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THE SITUATION ROOM

More Violence in the Wake of Iranian Elections; John Boehner Interview

Aired June 16, 2009 - 16:00   ET

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


WOLF BLITZER, CNN ANCHOR: The comedian Bill Maher, he's here in THE SITUATION ROOM. Why is he criticizing President Obama? And does he think David Letterman should have apologized to Sarah Palin?

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.

What you're about to see is shocking and not suitable for children. Days of unrest are not letting up in Iran. We have new images of the post-election protests, and again, we warn you, these images, they are graphic.

These images were taken yesterday. They show a bloody demonstrator after being shot, protesters burning a car, a bloody demonstrator being held up and rushed to a hospital, an Iranian riot police standing guard.

Although Iran state television says its supreme leader is calling for national unity, protests are continuing today. Supporters for Mahmoud Ahmadinejad and his opponent Mir Hossein Mousavi took to the streets, but Iran does not want you to see what is going on.

Let's go straight to CNN's Reza Sayah. He's in Tehran. Reza?

REZA SAYAH, CNN CORRESPONDENT: Not good news coming out of Tehran for CNN and other members of the foreign media. The Iranian government banning CNN and other media outlets from covering and broadcasting images from the rallies, the demonstrations similar to the ones that we've seen for the past four days after the controversial elections on Friday.

The Iranian government has made no secret of it that they're not happy with the international media and their coverage, describing it as biased and one-sided. Of course, it has been the foreign media that has largely shown the pictures of what has been a violent and sometimes brutal crackdown against supporters of Mir Hossein Mousavi, the disgruntled presidential candidate who's asking for a new vote.

Despite the crackdown, the Mousavi supporters are continuing to come out. They had another rally on Tuesday, but so did supporters of President Mahmoud Ahmadinejad. There was a massive turnout in a famous square in midtown Tehran, supporters of the president condemning supporters of Mir Hossein Mousavi, describing them as hooligans who've destroyed and vandalized parts of Tehran. Also CNN can report the arrest of a number of leading reformists, among them the former chief of staff of former reformist president, Mohammad Khatami. We can also report that the Mousavi camp, according to one adviser, has rejected the offer by the Guardian Council, Iran's highest legislative body, to recount part of the vote.

Reza Sayah, CNN, Tehran.

BLITZER: Reza, thanks very much.

Iran's Interior Ministry says about two-thirds of Iran, 66.5 million people were eligible to vote in Friday's presidential election. The median age of the Iranian population right now is 27 years old. That compares, by the way, to 37 here in the United States.

According to a 2007 census, 25 percent of Iranians live in the capital city of Tehran and its metropolitan area. Another third live in other towns and urban areas. 38 percent of Iranians live in what are described as rural areas or villages with no more than 500 people.

The situation in Iran is catching a lot of attention. Iran and the world are watching certainly to see what President Obama is saying, as well as what he's not saying and what he's doing.

Let's go straight to our senior White House correspondent Ed Henry. The president once again just a little while ago, Ed, he spoke out and at length.

ED HENRY, CNN SENIOR WHITE HOUSE CORRESPONDENT: That's right, Wolf. And the president is not saying that the election was rigged, and that's sparking outrage from his former rival, John McCain.

(BEGIN VIDEOTAPE)

HENRY (voice-over): The president said he has deep concerns about the election results in Iran, but does not want to interfere.

BARACK OBAMA, PRESIDENT OF THE UNITED STATES: It's not productive, given the history of U.S./Iranian relations to be seen as meddling, the U.S. president meddling in Iranian elections.

What I will repeat and what I said yesterday is that when I see violence directed at peaceful protesters, when I see peaceful dissent being suppressed, wherever that takes place, it is of concern to me and it's of concern to the American people.

HENRY: For the second straight day, the president stopped short of saying the reelection of Iranian president Mahmoud Ahmadinejad is illegitimate, fueling Republican charges that Mr. Obama's response has been too muted.

SEN. JOHN MCCAIN (R), ARIZONA: The president should speak out that this election is flawed, it is wrong, it's a deprivation of the Iranian people of their basic human right. HENRY: But the president notes there were no international observers on the ground in Iran, so it's impossible to make a definitive judgment.

OBAMA: There are people who want to see greater openness and greater debate and want to see greater democracy. How that plays out over the next several days and several weeks is something ultimately for the Iranian people to decide, but I stand strongly with the universal principle that people's voices should be heard and not suppressed.

(END VIDEOTAPE)

HENRY: Now, meanwhile, senior administration officials tell CNN that Dennis Ross, a State Department envoy, will be moving over here to the White House to lead the policy approach towards Tehran. It shows two important things. Number one, that they're beefing up for some tough decisions ahead, but secondly they continue to centralize the policy-making power, not just on Iran, but a whole host of foreign and domestic issues right here at the White House instead of the Cabinet, Wolf.

BLITZER: It's interesting in the midst of all of this Ahmadinejad heads over to Russia for talks with the Russians right now. It's a pretty intriguing development. The Russians saying they recognize this election as legitimate. His reelection, that is.

But the crackdown on the media, the international media, it's getting really intense right now. Reports who are allowed to stay, they have to be only in their offices or their hotel rooms. They can't go out on the streets, they can't cover these demonstrations. That's going to obviously put even more pressure on the Obama White House to respond with some increasingly tough language, I assume.

HENRY: Absolutely. Because that's one area where it will not necessarily look like they're interfering, if they're just saying, look, as the president has said for the last two days, you've got to allow people to peacefully protest, you've got to allow the media to have freedoms and not block all of that.

That -- it could be a way for the administration to carve out some tough comment without looking like they're claiming that the reelection was illegitimate and interfering with the Iranian government. So we'll see how that plays out, Wolf.

BLITZER: And we're going to get Republican reaction later this hour. Top Republican in the House of Representatives, John Boehner, will be here. We'll see what he says.

Let's take a look at the timeline of this -- that how it went from a pitched election to a point of worldwide controversy. At 8:00 a.m. Iran time, 46,000 polling stations opened. That's on last Friday. About 13 hours later, they closed, 13 hours of voting.

We started getting claims of victory about only two hours after that, Mir Hossein Mousavi's campaign said he won. Iran's state-run news agency controlled by Ahmadinejad said President Ahmadinejad was the winner.

Shortly after that, about -- only 19 percent of the votes counted, Ahmadinejad was said to be ahead by 2 to 1 by the state news media. Fast-forward to Saturday, Iran's Interior Ministry said it had counted 91 percent of the votes. That means it had counted almost 36 million hand ballots. Hand ballots, in less than 24 hours.

Let's go to Jack Cafferty right now. He's got "The Cafferty File." Jack?

JACK CAFFERTY, CNN ANCHOR: And I don't understand how the president can say, well, there were no observers on the ground so we don't know whether it was a legitimate election or not. It is physically impossible to hand-count 36 million anythings in 24 hours. I mean, doesn't that speak to the legitimacy of the election, that single fact? It seems to me it would.

BLITZER: Yes. The answer is yes.

CAFFERTY: Thank you. I have no further questions, your honor -- well, actually I do. I have one. President Obama wants to create another federal bureaucracy. This one would be a financial watchdog agency whose mission will be to protect consumers from deceptive or dangerous mortgages, credit cards and other financial products.

Supporters call this a financial product safety commission, compared to the federal agency that oversees the safety of toys and other products. Banking industry doesn't think this is a good idea at all. Critics saying it's bad for consumers and points out there are already several regulatory agencies that are suppose to do this very thing.

This new potential watchdog agency is just the latest in a string of moves by the Obama administration to increase the size and the role of government, including everything from the bailouts and part ownership of the American car companies GM and Chrysler, to the bank bailouts, to tighter rules on credit card companies and oversight of executive compensation.

Critics say the government is playing too big a role. Former president George Herbert Walker Bush, Bush 41, tells "The Washington Times," quote, "I think people are alarmed now. There's too much government intervention into everything. Too much. And too much spending," unquote.

Meanwhile, the American people still seem to be supporting their president on this. A recent CNN Opinion Research Corporation poll found that 42 percent of those surveyed think the increased government involvement on how business is run is about right. 35 percent say the involvement has gone too far and 23 percent think the government has more to do in this regard.

So here's the question -- when it comes to the government's role in our lives, has President Obama got too far? Go to CNN.com/caffertyfile, and post a comment on my blog. Wolf?

BLITZER: Jack Cafferty, thank you.

The U.S. says it's ready to confront North Korean ships. If those ships are suspected of carrying weapons or nuclear technology, the U.S. will act. But how might North Korea respond?

And how much would you be willing to pay for better healthcare? One idea being floated right now involves the benefits many Americans get through their jobs.

And California's financial crisis is such a mess, some of those who need help the most are about to see some critical services cut.

(COMMERCIAL BREAK)

BLITZER: North Korea developed nuclear weapons. Would these stabilized Asia and threaten the world? That's what President Obama said today after a meeting with South Korea's president.

(BEGIN VIDEO CLIP)

OBAMA: There's been a pattern in the past where North Korea behaves in a belligerent fashion and if it waits long enough is then rewarded with foodstuffs and fuel and concessionary loans, and a whole range of benefits. And I think that's the pattern that they have come to expect.

The message we're sending, and when I say we, not simply the United States and the Republic of Korea, but I think the international communities, we are going to break that pattern.

(END VIDEO CLIP)

BLITZER: Meanwhile, if North Korean ships are suspected of carrying weapons or nuclear technology, the United States could launch a very controversial act.

Let's go to our Pentagon correspondent Chris Lawrence. He's looking at this part of the story.

Chris, explain.

CHRIS LAWRENCE, CNN PENTAGON CORRESPONDENT: Well, Wolf, this is going to be armed U.S. Navy ships confronting North Korean ships at sea, but some say even that doesn't go far enough.

(BEGIN VIDEOTAPE)

LAWRENCE (voice-over): The U.S. suspects North Korea is shipping arms and nuclear technology over the high seas and will enforce a U.N. resolution to confront their ships.

OBAMA: This is part of what the Security Council resolution calls for, is the interdiction of arms shipments.

LAWRENCE: So if the Navy spots a ship suspected of carrying arms, it will use radio-to-radio contact to hail the North Koreans. The Navy will ask to come aboard and check for weapons. North Koreans will almost surely say no, and that's it, except at some point the North Koreans will need to re-supply.

Wherever they dock, the U.S., China and other countries will pressure that country to refuse to refuel the ship until it's been inspected.

JAMES CARAFANO, HERITAGE FOUNDATION: You don't want to telegraph that. You want the ship to show up at port and then surprise it and jump on it.

LAWRENCE: James Carafano was a former Army officer who sees several problems with the policy. He says the North Korean will figure out ways to transfer materials at sea, and if it's small nuclear components, put them in the small boats that are difficult to track. And he says the lack of forced inspections make America look weak.

CARAFANO: As soon as the North Korean say no and sail out of there, even if the ship gets inspected later on, this is a great propaganda victory for the North Koreans, because they'll just say, oh we snubbed our nose at Americans and we sailed on.

(END VIDEOTAPE)

BLITZER: Chris, a lot of the critics are saying why isn't the Obama administration goings further? * LAWRENCE: Well, because countries like China and Russia had to agree to this resolution and -- you know, they would only go so far. And forcibly boarding their ships could be considered an act of war by the North Koreans. You know some people are saying -- are looking at this from the opposite side and saying this is some of the most aggressive approaches to North Korea in years, and with Navy ships confronting North Koreans ships on the high seas, that there's a real worry of escalating tensions there.

BLITZER: Thanks very much, Chris Lawrence, working that story over at the Pentagon.

North Korean state-run media says two American journalists sentenced to 12 years of hard labor have admitted to criminality acts. The North Korean news agency's account offers the first details of the arrest of Euna Lee and Laura Ling back in March, says they illegally crossed the river from China into North Korea and were inside the border when they were arrested.

Says Lee and Ling said they intended to stifle North Korea's socialist system. That's what the North Korean state media is saying right now.

By the way, tonight, on "AC 360"" an exclusive, Lisa Ling, her brother-in-law Ian and the husband of Euna Lee, the other journalist sentenced to North Korea, they are getting ready to speak out about these new developments in the case. Their first time speaking out since the sentencing. A "360" exclusive later tonight, 10:00 p.m. Eastern only here on CNN.

Meanwhile, how much would you be willing to pay for better healthcare? One idea being floated involves the benefits many Americans get through their jobs.

Let's bring in our congressional correspondent Brianna Keilar. All right, what's this idea about, Brianna?

BRIANNA KEILAR, CNN CONGRESSIONAL CORRESPONDENT: Well, it's just one of the ideas being talked about here on Capitol Hill, Wolf. And you have agreement between Democrats and Republicans that healthcare reform is a necessity, but even among Democrats there isn't agreement on how to finance it.

(BEGIN VIDEOTAPE)

KEILAR (voice-over): How do you pay for $1 trillion healthcare overhaul? One idea Congress is considering, taxing employer-provided health care benefits. Millions of Americans get health insurance through their jobs.

The average cost of an annual premium is about $13,000. Employers pay most, if not all of that. It's a benefit employees get tax-free, keeping $226 billion in potential revenue out of the U.S. treasury.

JONATHAN GRUBER, MASS. INSTITUTE OF TECHNOLOGY: It certainly seems a natural place to look for the money you need to cover the uninsured.

KEILAR: Here's how it might work. Congress would put a limit on the value of benefits you'd get tax-free, say, $13,000, and you would be taxed on any amount over that cap. If your premium costs $15,000, you'd be taxed on the $2,000 difference.

Max Baucus, Democratic chairman of the Financial Committee, could propose a form of the tax soon, but many Democrats oppose it, including Connecticut senator Chris Dodd, who is pushing his own healthcare bill.

SEN. CHRISTOPHER DODD (D), CONNECTICUT: I think frankly that's going to be a source of tremendous frustration from a lot of people at a time, frankly, when the costs on home heating oil and job loss and foreclosures matters and so forth are mounting up, the tuition cost, and the idea of leveling a tax on them this time here, I don't think would be met very favorably.

(END VIDEOTAPE)

KEILAR: President Obama also opposes taxing these benefits. In fact, he slammed Senator McCain on the campaign trail for proposing it. What he would like to do instead is reduce the rate at which wealthier Americans itemize their deductions on their tax returns, but even on that method, Wolf, he's running into some opposition from Democrats. BLITZER: All right. Brianna, thanks very much. And we're going to talk about healthcare. That's coming up later this hour with the top Republican in the House of Representatives, John Boehner. He'll be joining us live here in THE SITUATION ROOM.

He's been out of office for almost a decade. Now a new column says former president Bill Clinton's star is falling while wife Hillary's star is rising. What's going on?

And another former president touring a refugee camp in the Middle East. Jimmy Carter shares what moved him to tears.

(COMMERCIAL BREAK)

BLITZER: Alina Cho is monitoring some other important stories incoming to THE SITUATION ROOM right now. Alina, what's going on?

ALINA CHO, CNN CORRESPONDENT: Hey, Wolf, emotional moments for former president Jimmy Carter during his tour of Gaza today. Carter paid a visit to a Palestinian refugee camp in the region and called for an end to Arab/Israeli violence.

(BEGIN VIDEO CLIP)

JIMMY CARTER, FORMER PRESIDENT: I have to hold back tears, when I see the deliberate destruction that has been raked against your people.

(END VIDEO CLIP)

CHO: Carter called on Israel to end its blockade, saying Palestinians are being treated like animals.

Presidential campaigns in Afghanistan are officially under way. The sitting president, Hamid Karzai, and 40 other candidates have kicked off their election bids. Despite his weakened standing in recent years, Mr. Karzai is the clear front-runner for the second term. His chief rivals are a former finance minister and a former foreign minister. The campaign period runs through August 18th. Voting then takes place two days later.

Eagle watching is about to become illegal, at least on the shoulder of 12-mile road in Michigan's Oakville township. The township supervisor says so many people gather there to watch a pair of bald eagles raising two babies that it's simply not safe anymore. They're even posting no stopping signs. Violators could be fined up to 250 bucks.

And imagine getting your snow blower out in the middle of June. Well, that's exactly what they said to do in Westwood, New Jersey. Take a look at that. A powerful thunderstorm dumped more than three inches of hail yesterday. One fire chief in the area said it was like being in the middle of a blizzard.

I don't know, Wolf, looks a little like Buffalo to me.

BLITZER: No, no. Buffalo is much better.

(LAUGHTER)

Don't give Buffalo a bad reputation.

CHO: I'm not.

BLITZER: My hometown.

CHO: I know it's your hometown.

BLITZER: We're going to have, by the way, Alina, a lot more from Jimmy Carter coming up later in THE SITUATION ROOM. He's really going after the new prime minister of Israel, Benjamin Netanyahu. In addition to blasting the Israelis for what has been going on in Gaza. More of Jimmy Carter, that will be coming up here in THE SITUATION ROOM.

With journalists -- western journalists especially restricted severely in Iran, how can information reach the rest of the world? The power of the Internet is really ramping up. We're going to be checking out how often disturbing video and stories are coming out in bits and bites.

And President Obama calls the turn of events in Tehran rather troubling, but says the U.S. shouldn't meddle. Is that the right approach? Our iReporters from all over the world, including in Iran, they are weighing in.

(COMMERCIAL BREAK)

BLITZER: You're in THE SITUATION ROOM. Happening now, breaking news, Iran's government bars all foreign journalists from covering post-election demonstrations. Could we bear witness to Tehran's version of Tiananmen Square? Stand by.

Empty beds and empty coffers at charities across the United States. The ACLU charges federal finance laws with creating a climate that's shutting down legitimate Muslim charities.

And late-night funny man David Letterman apologizes to Governor Sarah Palin for crossing the line with a tasteless joke. Now might Palin try to spin the incident into a political strategy?

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

Dramatic developments unfolding on the streets of Iran right now. Iran's government has basically shut the door on coverage of political rallies by western journalists. Web sites are being shut down left and right. Newspapers are closed. U.S. officials say social networking sites like Twitter and Facebook are becoming the main source every information about what's going on.

Our Internet reporter Abbi Tatton has been following the steady stream of information.

Abbi, it's very disturbing what they're doing right now, but information is coming out.

ABBI TATTON, CNN INTERNET CORRESPONDENT: It's tough to keep up. There's so much information coming out, Wolf. We're talking about hundreds of Twitter posts a minute. We're talking about photos, videos like this one that we got from inside the protest yesterday that appears to show someone in a building in the distance shooting at the crowd.

On Twitter, from what we've been following, some of the main reports being shared by Mousavi supporters. We see repeated posts about students allegedly targeted by militia at universities, Tehran University, Isfahan University to the south. That is something you see all the time if you're following this.

We've also got report about protesters receiving threatening SMS messages, threatening voice mails saying don't go out in protest, we know who you are. Other people are saying that those have been a hoax.

Another thing you're going to see over and over again is that, today, it seems there's further Internet clampdowns. People are reporting that Gmail, Yahoo!, Twitter all now inaccessible. There are ways around this, but it just means that the Web users are going to have to go to extra lengths to try and get online.

BLITZER: So, what is real? What is not real? How do we figure this out?

TATTON: It's such a challenge for us, also for the people who are relying on Twitter as a lifeline right now, because there's very little other source of information.

I will give you an example. All day, there's been Twitter posts talking about how the Army is moving into Tehran. As many people online have been saying, hey, that's unconfirmed. We can't just re- tweet all this stuff out there. We have to confirm things.

Another thing that a lot of people online are worried about is misinformation, that some of this stuff might be spread by the government out there.

I was talking to one Twitter user who was corresponding with me today who was saying that all he's doing right now is relying on the trustworthy people he's known for a long time. Anyone new, he's not trusting them.

BLITZER: And we -- we have got to rely on journalists, Western journalists, to do their jobs. And that's becoming increasingly difficult...

TATTON: Definitely, Wolf.

BLITZER: ... with this crackdown that was just announced just a little while ago.

Abbi, thanks very much. President Obama says he's deeply -- deeply -- troubled by the violent protests triggered by the Iranian presidential elections, but he says it's up to the Iranian people to determine what happens next. Is the president's hands-off strategy the right course?

Let's discuss this and more in our "Strategy Session."

Joining us, Democratic Robert Shrum and the Republican strategist and CNN political contributor Alex Castellanos.

Alex, let me start with you.

How is the president of the United States handling this crisis? And I call it a crisis because it's -- the ramifications clearly unclear right on now.

ALEX CASTELLANOS, CNN POLITICAL CONTRIBUTOR: Well, I think you have to give him some credit, and you have to raise a few questions.

As president of the United States and as someone who -- who wants to see freedom bloom all over the world, he wants to -- I'm sure he's concerned that this does not -- this revolt, in a way, in Iran is not seen as -- as an exercise of the U.S. government. And, so, he wants to be careful not to embrace it too tightly.

However, he is not -- Iran is not our only interest. The United States is the defender of freedom throughout the world. And when we don't shine our light, freedom wilts. And, so, it is very important here that, in striking this balance, he stands up strongly, much as Ronald Reagan did about the evil empire against the Berlin Wall.

I mean, that's what brought change. We can't just trade the short-term interests here for the long-term interests that we have, as defenders of freedom in the world.

BLITZER: And -- and the president himself self-acknowledged, Bob, as you well know, today, there's a history that the United States has with Iran.

And, as he pointed out in his Cairo speech a couple weeks ago, that history includes the CIA getting involved in overthrowing a democratically elected government in Iran in the early '50s.

BOB SHRUM, DEMOCRATIC STRATEGIST: Yes, back in 1954.

And I'm -- I have to say, first of all, by the way, that I didn't notice Ronald Reagan ever trying to do anything about repression, say, in China, because he had to balance the national interests, stand up for freedom, but, at the same time, look at what your national interests are.

George Bush had to do -- the first George Bush had to do the same thing in Tiananmen Square. I think the president is doing a superb job of walking a very fine line.

And if he were, like Senator McCain this morning, to jump full force into this and condemn the -- the Iranian government, and intervene or look like he's intervening in this election, I think he would help Ahmadinejad.

BLITZER: We have an iReport -- an iReporter who sent us this, Billy Dennis of Mesquite, Texas. Listen to this, guys.

(BEGIN VIDEO CLIP)

BILLY DENNIS, CNN IREPORTER: If there is no hope in the overturning of the election results, it would be folderol for Obama to publicly condemn the election, since he wants to have an open dialogue with whomever the president may be.

(END VIDEO CLIP)

BLITZER: Folderol.

What do you think?

CASTELLANOS: Well, first, on Ronald Reagan, I think he -- he didn't do a bad job, let's say. I'm sorry he didn't get to liberate China, but at least he -- he did bring down the Soviet empire.

SHRUM: Well, he had a little -- he had a little bit of help over about 40 years.

CASTELLANOS: Not a bad -- not a bad start.

(LAUGHTER)

CASTELLANOS: Wolf, I think that's the big interest. I think the I-viewer there got the message.

This president has to shine a light for everyone all around the world. Now, the short-term tactical interests, if we start trading in inches for miles, we lose. At this point, the president should stand up and advocate freedom.

There are three things -- two presidents should get credit here. Obama has distanced us a little bit from the immediate problems in Iran, so we're not the straw man they can knock down. That's a good thing. He should get credit.

George Bush helped bring democracy to the region. He should get credit for that. And the third thing that should get credit here is technology. Technology, Twitter, the things you have been talking about here today, that -- Facebook -- those kind of technologies compel freedom. It's hard to tell freedom -- with that much power, that they can't protest, that they can't communicate.

(CROSSTALK)

BLITZER: This new technology, it's really amazing what is going on, the impact.

I want to move on, because I got Bob Shrum here. And he wrote a provocative column in "The Week" magazine.

And, among other things, you said this: "Bill Clinton can still raise big money and big crowds, and nothing will keep him off the campaign trail. But he now looks like a fading influence in America and even -- in American and even Democratic politics. The one other candidate he campaigned for, a former Clinton aide running for a seat in Virginia's State Assembly, finished third in his primary. Despite such results, we are not entering a post-Clinton era, just a post-Bill era."

You were referring to his good friend Terry McAuliffe coming in not very high in that Democratic gubernatorial election in Virginia last week.

SHRUM: Yes, well, he was virtually Terry McAuliffe's running mate. And the assumption was that Bill Clinton was Terry's ace in the hole, as he was supposed to be Hillary Clinton's ace in the hole.

And what I think has happened is, over time -- and this is only natural at some level -- his influence has faded. It was accelerated in the area where he was supposed to help most in Virginia, which was with African-Americans, by what happened in the South Carolina primary last year, and was perceived to have happened in that primary by black voters.

BLITZER: But you see his star going down...

SHRUM: I see...

BLITZER: ... and Hillary Clinton's star going up?

SHRUM: I think the irony is that she's out of the political fire. She's at the State Department. She's amassing massive national security credentials.

I don't see anybody else in Obama's shadow who grows into the kind of stature you need to have as a presidential candidate. And, look, it's a long way away, but, right now, I think -- and she probably doesn't want anyone to say this -- she's a very formidable candidate in the Democratic Party in 2016, not put there by her husband, but put there by herself.

BLITZER: Because, what -- she's only, what, 61 or 62 years old right now.

CASTELLANOS: I think -- I think Bob may well be right.

And he's written a brave piece.

(LAUGHTER)

CASTELLANOS: I don't think he's going to get as many Christmas cards next year as -- as he has.

But I think the Democrats -- Bob points out something important. The Democrats have had a generational transformation in their party. You know, they have gone from old-school politicians who used to be laughed at on "The Tonight Show" to the guests on "The Tonight Show."

People are very conversant with this younger generation. When you saw both of them campaign together, Bill Clinton and Obama, they were both hugely talented orators, but it's amazing how old-school Bill Clinton was.

And I think the world has caught up to them. So, I think Bob is exactly right. And, by the way, the other man who was old-school like that, who went on TV this year here in Virginia, saying, "I'm a politician, vote for me," was Terry McAuliffe.

(CROSSTALK)

CASTELLANOS: It was just -- the world has moved on from that kind of politics.

BLITZER: We have got to move on right now, guys. Thank for coming in.

SHRUM: Thank you.

BLITZER: President Obama says, beware the naysayers. He says, anybody claiming he wants government-run health care is not telling the truth. I will ask the top Republican in the House of Representatives if that's a charge aimed at him.

And, in California right now, some fear, Alzheimer's patients who need care desperately won't get it, or worse. California's budget mess is causing some real nightmares.

And should the nation's veterans be worried, deeply worried, about some treatments they get at veterans hospitals across the country? There are shocking findings that have just been released.

(COMMERCIAL BREAK)

BLITZER: Democratic state lawmakers in California are considering new taxes to close the state's massive budget deficit.

Meantime, the governor, Arnold Schwarzenegger, has proposed deep cuts to help make up the $24 billion shortfall. The crisis in California sounds so big, we wanted to show you how it's affecting just one group of people.

Our national political correspondent, Jessica Yellin, visited a center that provides day care for the elderly, many of them with Alzheimer's, and its programs right now are on the chopping block -- Jessica.

(BEGIN VIDEOTAPE)

JESSICA YELLIN, CNN CONGRESSIONAL CORRESPONDENT: Wolf, the budget crisis here in California can sound so big, so overwhelming, we wanted to show you how it affects just one group of people, people with Alzheimer's.

We visited a center that provides day care for the elderly, many with Alzheimer's, and many of its programs are on the chopping block.

UNIDENTIFIED FEMALE: I give you, for example...

YELLIN (voice-over): Howard Wolfberg has Alzheimer's. He recently took his dog out for a walk and got lost for 25 hours.

(on camera): And he was just wandering in the streets...

TOBY WOLFBERG, WIFE OF ALZHEIMER'S SUFFERER: Mm-hmm.

YELLIN: ... of the city?

WOLFBERG: Yes. He ended up on a lawn in Westwood.

YELLIN (voice-over): Now the only time his wife, Toby, can leave his side is when she drops him off here, at Santa Monica's Wise and Healthy Aging Center.

WOLFBERG: I can't tell you how incredibly helpful, for both of us. He's a wanderer, so I am constantly with him.

(SINGING)

YELLIN: This facility provides daytime supervision for 60 elderly clients. About half suffer from Alzheimer's.

But now it faces devastating budget cuts. With California out of money, Governor Schwarzenegger's proposed changes would slash 10 percent of this center's funding. The state already cut more than 15 percent last year. Many of these seniors would be turned away.

GRACE CHENG BRAUN, PRESIDENT & CEO, WISE AND HEALTHY AGING CENTER: There would be no one to -- to -- to look after them. We will be finding people who literally die at home, and it may be days or week before anyone would even know.

YELLIN: And this is just one story. Across the state, the governor proposes eliminating nearly half-a-billion dollars in programs affecting seniors, including significant funding for Alzheimer's care and research.

GOV. ARNOLD SCHWARZENEGGER (R), CALIFORNIA: I know the kind of people it affects.

YELLIN: And he does. California's first lady, Maria Shriver, is a champion of Alzheimer's programs. She even made an HBO documentary to raise awareness.

(BEGIN VIDEO CLIP, "THE ALZHEIMER'S PROJECT")

MARIA SHRIVER, FIRST LADY OF CALIFORNIA: I'm a child of Alzheimer's.

(END VIDEO CLIP)

YELLIN: In a statement to CNN, Shriver's spokesman says: "The governor, nor the first lady, like any of these cuts. But the governor has to make difficult decisions. And Shriver will continue to be a leading voice on the issue."

That may be little solace to these patients and their families.

(on camera): Now, the state legislature has not approved the governor's proposed cuts. In fact, the Democrats have some very different ideas that the governor is not accepting. So, there will be heavy negotiations ahead, with no resolution in sight -- Wolf.

(END VIDEOTAPE)

BLITZER: What a story, Jessica Yellin.

We're watching California very, very closely. What happens there often happens in the rest of the country as well.

The top Republican in the House of Representatives is certainly one of the president's most vocal critics, but what does he think about how President Obama is now handling the crisis in Iran and the crisis in North Korea? You're going to hear from the minority leader, John Boehner. He's standing by live to join us -- right here in THE SITUATION ROOM.

Plus, empty beds in a women's shelter, charities struggling for money -- it's not just the recession that's to blame -- why an anti- terrorist law is keeping people from giving.

(COMMERCIAL BREAK)

BLITZER: Iran is erupting right now with anger and death.

The presidential election is being disputed, and there's blood and protesters on the streets. Some people here in the United States are urging President Obama to be more forceful in his reaction to what is going on.

Let's bring in Congressman John Boehner, the top Republican in the House of Representatives.

Congressman, I suspect -- I don't know, but I suspect -- you might be one of them. What do you think of the way the president has reacted to what has gone on in Iran?

REP. JOHN BOEHNER (R-OH), HOUSE MINORITY LEADER: Well, Wolf, I think the situation there is -- is very serious.

And I think it's a real opportunity for President Obama to really make a strong statement and take a strong stand with regard to what the leadership over there is doing.

It's pretty clear that they have had serious election difficulties. The people in Iran believe in democracy. They believe in the rule of law. And they -- I think they believe that this election has been stolen.

BLITZER: What do you want him to do, the president?

BOEHNER: I think the president, who's said that he's want -- he wants dialogue, I think he has the opportunity to say, we're not going to have any dialogue if this is the way you're going to treat your people.

And, so, he has an opportunity to make a very strong statement.

BLITZER: Do you think he will?

BOEHNER: I don't know.

BLITZER: What about North Korea? There's a crisis unfolding there right now as well. Should the U.S. actually go ahead and board North Korean ships that are suspected of having either nuclear technology or -- or weapons on board?

BOEHNER: Wolf, I just met with the president of South Korea.

And -- and I mentioned to him that I have been in Congress now for 18-and-a-half years. And, over that time, every agreement that the North Koreans have made, they have ignored. And all they have done is come to the table, agreed to do what they had agreed to do 10 years ago. We -- we give them food. We give them fuel oil. And then they continue to not do what they have agreed to do.

And I think it's time to take a very serious stance...

BLITZER: All right. So, what do you think the president should...

BOEHNER: ... when it comes to North Korea.

BLITZER: What do you want, specifically, the president to do?

BOEHNER: Well, I think that making sure that these ships do not proceed would be the right order.

I'm not sure that boarding these strips -- these ships is the right move, but we can impede their progress and make sure they're not delivering nuclear weapons or parts to nuclear weapons to other countries around the world.

You know, it was North Korea that we believe, and others believe, that were building this nuclear facility in Syria. They're spreading the use of this technology. And we should do all that we can to prevent it.

BLITZER: Two major crises unfolding right now, Iran and North Korea.

Let's talk about some of the domestic priorities under way right now. The president wants health care reform, delivered a big speech on it yesterday. And, in that speech, he said this:

(BEGIN VIDEO CLIP) BARACK OBAMA, PRESIDENT OF THE UNITED STATES: So, when you hear the naysayers claim that I'm trying to bring about government-run health care, know this: They're not telling the truth.

(END VIDEO CLIP)

BLITZER: Are you among those naysayers who are suggesting he wants to bring about government-run health care?

BOEHNER: Well, I think the president is ignoring reality.

The Congressional Budget Office came out with a score on Senator Kennedy's bill, just part of the score -- of the -- of his bill, that says that the public option would cost over $1 trillion, and would cause 23 million Americans to lose their private health care coverage, and only 16 million of which would -- would be covered under the -- the government plan.

And, so, it's not just me and others. It's -- it's very clear that the so-called public option would be subsidized by the government. It would draw people out of the private sector. It would cause companies to just give up their coverage and force people into a government-run plan.

BLITZER: I know you don't...

(CROSSTALK)

BOEHNER: That's not what we -- that's not what we want.

What we want is, we want to work with the president to make sure that all Americans have access to high-quality, affordable health insurance.

BLITZER: I know you don't want a government-run health insurance plan. You want a private-run plan.

What about this proposal, this compromise, in between? Kent Conrad, the Democratic senator, suggesting co-ops, where you -- you band together hundreds of thousands of people, and you create a co-op that's not government run. It's privately run. But it -- but it would potentially do the same thing.

BOEHNER: You know, I think it's worth exploring.

I haven't seen how this would work and what the rules would be. But, clearly, it's an idea that might be able to bridge the differences. But, at the end of the day, we want to make sure that doctors and patients are making decisions about what care is in their best interest, not some government bureaucrat in between.

And, so, if there are ideas out there that will help promote a competitive health insurance system in America that provides access to all Americans to high-quality health insurance, I'm for it.

BLITZER: Congressman, thanks very much for coming in. BOEHNER: Thanks, Wolf.

BLITZER: Hundreds of thousands of protesters in the streets of the capital right now, and Western journalists are totally restricted from covering it. It sounds eerily like China's Tiananmen Square two decades ago. Is history repeating itself in Iran?

And he's known for biting political punchlines. Now the comedian Bill Maher is sharpening his teeth right for the Obama presidency. What has him so riled up? Why is he so angry at the president of the United States? You're going to find out. Bill Maher will be here in THE SITUATION ROOM.

(BEGIN VIDEO CLIP, "REAL TIME WITH BILL MAHER")

BILL MAHER, HOST, "REAL TIME WITH BILL MAHER": We like you. We really like...

(END VIDEO CLIP)

(COMMERCIAL BREAK)

BLITZER: On our "Political Ticker": Sonia Sotomayor meeting the senators -- more introductions for the Supreme Court nominee today on Capitol Hill. The judge meets with six senators, both Republican and Democratic.

Apparently, New Yorkers really like their mayor. In a fresh poll, Michael Bloomberg beats possible opponents by a wide margin. The Quinnipiac University poll shows New Yorkers would pick Bloomberg over Democratic City Comptroller William Thompson by 22 percentage points. Bloomberg tops a city council member by 30 points. New Yorkers say they approve of Bloomberg's performance and don't think the billionaire mayor is out of touch at all.

And was Nick Cannon over at the White House today scouting for dancers, singers, or someone who can juggle flaming batons. The host of "America's Got Talent" was there today shooting promos for the show's season premiere. It appears he did not -- repeat, not -- meet with the president. And, for those of you wondering, Cannon's wife, Mariah Carey, she was not there.

Remember, for the latest political news any time, you can always check out CNNPolitics.com.

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

JACK CAFFERTY, CNN ANCHOR: That's -- that's fascinating stuff. It truly is.

(LAUGHTER)

BLITZER: It's -- little -- little political nuggets there.

(LAUGHTER)

CAFFERTY: The -- the question this hour, when it comes to the government's role in our lives, has President Obama gone too far?

And -- and "Where is Mariah Carey?" is the other question.

Robert writes: "A left-wing liberal advocating more government? Who saw that coming when we elected this president? Not to bash him, though. The Republican alternative of pretending nothing is wrong is just as bad, and it's what got us here. It's time to reconsider the two-party system. They have both run the nation into the ground together."

Steve writes: "Obama is creating way too many czars. People need to take responsibility for their actions, not blame the mortgage companies, credit card companies because they got in over their heads. Obama is trying to save everyone from themselves."

Frank writes: "Fact is, the government isn't involved enough in the lives of Americans. The government is to govern for the people, not to be used as a doormat for the wealthy and greedy, with a big sign out front reading, 'Welcome to America, where you can take the public for a ride on us'"!

Ken writes: "He promised change. He asked for my vote. He got it. He didn't say, 'I'm taking over your life, sucker,' but he sure has."

Rebecca in South Carolina: "Many of the problems we currently face resulted from government's relinquishing its regulatory role. As yet, the Obama administration has not gone far enough in reestablishing oversight.

Jay writes -- quote -- "The natural progress of things is for liberty to yield and government to gain ground" -- unquote," spoken by or written by Thomas Jefferson.

And Angela in Kentucky: "Oh, boy, you got to love the banks yelping about too much government intervention, so they can continue to rob and pillage their customers and the country with impunity. I will take my chances with President Obama, thank you."

If you didn't see your e-mail here, you can go to my blog at CNN.com/caffertyfile. Look for yours there, among hundreds of others -- or -- or not. You can go look for Mariah Carey, if you would rather.

BLITZER: Or Nick Cannon, somebody.

CAFFERTY: Or -- or Nick Cannon, whoever that is -- Wolf.

(LAUGHTER)

BLITZER: Jack, thank you.

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

Happening now breaking news: protesters in the streets calling for reform, a harsh crackdown by authorities, and tight new restrictions on the foreign news media. That's the chilling scene in Iran today. Two decades after Tiananmen Square, some see ominous similarities to China's rushing of pro-democracy activists.

A grave threat to the world -- President Obama delivers a warning on North Korea's nuclear effort and a pledge that the United States will no longer reward that communist nation's bad behavior.

And comedian David Letterman apologizes to Sarah Palin for a joke that the governor called perverted. We're going to tell you what she is saying now.

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

A real show of defiance in Tehran today -- thousands of pro- reform demonstrators were back on the streets, despite the arrest of some of their leaders. At the same time, a state-run rally drew thousands in support of President Mahmoud Ahmadinejad, declaring the -- declared the winner of Iran's disputed election.