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President Obama Pushes Health Care Reform; Murder Charges Filed Against Holocaust Museum Shooter

Aired June 11, 2009 - 18:00   ET


WOLF BLITZER, CNN ANCHOR: Let's go straight to our Pentagon correspondent, Barbara Starr. She's working the story for us.

What are you learning, Barbara?


A U.S. official tells our national security producer, Pam Benson, that there are now -- quote -- "indications" North Korea may be preparing for another nuclear test. Of course, this would come just a few weeks after the most nuclear test. It would be the third test by North Korea.

This is not what the Obama administration or the world wants to see -- no indication of what the actual preparations are. But what we can tell you is, U.S. spy satellites, for weeks now, have been flying over North Korea continuously. They are seeing activity at several facilities, vehicles, activity on the ground.

They also believe North Korea is getting ready for a number of missile tests. It's a pattern of activity they have seen before that has led up to these kind of tests. They say they have every reason to believe it's going to lead again to another round of tests -- not good news.

BLITZER: The only way the North Koreans are going to stop all this is if China -- and they're dependent on China -- gets tough with them. Are there any indications that China is beginning to seriously consider the ramifications, and maybe squeeze Kim Jong Il?

STARR: Well, most of the people we talk to do say exactly that. China is the linchpin in this, and especially in enforcing any type of new U.N. resolution.

That's the focus of a lot the Obama administration's diplomatic effort. If you get China on board and you get China to crack down on the North Koreans on their weapons shipments across the border, on all of this activity, it might actually make a difference. But it does remain to be seen whether China, which is a very sensitive country to stability in the region, thinks the North Korean situation could become unstable enough that they do need to step in.

BLITZER: And let's not forget, in the middle of all this heightened tension with North Korea, two American journalists are still being held captive by the North Koreans right now, Laura Ling and Euna Lee.

Thanks very much, Barbara Starr.

STARR: Sure.

BLITZER: We will stay on top of this story.

President Obama took his push to reform the nation's health care system on the road today. His bottom line to a Wisconsin town hall audience: It is now or never for health care reform.

Our White House correspondent, Dan Lothian, traveling with the president.


DAN LOTHIAN, CNN WHITE HOUSE CORRESPONDENT: Wolf, with some 46 million uninsured Americans and a health care system that the president believes is in critical condition, the White House has started a big push on the road. Aides say the administration is trying to convey a sense of urgency, while giving the public a chance to help shape the health care debate.

(voice-over): Vowing to fix what is broken and build on what works, President Obama said inaction is not an acceptable option in the health care debate.

BARACK OBAMA, PRESIDENT OF THE UNITED STATES: The status quo is unsustainable. I'm not doing this because I don't have enough to do.


OBAMA: We need health care reform because it's central to our economic future. It's central to our long-term prosperity as a nation.

LOTHIAN: The president took his message to a town hall meeting in Green Bay, a city that health care researchers have given high marks for controlling medical spending, while maintaining quality care.

But, even here, a 35-year-old mother of two struggling with breast cancer says her family is drowning in medical bills.

LAURA KLITZKA, TOWN HALL ATTENDEE: We have thousands of dollars that we owe to medical clinics and hospitals. We have to sacrifice a lot as a family in order to pay the monthly bills that we have.

LOTHIAN: Finding a bipartisan solution on Capitol Hill won't be easy. The president is pushing a public health insurance option that he says will keep costs down.

But not everyone is buying it.

PAULETTE GUERIN, TOWN HALL ATTENDEE: My concern is that we will end up in a situation like we have with Medicare, where Medicare is basically a subsidy of private insurance companies.

LOTHIAN: And more doubts on the motorcade route -- protesters holding signs. One read, "No Socialism," a charge the president dismissed.

OBAMA: Nobody is talking about doing that.

LOTHIAN: One early proposal gaining bipartisan traction is a privately operated health insurance co-op, run and paid for by its members, with some federal money up front.

At the town hall, Mr. Obama said, he's all ears.

OBAMA: I'm very open-minded. I'm happy to steal people's ideas.

LOTHIAN (on camera): Continuing the health care road show, on Monday, the president heads to Chicago. There, he will address the American Medical Association. It is a group that objects to a government option.

An aide says the president looks forward to having a good dialogue with the AMA, and coming up with the best comprehensive plan -- Wolf.


BLITZER: Dan Lothian traveling with the president in Green Bay, Wisconsin.

There's new focus right now on health insurance benefits that the members of Congress enjoy. Will those benefits be extended to all of you?

Our congressional correspondent, Brianna Keilar, has been looking into this story for us.

Brianna, what are you finding out?

BRIANNA KEILAR, CNN CONGRESSIONAL CORRESPONDENT: Well, Wolf, both Republicans and Democrats agree that Americans should enjoy the kind of health care choices they do. But what are they and why are they so great?

We asked a member of Congress who has become very familiar with her insurance plan.


KEILAR (voice-over): Congresswoman Debbie Wasserman Schultz, a mother of three, spent last year battling breast cancer.

REP. DEBBIE WASSERMAN SCHULTZ (D), FLORIDA: The first major surgery, you know, really major surgery, was my double mastectomy. The submitted charges just for my double mastectomy was $15,000 -- were $15,000. KEILAR: But she only paid a few hundred dollars for that surgery, her first of seven. She estimates the total cost of her care is close to $100,000.

WASSERMAN SCHULTZ: We are a middle-class family. And there is no possible way. That would have just been the beginning of a mountain of debt. I mean, I could easily see, just from having gone through my own health experience in the last year, how very quickly a family could be bankrupt.

KEILAR: Wasserman Schultz's Blue Cross/Blue Shield basic plan is one of 10 nationwide plans and hundreds of smaller regional plans members of Congress and other federal employees can choose from. The government pays two-thirds of the cost of premiums, and federal employees pick up the rest, from about $1,300 per year, up to $2,400 per year, depending on the plan.

Sounds great, but could this kind of care be extended to the nation's 47 million uninsured?

UNIDENTIFIED FEMALE: It does let people pick coverage that is what they think they need and what they are willing to pay for that -- that coverage.

KEILAR: Beth McGlynn, a top researcher for the nonpartisan RAND Corporation, says another advantage is the program is already up and running nationwide. But there is a rub, the cost to taxpayers.

McGlynn says perhaps the only way to pay for the change or any health care reform is to tax benefits employees now receive through their employer.


KEILAR: And we should mention that Congresswoman Wasserman Schultz is a Democrat. Most Democrats favor a public option, a government-run insurance plan, when it comes to reforming health care.

Republicans do not. And they point out, Wolf, when you look at what members of Congress get, they are all private insurance options.

BLITZER: Interesting. Do they have any other perks that come with their health plans?

KEILAR: They do. You could say here on the Hill medicine comes to members of Congress. They don't have to go to it.

There is an attending physician on site here. There are also some specialists, for instance, gynecologists, who come from time to time. So, members of Congress can actually go to the doctor without ever leaving work. They also get prescriptions delivered, so certainly some very nice, convenient perks, Wolf.

BLITZER: Interesting. All right, thanks very much for that. We are going to be spending, as I say, a lot of time talking about health care in the coming weeks. The president of the Campaign for Tobacco-Free Kids says a piece of legislation -- and I'm quoting now -- "represents the strongest action Congress has ever taken to reduce tobacco use." The Senate votes to give the FDA broad new powers. The measure it passed would increase the FDA's powers to regulate tobacco, change or ban certain tobacco products, limit nicotine levels, and regulate the marketing and advertising from those tobacco companies.

In a statement, President Obama says -- and I'm quoting now -- "It will make history by giving the scientists and medical experts at the FDA the power to take sensible steps that will reduce tobacco's harmful effects and prevent tobacco companies from marketing their products to children."

The measure now goes back to the House, which passed a similar pressure overwhelmingly. It could be on the president's desk by tomorrow. The president says he will support this measure.

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

JACK CAFFERTY, CNN ANCHOR: Well, here is some discouraging news. Experts, some of them, are predicting soon the price of oil could hit $250 a barrel.

Currently, a barrel of crude trading at above $73 for a while today, up from the lows of just $30 a barrel only four months ago. Prices go up for a lot of reasons. The big one is a new report out that shows the world's proven crude oil reserves have fallen for the first time in 10 years.

Demand for oil has gone up for the first time in 10 months. And, as the global recession begins to wane, demand for energy is only expected to increase. Plus, it's the start of the summer driving season. And, since oil is traded in dollars, any further decline in the value of the U.S. currency, could also push oil prices higher.

If oil prices keep going up, it is possible that could erase the glimmers of economic recovery that we are beginning to see, those little green shoots of hope that pop up here and there. Some analysts say they wouldn't be surprised if oil hits $80 or $90 a barrel soon, while the chairman of the Russian energy group Gazprom is repeating last year's prediction of $250 a barrel.

Meanwhile, rising oil prices mean higher gas prices. The national average for a gallon of regular unleaded gasoline is now $2.63, according to AAA. Gasoline prices have increased for 44 days in a row, with the average price jumping almost 30 percent for a gallon since the end of April.

So, here is the question. How will your life change if oil ever reaches $250 a barrel?

Go to and post a comment on my blog.

BLITZER: And a lot of folks will be riding bikes, instead of driving cars. CAFFERTY: Indeed they will.

BLITZER: Yes, that's pretty sad.

Thanks, Jack, very much.

He apparently opened the door to his killer, a security guard's last act before he was gunned down at the U.S. Holocaust Memorial Museum. As a white supremacist is charged with murder, we're going to take you inside the scene of horror.

Plus, I will speak with an investigator who infiltrated hate groups for the FBI, the behind-the-scenes story of how they operate.

And powerful storms cause chaos in the Dallas-Ft. Worth area, cutting off power to a quarter-million customers.


BLITZER: Shocking new details of those moments of horror inside the U.S. Holocaust Memorial Museum, one man dead hailed as a hero, another man now charged with the murder.

Let's go to CNN's Kate Bolduan. She's on the scene for us just outside the museum.

Kate, what's the latest?


Well, law enforcement, they are now working to create a detailed timeline of Von Brunn's whereabouts in the 36 hours leading up to the shooting. But, already, we are learning startling new details of the tragic incident.


BOLDUAN (voice-over): Police have started to piece together what happened during Wednesday's shooting, and have officially charged self-proclaimed white supremacist James Von Brunn with murder.

CATHY LANIER, D.C. METROPOLITAN POLICE CHIEF: As he approached the 14th Street entrance, as was said earlier, Special Police Officer Johns was kind enough to open the door to allow him to enter. As he entered, he raised the rifle, opened fire, striking Special Police Officer Johns.

BOLDUAN: Other security guards returned fire, critically wounding Von Brunn.

According to the affidavit, 11 bullet casings were recovered at the scene. The entire incident was captured on museum security cameras. The affidavit also reveals new details of the accused shooter's frame of mind.

When searching Von Brunn's car, investigators found a notebook with handwritten notations saying: "You want my weapons, this is how you will get them. The Holocaust is a lie. Obama was created by Jews. Obama does what his Jew owners tell him to do."

Federal prosecutors are now exploring hate crimes charges.

JOSEPH PERSICHINI, ASSISTANT FBI DIRECTOR: We will do everything possible, not only to stop Mr. Von Brunn, but the other Mr. Von Brunns that are around here in this nation today.

BOLDUAN: Authorities remained convinced Von Brunn acted alone. FBI officials say they have been aware of his hate speech, but were not actively investigating Von Brunn, despite a 1983 conviction for attempted kidnapping.

PERSICHINI: No matter how offensive to some, we are keenly aware that expressing views is not a crime, and the protections afforded under the Constitution cannot be compromised.


KEILAR: Now, a federal murder charge, which Von Brunn faces, carries a mandatory sentence of life in prison without the possibility of parole.

And, Wolf, the latest is, Von Brunn remains in critical condition because of that gunshot wound to the face.

BLITZER: Kate Bolduan reporting for us from the U.S. Holocaust Memorial Museum here in Washington.

And a CNN exclusive -- we are able to take you inside the museum now to the scene of the shooting. Take a look at this. We see a hat left behind, a bullet hole in the security door and the grim effort to clean up the crime scene of slain officer Stephen Tyrone Johns.

My next guest infiltrated hate groups on behalf of the FBI acting undercover as a neo-Nazi sympathizer and white supremacist. And he even gave some fiery speeches.


DAVID GLETTY, INFILTRATED HATE GROUPS FOR FBI: As I was coming out of the store after paying for gas (EXPLETIVE DELETED) tried robbing me with broken bottles. They couldn't afford knives or whatever, so they had broken bottles.


UNIDENTIFIED MALE: They stole those.

GLETTY: So, as I was -- as I'm coming out, they are like, man, give me your money, everything will be all right.

Well, Kevin (INAUDIBLE) sees what's going on, so he gives me the signal, like, I'm coming. Move. So, as he is running at them from behind, I kick one bottle out of the hand and move to the side. And he clotheslines these two guys. They just slammed...


BLITZER: Let's talk to the investigation right now, David Gletty. He's the author of the book "Undercover Nazi: The FBI Infiltration of Extremist Groups in America."

David, thanks very much for coming in.

You spent four years pretending you were a neo-Nazi; is that right?

GLETTY: Yes, that is right.

BLITZER: How -- how worried are you about these guys? Is it just talk for the most part, or what we saw yesterday, is there action that's being planned out there, potentially deadly action?

GLETTY: Wolf, there's actions planned. Like, myself and my investigative partner, Joe, we infiltrated them for many years. We were a part of meetings they had.

Many times, they would plan terrorist acts. And a couple times, the groups that we did infiltrate did go through with some terrorist acts. One was 2006 Jacksonville, Florida. They went and shot up a building with assault rifles to close down a communist rock 'n' roll festival that was supposed to go on. That event was canceled. And that was a terrorist act.

So, no matter how crazy they act, we need to take everything they say seriously, just I like did while working undercover, and do not let anything, any rock go unturned.

BLITZER: And you have suggested that these guys, basically, the violent ones, they go out in groups of, what, two or three. They don't really act alone; is that right?

GLETTY: Yes. What we call them is splinter cells, where they have groups of two or three, sometimes four. And they work separate than the large group.

Most of these people, especially the elders in the groups, they know that the movement is infiltrated by operatives like myself and criminal informants. So, they know that, any big events, to keep your mouth shut, don't discuss any plans when you have more than four or five, six people in a room.

Then, after these large events, say a rally, they have the little after-parties. And that's when they are around drinking beer, cooking food, just like an all-American barbecue. And they will go into a back bedroom, sit at a table, whip out their laptop computers, bring up satellite photos of targets that they want to hit, and they will have the main guys there. And myself and my investigative, Joe -- my investigative partner, Joe, were privy, because we built our characters so well to fit in with these guys. They invited us to some of these parties. And we were able to stop some of these smaller terrorist acts and prevent people from being harmed. But we would get them on recording devices.

And there are guys in prison because of the recording devices that we wore. And you cannot beat your own voice in front of a judge talking about these terrorist acts. Then we would get them on recording device committing the acts. And then get them on recording bragging about the acts. There is nothing you can do about that. And they go to prison.


BLITZER: That's pretty strong, pretty strong evidence.

The 88-year-old suspect in this case, did your paths ever cross?

GLETTY: Yes, sir, I believe, back in 2006. I believe it was early 2006 up at a Klan rally at the Klan -- the old redneck shop, the only Klan museum in the United States of America.

And, these guys, they are proud. They are proud of having that museum. And a lot of times during these museums, they would have 400 people there. And Sonny Hodges (ph), he vouched for myself and my investigative partner, Joe. He brought us into the Klan. And that was very important, building our character.

And Mr. Von Brunn was pointed out to myself and Joe. We were told that he was a hero in the white power movement because he served time in prison for the white power movement. And they consider him or any white person in jail for a racially -- for a racial crime as a POW, a prisoner of war, held in prison by the imperialistic government.

BLITZER: Well, you say that they usually act in groups of three. Do you believe James Von Brunn, the suspect yesterday, acted alone or had others who knew or helped him plot this?

GLETTY: Well, I hate to go against what some of the other police officers and detectives have said.

But, from my knowledge, working undercover, I know, pretty strongly, I guarantee there is at least two or three other people out there that knew Mr. Von Brunn, what he was up to. And they helped in some part of the planning.

He might have been the only one that acted out in the violence. But I guarantee you, there are other people that knew exactly what was going to happen.


BLITZER: You are a very -- you're a very courageous guy to have done for four years what you did. hand you are still courageous right now for speaking out.

How worried are you, given the fact that there are some bad guys out there watching you?

GLETTY: Well, I know that a group of 10 people are not going to show up here and gun me down in the streets. It's the lone wolves I'm worried about.

And those are the hardest ones to infiltrate. Those are the more intelligent people, intelligent as far as not sharing their ideas with -- with everyone at the party. Those are the ones that are very careful. A handpicked few members of their crew are the only ones there during the meetings.

And we need to take this serious. I am not saying this to scare people, but they are out there. And these guys are actively making plans. And they might sit down and plan out some acts. Sometimes, they back down because they get afraid of being caught.

But I guarantee you, they are out there right now, as we speak, hailing Mr. Von Brunn as a hero. And now they want to follow up with their own type of terrorist act.

BLITZER: David...

GLETTY: And that's what it is.

Go ahead, sir.

BLITZER: No, I was going to say -- I was going to thank you. But if you had one final thought, quickly, say it.

GLETTY: I was going to say, we, as Americans, need to stay vigilant and all keep an eye out for each other. It is common sense. When you see something wrong, like a guy with something bulky under his jacket, we need to act.

BLITZER: David Gletty, thanks very much for joining us.

GLETTY: And thank you, sir.

BLITZER: Good luck.

David Gletty infiltrated these groups for four years for the FBI.

The swine flu is now a global pandemic. We're going to tell you what the World Health Organization is saying about a virus that can't be stopped, at least not yet.

And some Guantanamo detainees are now getting a new home -- why Bermuda -- yes, Bermuda -- is agreeing to accept former terror suspects.


(NEWS BREAK) BLITZER: Newly discovered tapes of Supreme Court nominee Sonia Sotomayor talking about affirmative action, we will have details.

And Sarah Palin and her husband vs. David Letterman -- what the talk show host said that the Palins call perverted.



Happening now: from prison to island paradise. Some Guantanamo Bay detainees are getting a brand-new home. It's a popular destination for tourists. Stand by. We are going there.

New questions about Bank of America's takeover of Merrill Lynch -- did the federal government force a bad deal?

And David Letterman admits his joke about Sarah Palin's daughter was in poor taste. The governor, herself, calls it perverted -- all that coming up, plus the best political team on television.

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

We have just learned more former terror detainees have been resettled. They have both been held at the detention facility in Guantanamo Bay. One is an Iraqi who has been sent back to Iraq. The other was sent back to his home country, the African nation of Chad.

Earlier, we learned four other detainees were sent to Bermuda -- yes, Bermuda. They're four Chinese nationals.

Let's get some more on what is going on. Let's go to Bermuda. CNN's Don Lemon is standing by.

Don, you had a chance to interview the prime minister. What did he say?

DON LEMON, CNN ANCHOR: Yes, I had an inter -- a chance to interview the premier here. His name is Ewart Brown.

And I talked to him about the benefit, why he would accept these four Chinese nationals. And what they call them are Uighurs. These were four of 17 men who were taken into custody in Afghanistan back in 2001 when they were rounding up terrorists.

It's a very interesting story behind it, Wolf, because the premier says he was in Washington back in May visiting the president, talking to him about issues about Bermuda. And said he simply picked up the paper, "The Washington Post." And he saw the problems that the president was having with conservatives and even with Democrats -- even with his own allies about closing the facility and about finding places to house these detainees.

So he said he picked up the paper and then had a conversation with people in the administration about how he could help out. And he said he did just that. He wanted to do it. The negotiations started. He initiated it.

So he's saying that by initiating this, he thinks that it caused some problems by -- once it -- once it happened.

So what he's saying is that the British government is upset with him because he accepted these people and made this deal, basically without them -- notifying them, just moments before they got on an airplane -- on an airplane that they chartered, a private airplane -- to go to Guantanamo Bay and pick up these detainees.

And here's what he said about the tension between the British government and with him.


EWART BROWN, BERMUDIAN PRIME MINISTER: We did notify them, but it was very late in the process, because we didn't think that that was required. We, as I said before, we saw this and we see this as an immigration matter, which falls within the portfolio of the minister responsible for immigration. We realize that there are political overtones. But we didn't think that that threw it into the -- into the foreign policy sector, because the British are responsible for...


LEMON: Now, as you heard, he said he thought it was an immigration matter. To him, he says, it is a humanitarian effort and he believes what the president is trying to do. He is fully behind it and he thinks it's for the good not only for the detainees in Guantanamo Bay, but also for the good of the world, he says, the international community -- Wolf.

BLITZER: Don Lemon on the scene for us.

Don, thanks very much.

Another story we're following -- did government pressure lead to a massive and much criticized merger of financial institutions?

That's what members of Congress wanted to know today.

Let's go to CNN's Mary Snow.

She's working this story.

And it's got lots of significance for people who invest their money -- Mary.


Lawmakers grilled Bank of America's CEO today, asking why a private deal wound up costing taxpayers $20 billion. And they're questioning whether federal regulators abused their power.

(BEGIN VIDEOTAPE) REP. EDOLPHUS TOWNS (D-NY), OVERSIGHT AND GOVERNMENT REFORM CHAIRMAN: The Treasury department had provided $20 billion for a shotgun wedding. But the question may be, what was hold -- who was holding the shotgun?

SNOW (voice-over): The shotgun now, which the chairman of the House Committee on Oversight and Government Reform was referring to was Bank of America's takeover of Merrill Lynch -- with the government providing billions to help close the deal.

Lawmakers grilled Bank of America's CEO, Ken Lewis, on whether he was threatened by federal officials to go ahead with the deal, as Merrill Lynch was losing billions and Lewis had indicated he wanted to back out.

REP. PAUL KANJORSKI (D), PENNSYLVANIA: Do you think Mr. Bernanke or anyone working under the Federal Reserve chairman took unauthorized, illegal or improper action toward you or the Bank of America during these trying times?

KENNETH LEWIS, CEO, BANK OF AMERICA: I do not. I would say they strongly advised and they -- and they spoke in strong terms. But I thought it was with good intentions.

SNOW: But lawmakers implied Lewis wasn't being honest.

REP. ELIJAH CUMMINGS (D), MARYLAND: Basically, what we've said is we don't buy it.

SNOW: Lawmakers produced e-mails, including one from a Federal Reserve official talking about Lewis wanting to exercise a material adverse change clause, or MAC, that would undo the deal, and referencing Federal Reserve Chairman Ben Bernanke: "Just had a long talk with Ben. Says that they think the MAC threat is irrelevant because it's not credible. Also intends to make it even more clear that if they play that card and they need assistance, management is gone."

And that would have meant Lewis would be out of a job.

Lewis acknowledged that while the pressure played a part in his decision to go through with the deal, he says he was also concerned that backing out would have adverse effects on the larger financial system, as well as Bank of America.


SNOW: Lawmakers are also investigating whether Lewis was pressured to withhold information about Merrill Lynch's financial problems. He indicated he was not.

The Federal Reserve declined comment on today's testimony. The House panel plans to invite the Federal Reserve chairman and former Treasury secretary, Henry Paulson, to testify at a later date -- Wolf.

BLITZER: Mary Snow reporting for us. Thank you.

CNN iReporters -- they're speaking out about President Obama's push for health care reform and they're very passionate about it. One man says it could mean just one term for the president.

Plus, Supreme Court nominee, Sonia Sotomayor, calling herself -- and I'm quoting now -- "the perfect affirmative action baby." Her comments on newly discovered tapes.

What's the fallout?


BLITZER: It's certainly one of the most controversial items on the president's agenda. As he begins a new push for health reform, our iReporters are weighing in.


UNIDENTIFIED FEMALE: I had a serious health problem when I was unemployed in France. I was able to choose all of my doctors, all of my treatment and my health care was covered at nearly 100 percent.

If this had happened to me in the United States, I would have had to declare bankruptcy.

UNIDENTIFIED MALE: Obama's campaign promise was he wasn't going to raise our taxes. If he puts a tax on a benefit, he's just done that. He will be done at the end of one term.


BLITZER: Now, let's talk about this and more with our senior political analyst, Gloria Borger; David Frum, the former speechwriter for President George W. Bush; and CNN's Joe Johns.

Is there going to be any middle ground that's going to be acceptable to the president of the United States, Democrats on the Hill and Republicans on the Hill or will this be a strictly Democratically passed initiative, assuming it passes?

GLORIA BORGER, CNN SENIOR POLITICAL ANALYST: It's very difficult to come up with a compromise on this. One thing we heard from the iReporter there is this notion of taxing your health care benefits. The president has gone on the record saying that he's not going to do that. So I think that's probably pretty much a nonstarter for the White House.

BLITZER: Well, he says it's not his initiative, it's not his idea, but he hasn't flatly rejected it.

BORGER: Right. The thing that we're hearing from Capitol Hill today is this notion of having these non-profit cooperatives run by states. You buy into it, essentially. You buy into a membership there at the state level. And that could be an alternative to this public insurance system that the president has been talking about that Republicans really don't like.

BLITZER: He's looking for some middle ground, I think.

Let's listen to what he said in Green Bay, Wisconsin today, David.


BARACK OBAMA, PRESIDENT OF THE UNITED STATES: In all these reforms, our goal is simple -- the highest quality health care at the lowest possible cost.

Let me repeat what I said before. We want to fix what's broken, build on what works.


BLITZER: On the left there, people like Senator Bernie Sanders, who want a government-run health insurance operation -- strictly government run, no more private insurance companies.

On the right, there are groups who hate that, obviously; Judd Gregg, for example. He doesn't want any competition from the government to the health care insurance industry.

Can the president of the United States thread the needle?

DAVID FRUM, FORMER BUSH SPEECHWRITER: Look, this is vintage Barack Obama. You appear as if you look -- appropriate as if you want a middle ground and then elbow your opponents while they're not looking.

The president, I think, has -- has the votes. He's got the power. One thing about this -- this taxing of benefits, by the way. A footnote to history. This was an idea that originated at the Heritage Foundation during the term of the first President Bush, because it actually -- it doesn't make a whole lot of sense that health care benefits are excluded. They're income.

Why aren't they treated as income?

And that's actually the source of the irrationality. It was a John McCain idea, too.

BLITZER: And -- and he got punished, Joe, as you remember, John McCain...


BLITZER: ...for raising the idea. The Obama campaign hammered away at it.

FRUM: It's simple economic rationality, of course. We...

BORGER: They're not going to...



FRUM: Right, you know, a lethal economic rationale (INAUDIBLE).

JOHNS: It is a very volatile idea. I know Rick Santorum and others have talked about varying forms of this. There are things in the United States Social Security recipients don't sound like they'll accept. There are things that people who have a variety of different entitlements just simply won't accept and will vote against. That's the problem. That's what they're up against.

And when you look at what's going on right now, with some of the groups, like the AMA already saying we're not going for this public thing, this president could have a lot of problems with that.

BORGER: But they are going to have to raise some kind of taxes. And that -- you know, that's going to be the real problem, because the administration has also talked about itemized deductions -- you know, raising the cap on itemized deductions.

FRUM: Sure.

BORGER: Do you want your home mortgages or -- you know, and that's kind of -- you know, that's going to be very tricky.

FRUM: None of those things will bring in remotely the amount of money that this -- that the president's ideas are going to needed. And, in fact, one of the things that I would suggest that the president would do better, instead of tinkering with deductions and payroll taxes...

BORGER: For wealthy people...

FRUM: Yes. OK.

BORGER: For wealthy people.

FRUM: Instead of -- instead of looking for nickels behind the sofa, that if you've got a plan that people think is a real benefit, be forthright about it. Say this is our plan, it's going to cost money and we're going to propose...


FRUM: ...a VAT (ph). We're going to propose a carbon tax to pay for it. Be up front, because -- because otherwise, you're just...

BLITZER: All right...

FRUM: ...going to make the fiscal problems of the country so much worse.

BLITZER: I want to move on, but we're going to discuss, obviously, health care a lot in the coming days and weeks.


BLITZER: "The New York Times" got some video clips of Sonia Sotomayor -- clips that the White House made available, Joe, to the Senate Judiciary Committee, together with her -- text of her speeches. And she says some interesting things. We went through them.

Listen to this.


JUDGE SONIA SOTOMAYOR, SUPREME COURT NOMINEE: I am a product of affirmative action. I am the perfect affirmative action baby. My test scores were not comparable to that of my colleagues at Princeton or Yale. But if we had gone through the traditional numbers route of those institutions, it would have been highly questionable whether I would have been accepted.


BLITZER: She may have been a product of affirmative action, but she graduated from Princeton summa cum laude. It doesn't get any better than that.

JOHNS: That's for sure. And when you listen to that, the first question is are these comments susceptible of a political attack?

And -- because they seem quite reasonable on their face. On the other hand, there are a lot of groups who can take this stuff, put it into ads and stir up interest.

At the end of the day, though, when you look at Sotomayor and the kind of things she said, a lot of people on the Hill are just questioning whether she's going to get 65 votes, say, or about 80 votes. If she gets 65 votes (INAUDIBLE)...

BLITZER: I spoke with one Republican senator yesterday who said probably 80.

FRUM: Yes. Well, look, kudos to her for being so candid and forthright.

BORGER: Right.

FRUM: And, also, the tit -- the phrase she's quoting, an affirmative action baby, I believe she's citing comes from an essay by Steven Carter, the Yale professor, that is one of the best essays on this whole subject and actually is very critical of a lot of the way affirmative action works.

So if that's her -- her reference, that shows not only a lot of self-knowledge, but some -- some distance.

That said, that -- I think one of the things that is driving -- that is the story of this nomination is the more we learn about the record of Sonia Sotomayor as a judge, the more boring and conventional she looks. But her (INAUDIBLE)... BLITZER: Which is good for her confirmation.


BORGER: Which is what the White House might have been looking for, by the way.

FRUM: What she says is, unfortunately for her, often dangerously unboring.

BORGER: Well, you know...

JOHNS: The Democrats want a fit. They want a little bit of a fight, but they don't want it to get out of control.

BORGER: Right. But -- and, but she's -- you know, she clearly believes when -- when you listen to some of these tapes, she believes that there is a cultural bias in testing. That's going to be fodder for people on the New Haven firefighters case, which is an affirmative action case.

BLITZER: July 13th the hearings start. We'll have extensive wall to wall coverage right here on CNN.

Guys, thanks very much.


BORGER: And it won't be boring.

BLITZER: Not at all.


BLITZER: As we reported, the Senate dealt a blow to the tobacco industry, voting to give regulators new power to limit nicotine. The House is set to vote tomorrow.

In light of all of this, we're asking you, our viewers, this question -- is it time to ban cigarettes altogether?

Submit your video comments to We're going to try to include some of your iReports tomorrow right here in THE SITUATION ROOM.

The late night jokes that Sarah Palin and her husband say simply went way too far -- details of what David Letterman said that has the Palin family outraged.

And when blackbirds attack -- yes. CNN's Jeanne Moos takes a Moost Unusual look.


BLITZER: You might say one of David Letterman's jokes has made the top 10 list of bombs. What he said about Sarah Palin's daughter, even Letterman says he now regrets. And Palin calls it "perverted."

Our national political correspondent, Jessica Yellin, has more -- Jessica?

JESSICA YELLIN, CNN CORRESPONDENT: Well, David Letterman is used to getting a lot of attention. But now, he's getting some he might not have counted on. He is in a public fight with Alaska governor, Sarah Palin, over some jokes he cracked about her family.



UNIDENTIFIED MALE: It's the late show.


YELLIN (voice-over): This is the David Letterman joke that started the firestorm.


DAVID LETTERMAN, HOST: One awkward moment for Sarah Palin at the Yankee game. During the seventh inning, her daughter was knocked up by Alex Rodriguez.

YELLIN: Governor Sarah Palin and her husband, who attended a New York Yankees game this weekend as part of a visit to New York, immediately blasted the late night talk show host. The governor called his comments "disgusting," saying, "acceptance of inappropriate sexual comments about an underage girl who could be anyone's daughter contributes to the atrociously high rate of sexual exploitation of minors by older men."

On Wednesday night, the talk show host acknowledged he went too far.


LETTERMAN: And were the jokes in question in questionable taste?

Of course they were.


LETTERMAN: Do I regret having told them?

Well, I think I probably do.


YELLIN: The governor's husband, Todd Palin, also ripped into Letterman saying: "Jokes about raping my 14-year-old are despicable." But the comedian insists he wasn't joking about underage Willow, who accompanied her parents on their trip to Yankee Stadium. Instead, Letterman says the joke was about the Palins' oldest daughter, Bristol, who had a baby out of wedlock last year.


LETTERMAN: I would never, never make jokes about raping or having sex of any description with a 14-year-old girl. I mean, look at my record. It has never happened. I don't think it's funny.


YELLIN: In a radio interview with conservative host John Ziegler, Palin also sarcastically went after Letterman for another joke he made about her own shopping trip to Bloomingdale's to update her, "slutty look."

GOV. SARAH PALIN (R), VICE PRESIDENTIAL CANDIDATE: Pretty pathetic, good ole David Letterman.


YELLIN: Now, Letterman has invited the Palins to come on the show and clear the air. But a spokesperson for Governor Palin declines that invitation, saying they have no intention of coming on the show and giving a boost to Letterman's ratings -- Wolf.

BLITZER: All right.

Thanks very much, Jessica Yellin, for that.

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

CAFFERTY: The question is, how will your life change if oil reaches $250 a barrel?

And that is a prediction that's being made by at least one analyst about the outlook for crude.

Bob writes: "I wish it would go to $2,500 a barrel. It's going to take something that drastic to get people to actually participate in changing their habits and really put an effort into alternative energies, not to mention alternative lifestyles."

Joe in Virginia writes: "Probably not much, since I try to drive as little as possible now and began seriously conserving and combining trips after the last bout of $4 a gallon gas. Also, we've replaced our heat pump with the highest efficiency one available. We drive a V.W. diesel that gets 50 miles to the gallon. I don't know what more I can do."

Ed in Pennsylvania: "I think we'll be screwed. That would mean $8 a gallon gas, although it will be amusing to watch everyone who owns a gas guzzler buying $125 worth of gas twice a week. It's a fitting punishment."

Casey says: "It won't. My job includes driving. That won't stop. I already don't drive more than is necessary, so all that will happen is I'll have less money to pay toward my credit card debt. Life goes on."

Peterson says: "Well, I bought oil stocks when the bottom dropped out. It was in the $30 a barrel range. So I'm hoping profits from that will offset the costs. Other than that, it may make sense to look at alternatives again. I've invested in solar stocks, as well. Everything is an opportunity and this is one, as well."

Steve says: "Our business will close its doors. The cost of buying supplies will go up. Our customers won't be able to afford to buy anything other than the bare necessities. Fuel costs affect everyone and everything, not just driving."

And Greg in Atlanta writes: "Ramen noodles, basic cable and an intense search for a sugar mama, Jack."

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.

I'll see you tomorrow, Wolf.

BLITZER: See you tomorrow, Jack.

As that price goes up for gas, it's a hidden tax on for all of us.


BLITZER: In San Francisco, pedestrians are trying to stay clear of a very busy blackbird.

CNN's Jeanne Moos has the story. That's coming up next.


BLITZER: A blackbird is forcing pedestrians in San Francisco to duck and cover.

CNN's Jeanne Moos has the scoop on a Moost Unusual feathered foe.


JEANNE MOOS, CNN CORRESPONDENT (voice-over) (voice-over): Keep your eye on the birdie. Seriously, keep your eye on the birdie and cover your head.

UNIDENTIFIED MALE: Oh, yes. There we go. There we go.


MOOS: It's the blackbird bomber terrorizing pedestrians, but at least entertaining passersby in San Francisco's financial district.

UNIDENTIFIED FEMALE: Apparently, he seems to really like bald men, I've heard. He just took a little bit of my hair.

MOOS: Not since Rice-A-Roni has San Francisco had this much of a treat.

UNIDENTIFIED FEMALE: It was perfect lunch theater, watching innocent people get pecked on the head.


MOOS: The bird even has a blog called Attack Bird Chronicles, which has christened him Swoops. Everyone seems to assume Swoops is a male protecting a nest of chicks you can hear peeping in this tree. Swoops seems to lie in wait. He's been attacking passersby for the past few weeks. Those who have been pecked by him say it doesn't really hurt.

UNIDENTIFIED MALE: I guess it's Alfred Hitchcock or something.

MOOS: Actually, "The Birds"


MOOS: ...was filmed only 40 miles or so north of here.


UNIDENTIFIED FEMALE: Birds are not aggressive creatures, Miss. They bring beauty into the world.


MOOS: Yes, tell that to the woman who's having her cell phone call interrupted.

(on camera): So why would a bird be carrying out unprovoked attacks on pedestrians?

It's as if the bird is suffering from PMS or something.

Hormone levels?

GLENN PHILLIPS, EXECUTIVE DIRECTOR, NEW YORK CITY AUDUBON: Sure. Birds can really have -- their hormone levels can get really high now and so they get very aggressive to -- to protect their nests.

MOOS (voice-over): Swoops has the girls swooning.

UNIDENTIFIED FEMALE: I think he wins the award for best dad of the year.

MOOS: A street musician paid homage with a piece entitled "Ornithology."


MOOS: And what's Swoops favorite type to attack?

UNIDENTIFIED FEMALE: I did think it was dark-haired people. But after seeing him attack you...

MOOS: That would be fearless producer Augie Martin (ph). One guy who was attacked even flipped the bird at the bird.

So if you're going to San Francisco, be sure to hold an umbrella over your hair and don't believe your bird-brained friends.

UNIDENTIFIED MALE: Get in there. You're clear. He's good. He's not coming. He's not coming.

MOOS: Jeanne Moos, CNN, New York.


BLITZER: That's it for me.

I'm Wolf Blitzer in THE SITUATION ROOM.


Kitty Pilgrim is sitting in for Lou -- Kitty.


President Obama uses what some might call the rhetoric of fear to sell his health care reforms. The president is declaring there's no alternative. Now, opponents say there is an alternative. It won't lead to socialized medicine.

The World Health Organization declares the first global pandemic in four decades. It's raising its swine flu alert to the highest level. Two of this country's leading authorities on infectious diseases will join us.

And disarray among Republicans -- what many say is a vacuum of leadership.