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THE SITUATION ROOM

Secret CIA Plan to Assassinate Al-Qaeda Leaders Revealed; Suicide Bombers Strike Hotels in Jakarta, Indonesia; Marking 40 Years Since Americans Landed on the Moon

Aired July 18, 2009 - 18:00   ET

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


WOLF BLITZER, HOST: A secret CIA plan to assassinate al Qaeda leaders revealed. This hour, how it would have worked and why it was scrapped. Tough questions for the Senate Intelligence Committee Chair Dianne Feinstein.

Terror in Indonesia. Suicide bombers strike hotels popular with Americans and other foreigners. Is this an isolated attack or a deadly warning of things to come?

And a giant leap into history. We're marking 40 years since Americans first landed on the moon, changing the United States, this world and this universe.

We want to welcome our viewers in the United States and around the world. I'm Wolf Blitzer. You're in THE SITUATION ROOM.

One small step for man, one giant leap for mankind. On July 20th, 1969, the hopes and the dreams of the nation, to go where no man had gone before, they came true. Apollo 11 landed on the moon. And Americans became the first ever to walk there. Monday marks the 40th anniversary. We'll mark this historic moment with a special hour of THE SITUATION ROOM. Among our guests, Buzz Aldrin.

Right now, let's turn now to a man who also walked on the moon. Harrison Schmitt was part of 1972's Apollo 17, the last Apollo mission and the last manned mission to the moon. Harrison Schmitt is joining us now.

Thanks very much, Mr. Schmitt, for coming in.

HARRISON SCHMITT, MEMBER OF APOLLO 17 CREW: Well, it's great to be here. I hope I'm the most recent.

BLITZER: Yeah, you were the last person to walk on the moon. You and Eugene Sernin, the commander of Apollo 17. Technically, were you the last person on the moon or was he?

SCHMITT: Well, I was the last to step on the moon. And Sernin was the last to get off. And so you can figure it out from there.

BLITZER: All right, well, we'll give you both a lot of credit. Looking back 40 years, almost 40 years for you, what was it like? How scared were you?

SCHMITT: Well, there's no fear involved in these kinds of missions that you train for so long. I trained as a backup crewman for Apollo 15. I was deeply involved in the training of all the crews, particularly the lunar surface training. We know what we're doing. We're doing exactly what we want to do at that time. And fear or being scared is really not part of it. You can't afford that. If you're going to be scared, you shouldn't be in the program.

BLITZER: Did you ever think, you know what, I might not be coming back? This is unchartered territory?

SCHMITT: No. It certainly in our case it was not unchartered. Five other missions had landed on the moon prior to Apollo 17. And also we took great confidence in the rescue of the Apollo 13 crew and the abilities of our thousands of supporters back on earth and mission control center, working with mission control center, and their abilities to do these kind of things and do them right.

BLITZER: You were a PH.D. student at Harvard. What inspired you to all of a sudden say to yourself, you know what? I want to be an astronaut?

SCHMITT: Well, I was like many of my generation and the generation after me, when Sputnik 1 was launched by the then Soviet Union in 1957, it caught my attention. And I became one of the older persons in the Sputnik generation, began to think very seriously about space.

But I did not really think about volunteering to be an astronaut until NASA and the National Academy of Sciences asked for volunteers from the scientific community to join the fourth group of astronauts selected.

BLITZER: And there were more than 1,000 applicants. Six were selected. You were one of them, in part because in addition to having all the physical strength, you were also a scientist.

SCHMITT: Well, I was a scientist and a geologist. And NASA actually had hoped, and the National Academy had hoped to have more geologists qualify. And I frankly think they should have selected more. But nevertheless, I ended up being the only geologist and pretty much on a fast track to the moon.

BLITZER: I've read that when you and Eugene Sernin were on the moon, you discovered some orange soil there. Speaking as a geologist, what significance, if any, did that have?

SCHMITT: Well, it turned out to be volcanic material, fire fountain material such as you see formed on the island of Hawaii almost continuously these days. But it was material contained gaseous components from deep within the moon and really relates very directly to how the moon may have formed. Most of my colleagues believe the moon formed by a giant impact of a Mars sized asteroid on the earth, young earth. I don't think that the data from the orange soil supports that. So we're in a bit of controversy about that.

BLITZER: Still continuing the geological controversy. If you would have thought back in 1972 when you walked on the moon and you spent a few hours there looking ahead almost 40 years later, after the first man walked on the moon, that the space -- the space adventures, the whole space program would be in danger of ending, it looks like the space shuttle's going to end next year, would you have believed that?

SCHMITT: Well, I knew it was going to happen at least for a short period of time. I frankly did not believe, did not even think that it would be a half-century hiatus before Americans were once again were considering going back to the moon and to go on to Mars. Unfortunately, that's what happened. I must say, I've been very disappointed in that delay, but I think I understand it.

Other regimes, particularly the Chinese, seem to be intent on moving forward, to be dominant in space. I think having a nondemocratic regime dominant in space would be disastrous for human liberty here on earth, but that's a decision that this country is going to have to face here very shortly.

BLITZER: It's in part an economic decision. And the country is going through an economic crisis. I assume you appreciate that, of course as everyone else does.

SCHMITT: Well, I certainly appreciate that it does cost some money to go into space, but nothing like what's being spent on other things, which frankly on a different program, we can talk about being far less valuable to the future of liberty than going back into space.

BLITZER: I want to read what you and your crew partner, Eugene Sernin, left when you were the final two individuals ever to walk on the moon. You left a plaque that said this. "Here man completed his first exploration of the moon, December 1972, A.D. May the spirit of peace in which we came be reflected in the lives of all mankind." Give me a final thought, almost 40 years later, on what goes through your minds as you reminisce.

SCHMITT: Well, of course those words are as relevant today as they were then. And that's another underscoring of the fact that the United States just has to be the dominant space bearing nation. If we're not, than the future of liberty, as I indicated earlier, I think is in serious jeopardy here on earth. The Chinese will not have similar sentiments, believe me.

BLITZER: Harrison Schmitt, thanks so much for everything you've done. And thanks for coming in during these historic hours.

SCHMITT: Well, it's my pleasure. Thank you for the invitation. And best to everyone on this anniversary date.

BLITZER: A very courageous man indeed. Appreciate it very much.

We're getting a first look at some new improved images of the Apollo mission, but some of the spectacular video may be lost forever. CNN's Tom Foreman explains.

(BEGIN VIDEOTAPE) UNIDENTIFIED MALE: That's one small step for man, one giant leap for mankind.

TOM FOREMAN, CNN CORRESPONDENT: It's the iconic image of our efforts to explore space. And now as we approach the 40th anniversary of man's first visit to the moon, NASA has restored and enhanced the original grainy, black and white images, including that one that riveted the planet.

UNIDENTIFIED MALE: That looks beautiful from here.

FOREMAN: Astronaut Neil Armstrong setting foot on the lunar surface on July 20th, 1969. The new high definition video is an improvement over the original, but NASA officials believe that somewhere out there is video that could take our breath away. Images like this, but sharper and clearer than anything seen before. The problem is, no one knows where it is.

UNIDENTIFIED MALE: And liftoff of "Endeavour."

FOREMAN: Regular shuttle missions and the crisp color images they transmit have space fans a little spoiled. We forget just how complicated it was to transmit pictures from space to earth in 1969.

Here is how it worked. A small camera built into Apollo 11 scanned the lunar landing in a unique format unsuitable for regular TV. Those images were transmitted to tracking stations in southeast Australia and California's Mojave Desert, where they were converted to a standard format and sent on to Houston, losing picture quality every step of the way.

But veterans of the Apollo mission reminded NASA that technicians at both ground stations recorded the transmissions onto special tapes, which if converted now with modern technology, would produce the highest quality images of man on the moon ever seen. A search has been launched, but three years into it, after scouring multiple NASA facilities, there's no sign of those tapes. And now many fear the spectacular images on them, images far superior to anything we've ever seen, may be lost forever.

Tom Foreman, CNN, Washington.

(END VIDEOTAPE)

BLITZER: And on Monday, don't forget, the 40th anniversary of the landing of the first man on the moon. We're going to have a very special hour of THE SITUATION ROOM. Buzz Aldrin, who went to the moon with Neil Armstrong, he'll be among our guests. We'll look back at that historic day and talk to other experts about how it changed the world. All that, right here, in THE SITUATION ROOM, 4:00 p.m. Eastern on Monday.

The Supreme Court nominee Sonia Sotomayor, did she change any minds at her confirmation hearing this week? I'll ask Senator Dianne Feinstein, a member of the Judiciary Committee. Also, can thousands more U.S. forces turn around the war in Afghanistan? The journalist Bob Woodward is just back from the war zone. I'll ask him.

Plus, a deadly terror attack, suicide bombers strike at the Marriott and Ritz-Carlton hotels. Why a group with ties to al Qaeda is suspected.

(COMMERCIAL BREAK)

(BEGIN VIDEOTAPE)

BLITZER: The CIA is certainly the center of more controversy right now. There were reports the agency concealed information about a secret counterterrorism program from Congress for almost eight years on direct orders from then-Vice President Dick Cheney.

The bombing attacks on two luxury American chain hotels in Indonesia also has heightened the stakes in the debate over how the United States should combat terror. Joining us now is the Democratic chair of the Senate Intelligence Committee, Dianne Feinstein of California.

Senator, thanks for coming in.

SEN. DIANNE FEINSTEIN (D-CA), CHAIRWOMAN, INTELLIGENCE COMMITTEE: Thank you, Wolf.

BLITZER: On this latest terror attack in Indonesia, the Marriott, the Ritz-Carlton hotels, is there any intelligence that is coming in right now? I assume you've been briefed that this potentially is the start of a new wave?

FEINSTEIN: Well, I looked at the intelligence this morning and none of it said that this is a new wave. It does identify, you know, possible groups who carried this out. I think it's pretty clear that there -- that it was a terrorist attack, that it was meant to be a simultaneous attack, effect two hotels, both of them American and both of them large, well-thought-out American hotels.

As a matter of fact, in a couple of weeks, my own family was expected to be spending overnight at one of them in Jakarta. So it brings home the fact that terror is out there. It is not dead. It is alive and well. And they're attacking American interests.

BLITZER: Based on what you know right now, are these al Qaeda groups, al Qaeda-associated groups responsible for this simultaneous attack?

FEINSTEIN: Well, the best I'm going to say about that is that it is most likely two groups who wish to associate themselves with al Qaeda. And we'll have to wait and see. I think there is some interesting intelligence information that leads me to believe that it was a terrorist attack. This just didn't happen by spontaneous combustion.

BLITZER: Yes. It's not coincidence.

FEINSTEIN: That's right.

BLITZER: Two attacks, almost within a few moments apart at these two American hotels in Jakarta. Let's talk about the controversy about these plans, apparently never operational, the plans of the CIA to have these assassination hit squads go out into countries and go after al Qaeda targets.

Congress was never briefed on this, I take it, and the report is that the former vice president, Dick Cheney, told the CIA, don't share this information with Congress. I know this is very sensitive. You're the chair. What can you tell us?

FEINSTEIN: Well, let me be careful in what I say. We were briefed in what is called a memorandum of notification, which took place directly after 9/11 that did indicate what the executive plans were to begin to look for some of these people that might be responsible, might have been connected, might have been funding the effort.

However, we were not briefed on any specific program or specific activity. And so when Mr. Panetta came in and said, look, I just learned about this program, I'm canceling it as of today, he did exactly the right thing.

Now this program, without going into detail, had at least three iterations that we have been briefed on. We are developing information. We're asking for an accounting of dollars spent on these programs. And so at least the Senate Intelligence Committee will have a very good knowledge when we finish of exactly what moneys we used for and what the program did or did not do.

BLITZER: Well, did any of the CIA directors, whether George Tenet or Porter Goss or Michael Hayden, did they violate any laws by not sharing this information with the Congress?

FEINSTEIN: Well, it's not my interest to get into recrimination or blame at this stage. Let me say the program was not briefed, there is no evidence of it having been briefed. There is no evidence in the CIA of it having briefed. And there is no evidence in the committee files our having been briefed.

Nor do I remember having been briefed on it. So I think that's the evidence that we have today. Now for this...

(CROSSTALK)

BLITZER: Do you think the Senate Intelligence Committee should call any of these individuals and the former vice president, Dick Cheney, to come before your panel and be questioned about it?

FEINSTEIN: Well, we well may down the line call some people. I don't think this should be driven by the press questions. I think it should be driven a very even-handed investigation of what did go on. And we are doing that in an informal way. And I have written for information. Additionally we have spent the last two days marking out the intelligence authorization bill, which I'm very pleased to say we voted on and it was unanimous on both sides. It is a bipartisan. And it does strengthen the notification provisions. And it does say that there should be no exception to these notification provisions.

So I believe that will be helpful as well.

BLITZER: Well, we don't have a lot of time, but a quick thought on Sonia Sotomayor. You're also a member of the Senate Judiciary Committee. She is obviously going to be confirmed. But do you think she is going to get some significant number of your Republican colleagues voting to confirm her?

FEINSTEIN: I actually do. I believe we'll have every Democratic vote. And we'll have a significant number of Republican votes, probably at least a dozen. That's what I feel at this stage. Now, of course, that could change, but she will have a very substantial vote.

BLITZER: And one final question on health care. Should the wealthiest Americans be taxed with this surtax to help pay for health insurance for a lot of other Americans?

FEINSTEIN: Well, let me just say this. There is a growing concern in the Senate about both debt and deficit. They are at unprecedented, unsustainable levels over a long period of time. And there is concern that as this program becomes another entitlement, which means if you're entitled to it, you get it, it's not in the budget, you get the -- the moneys are paid.

Moneys that we pay out now from entitlements in the '09 fiscal year are over 50 percent of what the federal government pays out. So it is very important for us to know that this program, not only within the first 10-year period, but is sustainable on a downward curve that reduces cost rather than an upward curve that increases cost.

And many of us right now are very concerned that the curve goes upwards, not downwards. This has to be reconciled. This means we need to take the time to look at the bill, the funding mechanisms, to vote those mechanisms.

My state is on a fiscal precipice. I am really not going to vote for anything that adds huge financial costs to the state of California. So where would it add costs? And that's what we need to look at.

BLITZER: We've got to leave it right there. Senator Feinstein, good luck. Thanks very much.

FEINSTEIN: Thank you. Thank you, Wolf.

(END VIDEOTAPE)

BLITZER: He's just back from observing where things stand in Afghanistan. The journalist Bob Woodward will be here in THE SITUATION ROOM to assess the fight against the Taliban and al Qaeda. Plus, the 40th anniversary of the first U.S. man mission to the moon. We're taking a closer look back at the countdown to Apollo 11.

(COMMERCIAL BREAK)

(BEGIN VIDEOTAPE)

BLITZER: Taliban extremists continue to attack in Afghanistan. Now bombers target two American-owned hotels in Indonesia. Should the U.S. fear an entirely new wave of attacks against the United States and American interests? Bob Woodward is the award-winning veteran author and journalist for The Washington Post. He is just back from Afghanistan.

Bob, thanks for coming in.

BOB WOODWARD, ASSOCIATE EDITOR, THE WASHINGTON POST: Thank you.

BLITZER: I'm deeply worried, I'm sure you are, about what is happening in Afghanistan right now. The U.S. is pouring in more troops, and even more troops, thousands more, might be needed. Is there light at the end of the tunnel?

WOODWARD: Well, they haven't fixed it, and the war continues. And I think it's something that Obama and the White House and the Pentagon and everyone else involved in this are deeply concerned, because, as everyone says, Afghanistan is not Iraq. It's not something where you can surge X number of troops and kind of fix the problem.

The big difference in walking around there, it is a primitive country...

(CROSSTALK)

BLITZER: You went with General Jim Jones, the retired commandant of the Marine Corps, who is now President Obama's national security adviser, he studied this closely. Did you get the sense from your conversations with him, hearing him brief U.S. military personnel, he was coming back to Washington more upbeat?

WOODWARD: No. I think they're worried. And they want to make sure the strategy they have got is implemented. Now of course, the strategy is not just military. They want to improve the economy and they want to improve governance in Afghanistan.

And as I say, it's not a modern state. It's not like Iraq where they have vast oil wells so they can spend the money to increase their own military and police force, which everyone agrees.

So this is now Obama's war. And it's -- you know, there is not light at the end of the tunnel in the near future.

BLITZER: And one of the big problems, the U.S. is pouring in a lot more troops, they're going to have 68.000 troops, the president approved another 21,000. That may not be enough. And there is deep concern that the Afghans themselves, President Karzai, they're not stepping up to the plate.

WOODWARD: Yes. And a big concern about Karzai as a leader, I went with General Jones to talk to Karzai, and he is very outgoing and friendly and highly Westernized, but you dig behind that and a lot of people say he is making deals with people who are corrupt in order to win the election next month.

And not putting people in or keeping people in the Afghan government who are really going to fix things for the people in Afghanistan. So this is...

BLITZER: Most of Afghanistan's wealth is from poppies from opium. They're the biggest supplier of opium around the world. Is there any progress being made in reducing that?

WOODWARD: Well, you know what they've actually decided now, we can't fix that, because that is the farmer's income. I talked to the general on the ground in Afghanistan and I asked about that and he said, we do not want to eradicate the poppy crop now, we can't do it because I will have 21,000 angry farmers, and I can't deal with that.

BLITZER: And that was an American general you're talking about.

WOODWARD: That was an American general. And so there is a new policy of, we'll deal with the drug problem later.

BLITZER: Are the Pakistanis -- on the other side of the border, the Swat Valley, are they making progress in going after the Taliban and al Qaeda?

WOODWARD: They have. And that is an optimistic note. But, boy, what's going on in those ungoverned regions of Pakistan where Osama bin Laden presumably is, I would bet any money on it, but you know, it's the best guess.

And in Pakistan they're there recruiting. They're plotting. It's scary stuff...

(CROSSTALK)

BLITZER: Does the Obama administration have confidence in that man, President Asif Ali Zardari?

WOODWARD: You know, he is some -- you talk to people about it, and we talked with him also. And you know, he talks like he is on top of the game. You ask people about what's going on and they say he doesn't know much about governing.

He is Benazir's Bhutto's widower, and that's why he is in that office. He is somebody who spent 11 years in jail, somebody who is a businessman and not naturally a politician. And so we've -- the situation, Afghanistan-Pakistan, and they are linked, Afghan -- Af-Pak policy, as they call it, the leaders of those two countries are not as strong as the United States and our allies would like.

BLITZER: See what happens in those Afghan elections in August. That's going to be critical as well.

Iraq, not very far away, and you know a lot about this subject. I pick up my hometown newspaper, The Washington Post, and there is a lead, Anthony Shadid, a great reporter from Arbil in northern Iraq, the Kurdish area, let me just read this to you.

"Iraq's autonomous Kurdish region, and the Iraqi government are closer to war than at any time since the U.S.-led invasion in 2003, a Kurdish prime minister said Thursday."

Closer to war, Iraqi Kurds and Iraqi Shiites?

WOODWARD: Well, first of all, the Kurdish region is very independent. And they value their independence and they want more of the oil revenue. And that's something that really has not been worked out...

(CROSSTALK)

BLITZER: Could this whole Iraq experiment just simply collapse now that U.S. forces are out of the major cities and eventually not too far down the road, U.S. forces are going to be gone?

WOODWARD: Well, I wouldn't call it the Iraq experiment, I would call it the Iraq War. It's not over. We have 130,000 of our troops sitting there outside the cities, the general, Odierno, has told the Pentagon, said, look, we can't -- you know, the plan is to pull them out over the next year.

But let's not do this too fast, because there are all of these worries. And the problem in the north with the Kurds is only one of them. The other one is al Qaeda and the insurgency. Do we still -- they have not been eliminated in Iraq, it is still a violent country. There are still questions about how do you get a political solution there.

So, you know, here we are, six months into the Obama administration, and he has George Bush's wars in Afghanistan and Iraq still very much on the table.

BLITZER: And I know you're working on a book on the Obama administration that will be out next year. We're going to look forward to that. Bob Woodward, thanks for coming in.

WOODWARD: Thank you.

(END VIDEOTAPE)

BLITZER: Terrorists launch a deadly strike against two hotels in Indonesia. Our national security analyst Peter Bergen is here to assess whether it's the start of another string of attacks.

Plus, Sarah Palin's decision to quit as Alaska's governor, has it hurt her standing in the GOP? We'll discuss that and more with the Republican party chairman, Michael Steele.

(COMMERCIAL BREAK)

BLITZER: Let's get back to one of our top stories. Terror returns to Indonesia after a four-year lull with coordinated suicide bombings targeting two luxury hotel hotels in the capitol, the JW Marriott and the Ritz-Carlton. Suspicion immediately turned to a home grown terror group with ties to al Qaeda.

Let's bring in CNN's national security analyst Peter Bergen. He's an expert on al Qaeda and its affiliate groups. When you heard about this, these two hotel bombings, were you surprised?

PETER BERGEN, CNN NATIONAL SECURITY ANALYST: I was sort of surprised because Jamar Samir (ph), this al Qaeda affiliate in Indonesia that's done so many of these sorts of attacks was really on the back foot in the last several years. The Indonesian government's been quite aggressive in actions against this group, taking out top leaders, capturing killing, bomb makers. I think the conventional wisdom which I certainly shared was that this group was kind of, you know, really almost out of business.

BLITZER: Is it this group, do they directly coordinate with al Qaeda in the sense that Bin Laden or Ayman al Zawahiri, the leaders of al Qaeda who are still on the loose right now, they plot, they talk or it's just an inspiration?

BERGEN: Well, if you go back to the Bali attack of 2002, which 200 people died in, at that time there was a very direct link. The leader of Jamas in Indonesia was also somebody who had been in Afghanistan and a close friend of Bin Laden. He's now in U.S. custody. Now the links are, you know, much more inspirational rather than operational.

BLITZER: The fact that two American owned hotels, luxury hotels, were attacked, al Qaeda has always said to itself if you destroy America's economic prowess, you destroy America. The World Trade Center, for example, in New York was hit not once but twice as all of our viewers will remember. This is part of that same mentality, right?

BERGEN: Yeah. And I think also, you know, hotels are in the hospitality business. They can't turn themselves into fortresses. They're soft targets. It's a Western brand name. You're going to kill Westerners. These are rather easy things to do. We've seen a rash of these kinds of hotel attacks, the Hilton in Egypt, Best Western and Radisson in Amman, Jordan, the Marriott hotels both in Islamabad and in Jakarta on several occasions. So you know, unfortunately, if you're in a Muslim country with an al Qaeda affiliate, in a five star hotel with an American brand name, you know, the likelihood of an attack or an attempted attack is relatively high over a period of time.

BLITZER: And it's seen as a soft or easy target.

BERGEN: And it is.

BLITZER: The fear is that this could be the start of a new wave of terror attacks after a lull, not only in Indonesia but elsewhere. Is that a realistic fear?

BERGEN: You know, I mean, these groups, they sort of, you know, one place they go, another place they go, you know, diminishing. I mean, al Qaeda in Iraq is diminishing, yet at the same time al Qaeda in Yemen is growing and attacking Western tourists in that country.

So you know, if you average it out, al Qaeda and its affiliates are I think not doing particularly well because all the Muslims have turned against them. But in any given country, they may be growing. And Pakistan obviously right now has had a, you know more suicide attacks than any time in its history.

BLITZER: And there's a major Pakistani military offensive underway in the Swat Valley along the border with Afghanistan. The U.S. is beefing up its military presence in Afghanistan. But and this is the big question, is there any indication they're closing in on the al Qaeda leadership, Bin Laden, for example?

BERGEN: No, there's no indication of that. I mean, Bin Laden has disappeared. There hasn't been any good intelligence about where he is for, you know, since the battle of Tora Bora in December of 2001. That's a long time ago now.

BLITZER: When you heard about these reports that the CIA was planning, didn't actually go forward with these assassination hit squads of al Qaeda leaders, never informed Congress of it, it was in the planning stage, never fully operational, what do you think?

BERGEN: I must say, my outrage level was pretty low. I mean, we've been -- the United States government has been in the business of trying to assassinate Bin Laden since before 9/11. I men, but Clinton had a plan to, you know, capture and kill Bin Laden. So the idea that the United States might be engaged in sort of assassination operations against al Qaeda leaders, that's always been the case.

What's not clear to me in this operation was this operation perhaps going to go into other countries, third party countries that hadn't given permission. The other thing, of course, the operations never happened. So, it was - I mean, and we keep assassinating al Qaeda leaders with drones all the time. So it, you know, clearly the authority exists to do this, you know, anyway.

BLITZER: It's a sensitive issue. And we'll continue to explore it. Peter, thanks for coming in.

Ugly infighting among members of the group Young Republicans sparked by some racially-charged writings on the website of the group's leader. This comes as the GOP is trying to reach out to minorities. The party chairman Michael Steele will be my guest.

And it was 40 years ago this week, a liftoff that opened a whole new world of space exploration. We're going to show you some newly- enhanced video just released by NASA. Stay with us. You're in THE SITUATION ROOM.

(COMMERCIAL BREAK)

BLITZER: Racial slurs against President Obama marred the race for chairmanship of the Young Republicans. They appeared on the Facebook page of the candidate who won, Audra Shea. She didn't write them, but appeared to endorse them. Now she says she was totally misunderstood, she's condemning the slurs, and accuses her opponents of stirring the pot.

(BEGIN VIDEOTAPE)

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 having you here in THE SITUATION ROOM. We hope you come back.

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

(END VIDEOTAPE)

BLITZER: 40 years ago this week, Americans blasted off on a course that forever changed history. Now newly enhanced photos are providing a whole new way to look at that very first successful mission to the moon.

And what does a princess do to celebrate her 32nd birthday? The party thrown to honor Sweden's crown princess, just ahead in our hot shots. Stay with us. You're in THE SITUATION ROOM

(COMMERCIAL BREAK)

BLITZER: It's the day that helped forever change history. Almost 40 years ago, man saw a new frontier. On July 20th, 1969, the Apollo 11 landed on the moon. It's where no human had ever gone before. And while it's certainly easy to remember this mission, we're also looking at the countdown to the change in history.

(BEGIN VIDEO CLIP)

JOHN F. KENNEDY, FORMER PRESIDENT OF THE UNITED STATES: I believe that this nation should commit itself to achieving the goal before this decade is out of landing a man on the moon and returning him safely to the earth.

UNIDENTIFIED MALE: The target for the Apollo 11 astronauts the moon at liftoff will be at a distance of 218,096 miles away. We've just passed the two minute marker in the countdown. T- minus one minute, 54 seconds and counting. Our status board indicates that the oxidizer tanks in the second and third stages now have pressurized. And we'll continue to build up pressure in all three stages here at the last minute to prepare it for liftoff.

T minus 1:35 on the Apollo mission flight to land of the first men on the moon. All indications are coming in to the control center at this time indicate we are go. 1:25 and counting. Our status board indicates the third stage completely pressurized. 80 second mark has now been passed. We'll go on full internal power at the 50 second mark in the countdown. Guidance system goes on internal at 17 seconds, leading up to the ignition sequence of 8.9 seconds. We're approaching the 60-second mark on the Apollo 11 mission. T minus 60 seconds and counting. We passed T minus 60. 55 seconds and counting.

Neil Armstrong just reported back it's been a real smooth countdown. We passed the 52nd mark. Power transfer is complete. We're on internal power with the launch vehicle at this time. 40 seconds away from the Apollo 11 liftoff. All the second stage tanks now pressurized. 35 seconds and counting. We are still go with Apollo 11. 30 seconds and counting. Astronauts report it feels good. T-minus 25 seconds. 20 seconds and counting. T-minus 15 seconds. Guidance is internal. 12, 11, 10, 9, ignition sequence start. 6, 5, 3, 2, 1, 0, all engine running. Liftoff. We have a liftoff. 32 minutes past the hour. Liftoff on Apollo 11. Tower cleared.

Neil Armstrong reported back when he received the good wishes, thank you very much. We know it will be a good flight. Good luck and Godspeed.

(END VIDEO CLIP)

BLITZER: Wow. On Monday, the 40th anniversary of the landing of the first man on the moon, we're going to have a special hour of THE SITUATION ROOM. Buzz Aldrin, who went to the moon with Neil Armstrong will be here among our guests. 4:00 p.m. Eastern on Monday.

In Britain, a professional golfer enjoys a treat just one of our hot shots. That's coming up next.

(COMMERCIAL BREAK)

BLITZER: There is a look at some of this week's hot shots. In Russia, the President Dmitri Medvedev used binoculars to watch military exercises.

In India, an improvised raft was used to navigate through some flooding. In Sweden, the Crown Princess Victoria enjoyed a concert thrown for her 32nd birthday. And in Britain, a professional golfer ate some ice cream while practicing for the British Open. Hot shots, pictures worth a thousand words. On Monday the 40th anniversary of the landing of the first man on the moon, we'll have a special hour of THE SITUATION ROOM, 4:00 p.m. Eastern. Buzz Aldrin who went to the moon with Neil Armstrong, he'll be here.

I'm Wolf Blitzer. Join us weekdays in THE SITUATION ROOM from 4:00 to 7:00 p.m. Eastern and every Saturday at 6:00 p.m. Eastern on CNN, and at this time every weekend on CNN International.

The news continues next on CNN.