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New Fuel Standards for Cars; Confronting President Obama Head- On; No Money to Close Gitmo

Aired May 19, 2009 - 15:59   ET

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


WOLF BLITZER, CNN ANCHOR: Happening now, America's cars on the road to being cleaner and greener. President Obama sets a new standard for fuel efficiency. What the move means for the environment and for your wallet.

Plus, the Republican Party chairman vows to expose what he calls a great Democratic fraud and challenge the president head-on.

This hour, the GOP striving for a comeback and searching for a leader.

An astronaut's funniest space videos. The Atlantis crew records the lighter side of a grueling mission. We have the tapes.

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

You're in THE SITUATION ROOM.

Imagine what it would mean for the environment and for America's dependence on foreign oil if 177 million cars vanished from our roads. President Obama says new national fuel and emission standards for cars and trucks will have roughly the same impact within the next decade. Today, he outlined the plan and called it an historic turning point.

Let's go to our Senior White House Correspondent Ed Henry. He's got the details.

Ed, a dramatic day at the White House.

ED HENRY, CNN SR. WHITE HOUSE CORRESPONDENT: That's right, Wolf. In the campaign, this president talked a lot about change. And today was an example where he actually pulled together some parties that were at loggerheads. There were lawsuits flying around. He brought them together for some dramatic action that's going to have major ramifications for consumers.

(BEGIN VIDEOTAPE)

HENRY (voice-over): The president brought together congressional leaders, governors and automakers on a deal that marks the government's most ambitious step to cut greenhouse gas emissions ever.

BARACK H. OBAMA, PRESIDENT OF THE UNITED STATES: No longer will we accept the notion that our politics are too small, our nation too divided, our people too weary of broken promises and lost opportunities to take up a historic calling.

HENRY: A strict new national fuel efficiency standard demanding that by 2016, automakers are building vehicles that average 35.5 miles per gallon, saving 1.8 billion barrels of oil.

OBAMA: That's more oil than we imported last year from Saudi Arabia, Venezuela, Libya and Nigeria combined.

HENRY: White House officials say you'll pay about $1,300 more per car. But the president of Toyota notes that's likely to be offset by fuel savings.

JIM LENTZ, CEO, TOYOTA: If you look at it in the long run, if the consumer is getting 30 percent better fuel economy, in the long run of owning that vehicle and the ownership cycle, they will probably be better off.

HENRY: One unanswered question is whether troubled automakers like General Motors and Chrysler can adjust as well as competitors.

ALAN MULALLY, CEO, FORD: It's a real opportunity to do what we've been doing at Ford, and that is absolutely make sure that we're sized for this lower demand. Also, to accelerate the development of the new vehicles that people really do want in value.

HENRY: It doesn't hurt to get a plug from the driver in chief.

OBAMA: I still have my Ford parked in Chicago. It's a Ford hybrid. It runs great. You guys should take a look.

(END VIDEOTAPE)

HENRY: Now, while he doesn't drive it anymore, obviously, very much, the president does own a Ford hybrid, as does his press secretary, Robert Gibbs. Gibbs insisted to reporters today that government pressure on GM and Chrysler did not force this deal, but even Governor Arnold Schwarzenegger from California, a key supporter of this deal, told reporters today after this big announcement that all of that pressure on these automakers obviously had to force them to the table to help bring this deal along -- Wolf.

BLITZER: We're going to have more on this coming up, Ed. Carol Browner, the president's energy czar, as she's called, she's going to be joining us live. Stand by.

But there's another important story we're working on right now, a bold and defiant declaration by the chairman of the Republican Party. Michael Steele says the days of apologizing for the GOP are over, and so is President Obama's honeymoon. He's vowing to confront the Democratic administration head-on.

Let's bring in our Senior Political Analyst Gloria Borger and our Chief National Correspondent John King, the anchor of CNN's "STATE OF THE UNION," which airs every Sunday morning.

I want both of you to listen to this little excerpt of what Michael Steele said today.

(BEGIN VIDEO CLIP)

MICHAEL STEELE, RNC CHAIRMAN: So what's the loyal opposition to do with this popular president? Well, we're going to speak truth to power. We're going to speak directly and we are going to take them on, every last one of them on every street corner and in every neighborhood.

This is not about personalities. This is about the very sizeable gap emerging between America's opinion of the president, the man, and America's opinion of the president's policies. In fact, it is not a gap. It is a chasm.

(END VIDEO CLIP)

BLITZER: Gloria, he really came out swinging today if you listen to that speech. If you read it, he really minced no words.

GLORIA BORGER, CNN SR. POLITICAL ANALYST: No, he didn't. And he does have a point here about this gap between the president's popularity and his policies.

According to our polls, there's an 18-point gap. But one thing to keep in mind is that 75 percent of the people tell us that they like the president, he's got the right qualities to be president. But 57 percent -- and that's a very high number -- still agree with him on the issues. So they are more likely to give him the benefit of the doubt.

JOHN KING, CNN CHIEF NATIONAL CORRESPONDENT: And if you go issue by issue, on health care, are Americans concerned that the government might take too much influence? You bet.

Are they concerned that the government is spending too much money? You bet.

Are there regional differences, not so much party differences, but regional differences over climate change and energy? You bet.

But Wolf, when you ask people the question, "Who do you trust to handles these issues?" And you ask President Obama or the Republicans? There's a chasm there.

There's a gap between the president's personal approval rating and some of his policies. But the chasm Chairman Steele was talking about is the trust in his party right now.

BORGER: And the president's personal qualities, the rating on his qualities since last October, has gone up. And so that means the new things that the president is proposing, people are going to be much more willing to listen.

BLITZER: And he really went after the sort of second-tier Democratic leadership after the president, John. Listen to this.

(BEGIN VIDEO CLIP)

STEELE: We've seen strategists writing memos and doing briefings, urging the Republicans, avoid confronting the president, steer clear of any frontal assaults on his administration. They suggest that, instead, we should go after Nancy Pelosi, who nobody likes, or Harry Reid, who nobody knows, or this Tim Geithner fellow, who nobody believes, or maybe even Barney Frank, who nobody understands.

(END VIDEO CLIP)

BLITZER: I guess he was reading those memos saying they should go after some others because he obviously did.

KING: And you heard a little bit of laughter there. That's a good line in a speech, a red meat line to play to the Republican base.

But Wolf, I sent e-mails and made phone calls today to 12 different Republicans around the country. They are state party leaders, strategists who have been involved in campaigns, even people who have worked very high at the Republican National Committee. Of the dozen e-mails and calls that were returned to me, nine of them said this chairman is either irrelevant or mostly irrelevant.

He has a credibility problem with his own party right now. The biggest criticism is that they think Michael Steele likes being a political analyst. He likes giving lines like that, not doing the candidate recruitment, the fund-raising, the party-building organizations that a party in deep trouble, which the Republican Party is, must do.

BORGER: You know, and the strategy that he's disparaging is the strategy that was devised by his own Republican leadership in the Congress, because they looked at those polls and they said -- and I think, you know, to some degree, they might have been right -- let's attack Nancy Pelosi, she's not too popular. Barack Obama is very popular.

But the test of this, though, I think, is going to be as we head into those midterm elections, where is the unemployment number going to be? Is it going to be close to 10 percent? Even a popular president like Ronald Reagan lost 26 seats in his first midterm.

KING: And Bill Clinton lost a lot, too. The midterm elections are about the president's performance.

BLITZER: Yes. And 1994 was a disaster for the Democrats.

KING: Absolutely.

BLITZER: All of us remember that Contract with America.

All right, guys. Don't go away, because you are both coming back.

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

JACK CAFFERTY, CNN ANCHOR: Wolf, if you are looking for a new set of wheels, there are lots of deals to be had as two of the big three automakers close thousands of dealerships around the country. Seven hundred eighty-nine Chrysler dealerships have a deadline of June 9th to unload more than 40,000 cars and trucks. The dealers have got to sell the Chryslers, the Dodges, the Jeeps before then or risk losing thousands of dollars.

Chrysler, which has filed for bankruptcy, doesn't have the money to buy back the vehicles. But the company says the dealers will get the warranty reimbursement and the sales incentives like rebates and low-interest financing until June 9th. But after that, they don't get either one. And that's why Chrysler dealers are in a hurry to sell, even if it's at a substantial loss.

Over at General Motors, things aren't quite that bad. At least not yet.

Although the company is cutting 1,100 dealers, GM isn't in bankruptcy yet, so the dealers have more options. They also have more time to sell their cars. And the company is still required to buy back some of the cars and trucks.

Experts say before going to a dealership, you should find out about incentives and other deals and make a lowball offer. Of course, people can wait until the deadline gets closer and dealers have perhaps even -- are more desperate. But then keep in mind the inventory if you wait could be lower and you might not get your first choice.

Anyway, here's the question. Is now the time to buy either a Chrysler or a GM car?

You can go to CNN.com/caffertyfile and post a comment on my blog.

There are some hellacious deals to be had.

BLITZER: Yes. It's amazing how much they're willing to cut. In fact, in the next hour, Brian Todd is going to go out to one of those Chrysler dealerships. It's unbelievable how low those prices are right now.

CAFFERTY: But you've got to be careful. A company in bankruptcy, what about the warranty? What about service? What about parts down the road? I mean, it may work out just fine, but those are questions, certainly, to consider.

BLITZER: Well, Chrysler keeps saying the U.S. government is in charge of the warranties for all practical purposes.

CAFFERTY: Yes. And, of course, they do such a great job with everything they handle.

BLITZER: I knew you were going to say that.

Thank you. Stand by.

Democrats have made a tough choice, give their president something he needs to carry out a top goal or be lambasted by Republicans. We're going to tell you about their decision.

And in Britain, members of parliament set a shocking new standard for padding their expenses. Wait until you hear and see what they bought and why some may actually be getting away with it.

And a new verdict on whether the Republican Party should have bought Sarah Palin all those designer outfits.

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

(COMMERCIAL BREAK)

BLITZER: A powerful blow today to President Obama's plan to close the Guantanamo Bay prison camp for terror suspects. It comes from Senate Democrats who have decided not to give the president the money to follow through on his pledge.

Let's go to our Senior Congressional Correspondent Dana Bash.

All right. What's going on up on Capitol Hill, Dana?

DANA BASH, CNN SR. CONGRESSIONAL CORRESPONDENT: Well, you know, Wolf, that shutting Guantanamo Bay is such a high priority for President Obama. He announced on his second full day in office that it would close this January. The problem is he made that announcement without a plan for where the terror suspects will go, and he did ask Congress for money.

Well, Democrats now are grumbling that the White House simply didn't think that through, and now they are paying a political price.

(BEGIN VIDEOTAPE)

BASH (voice-over): It's an about-face for Senate Democrats and a rare slap at President Obama. Congress will reject his request for $80 million to close Guantanamo Bay until he comes up with a plan for the 240 detainees there.

SEN. HARRY REID (D-NV), MAJORITY LEADER: Guantanamo makes us less safe. However, this is neither the time nor the bill, I'm sorry, to deal with this.

BASH: Why? Democratic leadership sources admit Republicans have been successful in their relentless campaign accusing Democrats of jeopardizing American safety, playing up fears that terror suspects could be imprisoned or tried in your back yard.

Daily attacks on the Senate floor.

SEN. MITCH MCCONNELL (R), MINORITY LEADER: Shutting this facility now could only serve one end. That's to make Americans less safe than Guantanamo has. BASH: A Web video with ominous music featuring the smoldering Pentagon on 9/11 and a question, "What are Democrats doing to make you safe?" Even a press release entitled "Meet Your New Neighbor, Khalid Sheikh Mohammed."

Talk to Democrats in the hallway, and they are frustrated by the GOP tactics.

SEN. DIANNE FEINSTEIN (D), CALIFORNIA: ... this shibboleth of, oh, the Democrats want to put terrorists into your neighborhoods is just a lot of bull.

BASH: But many Democrats are also aggravated at the president for putting them in a political bind, announcing Guantanamo would close, asking for money without a plan for the terror suspects.

Even the Senate's number two Democrat and close Obama ally Dick Durbin.

UNIDENTIFIED MALE: Did the White House put you in a bit of an awkward position by asking for this money ahead of the plan?

SEN. DICK DURBIN (D), MAJORITY WHIP: Yes. Most of the members would have said why would we want to cast an unpopular vote for a theory as opposed to a plan?

(END VIDEOTAPE)

BASH: Now, Democrats insist the idea of closing Guantanamo Bay is not dead. They're just not going to move ahead with any money for it until the president comes up with a public plan for what to do with those terror suspects.

Meanwhile, Republicans, as you can imagine, Wolf, are reveling in a rare political victory here. They are still pushing ahead with a measure that will explicitly say that no detainees currently at Guantanamo Bay can be transferred anywhere on U.S. soil -- Wolf.

BLITZER: Dana, thanks very much.

Meanwhile, more U.S. financial aid is on the way to Pakistan to help people escaping the battle against the Taliban extremists. A very public announcement today by the Obama administration, even as Pakistan tries to keep some military help from the United States secret.

Let's go to our Pentagon correspondent, Barbara Starr. She is digging on this story.

What are you finding, Barbara?

BARBARA STARR, CNN PENTAGON CORRESPONDENT: Well, you know, Wolf, it took Pakistan days to agree to allow even the smallest amount of U.S. military aid for this growing humanitarian crisis. All of it underscoring how sensitive any U.S. help for Pakistan really is.

(BEGIN VIDEOTAPE)

STARR (voice-over): Pakistanis desperately trying to reach the safety of camps, driven from their homes by weeks of fighting between the military and Taliban in northwest Pakistan. The Obama administration is sending tents, packaged meals and other supplies.

HILLARY CLINTON, SECRETARY OF STATE: The people of the United States are responding to a request for assistance from the government of Pakistan with more than $100 million in humanitarian support.

STARR: But with more than one million people now displaced, the U.S. aid, some to be flown in by military C-17 aircraft, may not go far. Pakistan is reluctant to ask for large amounts of aid for fear of public backlash about any U.S. military presence, but Pakistan has accepted secret help from the Pentagon.

CNN has confirmed that in March and April, the U.S. military flew unmanned spy planes over the border region, gathering classified imagery of targets on the ground and gave the intelligence to Islamabad. The Pakistanis stopped asking for flyovers last month but did not say why.

Whether Pakistan can continue to deny the growing U.S. involvement remains doubtful. Even the head of the CIA is making a rare admission about its missile attacks in Pakistan, which it says have targeted top militants, but many Pakistanis say have killed hundreds of civilians.

LEON PANETTA, CIA DIRECTOR: Obviously, because these are covert and secret operations, I can't go into particulars. I think it does suffice to say that operations have been very effective.

(END VIDEOTAPE)

STARR: He can't go into particulars, but, Wolf, the CIA director right there, you heard it, acknowledged a classified operation over Pakistan. And Director Panetta went on to say it's the only game in town to try and track down and kill top al Qaeda operatives.

So the bottom line here, no matter how sensitive Pakistan feels about any type of U.S. assistance, the Obama administration's determined to remain in that only game -- Wolf.

BLITZER: Does it make any difference -- I know this is sensitive intelligence gathering, related material, the CIA is very sensitive to all of this for obvious reasons. Does it make any difference that the Pakistani government, including the president of Pakistan, Asif Ali Zardari, they repeatedly and openly talk about these drone attacks on Pakistani sovereign soil, and they hate it?

STARR: Well, that's absolutely right. And this is part of this underlying tension between the two governments. The Pakistanis obviously talking about it because of the number of civilians that have been killed. And there is such a backlash inside Pakistan about these operations and civilians being injured or killed in them. So the government feels it must address it publicly. But until now, really, the CIA has not talked about it publicly, trying to respect that Pakistani sensitivity. Clearly, Panetta is feeling a change of heart -- Wolf.

BLITZER: Yes, obviously.

All right. Thanks very much, Barbara, for that.

T minus a few hours and counting. What happens in California could help stop a painful economic crisis or plunge California deeper and deeper toward financial disaster. It could also cause voters to brand the governor, Arnold Schwarzenegger, a failure.

And one of the world's most famous directors is set to profile one of the world's most honored men. Wait until you hear who will take on Dr. Martin Luther King, Jr.

(NEWSBREAK)

(COMMERCIAL BREAK)

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

Happening now, mission accomplished. What's called the most powerful eyes on the universe is on its own once again. Atlantis astronauts repair the Hubble telescope. Wait until you see their home movies. They're literally out of this world.

It's not easy finding a job for the former leader of the free world, but Bill Clinton has a brand new one, helping what's called the poorest country in the Western Hemisphere. You're going to find out what his wife says and how much Bill Clinton will be paid.

And a swine flu shocker. The world nears 10,000 H1N1 cases, and it's spreading, possibly killing a baby in New York City.

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

What happens in just a few hours in California could launch potentially the state on the road to economic recovery or cause California to plunge toward economic disaster. Right now, voters are at the polls, voting on a host of measures over California's budget crisis.

The governor, Arnold Schwarzenegger, warns if they fail it will bring economic doomsday. But might the failure of these measures really mean Schwarzenegger's failure as governor?

Let's go to Los Angeles. CNN's Ted Rowlands is watching the drama for us -- Ted.

TED ROWLANDS, CNN CORRESPONDENT: Yes, Wolf. The polls are still open now. Governor Schwarzenegger was out in front of this, trying to convince California voters to pass these initiatives. But in the final analysis, most people think the voters are going to push these down and refuse to pass them, and deal the governor another high- profile defeat.

(BEGIN VIDEOTAPE)

GOV. ARNOLD SCHWARZENEGGER (R), CALIFORNIA: We are mad as hell and we are not going to take it anymore.

ROWLANDS (voice-over): When he decided to run for governor of California, Arnold Schwarzenegger vowed that with him in charge, things were going to change.

SCHWARZENEGGER: We are here, Ladies and Gentlemen, to clean house. We are here to clean house.

ROWLANDS: In a state plagued by years of legislative gridlock and partisan bickering, Schwarzenegger believed he could do what no other recent governor could.

SCHWARZENEGGER: Every governor proposes moving boxes around to reorganize government. I don't want to move boxes around, I want to blow them up.

ROWLANDS: But over the past six years, Schwarzenegger has failed to blow up much of anything. In 2005, his budget initiatives that he took directly to the voters without wide political support went down in flames. And, today, low numbers of Californians trickling to the polls are expected to once again vote down the governor's latest attempt at budget reform.

DAN SCHNUR, REPUBLICAN POLITICAL CONSULTANT: You can't blow out boxes, and you can't sweep out buildings by yourself. It has to be done with support and with coordination with the legislature.

ROWLANDS: Schwarzenegger's effort to bridge the gap between the parties has often cost him support in his own party.

RON NEHRING, CALIFORNIA REPUBLICAN PARTY CHAIRMAN: When you are moving forward with ideas from the Democrat side, well, you know, don't expect a lot of Republicans to be, you know, particularly enthusiastic about that.

ROWLANDS: Despite the failures, including the one expected today, Governor Schwarzenegger seems upbeat that he can still somehow change the state that many believe is simply ungovernable.

GOV. ARNOLD SCHWARZENEGGER (R), CALIFORNIA: I never give up. When you believe in something, then you never give up, because I don't just put the -- you know, you go and see the way the wind blows. I don't do that. I'm very passionate about this.

(END VIDEOTAPE)

ROWLANDS: And it's worth noting, Wolf, that the governor is not in the state today. He, of course, is in Washington, D.C., where he has had some success in -- in the area of green technology and pushing green reforms. So, he's reveling in that, rather than staying here in California, where it looks like these initiatives are going to go down.

BLITZER: The states really are enormous out there.

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

Turning to revelations and scandal rocking Britain right now -- it's so high-profile and causing so much public anger, it's triggered days and days of turmoil.

CNN's Robin Oakley has more for us from London -- Robin.

(BEGIN VIDEOTAPE)

ROBIN OAKLEY, CNN EUROPEAN POLITICAL EDITOR: Wolf, British political life has been shaken to its foundations by detailed newspaper revelations of how members of parliament have been milking their expenses system.

The public has been outraged by the scale of the scams, claims for the upkeep of gardens, swimming pools and tennis courts, massage chairs, and home cinema systems. But they have also been horrified by the pettiness of some, claims for an oven glove or a can of dog food.

The worst practice, that of the so-called flipping, naming a series of residences as an official second home, and having them all refurbished, at the taxpayers' expense. Two members of one party have been suspended for continuing to claim interest on their mortgages, when they had already been paid off.

A justice minister has resigned over his housing arrangements. But now the biggest scalp of all: The speaker of the House of Commons, Michael Martin, has been forced to give his resignation. Speaker Martin was not just in charge of chairing debates. He was responsible for the fees office in the House of Commons, which was supposed to keep members' expenses claims in check.

He got the tone wrong. He sought to suppress the publication of details. And he was seen to be an impediment to the reforms which all now agree are necessary.

Prime Minister Gordon Brown has said that any member of his Labor Party who has been found guilty of breaking the House of Commons rules will not be allowed to stand for the party at the next election. The problem is that most of the scams exposed were within the rules.

It's the rules themselves that have got to be changed, and that will be one of the first tasks of the new speaker to be elected on June the 22nd -- Wolf.

(END VIDEOTAPE)

BLITZER: All right, Robin, thank you.

Abbi Tatton is taking a closer look at some of the outrageous expenses that -- that these members of parliament claimed. And some of them are pretty outrageous. What are you seeing?

ABBI TATTON, CNN INTERNET REPORTER: Wolf, it was just anything and everything, according to some of these reports.

The British newspaper "The Daily Telegraph" got ahold of the official expenses for all 646 members of parliament. And this is why the British public is outraged. Take a look.

One cabinet secretary, Jacqui Smith's expenses included $15 for two pornographic movies. Her husband later apologized publicly for that. One M.P.'s gardener charged over 500 bags of horse manure to the houses of parliament and therefore to the British taxpayer at about $1 a bag.

And then there's just the trivial grocery items, some of them bordering on absurd, toilet paper, a glittery toilet seat, chocolate biscuits, Christmas decorations. The list goes on and on.

The case that really came to symbolize this whole scandal is one M.P., Douglas Hogg, who claimed $3,000 for somebody to clean the moat of his country estate -- Wolf.

BLITZER: So, is he going to get away with that, cleaning the moat?

TATTON: The moat, not so much. Now, he's going to repay that money. And he's also said, according to reports today, that he won't be running for reelection.

BLITZER: The chocolate biscuits are really chocolate cookies.

(CROSSTALK)

TATTON: Oh, did I say biscuits? Yes.

BLITZER: You said biscuits. That's a British term.

TATTON: OK.

(CROSSTALK)

TATTON: ... HobNobs, very nice...

BLITZER: Cookies.

TATTON: ... but the taxpayers shouldn't be paying for them.

BLITZER: Cookies.

TATTON: Right.

(LAUGHTER)

BLITZER: Thank you. Thank you. A 13-year-old boy's cancer is now spreading, but his parents still are refusing chemotherapy for him. Stand by for the latest on what prosecutors are doing in hopes of saving his life.

Also ahead: Sarah Palin says she didn't keep the clothes, but should the Republican Party pay a new price for buying her those designer outfits?

And you usually don't get to see a shuttle mission quite like this, astronauts' home videos from 350 miles in space.

(COMMERCIAL BREAK)

BLITZER: President Obama says strict new fuel standards will save almost two billion barrels of oil over the lifetime of cars and trucks bought in the next five years. But the rules will cost consumers up front an extra $1,300 per vehicle by the time the plan is complete in the year 2016.

Let's talk about it with Carol Browner. She's a top presidential adviser on energy and climate change.

Thanks, Carol, very much for coming in.

CAROL BROWNER, ASSISTANT TO THE PRESIDENT FOR ENERGY AND CLIMATE CHANGE: Thanks for being...

BLITZER: The Big Three U.S. automakers, they are in financial trouble right now. Where are they going to get the money to create these -- these new lines of much more fuel-efficient vehicles?

BROWNER: Well, Wolf, one of the things we did is, we worked with all of the car companies to make sure that we were providing them flexibilities while we we're setting these tough new fuel-efficiency the first ever tailpipe greenhouse gas pollution standards.

And the car companies assure us that they will be able to meet these with the flexibilities that we have provided and give the consumers what they want, which are more fuel-efficient cars. It means, every time you fill up, that gallon of gas is going to go a little bit further than it used to.

BLITZER: Does this give additional advantage to the foreign carmakers, the Hondas, the Toyotas, because they already are building smaller, more fuel-efficient cars? And it will help them, presumably, more than it would help the Big Three.

BROWNER: We did it differently than we used to do it.

Under the old CAFE, the old fuel-efficiency standards, you averaged across your entire fleet. So, companies that made bigger cars had to make some smaller cars to offset the fuel efficiencies of those -- the small fuel gains of those bigger cars.

By requiring standards for each class size of vehicles, we actually preserve the consumer choice. There's no more just averaging across the fleet. There's actually looking at the size of cars you make. And, for every size of car a manufacturer makes, it's going to be cleaner. So, the consumer, you know, the soccer mom who wants her minivan, she can get her minivan. It's just going to be cleaner and more fuel-efficient.

BLITZER: It's going to cost up front, what, a little bit more than $1,000 to get this new cleaner, more fuel-efficient car. And, presumably, over the life of five or six or 10 years, people will make it up, because they will spend less on fuel. But they have to come up with the money to begin with. How difficult is that going to be in these tough economic times?

BROWNER: Well, that's right. They do make -- make back the money.

But it's also important to remember that most people buy their cars on time. They take out a loan for -- for 60 months, on average. And, so, if you amortize the cost of the loan over -- the cost of these new fuel efficiencies over the period of the loan, actually, for most people, it becomes very economical.

And they get the fuel savings right away. The minute they drive that car off the lot, they are getting fuel savings. And that's money in their pocket when it comes to the pump.

BLITZER: How -- are we going to see our highways pretty much like European highways, with really small cars out there, as opposed to what we're used to in the United States?

BROWNER: No. What we did by using a footprint or a class size approach, which is what we did, is preserve the consumer choice.

If consumers want to buy some bigger cars, perhaps, they can do that. But those are going to be more fuel-efficient. Every single type of car on the road will get more fuel-efficient, which is good for consumers.

BLITZER: Every single new car. But if you still have your old car, you can keep it, no matter what, right? You aren't going to be taking those cars away from people?

BROWNER: No. People don't -- their cars are not going to be taken away. But for somebody who is looking to buy a new car in the future, when they get ready to buy that car, they can have a more fuel-efficient car.

BLITZER: Do you support the proposal on the Hill what is called cash for clunkers? People give up their old cars, they get a little voucher to go ahead and buy a new, more fuel-efficient car. Is that a proposal the Obama administration supports?

BROWNER: The president has called for cash-for-clunker legislation. We think it's an important component of helping the -- the car industry in -- in the near term. We think -- we encourage Congress to pass legislation, and they have been working on it. BLITZER: And one final question: Could you have gotten this deal with the Big Three automakers, the labor unions, the lawmakers from Michigan, for example, if the U.S. federal taxpayers weren't already bailing out these -- these car -- Ford and Chrysler -- excuse me -- Chrysler and GM? Because you really control them now, for all -- for all intents and purposes.

BROWNER: I will tell you why we got this deal. The car companies, all of them, not just, you know, GM and Chrysler, all of them were looking at possibly three different regulations, one from California, one from the EPA, and one from the Department of Transportation.

What we did is weave all of that together to give the car companies one national policy and to give the consumer more fuel- efficient vehicles. It's a win-win.

BLITZER: Carol Browner is in charge of energy over at the White House.

Thanks very much for coming in.

And here's another way we can look at the new fuel-efficiency standards. Let's say you are driving from Washington, D.C., to Chicago today. At current gas prices, and under the current fuel- efficiency standard, you would use about 28 gallons of gas and pay about $64.

In 2016, let's say gas prices are about the same, but you are getting 35 miles to the gallon under the new fuel regulations. It would take about 20 gallons of gas to get you from D.C. to Chicago, at a cost of about $46.

One well-known political activist has a message for gays.

(BEGIN VIDEO CLIP, "THE COLBERT REPORT")

MEGHAN MCCAIN, CONTRIBUTOR, THEDAILYBEAST.COM: I'm liberal on social issues. And I do believe that the Republican Party can be a safe place for the gay community.

(END VIDEO CLIP)

BLITZER: John McCain's daughter, Meghan McCain, says the Republican tent is big enough for gays and lesbians.

And if you want what could be the deal of a lifetime, why some auto dealers are selling cars for thousands of dollars cheaper.

(COMMERCIAL BREAK)

BLITZER: Let's get back to our top story, the new fuel- efficiency standards outlined by the White House in an historic deal just announced today.

Let's bring in two CNN political contributors, the Democratic strategist James Carville, and the Republican strategist Ed Rollins.

The president says, Ed, this couldn't have been done only a few months ago, but he did it. How do you explain this -- this -- this deal?

ED ROLLINS, CNN SENIOR POLITICAL CONTRIBUTOR: Well, I think the industry is on its -- on its backside. And I think, to a certain extent, they are getting an awful lot of federal resources. And I think, at the end of the day, this is going to cost a lot of money. This is going to cost $47 billion for the car companies to get to that standard.

But, if they can get to that standard, and it doesn't take more additional taxpayers' money, then I think we're -- we're way ahead of the game.

BLITZER: It's hard for Chrysler and GM to say no to the White House, when they are so dependent on federal taxpayers' money, isn't it, James?

JAMES CARVILLE, CNN POLITICAL ANALYST: Yes, it is. But, again, Ford said yes. And, you know, let's not forget that a lot of these foreign automakers have huge presence here in the United States.

And, you know, this just is the kind of thing it's been a long time since we have moved them up. And the administration saw an opportunity, and they seized on it. And I -- I think that's much -- much to their credit.

BLITZER: We -- we asked our viewers to send us some thoughts.

Billy Dennis Jr. of Mesquite, Texas, sent us this iReport. Listen to this.

(BEGIN VIDEO CLIP)

BILLY DENNIS JR., CNN IREPORTER: One of the reasons, among the many, that are causing American car companies to struggle is the poor fuel-efficiency of their vehicles. Having higher fuel standards is something they will desperately need in order to compete in today's marketplace.

(END VIDEO CLIP)

BLITZER: So, is this, in the end, going to really help GM and Chrysler and Ford, Ed?

ROLLINS: I -- I think it helps. I think, at the end of the day, you know, we're going to drive all kinds of cars in the rest of our lifetime.

James and I are a little bit older than some of these younger people watching...

(LAUGHTER)

CARVILLE: Right.

ROLLINS: ... and getting their first cars. And -- and we won't have the big souped-up Pontiac, GMs, and all -- or GTOs, and all the rest of it. But it's going to be good for the environment. And anything that takes less oil is -- is a positive thing for the country.

BLITZER: And, James, on that, I think you agree, right?

(CROSSTALK)

CARVILLE: I -- I completely agree with that.

Heck, I have -- it sounds like he's an economist. He had a pretty smart observation there.

(LAUGHTER)

BLITZER: Yes.

(LAUGHTER)

BLITZER: All right, let's a little bit talk about Meghan McCain, the daughter of John and Cindy McCain.

She was on Stephen Colbert's show last night. And she said this.

(BEGIN VIDEO CLIP, "THE COLBERT REPORT")

MCCAIN: It can be a party for a 24-year-old pro-sex women. It can be.

(LAUGHTER)

MCCAIN: I just think that we have people that are in this party that are hijacking it and trying to make it even extreme.

(END VIDEO CLIP)

BLITZER: All right, you -- you got a laugh out of that, James.

(LAUGHTER)

BLITZER: She's describing what Ronald Reagan used to call a big- tent party.

(CROSSTALK)

CARVILLE: Right. Well, I'm not sure there are many 24-year-old anti-sex women out there.

(LAUGHTER)

CARVILLE: But I -- she's a very -- she's -- her father -- and Ed and you, Wolf, and I all know her father. And he can be very blunt sometimes. And this young woman is her father's daughter. She can be very blunt, and kind of refreshing in some ways.

ROLLINS: I'm reminded I'm reminded -- I sit -- I was complaining one time to Ronald Reagan about his late daughter, Maureen Reagan, who was the co-chairman of the Republican National Committee.

And he said, "Ed, just be grateful I have only one child that is interested in politics."

The bottom line is, this young girl got to the top of the ladder. I think she's describing what -- a social club, as opposed to a political party. And, obviously, a political party has certain rules and certain regulations and certain ideologies. And not everybody wants to be a part of that. A social club is something totally different.

BLITZER: But what about what -- the basic message she is saying is that, you know, some of these value that she wants the Republicans to embrace, some Republicans, some conservatives, Ed, say they are simply incompatible.

ROLLINS: Well, I think that's true.

And I think the bottom line is, listen, we have discussed open -- big tent for a long, long time. And we want as many people as we can. We're way behind in the -- in the numbers, as James knows well, and I think to a certain extent.

CARVILLE: Right.

ROLLINS: But you have got to be comfortable in the party and you can't chase away the people that are there and have been the -- the backbone of your party.

BLITZER: How do they, James, go after getting younger supporters out there, the GOP? We heard a long speech, as you heard earlier today, from the chairman of the Republican Party, Michael Steele.

CARVILLE: Right.

BLITZER: He's trying to find some young supporters out there.

CARVILLE: They are.

And, you know, I wrote about this in my book. And, at some extent -- extent that I can be sympathetic with Republicans, I'm slightly sympathetic to them. I think Meghan is like her grandmother and her dad. She's -- she's outspoken.

But the Republican Party can't afford to have the Christian conservatives, which, according to the new Gallup poll, is the only group of people out there -- regular churchgoers are the only group of people they're not losing with.

So, it's going to take a delicate balance. It will take somebody like Ed's former boss, President Reagan, who can come in and -- and have tremendous appeal with younger voters, but, at the same time, have tremendous appeal with these other conservative...

(CROSSTALK)

BLITZER: Is there -- is there a name out there, Ed?

ROLLINS: There's not anyone today. I mean, obviously, two years, four years from now, there may very well be.

But we have -- we have got to develop a whole new group of leaders.

(CROSSTALK)

ROLLINS: And I think they will come from within. They're not going to come from without.

BLITZER: Arnold Schwarzenegger, James, he is back in Washington today supporting the president's initiative on this fuel-efficiency standards. He was here supporting the president on the economic stimulus package.

Is he emerging as President Obama's favorite Republican out there right now?

CARVILLE: Well, maybe so. Maybe he's just looking for a reason to get out of California.

(LAUGHTER)

CARVILLE: You know, he's got -- yes. And he's -- you know, he's -- he's, obviously, a -- a dynamic guy. And he's been very green prior to this. It's not like he's a recent convert to this kind of thing. I mean, it's completely consistent with what he's proposed and -- and been in favor of in the past.

(CROSSTALK)

BLITZER: He's got -- he's got a lot of problems, though, as we have been reporting, Ed, in California right now.

ROLLINS: He has to be the president's best -- the president has to be his best friend, because the president is the only place he can go get money. He's probably going to lose some initiatives today that he sponsored that will do some economic changes.

He's got a big, big deficit ahead of him that he has got to deal with again. I think he's had a hard, hard road here and a harder road ahead.

BLITZER: Who is going to be the next governor, James, of California?

CARVILLE: Oh, you know, the -- I'm -- I'm -- I have got too many friends in California, and -- and too many -- too many Democratic friends out there to go around predicting that. But, you know, it's going to be a very competitive race out there. And I suspect, as Ed -- as Ed pointed out, they are probably going to have some difficulty with some of these ballot propositions.

And California is generally on the cutting edge of everything. And, right now, it's on the cutting edge of a fiscal crisis. So, it -- I think it would be -- who knows who can emerge in this governor's race out there, because the situation changes pretty much -- but you have got to take your hat off to -- to -- to Jerry Brown.

I mean, this guy, when I was in the -- in the -- you know, a long, long time ago, his dad was in the governor -- was governor when I was in the Marine Corps. I mean, he -- it's truly amazing how he keeps -- he keeps coming back. So, I wouldn't count him out.

But, boy, there's a lot of other people out there thinking about it, too.

BLITZER: He's making it clear -- he's the attorney general. He is making it clear he would like to be governor again, Ed.

ROLLINS: I'm a -- I'm a Californian. I grew up with Jerry Brown. And I may -- I may see -- I may be buried with Jerry Brown.

(LAUGHTER)

ROLLINS: I think, to a certain extent, he's the horse to beat right now. And I don't know who the Republican is going to be, but I would say at this point he's going to be a very strong candidate if he gets the nomination.

(CROSSTALK)

BLITZER: We had Meg Whitman, the former CEO of eBay, on yesterday. She's -- she wants to be the Republican candidate. We are going to invite Jerry Brown, talk to him as well.

Guys, thanks very much for coming in.

(CROSSTALK)

ROLLINS: Thank you.

CARVILLE: Thank you.

(CROSSTALK)

BLITZER: Sarah Palin took a lot of heat for letting her party buy her fancy clothes when she was running for the vice presidency. Did she do anything wrong? There's a new ruling that is just out.

Also ahead, it was the riskiest space repair mission ever, but shuttle astronauts found some time for laughs and some time to capture it all on videotape. You are going to want to see this.

And Bill Clinton's new job -- what he hopes to accomplish as a special United Nations envoy to Haiti, with a lot of work and virtually no pay.

(COMMERCIAL BREAK)

BLITZER: On our "Political Ticker": Sarah Palin took a political beating for wearing expensive designer clothes while running for vice president as a woman of the people.

But now federal election officials are dismissing a formal complaint about the $150,000 wardrobe purchased by the Republican Party. A government watchdog group filed the complaint, arguing that candidates aren't supposed to use donor money for personal expenses like clothes. The FEC ruled that ban doesn't apply to party money.

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

JACK CAFFERTY, CNN ANCHOR: I guess that makes it all, all right, doesn't it?

The question this hour, is now the time to buy a Chrysler or a GM car?

Mike writes: "These companies standing shoulder to shoulder with the president to tell me they are being coerced into doing what Honda and others have been doing for 20 years is hardly the day to run out and buy one. When the guys in Detroit really come to understand that making an affordable green car requires more than changing the paint color, give me a call."

Ken in North Carolina: "Too late for that, Jack. I already am driving a GM vehicle. Besides giving me good service, I have found it to be a much better vehicle than any other, as it is paid for."

Evalena: "Don't buy so quickly. Look before you leap. I have a 2007 Buick, and have been waiting for a $29 motor mount since late January. The dealer is still saying the part will be here by late May. We will see."

Gary in California: "I imagine there will be some real bargains offered up, but I'm not sure how that whole warranty thing is going to work. I would be hesitant to buy one right now."

Steve in Oregon: "I worked for Toyota for six years, and their business model, product and treatment of their employees far exceeds that of American brands. Toyota and Honda sell more cars in the U.S. with fewer dealers. Americans are moving away from the era of the savings, rebates, interest rates, and other incentives, to wanting fuel-economy technology, reliability, and resale. The American brands knew what would happen if they didn't change in the 1970s. But, instead, they tried to put profits ahead of principle. And now they have run out of countries to outsource to."

Frank writes: "Time to buy a Ford. Let's not forget who didn't come to the table to get taxpayer cash."

And Leonard in Amsterdam writes: "Great time to buy. Keep it in mint condition. Twenty years from now, you can make a killing on eBay. Pristine example of America's squandered industrial greatness."

If you didn't see your e-mail here, you can go to my blog at CNN.com/caffertyfile, and look for yours there -- Wolf.

BLITZER: Jack, thanks very much

And, to our viewers, you're in THE SITUATION ROOM.

Happening now: The immigration controversy lands in America's jails. A new program identifying criminal immigrants has led to thousands of deportations. But people on both sides of the issue right now are unhappy with it.

Also, you heard Jack's question. Is now the time to buy a Chrysler? This may help you answer. Our Brian Todd goes car- shopping, and finds some very, very deep discounts, in some cases, more than $10,000 off.