -- of spying for the United States in part because she had a copy of a confidential Iranian report on the U.S. war in Iraq. Sunday, an appeals court accepted her explanation she didn't pass on any information, and her sentence was suspended.

President Obama continues to work towards peace in the region. It's a huge issue on his upcoming schedule. The Israeli prime minister, Benjamin Netanyahu, visits the White House next Monday. President Hosni Mubarak of Egypt visits May 26, the Palestinian Authority president, Mahmoud Abbas, on May 28. The White House says the president will talk to each of them about achieving peace between Israelis and Palestinians and between Israel and the rest of the Arab world.

The father of a U.S. soldier charged with murdering fellow troops says he thinks combat in Iraq broke his son. Stand by for his chilling words.

And we have new information about how and why the soldier being treated at a stress clinic in Baghdad apparently snapped, plus, the first I.D. of one of the victims.

And is President Obama being squeezed by Latinos, women's group as he considers his choice for the United States Supreme Court? The best political team on television is ready to weigh in.


BLITZER: To our viewers, you're in THE SITUATION ROOM. Happening now: NASA engineers say damage from debris has been detected on a wing of the shuttle Atlantis sustained during yesterday's launch. They say dings on four ties are being examined right now. The shuttle Endeavour is standing by in the unlikely event NASA needs to launch a rescue mission.

Another difficult quarter for Freddie Mac -- the troubled mortgage finance company reports a $9.9 billion loss and is asking for $6 billion in aid from the U.S. Treasury.

And Florida Governor Charlie Crist is passing on seeking reelection for another political brass ring. Crist, a Republican, says he will run for the United States Senate seat being vacated by Republican Senator Mel Martinez -- all of this, plus the best political team on television.

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

A U.S. soldier now stands charged with murder in the shooting deaths of five fellow troops in Iraq, his name, John M. Russell, an Army sergeant on his third tour of -- tour of duty in Iraq. We're learning more about the treatment he was undergoing in a stress clinic in Baghdad. And we now know the identity of one of the shooting victims.

Let's go to our Pentagon correspondent, Chris Lawrence. He has the very latest for us -- Chris.

CHRIS LAWRENCE, CNN PENTAGON CORRESPONDENT: Well, Wolf, we have now learned that there were ongoing talks between Sergeant Russell's commander and the Army chaplain for several days before the shooting.


LAWRENCE (voice-over): Sergeant John Russell's commander not only thought he was troubled, but that he was -- quote -- "a threat to himself and others."

So, a week before the shooting, the commander took away his weapon and referred him to Camp Liberty's stress clinic. A top U.S. general in Baghdad admits there's still a stigma to mental health issues, so that may have been challenging for Sergeant Russell.

MAJOR GENERAL DANIEL BOLGER, MULTI-NATIONAL DIVISION BAGHDAD: He's a noncommissioned officer and all that kind of stuff, so, I mean, he's in a leadership capacity. And to make that trip down there is a tough decision for either him or his chain of command to make.

LAWRENCE: A senior defense official says Russell became hostile and had to be escorted out of the clinic. Later, one official says Russell assaulted another soldier, seized his weapon and vehicle, then came back to the clinic and killed five fellow American troops, including U.S. Navy Commander Charles Springle.

A lot of troops have deployed multiple times, and Russell was on his third tour in Iraq. A 2008 Army study found, soldiers on their third or fourth deployment have significantly lower morale and more mental health problems. And those that have treated troops in the field say it can compromise a soldier's ability to release stress and deal with everyday problems.

GEN. GEORGE CASEY, U.S. ARMY CHIEF OF STAFF: So, each time you go, that stress adds up. So, we know that, you know, as a person deploys multiple times, especially in a combat situation, they can get into more and more difficulty with stress if they're not well- prepared.


LAWRENCE: We're also learning a little bit more about that Navy officer who was killed.

Commander Springle was commissioned more than 20 years ago. He had served multiple tours overseas, but this was his first time in Iraq. He had just got to the country in January, and had been working with the medical company there in Baghdad for the past few months -- Wolf.

BLITZER: All right, what a sad story that is.

Chris Lawrence, thank you.

Sergeant Russell's father is trying to figure out what happened to his son and what apparently went so terribly wrong at that stress clinic in Baghdad. Listen to this.


WILBURN RUSSELL, FATHER OF SERGEANT JOHN RUSSELL: He talked, they were going to wash him out, send him -- you know, give him a dishonorable for insubordination, or he wasn't capable of handling the stress or something, you know, because they -- they broke him, you know?

A guy -- normally, a guy does not go off and -- and kill people just because he doesn't like them, you know? There's got to be a reason.


BLITZER: CNN's Ed Lavandera spoke to Wilburn Russell in Texas.

Ed is joining us now -- Ed, you had an extensive interview with the father and some other family members of this -- this man accused of killing five fellow troops.

What do they think?

What are they saying to you?

What may have resulted in this horrible, horrible development?

ED LAVANDERA, CNN CORRESPONDENT: Well, it's interesting, Wolf, what we gathered from speaking with them this afternoon is that they do not believe that what drove Sergeant Russell to commit these shootings was anything driven because of his experience in combat, that they do not believe this was a combat-related issue, that they had -- over the course of his three deployments over the last four or five years, that he had shown no signs of having psychological issues.

They do believe that it was an internal problem with commanding officers there in Iraq that led him to do this, stress brought on by them. They say that Sergeant Russell feared that he was being pushed out of his military -- out of the military, out of the Army, that his extensive Army career was being put in jeopardy and that that's why -- what caused this point.

But what they're not sure about -- what drove him to the breaking point.


RUSSELL: His wife told us. You know, he e-mailed her and said he'd had the worst two days of his life because some of the officers had threatened him. Well, you don't have much recourse when you have officers, you know, riding you.

LAVANDERA: But you don't know what that threat was about?

RUSSELL: No. No, I don't have any idea.

LAVANDERA: Do you think it was they threatened to kick him out of the military or?

RUSSELL: I don't know. They might not have made that threat. They might have told him that, we'll get you. We'll get you, you know.


BLITZER: Do any of the family, Ed, know what actually led Sergeant Russell to that stress center -- that medical facility at the military camp in Baghdad -- to begin with?

LAVANDERA: Well, you know, that's one of the things that they're perplexed by about what's going on. They said that just in recent days, they had heard the news that Sergeant Russell had been sent to -- to this stress camp. They believe that it was probably something he did not want to do. His father described him as a John Wayne type.


RUSSELL: I hope they do dig and find out that they've got a bunch of slipshod guys running that stress center, that, you know, are vindictive and, you know, not doing their job right.


LAVANDERA: So, Wolf, as you hear there, a lot of uncertainty about what's going on and a lot of anger about what has happened with -- with their son there -- Wolf.

BLITZER: All right, Ed.

Thanks very much.

Another story we're following involves an ex-soldier's rape and murder trial, highlighting how deeply troubled troops being sent back into combat can unfold in further tragedies.

Let's go to CNN's Deborah Feyerick.

She's working this story for us.

All right, what do we know about this one -- Deb?

DEBORAH FEYERICK, CNN CORRESPONDENT: Well, Wolf, we can tell you that the trial here at federal court in Paducah, Kentucky is seen internationally almost as a war crimes trial of a U.S. soldier for atrocities committed against an Iraqi family.

Last week, Steven Green was convicted of raping a 14-year-old, shooting her in the face and then setting her body on fire to get rid of the evidence. He was also found guilty of killing her mom, her dad and a younger sister.

Now, the penalty phase -- the -- I'm sorry, the death penalty phase has begun now. To save his life, his defense lawyers are arguing that it was the military's fault. And that's where they're pointing the finger. And they say that a combat stress control team that evaluated Green never diagnosed him with either Acute Stress Disorder or Post-Traumatic Stress Disorder, even though the symptoms were clear in a psychiatric evaluation.


FEYERICK (voice-over): Private First Class Steven Green had been in Iraq for four months and saw atrocities that most 21-year-olds, if they're lucky, never see. Green, now 24, faces the death penalty for atrocities he committed.

His lawyers say the death of two respected unit commanders drove Green to the edge. In testimony, Green's unit sergeant, Eric Lauzier, said that's what broke Steven Green and sent him to the combat stress unit.

A psychiatric nurse practitioner from a combat stress team evaluated Green, gave him sleeping pills and returned him to combat -- what Green's sergeant calls the military equivalent of fixing a flat when it's the truck that's broken.

The facts of the case are not in dispute. On March 12th, 2006, Green, along with three other soldiers, donned black clothing and masks and walked 300 yards from their checkpoint to the home of the Janabi family. There, witnesses say Steven Green shepherded the parents and their young daughter into a bedroom and shot them point blank with an AK-47, while the 14-year-old daughter, Abeer, was being raped in the other room.

Court documents say Green then joined the others in the rape and afterward shot Abeer al-Janabi three times in the head. Her body was set ablaze to hide evidence of the rape.

In his opening, the defense lawyer never asked the jury to find Green not guilty, but instead, seemed to lay the groundwork for a verdict that may spare his client's life -- life in prison, not the death penalty that prosecutors seek.


FEYERICK: Now, the nurse practitioner testified today on the stand, saying she often counsels soldiers that having sad and angry feelings are normal in that context. She also said it was important to keep soldiers in the combat arena both to keep troop numbers up but also so as not to isolate troops and make them feel as if they were somehow sick -- Wolf.

BLITZER: What a story that is.

All right. Deborah Feyerick in Paducah, Kentucky for us.

Thank you, Deb, very much.

You'll keep us posted on the final, final sentence and verdict.

Moderate Democrats, meanwhile, revolting against President Obama's health care reform plan. Some of them say they're increasingly troubled.

But why?

Plus, the president under pressure to nominate a woman or a Latino to the U.S. Supreme Court.

Will he yield?

I'll ask the best political team on television.


BLITZER: Thirty-two moderate Democrats -- Democrats in the House of Representatives, so-called Blue Dogs -- they're not very happy with their leadership right now. At issue -- the health care reform legislation that's being crafted.

Let's assess what's going on with our CNN political analysts, Gloria Borger, David Gergen and Roland Martin.

Among other things, they write this in a letter to some of these chairmen who are putting this legislation together, Gloria.

They say: "We are becoming increasingly troubled by the fact that this framework will make significant policy judgments about the content of health reform and that the process has yet to be structured in a way that includes the contributions of the majority of our caucus."

They don't like the fact that a bunch of liberal chairmen like Henry Waxman and Charlie Rangel and George Miller in the House -- they're crafting this legislation. And they say these moderate Democrats, that they really aren't even included, they have no say in this.

GLORIA BORGER, CNN SENIOR POLITICAL ANALYST: You know, the first law of politics to be inclusive and get everyone to the table. And I think what you're seeing in the House is a very top down process. And that includes the House speaker, Nancy Pelosi.

These Blue Dogs are one fifth of the House caucus. They're fiscal hawks. They need to be listened to. They're worried about the public insurance portion of the president's health care measure.

And the president doesn't want to be in a position of having to woo over these moderate Democrats when he really should have them on board. And at some point, when it comes to spending money, the back of the camel just breaks.

BLITZER: As you know, David, the president -- the White House, they punted on this one. They told the Democratic leadership in the House and the Senate, you guys put together the legislation. We'll give you some guidelines, but the White House isn't coming up with the actual wording of the legislation. The members of the Democratic leadership in the Congress, they're doing it.

DAVID GERGEN, CNN SENIOR POLITICAL ANALYST, FORMER PRESIDENTIAL ADVISER: That's absolutely right, Wolf. And it's a very unusual situation, in which we have a White House that is so ambitious, has so many major items on its agenda, that it has had to contract out, if you would, the writing of legislation to Democrats on Capitol Hill.

And what -- and to go back to Gloria's point, what you often find is that the chairmanships of these committees on the House, among the Democratic chairmen, tend to be the more liberal members of the party. They've been there a long time. They come from safe districts.

These moderate or Blue Dog Democrats come from very unsafe districts. Many of them come from districts that, only a few years ago, were Republican districts.

So they're worried that the legislation on health care is tilting to the left, not only a sort of a public payer or a public form of insurance that would compete with the private sector, but there's also -- it's very expensive and nobody knows how they're going to pay for it.

BORGER: Right.

GERGEN: So there are these big, big issues. And it's not surprising that the Blue Dogs would say, hey, we want a seat at the table. We don't want to see this go too far left.

And Henry Waxman, to his credit, I gather he's holding a meeting on Wednesday, tomorrow...

BORGER: Right.

GERGEN: bring in Democrats to talk in a more serious way.

BLITZER: Yes. At some point, Roland, they probably would want to bring in some Republicans, as well. On the Senate side, they're doing that, but not necessarily on the House side.

ROLAND S. MARTIN, CNN POLITICAL ANALYST: Well, first and foremost, we're calling them moderate Democrats, but, in many ways, these are conservative Democrats. I call it the Zell Miller wing of the Democratic Party. And so it's...


MARTIN: No. Well, I didn't say all of them, I said some of them. And so -- and so -- because you have people like Sanford Bishop, you have Heath Shuler, who come from conservative districts. So you have that, as well. And that is, they also are appealing to the constituents where they come from.

Now, as in relation to how do you appeal to them?

Look, from a Democratic standpoint, you can't get to the Republican Party until you deal with your party first. And so they have to be able to contend, because, look, if you have these Democrats -- these Blue Dog Democrats who say we're going to hold this up, then it causes problems for Speaker Nancy Pelosi.

So, yes, they should include them. But I think the White House, frankly, is going to have to become a little bit more aggressive to make sure they're on board, as opposed to saying hey, House, you figure it out.

BORGER: Right. And when it -- when it comes to money, you know, you have a $648 billion set-aside -- a big pot you're supposed to spend on health care. And some of the proposals the president's talking about, like limits on charitable deductions and mortgage deductions, are dead on arrival on Capitol Hill. They're not going anywhere.

So the question these Democrats have is where are we going to get the money?

Are we going to have to raise taxes to pay for it?

GERGEN: Yes, let me -- Wolf, I think Roland has a very good point about the president. The White House needs to get more aggressive in trying to guide this on the politics of it, as well as the substance. You can't just sort of leave it to the House and expect magical things to happen.

BORGER: Right.

GERGEN: But the second point is, also, that, on the Senate side, very interestingly, the Democratic chairman of the Finance Committee, Max Baucus, has been very inclusive and has reached out to Republicans. He's been arguing I want a bill that Chuck Grassley can sign -- the leading, the ranking Republican on the committee. And I think that is producing more of a bipartisan spirit in the Senate than what you see in the House...

BLITZER: All right...

GERGEN: ...and I think is ultimately very good.


BLITZER: Very quickly, Gloria. I just want to (INAUDIBLE)...

BORGER: Well, and the president may use the Senate to pressure the House.

BLITZER: I want -- I want you to weigh in, all three of you, quickly, on this interesting letter that Olympia Snowe, Republican Senator from Maine; Barbara Boxer, Democratic Senator from California; have written to the president saying, you know, he's got to find a woman to be the next Supreme Court justice.

It's -- they say: "Women make up more than half of our population, but right now hold only one seat out of nine on the United States Supreme Court. This is out of balance. In order for the court to be relevant, it needs to be diverse and better reflect America."

Is it a forgone conclusion, Roland, that President Obama will nominate a woman?

MARTIN: No, it's not, because, look, you have women, you have Hispanics, you have African-Americans. You have all kind of interest groups who are simply trying to target the president. The reality is, he is not going to be locked into gender or race. He is going to be looking at the best person for the job.

BORGER: You know, if you look at the pool of relevant experience in this country, you know, more than half the population is female. So it's not really an interest group. And both Sandra Day O'Connor and Ruth Bader Ginsburg have at one point or another have said, you know, we'd like to see more women on the court.

BLITZER: All right. We've got to leave it there, guys.

GERGEN: What...

BLITZER: David, hold your thought, because we're simply out of time. But there'll be plenty of time down the road.

Tell us what you think -- how important should race or gender or ethnicity be when picking a Supreme Court nominee?

Submit your video comments to, then watch tomorrow to see if your video makes it on the air.

Let's go to Lou Dobbs to see what's coming up right at the top of the hour -- Lou?


Tonight, Medicare -- Social Security -- they're running out of money faster than expected. Tonight, we examine what this means for the American people and the president's agenda.

Also tonight, about a third of this country's public high school students now are failing to graduate. Many say this country is failing an entire generation of students. We'll have a special report for you.

And Donald Trump says Miss California, Carrie Prejean, has not failed and will not be fired. Trump saying Prejean can keep her title despite the controversy over those photos of her. We'll examine the controversy in our face-off tonight.

Join us for all of that, all the day's news and a lot more, coming up at the top of the hour -- Wolf, back to you.

BLITZER: All right, Lou.

Thank you.

How will rising gas prices and the recession impact your summer vacation plans?

That's Jack's question this hour. Stand by for your e-mail.

Also, caught in the crossfire between the Taliban and Pakistani troops -- how these orphan boys lived to tell their story.


BLITZER: The war in Afghanis -- in Pakistan, that is, in the Swat Valley has all kinds of victims and refugees.

CNN's Ivan Watson has the story of some orphan boys who narrowly escaped the fighting and the danger -- Ivan.

IVAN WATSON, CNN CORRESPONDENT: Wolf, the United Nations says an estimated half million Pakistanis have fled the northwest of the country in the last 10 days. Among them, the residents of one orphanage. These orphans just escaped from the Swat Valley.


WATSON (voice-over): Rasheed Ali (ph) is an orphan who just escaped a war zone on foot. He and 24 other boys from an orphanage stopped to rest in a school, after having walked more than 20 miles to flee the fighting in Pakistan's Swat Valley.

The dazed look on their faces says it all -- boys as young as five years old -- tired, scared, thirsty. Some, like 12-year-old Rasheed (ph), are disabled. Because of his deformed spine, he cannot sit down to rest. These boys spent the last week hiding in the back of their orphanage in the town of Mingora, after it ended up on the front lines of Pakistan's war with the Taliban.

UNIDENTIFIED CHILD: Every day, sir -- every day there are men in Taliban and Army every time fights and bomb blasts. We cancel (INAUDIBLE).

WATSON: When the Army briefly lifted a curfew on Sunday, teacher Imran Khan (ph) decided to make a run for it.

IMRAN KHAN: Most of them, we will help them. We carried them on our shoulders.

WATSON: Eventually, they found a van to complete the last leg of their journey to the western city of Peshawar. The United Nations reports more than 360,000 people have fled their homes in the last 10 days. Another Pakistani charity has offered to feed and house these kids for the next two months.

Despite the hardships they've endured, no one here is complaining.


WATSON: And, Wolf, one final footnote to illustrate the support that the Taliban continues to enjoy in Northwest Pakistan.

When I asked these children who had just been forced to flee their homes whether or not they supported the Pakistani Army or the Taliban, nearly half of these boys said they liked the Taliban, because they said the Taliban were fighting for Islam -- Wolf.

BLITZER: Ivan Watson in Pakistan for us.

Thank you.

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

CAFFERTY: The question is -- how will rising gas prices and the recession impact your summer vacation plans?

Donna in Colorado Springs says: "We plan on taking small trips this summer because gas is over a dollar cheaper than it was this time last year. We might even travel a bit more. You can't sit at home and worry about the economy 24/7. We all need a break right now."

Steve in California: "I'll be unemployed the end of May -- no money, no vacation. If gas was a buck-and-a-half. I'd still be staying home."

Joe writes: "The price of a barrel of oil was $32 in January 2009. It's been climbing ever since. It finished today at $58. The real question is why? The economy is staggering, unemployment is at 9 percent, businesses that traditionally use large quantities of oil are not, oil storage facilities can't take anymore, tankers full of oil waiting offshore to unload, OPEC turning the valve off and yet oil is on the rise. One can only say that we're on the oil standard, not the gold standard."

Ron in Oregon: "We're still haunted by last summer's gas prices. And I haven't had much work for the last six months. With that and all the great news today about Social Security and Medicare, we'll probably not travel much this summer. If we do, it will be within the state."

Marin writes: "I'm so over the slump of the economy, I want to have fun again without feeling guilty about it. I plan to take a nice trip this summer. Gas prices and the recession aren't enough to stop me from having a good time. Want to come along, Jack? Bring Wolf."

Fernando in San Diego writes: "I'll just have to stay here in San Diego this summer. I'll have to relegate myself and my family to making sand castles, taking walks and eating at home together. We might even have to cancel our cable plan and just read or just talk to each other. We'll miss you, Jack. Well, not that much."

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

I liked that last e-mail.

BLITZER: Yes. Except I don't want him to cancel that cable plan.

CAFFERTY: Well, Wolf will pay your cable bills.


CAFFERTY: Send it to him care of CNN headquarters in Washington...

BLITZER: Thank you. Bye.

CAFFERTY: ...and he'll be...


BLITZER: See you tomorrow, Jack.

Apple isn't succumbing to temptation to mix religion and the iPhone.


BLITZER: Cell phones can do just about anything and everything these days. But one company has realized it has to draw the line on the Moost Unusual ideas.

Here's CNN's Jeanne Moos.

(BEGIN VIDEOTAPE) JEANNE MOOS, CNN CORRESPONDENT (voice-over): When it comes to using the image of Jesus, there's no putting the brakes on it -- from wrapping paper to action figures. There's even the "His Essence" candle.

(on camera): It's the scent of Jesus.

(voice-over): Based on ingredients cited in the bible's Book of Psalms.

UNIDENTIFIED FEMALE: Oh, my goodness me. They're putting Jesus in everywhere.

MOOS: Everywhere except the iPhone. "Apple Rejects Jesus' Face," those his actual name is "Me So Holy." You can put anyone's face into a portrait of Jesus or other religious figures.

HEATHER LIPNER, CO-CREATOR, "ME SO HOLY": We asked religious people. And, you know, they -- you know, a lot of them were like hey, I'm not offended by this. I think this is funny.

MOOS: Heather Lipner and Ben Kahle formed a company to make software applications. Their first ap was accepted for sale by Apple.


UNIDENTIFIED MALE: And today, we'll choose a sheep.


MOOS: It's called the Animalizer. Choose an animal and insert a face.


UNIDENTIFIED MALE: And we size it and shrink it and fit it right into the animal nicely.


MOOS: But when they tried expanding the concept to "Me So Holy," letting you put your face in, say, Mary's image or a nun's image, adding a caption, e-mailing it to someone, Apple sent a rejection letter.

BEN KAHLE, CO-CREATOR, "ME SO HOLY": And I think it said it was offensive, you know, it could be deemed as offensive.

MOOS: Reaction online was mixed: "Me So Holy?" How about "You So Stupid?" Of course this is going to be offensive to some people."

But others criticized the rejection: "Apple seeks to become our iNanny."

Nanny is an interesting choice of words given that Apple recently pulled an application called Baby Shaker. (VIDEO CLIP)

MOOS: You shake a virtual infant. Apple apologized, calling it a deeply offensive mistake.

As for "Me So Holy."..

LIPNER: It's a parody. It was not meant to be offensive in any way.

MOOS: They're hoping Apple will reconsider, allowing them to sell their application in the company's aps store.

UNIDENTIFIED MALE: Please, please.

MOOS: Consider prayer. When it comes to messing around with religion, the folks at Apple are having none of it none of it -- none of it.

Jeanne Moos, CNN, New York.


BLITZER: And we love hearing what you think.

How important should race or ethnicity or gender be when picking a U.S. Supreme Court nominee?

Submit your video comments to We'll get some of them on the air.

I'm Wolf Blitzer in THE SITUATION ROOM.

Up next, "LOU DOBBS TONIGHT" -- Lou.

DOBBS: Good evening, everybody.

The finances of Medicare and Social Security are worsening -- running out of money far more quickly than expected. A new challenge for the president, who says we can't afford to leave what he calls the hard choices for the next generation.

Hard choices are ahead for this country's educational system. Almost a third of the nation's public high school students are failing to graduate. Many say the country is failing an entire generation of students.