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Latest on Murdered Parents of 14 Kids; Hepatitis C Scare; Oldest Woman To Give Birth Dies

Aired July 16, 2009 - 17:00   ET

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


WOLF BLITZER, HOST: Happening now: new evidence found and a new arrest in the case of that murdered Florida couple known for adopting special-needs children -- what these latest developments reveal about the shocking case.

Also, thousands of patients at risk of contracting hepatitis C -- what this drug-addicted hospital worker did that may have exposed them.

And racial slurs spark ugly infighting among young Republicans. The party chairman, Michael Steele, he will be here. We will talk about that, a lot more, health care reform, Sarah Palin, and a party plagued by scandal right now.

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

But first, major new developments today in the murder of that Florida couple with 14 children, many of them adopted and special -- and with special needs. Officials now say they found valuable evidence in the case and there's new information about the latest suspect arrested. She's facing charges of accessory to murder.

CNN's Ed Lavandera is joining us now.

He's been working this story for some time.

Let's go to Ed for latest.

What do we know right now -- Ed?

ED LAVANDERA, CNN CORRESPONDENT: Well, Wolf, investigators are telling us that now they're starting to approach the final part of this investigation and will now move in more intensely into the prosecutorial phase. But as we've uncovered some new details today, the latest arrest warrant of Pamela Wiggins reveals the fact that there was a red minivan -- a second vehicle parked near the home of Byrd and Melanie Billings.

And according to this arrest report of Wiggins, it says that the car was registered in her name and it was used by the suspects as a -- also, as a getaway vehicle from -- from the crime scene.

She has posted bond. She was arrested last night and she is free on bond now, we understand. So she has been charged with accessory after the fact. Still a lot of questions as to exactly how all of these people played -- played into these -- into these roles together. But we're told that the mastermind is Leonard Patrick Gonzalez, Jr. That's what investigators have been saying, that he has had a long relationship with Miss. Wiggins. And that throughout the rest of the group, these were all people who were brought together through various business associations and friendships and that sort. Obviously, that is something that investigators continue to look at, as well.

But, Wolf, here the headline, seven people still in jail, accused with two counts of murder. And authorities here say now, as the Wiggins family prepares for viewings this evening and funerals tomorrow, investigators are saying they are coming to the end of their investigation -- Wolf.

BLITZER: Ed Lavandera is watching this.

He's been watching this story closely for us.

And I want to get some more now on what is going on -- perhaps the motive, perhaps more.

Joining us now is David Morgan.

He's the sheriff there in Pensacola, Florida.

He's been on top of this from the beginning.

He's joining us right now live.

Sheriff, thanks very much for coming in.

Let's walk through. For some of our viewers who may not have been following this as closely as you or I -- you're obviously following it a lot more closely than I am -- is there a clear motive that you have discerned as of right now?

SHERIFF DAVID MORGAN, ESCAMBIA COUNTY, FLORIDA: We have a motive that we're working on as the primary motive in this case, Wolf, and that is a home invasion/robbery. But as we've shared with folks throughout this investigation, we believe as the investigation continues and more information is released into the public venue, people will see that there's really more than one motive that's involved in this crime. And, again, we're not at liberty to release that at this time.

But this is a story that I think will intrigue everyone for years to come.

BLITZER: Because you've suggested, at least a few days ago -- and it intrigued me when I heard it -- first of all, it's a heart- wrenching story to begin with -- that it's almost like a movie script. You can't make this kind of stuff up.

I wonder, without, you know, undermining or jeopardizing your investigation, if you could give us a little bit more of an explanation of why you said that.

MORGAN: Well, I said that because it's this -- this odd group of people that, up until just a couple months ago, had no association with each other. Yet they come together and they gel very quickly. They train for 30 days on assaulting a home, down to getting ninja garb, certain weapons, checking out the compound, assaulting that -- that building -- I should say a home -- with, again, military precision; entering within just a few moments of each other both on the front and back side.

They're on that compound less than 10 minutes. They're in the home less than four. And it's just -- again, it was a very precise movement on their part. And, again, they only had one gaping hole and that was no one took care of the alarm and video system.

BLITZER: Well, that's, I guess, a huge gaping hole.

Why is that?

Is there an explanation?

Because all of us who have seen movies know the first thing suspects or criminals do in a situation like this is they cut the lines to the -- to the videos, to the -- to the security, the alarm system, to make sure that nobody can alert anyone else or certainly no one can photograph what's going on.

MORGAN: We've been working on that premise for some time, Wolf. And, of course, that's part of the ongoing investigation. Because I'm of the belief, and have been for some time, that that was a person or persons that had that responsibility to make sure that the video system wasn't on. Otherwise, this group of people would not have entered that compound and basically roamed around with such impunity.

BLITZER: That person of interest -- is that person under arrest right now or is it someone still on the loose?

MORGAN: No, sir. No, sir. And again, it's persons, not person.

BLITZER: Persons who were supposed to...

MORGAN: We're looking at it started with...

BLITZER: Who were supposed to deactivate the security system who didn't do it.

So you're looking for those people?

MORGAN: Yes, sir. We started with one. We're up to two and there may be three now. But, again, I caution folks, we've interviewed probably between 20 and 30 people that, at one time, were persons of interest that never got above the entry level, if you will. That we would call them in, we would then verify their story, that they actually had been at an appointed place at an appointed time and there were witnesses. And so, again, they go off the scope, if you will, in an investigation. But we have three that we're still very concerned about that we have yet to verify their whereabouts and do they actually have any connection to this case at all.

BLITZER: Now, the safe is -- is very important. Apparently, that's where some valuables were, including money or we don't know what.

Do you know what was in that safe that was taken in this supposedly precision operation?

MORGAN: We're not allowed to release that information at the request of the state attorney, Wolf, at this time. But the significance of the safe is, again, it was a safe that was in the home.

BLITZER: And that safe is now missing.

Or do you have that safe?

MORGAN: I'm sorry, sir?

BLITZER: You have the...

MORGAN: (INAUDIBLE).

BLITZER: You have the -- you've retrieved the safe, right?

MORGAN: Yes, sir, we have.

BLITZER: You have.

MORGAN: The safe is in (INAUDIBLE).

BLITZER: So you know what was inside, but you can't tell us.

MORGAN: Yes.

BLITZER: The other comparison that you made that was pretty intriguing to me was the 1969 murder -- those killings involving Charles Manson out in California, because that involved almost like a cult-like figure.

Is that what we're seeing here, as well?

MORGAN: No, sir. And, again, we don't believe that there's any cult involved. My comparison there was from purely a law enforcement perspective in the numbers of people involved in the Tate/La Bianca murders and now, sadly, in the number of people that we've been identified to date -- eight -- that have been involved in the Billings murders.

And I believe there were five or six people in that California case, to include Charles Manson, that were involved in those murders. Yet here -- and again, small town Pensacola -- we have eight. Eight.

BLITZER: And all the weapons, have you retrieved all the weapons that were involved in this -- in this homicide?

MORGAN: We believe that we have, sir. We believe that we have those weapons now, again, in our evidence room.

BLITZER: And can you clarify for us all these rumors that have been out there about drugs -- if they played any role in this -- in this killing?

What can you tell us about that?

MORGAN: Well, again, the drugs -- there was some -- I think, some misunderstandings and misinformation.

Our investigation will focus on those folks that perpetrated this crime against this family. And that is our only focus in this investigation.

During the conduct of this investigation, we found out other information -- again, such as drug, weapons, those sorts of things -- that were outside the purview of this investigation, because it did not relate directly to the killing of the Billings family.

And so, therefore, we had a conference with these associated federal agencies and we passed along that information on the suspects in this case so that they might initiate an investigation or, if you will, do with it as they saw fit.

BLITZER: Good luck, sheriff.

We're -- the whole country is watching and hoping for the best.

We appreciate your joining us.

MORGAN: Thank you, sir.

BLITZER: Sheriff David Morgan joining us from Pensacola.

He's the county sheriff down there.

A drug addicted hospital worker puts thousands of patients at risk for a potentially deadly disease -- what she did and her tearful confession.

Also, how old is too old to have a baby?

The death of a 69-year-old mother of 2-year-old twins is raising new controversy about in vitro fertilization.

Plus, glorified suicide bombers to kids -- we're going to show you a controversial show some are calling horrific child abuse.

(COMMERCIAL BREAK)

BLITZER: A Hepatitis C scare expands from Colorado to New York. It's affecting thousands of former hospital patients who may have been exposed to the virus. Let's go to CNN's Mary Snow.

She's in New York.

She has the extremely disturbing details for us -- Mary?

MARY SNOW, CNN CORRESPONDENT: You know, they really are, Wolf. And it's also raising a lot of questions.

A hospital north of New York City is now advising thousands of patients to get tested for Hepatitis C. The people being notified had surgery during a period between 2007 and 2008. And that time coincided with the time one former technician worked at the hospital.

(BEGIN VIDEOTAPE)

SNOW: (voice-over): Sixty-four-year-old Madeleine Pettit shows us where she was tested for Hepatitis C. She is one of roughly 2,700 former surgery patients at New York's Northern Westchester Hospital who are now being urged to get tested for the virus. That's because a former hospital employee, now under arrest in Colorado, may have put patients at risk.

It's made people like Pettit anxious.

MADELEINE PETTIT, TESTED FOR HEPATITIS C: I mean there are so many diseases out there and naturally you put your trust -- and I love this hospital.

SNOW: This New York hospital is just the latest to investigate a Hepatitis C scare linked to 26-year-old Kristen Parker, seen here in a police videotape.

Parker also worked as a surgical technician at Rose Medical Center in Denver. She caused outrage there after investigators say she admitted to injecting herself with syringes of a powerful painkiller called Fentanyl and refilling those used syringes with saline. Those same syringes were then allegedly put back into stock intended for patients.

(BEGIN VIDEO CLIP FROM JUNE 30, COURTESY DENVER SHERIFF DEPARTMENT)

KRISTEN PARKER, FORMER SURGICAL TECHNICIAN: I can't take back what I did. If I would have known, it would have been different. And now I've got to live with what I did for the rest of my life and so does everybody else.

(END VIDEO CLIP)

SNOW: Rose Medical Center has notified 4,700 patients to get tested. An affidavit states that Parker told police she believes she got Hepatitis C by using heroin.

The Hepatitis C virus is usually spread by sharing needles and can cause an infection of the liver. In worse cases, it can lead to liver cancer.

(BEGIN VIDEO CLIP FROM JUNE 30, COURTESY DENVER SHERIFF DEPARTMENT)

PARKER: I mean to the extent that people being sick for the rest of their lives because of me, that's something I can't take back.

(END VIDEO CLIP)

(END VIDEO TAPE)

SNOW: So far, officials in Colorado say there have been 10 confirmed cases of Hepatitis C. Tests are now being done to determine whether or not it's linked to Parker.

We did reach out to Parker's attorney. Our messages weren't immediately returned. And, Wolf, she is now facing three drug-related charges -- Wolf.

BLITZER: All right. You'll let us know if we get some reaction from her side of the story.

Thanks very much, Mary, for that.

Residents of a community in Spain are absorbing the news that their neighbor -- the oldest woman in the world to give birth -- has died. She leaves behind two very young sons, as well as a new question about age and fertility treatments.

Let's bring in our senior medical correspondent, Elizabeth Cohen.

Lots of ethical questions involved here.

ELIZABETH COHEN, CNN MEDICAL CORRESPONDENT: Oh, absolutely, Wolf.

Wolf, the Associated Press says that the oldest new mom in the world died of stomach cancer. And those ethical questions you're talking about, the big one is, when is a woman simply too old to get pregnant?

(BEGIN VIDEOTAPE)

COHEN: (voice-over): Three years ago, Maria del Carmen Bousada made headlines when she became the oldest new mother in the world. She gave birth to twins Christiane and Pau when she was 66 years old.

(BEGIN VIDEO CLIP)

MARIA DEL CARMEN BOUSADA (through translator): My body responded so well to this.

How great is it that I can do this, even though I'm the oldest mother?

(END VIDEO CLIP) COHEN: Now the oldest mother has died at age 69.

DR. VICKEN SAHAKIAN, PACIFIC FERTILITY CENTER: Obviously, it's a tragedy.

COHEN: the fertility doctor who helped her get pregnant says he never would have done it if he'd known her true age. He says Bousada told him he was 55.

SAHAKIAN: You could lie about your medical history just to get to your goal.

COHEN: Dr. Sahakian says Bousada lied to him about her age.

This is what she said.

(BEGIN VIDEO CLIP)

BOUSADA (through translator): Maybe things shouldn't have been done the way they were done, but that was the only way to achieve the thing I've always dreamed of and I did it.

(END VIDEO CLIP)

COHEN: Of course, a mother can die at any age. But doctors say they don't want to help a woman in her 60s get pregnant because they fear she won't survive long enough to raise her children.

(END VIDEO TAPE)

COHEN: Now, the American Society for Reproductive Medicine definitely looks down on these kinds of pregnancies. The Society puts it simply. They say that postmenopausal women should not get pregnant or, as they put it, "postmenopausal pregnancy should be discouraged." Those are their words -- Wolf.

BLITZER: Elizabeth, did her -- did her cancer have anything to do with the pregnancy?

COHEN: No. Doctors we talked to said that stomach cancer has nothing to do with hormones or nothing to do with pregnancy.

And, Wolf, I want to add -- this is kind of interesting -- that this mom said that she thought she would live, really, much longer than she ended up living. Her mother died at the age of 101, so she thought she would be around to raise her two children.

BLITZER: All right.

Thanks very much.

Elizabeth raising some significant issues there for all of us to ponder.

By the way, the decline of a woman's fertility begins around age 27 because of a natural depletion and aging of her eggs. The American Fertility Association says that by age 40, the chance of a woman becoming pregnant during any one cycle drops to 5 percent. In addition to age, other factors that can change a woman's ability to have a baby include smoking, excessive alcohol use, stress or diet, athletic training and being overweight or underweight.

A shootout in New Jersey leaves five police officers wounded and two suspects dead. President Obama commented on the incident during his visit to the state today.

We're going to tell you what he said.

And is Sarah Palin's political future out there as an Independent?

The Republican Party chairman, Michael Steele, is here to talk about that, health care, a lot more. Michael Steele standing by, right here in THE SITUATION ROOM.

(COMMERCIAL BREAK)

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

DON LEMON, CNN CORRESPONDENT: Well, a story, Wolf, out of Jersey City, New Jersey. This morning, five police officers were shot in a gun battle. Both suspects were killed in the shootout and two of the wounded police officers are listed in critical condition tonight. President Barack Obama, visiting New Jersey today, had this to say.

(BEGIN VIDEO CLIP)

BARACK OBAMA, PRESIDENT OF THE UNITED STATES: Our thoughts and prayers go out to the families of all the officers who have been hurt. And we are confident that they are going to end up coming back strong as ever. But it's a reminder for all of us of the incredible sacrifice that our law enforcement officials engage in and their families are part of each and every day. So I hope everybody keeps them in their thoughts and prayers.

(END VIDEO CLIP)

LEMON: Wolf, police say the shootout began when one of the suspects opened fire with a shotgun after police approached a car that they had been monitoring in connection with an earlier robbery and shooting.

A Canadian soldier was killed in Southern Afghanistan, making this the deadliest month for foreign troops in that country since the start of the nearly 8-year-old war. Forty-seven international troops have been killed in Afghanistan this month. The previous most deadly months were in June and August of last year. U.S. commanders had been expecting higher casualties since stepping up efforts to curb a resurgent Taliban threat.

A major American landmark has a new name -- at least officially. The owners of this 110 story Chicago skyscraper say it is no longer the Sears Tower.

How can that be?

Instead, they say it is called the Willis Tower after its new main tenant, London-based insurance broker, Willis Group. Now, a group opposing the name change says it has gathered more than 34,000 signatures. The Sears Tower originally opened back in 1973.

Television's annual Emmy Awards announced their nominees today, with the comedy show "30 Rock" leading the pack with 22 nominations. The HBO movie "Grey Gardens" is up for 17 Emmys while the drama "Mad Men" received 16 nominations. The biggest surprise, however, may be in what was left out. Shows like "Desperate Housewives" and "Grey's Anatomy" came up empty in the top categories.

That is surprising, but you've got to love that "Mad Men" -- Wolf, do you watch that show?

BLITZER: Oh, it's a great show. It's a great show.

LEMON: Isn't it awesome?

Don Draper. You're Don Draper.

BLITZER: Oh, I don't know.

LEMON: That's you.

BLITZER: I don't have -- smoke and I don't have drinks in the middle of the day. No cocktails at lunch hour, stuff like that.

LEMON: But just as cool, though.

BLITZER: But -- but, Don, what about the news and documentary Emmys?

You know that CNN, we got nominated for a whole bunch of Emmys. And I'm not hearing the love from you.

LEMON: Well, congratulations to you, Wolf...

BLITZER: Thank you.

LEMON: ...on your nomination for Wolf.

BLITZER: Thank you. (INAUDIBLE) to all of us for our...

LEMON: You're ubiquitous.

BLITZER: ...our coverage...

LEMON: You're everywhere.

BLITZER: ...our coverage of the Democratic National Convention...

LEMON: Yes.

BLITZER: ...coverage of election night. We got a lot of nomin -- nominations once again this year.

LEMON: We did. And, you know, we also -- which is the highest award that you can receive, one of the highest in this business, a Peabody for the election coverage and which you...

BLITZER: We got that Peabody this year, too.

LEMON: Which you helmed, Wolf.

BLITZER: Well, not...

LEMON: So congratulations on that.

BLITZER: ...it was a great team.

LEMON: Yes.

BLITZER: An excellent team we've got.

All right, we'll tell our viewers more about these nominations in the day -- in the coming days.

Don Lemon. He's a very proud guy.

LEMON: Thank you, Wolf.

BLITZER: The Q&A between Judge Sonia Sotomayor and the Senate Judiciary Committee is now over. It was day four today. Some Republicans, though, still suspicious about where the Supreme Court nominee stands on some key issues.

Our senior political correspondent, Candy Crowley, is tracking the story for us.

A special prosecutor may be appointed to investigate the CIA interrogation techniques during the Bush era.

Should the Obama administration be looking forward instead of back?

We'll talk about that and more with James Carville and Bill Bennett -- they're here to weigh in.

Plus, a children's TV program in Gaza glorifying suicide bombing and some are calling the broadcast child abuse. We'll tell you the latest right here in THE SITUATION ROOM.

(COMMERCIAL BREAK)

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

Happening now, Sarah Palin back in the news, as some Republicans are now going public with concerns that she's bad for the party. Is she?

I'll ask the chairman of the Republican National Committee, Michael Steele. He's here live. We'll talk to him in a few moments.

Also, prescription drugs -- the DEA says seven million Americans are abusing them. And you may be surprised how many of those addicts are getting their fix in unusual ways.

And NASA releases newly restored and enhanced images from the Apollo moon landing. But space agency officials say there are other high quality images from that mission that would take our breath away. We're going to show you the video that we have.

I'm Wolf Blitzer.

You're in THE SITUATION ROOM.

Parting shots of GOP senators make their comments as the Sonia Sotomayor confirmation hearings wrap up. An important day -- day four of this process.

Let's bring in our senior political correspondent, Candy Crowley.

We watched all of it. It was an -- it was historic and important.

CANDY CROWLEY, CNN SENIOR POLITICAL CORRESPONDENT: It was historic. It was important. In the end, not many surprises.

The Judiciary Committee is now hearing from a number of panels and witnesses on the case for or against Sonia Sotomayor, but we pretty much have the verdict.

(BEGIN VIDEOTAPE)

CROWLEY: (voice-over): It's all over but the voting. Even the probable nays are letting it slide.

SEN. JEFF SESSIONS (R), ALABAMA: I don't think any member of this side will support a filibuster.

CROWLEY: It ended well for Judge Sonia Sotomayor, who spent three days answering all questions and saying very little about the controversial political and legal issues of the day.

JUDGE SONIA SOTOMAYOR, SUPREME COURT NOMINEE: Senator, would you want a judge or a nominee who came in here and said, I agree with you, this is unconstitutional -- before I had a case before me, before I had both sides discussing the issue with me?

CROWLEY: There's no clue from the witness table where a Justice Sotomayor would come down on issues likely to make their way in some form to the Supreme Court -- abortion, property rights, the right to own a gun -- not just legal, but political dynamite. SEN. LINDSEY GRAHAM (R), SOUTH CAROLINA: People now understand the role of the court in modern society when it comes to social change. That's why we fight so hard to put on the court people who see the world like us. That's true from the left and that's true from the right.

CROWLEY: It's also why Republicans returned repeatedly to Sotomayor's public speeches -- her most famous words, that "a wise Latina" would more often than not make better decisions than a wise white man. Republicans hear the sound of identity politics in that, of a judge with an agenda.

She says her 17 years on the bench provide proof that gender, race and background do not sway her decisions. And Republican Senator Lindsey Graham buys it.

GRAHAM: Well, Judge, to be honest with you, your record as a judge has not been radical by any means; it's to me left of center. But your speeches are disturbing, particularly to conservatives.

CROWLEY: Other Republicans are not so sure and pressed her repeatedly, but she stayed with the script, giving up nothing though she says she appreciates their efforts.

JUDGE SONIA SOTOMAYOR, SUPREME COURT NOMINEE: But I love that you're doing your job, and I love that I'm doing my job as a judge. I like mine better.

SEN. TOM COBURN, (R) OKLAHOMA: I think I would like yours better, as well. Although I doubt that I could ever get to the stage of a confirmation process.

(END VIDEOTAPE)

CROWLEY: Bottom line, beneath all those words either pointed or humorous, history is happening. Barring something completely improbable, Sonia Sotomayor will be the first Hispanic and the third woman to sit on the highest court...

WOLF BLITZER, CNN ANCHOR: And we expect that vote to come in plenty of time for her to be on the bench in early October when they reconvene.

CROWLEY: Yes, early August.

BLITZER: Yes, that's when the voting takes place, before the recess.

CROWLEY: Right.

BLITZER: Thanks very much for that, Candy.

Let's bring in our CNN political contributors, the Democratic strategist James Carville and Bill Bennett, the host of the national radio talk show "Morning in America," he's a fellow at the Claremont Institute, as well. And I want to speak about -- talk to you guys first about health care reform. It's reaching a decisive moment right now.

James first, to you; if you go back to the Barack Obama campaign and that was a long time ago, but there was a hard pledge he made there on the campaign Web site among other places saying this, and I'll read it to you -- "No family will pay higher tax rates than they would have paid in the 1990s." That was during the Clinton administration.

JAMES CARVILLE, CNN DEMOCRATIC STRATEGIST: Right.

BLITZER: But he's -- on the verge right now if Nancy Pelosi and Democrats in the House get their way to have to break that pledge, isn't he?

CARVILLE: Well, the Democrats in the House get their way, but then you also have the Senate and the President has not weighed in. It seems the strategy is to let this thing work through the legislative process.

By the way, they're closer to getting health care reform than any time in history. I think the AMA came out and was stopped in 1948 with the Harry Truman tribe (ph).

So this process has quite a ways to go in terms of evolving, but I think we're going to get -- I think this thing is moving along quite crisply here. We're going to end up with health care reform, that's something that never happened in this country before. Many have tried it, believe me.

BLITZER: The Democrats in the House like the idea of increasing the tax rates for the wealthiest Americans, Bill, although there may not be an appetite, as James says, in the Senate for that. What do you think is going to happen?

WILLIAM BENNETT, FORMER REAGAN EDUCATION SECRETARY: That's just one issue, Wolf. Remember, the whole premise of the Obama campaign, President Obama's campaign on health care and on education, on cap and trade, was that this was what was going to get things under control, get -- provide health care, but also get this economy under control.

He said that the health care spending would -- the curve would be going down and not going up. He got de-crisped today; James said it's moving along crisply -- I'd say un-crisply -- the Congressional Budget Office adamant that this plan will increase spending dramatically. We already have a deficit three times that deficit that was ridiculed of George Bush's.

But that this plan was nailed today by the CBO as being radically more expensive and will not control costs. Kent Conrad's exchange with the Director of CBO makes that absolutely plain. This thing is going to be really expensive. I don't know if it's going to pass, but it isn't going to pass on the terms Barack Obama promised.

BLITZER: Go ahead, James. CARVILLE: Well, I just I'm always amused that Reagan and Bush 43 supported it, without worry about the deficit but I'll leave that for another day. I think that we were all moving forward than we have at any time in our history. I think the recovery is beginning. I think it's going to move along pretty nicely here.

And, you know, we're going to say, there's a lot left to go in this fight and there's a lot, the House bill and the Senate bill and the conference committee. And I think the White House is going to move in at a certain point. But I think that right now they've got to be feeling pretty good about the way things are.

BLITZER: Is it at all realistic, Bill Bennett to...

BENNETT: No.

BLITZER: ...to think that the president...

BENNETT: No.

BLITZER: ...in the end will agree with some of his fellow Democrats and say the tax -- the tax-exempt status for health care benefits, for insurance benefits that employers give employees, that those should be taxed just as regular income is taxed? So far the President says he doesn't like it.

BENNETT: He may, but there are problems there, too. This is what Chairman Baucus, who has now been outspoken, saying the president has not been helpful on that and he'd like the president to come his way.

Then they're going to be in the business of raising taxes. And the pledge you started with initially is going to be violated. But James, talked about Reagan deficits and anybody else's deficits, Barack Obama will have deficits larger than all the deficits of all the presidents in the history of the United States within 18 months...

BLITZER: But, he did Bill, he did inherit a huge deficit, over a trillion dollars, as you know.

CARVILLE: Sure.

BENNETT: And as you know, the projected numbers by CBO and others up to three years are $9.4 trillion. It's dwarfed. But, look, I just disagree that this thing is moving smoothly. It is not moving smoothly.

CARVILLE: Right, but it's moving along.

And I would point out if we didn't have the Iraq war and the Bush tax cuts it would be a lot different fiscally, but we have those things and they obviously were policy mistakes and we've got to live with them. But...

BLITZER: Let me move on James, to another issue and Bill, the issue of whether or not the attorney general, Eric Holder, should order a special investigation, a special council, to investigate the CIA's harsh interrogation techniques used during the Bush administration.

David Ignatius, a writer for "The Washington Post," a very thoughtful guy who knows a lot about this, he writes this in "The Washington Post." "If Obama means what he said about looking forward rather than backward then he should stick to his guns and hope that the attorney general and the House Speaker Nancy Pelosi agreed that it's time to stop kicking this football." He could stop it if he really wanted, right, James?

CARVILLE: Well, it's a little bit different. If you know again, if you have the Alberto Gonzales model and the Nixon model, to think nothing of the White House interference to the justice ball, but Democrats view that a little differently. And I think Holder took the job under the pretense of some kind of being independent.

And no Democratic political operative wants this to happen. The country doesn't want it to happen. But I don't know how they're going to deal with the attorney general. Apparently he and career people in the Justice Department are convinced that some laws were broken.

Maybe the president can, like, pardon some people and move this thing on, but take a very -- a lot of people take a very dim view of the White House interfering with the Justice Department. That didn't happen under Bush years but Obama seems to have a different point of view here.

BLITZER: All right Bill, go ahead. Button this up.

BENNETT: Yes, James has recovered his wisdom at least partly here, the idea that it pardons or something like it, but putting it behind him. [AUDIO GAP] to the attorney general, not for political reasons but for reasons of the national well-being, we're folding this up, we're moving forward.

BLITZER: We lost you a little bit on your satellite feed but we've managed to pick you back up.

Bill Bennett, James Carville, guys, thanks very much.

He had dozens of hits but now a new song believed to be by Michael Jackson has surfaced for the first time. Few people have heard it, but it may sound very familiar to you.

Plus, Paul McCartney talks about his relationship with Michael Jackson and reveals why it fell apart.

(COMMERCIAL BREAK)

BLITZER: Right now we're following some nasty infighting among some members of the young Republicans sparked by some racially charged writings online.

Our Internet reporter Abbi Tatton is working the story for us. Abbi what happened? ABBI TATTON, INTERNET REPORTER: Wolf, this is a race for the Chairmanship of the Young Republicans that got ugly earlier this month because of these comments posted to the Facebook page of candidate Audra Shay, calling the president a racial slur.

Now, Shay didn't write them, but she did appear to endorse them with a comment saying "You tell them," to the person that had written them. Other young Republicans immediately denounced the language that was used.

Shay came out with a statement saying, that she had been misunderstood. She's also condemned the language and she's accused her opponents of stirring the pot, basically.

Now, this really blew up online in the last couple weeks pushed by further digging and further comments found by the Web site, the Daily Beast. But despite all that, Audra Shay last weekend at the Convention of the Young Republicans was elected to be the new chair of that organization -- Wolf.

BLITZER: Yes, Abbi, how are other members of the organization reacting to all of this?

TATTON: Well, it seems to be a real split. You talk to some people who were at the convention who say that it was almost a fisticuffs, but however, Audra Shay was elected. One of the people that was there was Lenny McAllister, African-American from North Carolina, from the North Carolina delegation, also a young Republican.

He chronicled the whole thing last weekend on Twitter. One of the things he wrote was "Have the young Republicans just time warped back 30 years with this election?" -- Wolf.

BLITZER: All right, thanks very much, Abbi, for that.

Let's bring in Michael Steele; he's the Chairman of the Republican National Committee. He is joining us here in the Situation Room. What do you think about this?

MICHAEL STEELE, CHAIRMAN, REPUBLICAN NATIONAL COMMITTEE: Well, I don't have much to say, but I'm not unfortunately involved at that level of electing the Chairman of the Young Republicans. I think it's a stupid mistake that was made to, you know, appear to agree with a racist comment on a blog or some other posting.

The membership has worked it out. They've elected her. She's put a statement out clarifying that she thought it was a dumb thing to do and she should have known better and she wouldn't do it again.

What they need to do now is come together, recognize that she's been elected and move forward and use it as a lesson learned. And that you know, the one thing about the times we live in is that we are now much more politically and otherwise aware of how comments and phrases and agreements to those things can have an impact.

And I think in this case the young Republicans should be in a position now to move forward, understanding that the whole institution is impacted by this and now they need to heal it and move on.

BLITZER: You're the first African-American to lead the Republican Party.

STEELE: Yes.

BLITZER: Have you experienced since becoming chairman, any racism?

STEELE: Oh, no, my goodness, no, not at all. And I think that, you know, this notion that somehow racism is only unique to the Republican Party or that racism is, you know, something that Republicans are found to be involved with, it's just got to stop.

I mean, the reality of it is racism is a reality in America still, even with the election of Barack Obama. And I think that, again, as we've seen in the '08 election, as we will see in future elections as more and more African-American candidates run as Republicans and Democrats, that these issues are still going to be dealt with because it's part of the fabric of this nation that we have still not yet come to grips with it, Wolf, and I think that's part of the reality here.

People like to blow it up when it involves Republicans because they think that it confirms a narrative that they think is true. But the reality of it is this country still struggles with the Democrat, Republican, black, white.

BLITZER: Let's talk about health care reform, a significant issue right now.

Do you have a problem with raising the tax rates for the wealthiest Americans, those making more than $250,000 or $300,000 or $350,000 a year in order to generate funds needed so that 30 million or 40 million uninsured Americans will have health care?

STEELE: Well, you know, this is the problem I have with this. The short answer is absolutely. Why are we going down this road? You're talking 30 million to 40 million Americans who are without health insurance. So -- 10 million of which are illegal immigrants who wouldn't get it anyway. So, you have a smaller pool of people to work with.

BLITZER: Still millions of people.

STEELE: Out of 310 million people. So, you're going to upend the entire system, health care system of this nation, of 310 million people, 90 percent of the voters of whom have health insurance, 82 percent of all Americans have --

BLITZER: So, do I hear you saying the country doesn't need health care reform?

STEELE: No, I'm not saying that. We do need health care reform. The reform we need a cost reform. We need to look at the cost of health care. That's why the Republicans have argued for portability, putting, you know, legal questions and things like that that have impacted the cost of health care on the table.

Not just going, OK, you make X amount of dollars, I'm going to tax in order to pay for his health care. That's not solving the problem. You're still not dealing with trial lawyers; you're still not dealing with insurance companies, you're still not dealing with the pharmaceuticals, you're still not dealing with the patient/doctor relationship.

The government is inserting itself in a way that I think takes the choice...

BLITZER: Is this priority number one for the Republicans right now?

STEELE: Absolutely.

BLITZER: To destroy any notion of what the Democrats want and certainly what President Obama wants, health care reform?

STEELE: No. No. We're not trying to destroy the notion of health care reform.

BLITZER: No, no, but the notion that they have.

STEELE: What we're trying to get the American people to appreciate is that there's a better way to do this. That we do not have to tax to spend our way to health care, we do not have to tax to spend our way to deal with the costs.

Where in American history or anywhere for that matter have you saved money by spending more money? Do you do that? Is that how you run your household? Dear, we have a budget deficit, let's go out and buy a new house. We have a budget deficit let's go buy a new car. You don't do that, so why is the government doing it?

BLITZER: If you want to bring in 30 million or 40 million, whatever the number is, of people into the health insurance community, that's going to cost money.

STEELE: Then look at how we address the cost to get those 30 million to 40 million people to the table and there are a number of ways to do. Ten million or 12 million of those people qualify already for health care. They just don't know it.

A certain percentage that include young people who generally feel they don't need health insurance. What we've decided to do is to go directly to the people to have a conversation. We're inviting Americans to go to barackObamaexperiment.com where you can go and share your experience of health care. Let's gets this story before the Congress.

BLITZER: I'm going to move on to talk about some other political issues.

STEELE: One other point -- I just got to make this very quickly. Look what they did with the cap and trade bill; 1,300 pages of legislation, nobody bothered to read. The administration wants to rush through in two weeks a massive overhaul of our health care system. Tell me how many Congressmen are going to read that bill.

STEELE: All right. You're obviously going to fight it.

Let's talk a little bit about Sarah Palin, the governor of Alaska. She stunned all of us a couple weeks ago by announcing she was resigning.

Peggy Noonan, who was one of the chief speechwriters for Ronald Reagan, Republican, writing in the "Wall Street Journal," "Sarah Palin's resignation gives Republicans a new opportunity to see her plain --to review the bidding, see her strengths, acknowledge her limits and let go of her drama. It is an opportunity they should take."

Pretty strong words from Peggy Noonan.

STEELE: Well, I think you know -- the story on Sarah Palin is simply this: she made a very difficult choice to give up the governorship to focus on her family, to focus on other things.

I respect that choice. I admire that choice because it's very tough to do. And so, if you feel that in your leadership that other things are distracting from your ability to lead...

BLITZER: You don't have a problem that it looks like she quit in the middle of her term?

STEELE: No, she didn't. That's a wonderful Democrat talking point that she's a quitter. What she was she made a judgment about whether or not she could continue to be effective in her leadership there. Whether or not there were other things that were more important to deal with, with her family and her young son that she has to care for.

She made a personal and political decision. The brain trust here in Washington and around the country that's second guessing her, that think they know Sarah Palin better than she does, you know, have no understanding or appreciation for what she's going through and why she made that decision.

You have to take her at face value, why she made that decision when she did, and then let's wait and see what Sarah does next. Because then that would begin to give you some idea of how that story will unfold. All the pontificating, stop it; wait and see what she does.

BLITZER: We'll wait together with you.

Michael Steele, always a pleasure to have you here in THE SITUATION ROOM. We hope you come back.

STEELE: You got it. I will. BLITZER: Thank you.

A controversial children's show in Gaza that glorifies violence; why some are accusing Hamas of broadcasting programming that amounts to child abuse.

And lost images of the Apollo moon landing are found and restored just in time for the 40th anniversary of that historic event. We're going to show you the video right here in THE SITUATION ROOM.

(COMMERCIAL BREAK)

BLITZER: There's a children's television program in Gaza that seems to glorify suicide bombing. Critics say the broadcast is very harmful to children.

CNN's Paula Hancocks has details.

(BEGIN VIDEOTAPE)

PAULA HANCOCKS, CNN INTERNATIONAL CORRESPONDENT (voice-over): This is children's television, innocent enough at first glance. But this program on the Hamas-run al-Aqsa TV features the son and daughter of a female suicide bomber watching a reenactment of their mother's mission.

It was first aired in 2007 and has now re-aired; this time, with a studio audience. The young anchor sends a defiant note saying, "here we say to the occupier that we will follow her doctrine, the doctrine of the martyr Mujaheda Rim Riyashi until we liberate our homeland from your illegitimate hands."

Rim Riyashi killed four Israelis in the 2004 attack at the Erez crossing between Gaza and Israel. In the video, an actress playing her prepares explosives for her mission, ignoring her children's questions about what she is doing. The daughter then sees a news reporter about the suicide bombing and sings, "only now I understand what was more important than us."

An Israeli monitoring group, Palestinian Media Watch, tells CNN, these young children are tragic victims of horrific child abuse.

Dr. Sarraj is the leading Palestinian psychiatrist living in Gaza and worries about the impact of glorifying suicide bombers on children.

DR. EYAD SARRAJ, GAZA PSYCHIATRIST: Three years ago, we did a study on a sample of children in Gaza between the age of 12 and 14 and we asked them, "What would you like to be when you are 18." At that time, 56 percent of the boys said, "I would like to be a martyr;" and 17 percent of the girls said the same.

HANCOCKS: Dr. Sarraj says children in Gaza have been so traumatized by Israeli-Palestinian violence over the years that their perception of life and death is twisted and damaged. (on camera): It is possible for most people in this region to watch al-Aqsa TV if they have the right satellite dish. But it is not possible to note how many tune in and how many have seen this specific footage. But it is Hamas-run so the audience is likely to be smaller and restricted to those without political affiliation.

(voice-over): Al-Aqsa TV has not returned calls from CNN seeking comment on the program. Two years ago, the station created a Mickey Mouse style character that encouraged violent resistance against Israel and simulated the use of an AK-47 and grenades.

Paula Hancocks, CNN, Gaza City.

(END VIDEOTAPE)

BLITZER: This song believed to be recorded by Michael Jackson has been discovered. When you hear it here in THE SITUATION ROOM, you may conclude it sounds familiar.

And the singer, Paul McCartney, returns to the site where he and his fellow Beatles debuted in America. We're going to show you part of his performance.

(COMMERCIAL BREAK)

BLITZER: They were friends, even collaborators, Michael Jackson and Paul McCartney had two hits in the 1980s. But their friendship suffered when Jackson beat McCartney in bidding to buy the rights to the Beatles catalog of music.

Here's is how Paul McCartney explained it to David Letterman.

(BEGIN VIDEO CLIP)

PAUL MCCARTNEY, MUSICIAN: We made a couple of records together, did a video. We were very good friends. It actually kind of fell apart later because he was talking to me and asking my business advice. And one of the things I said to him was, think about getting into music publishing. And then he looked at me kind of, are you joking? He said, "I'm going to get yours."

So, you know, I kind of thought, oh, you. But it turned out to be true.

(END VIDEO CLIP)

BLITZER: Letterman, by the way, does this show from the Ed Sullivan Theater in New York City. And this was McCartney's first time back since he appeared there with the Beatles in 1964, 45 years later. He performed from the marquee instead of the stage.

(BEGIN VIDEO CLIP)

(PAUL MCCARTNEY PERFORMING A BEATLES SONG)

(END VIDEO CLIP) BLITZER: Love that song.

Happening now -- a one-two punch in the gut of the president's fight for health care reform; a senator says Mr. Obama isn't giving Democrats the help they need to get the job done.

Also, new this hour: prescription drug abuse under the microscope. After Michael Jackson's death, startling new accounts of addicts shopping for dentists who might dope them up.

And the first moon landing like you have never seen it before: NASA releasing new high-definition images of that giant leap for mankind 40 years ago.