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The Possibility of Dropping thePublic Option; Are Co-Ops Adequate Substitution for Public Option?; California Fire Blamed on Drug Traffickers; Taiwan Cleans Up After Typhoon; Public Option Outcry; Violence Faced by Gay Men in Iraq; Unstarlike Treatment for Bollywood Star; Vets Trying to Find 'New Direction' Upon Returning Home

Aired August 17, 2009 - 16:00   ET


WOLF BLITZER, HOST, THE SITUATION ROOM: Health care reform, the so-called public option. Now supporters are growing more vocal as the Obama administration hints it could be dropped in favor of a cooperative. What each would mean for the future of health care. Stand by.

Also, as the war winds down, violence ramps up against gay men in Iraq. There's a disturbing new report out detailing an organized campaign of torture and murder that's left hundreds dead.

Plus, anger boiling over in India right now at the way one of the country's biggest stars was treated by U.S. immigration officials. We're learning new details right now of the incident that's grown to a real international controversy.

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


He's been focusing like a laser beam on health care reform, but for a brief time today, President Obama put America's servicemen and women front and center, speaking to the Veterans of Foreign Wars, the convention in Phoenix, and vowing more money and help for vets struggling to deal with life after combat.

Let's go to our senior White House correspondent, Ed Henry. He's traveling with the president.

What was the president's basic message, Ed, to the vets?

ED HENRY, CNN SENIOR WHITE HOUSE CORRESPONDENT: Well, Wolf, the big message was urging more patience in Afghanistan, a war that has been going on now for almost eight years. The president telling these vets that the fighting is fierce, that the U.S. will not defeat the Taliban overnight.

And what's interesting is, out on the streets of Phoenix here, outside the convention center, some of the same liberal groups that used to stalk then-President Bush about the war in Iraq are now beating up on Mr. Obama, complaining that he's escalated the war, sent some 21,000 more U.S. troops to Afghanistan. Interesting, as well, Mr. Obama today defended his strategy by sort of taking a page out of the Bush playbook, and that's not sitting well with all veterans here. Some of them saying they want more details from this president about his strategy.


BARACK OBAMA, PRESIDENT OF THE UNITED STATES: This is not a war of choice. This is a war of necessity.

Those who attacked America on 9/11 are plotting to do so again. If left unchecked, the Taliban insurgency will mean an even larger safe haven from which al Qaeda would plot to kill more Americans.

DAN VIVEIROS, VETERANS OF FOREIGN WARS: I hope he's not sugarcoating things and saying what he thinks we need to hear because, as an organization, we don't want to hear it, we want to see it. And if he believes that and does what he says he's going to do, then I'll be very happy with it.


HENRY: And other vets we talked to said they understand why the president is not giving more details. His commanding general on the ground right now is doing a comprehensive strategy review, and that's why they're not putting out more details. Even some McCain voters saying, look, we respect the commander in chief and we're going to give him more time to get the strategy right.

The other thing these veterans definitely liked here was that the president vowed that his health care reform effort with will not impact veteran health care at all. That is obviously a major, major issue for the VFW -- Wolf.

BLITZER: It certainly is.

The other issue the president is facing right now, it's the huge issue, domestic issue, health care reform. I take it there were demonstrators in Phoenix, where you are, what, pro and against what the president has in mind?

HENRY: Absolutely. What was fascinating is, as the president was talking about national security inside the convention center, just a couple hundred feet from me here on the streets of downtown Phoenix, this raging debate over health care reform was playing out.

Seven hundred or more pro-Obama demonstrators saying we want health reform now, holding signs, shouting. There were a little bit less protesters, anti-Obama protesters, calling it socialism and the like.

We've seen that play out across the country. But what I saw that was interesting today is there was more energy on the Obama side than I've seen at any other Obama event. Far more people, a lot more shouting. You could see the labor unions and the Democratic National Committee were rallying these people. They're getting much more involved across the country.

And the final point is we went out and talked to some of these people. And even as the Obama administration back in Washington is signaling, look, maybe this public option will no longer be a central part of this, that they may be getting rid of that, people we talked to in the crowd who were pro-Obama said, look, we'll be disappointed if that happens, but it won't be the end of it. We still want reform.

And that's what the White House is hoping, that there will be a feeling out there, that, look, maybe a half a loaf, three-quarters of a loaf is better than nothing at all. That's certainly the message that the administration wants to get out there -- Wolf.

BLITZER: And they're getting it out. Thanks very much.

Ed Henry traveling with the president.

By the way, the president's health secretary, Kathleen Sebelius, was also indicating the public option, as it's called, may not necessarily make it into the final bill.

Listen closely to what she told CNN's John King on "STATE OF THE UNION" yesterday morning, a program that makes news every Sunday morning starting at 9:00 a.m. Eastern.


JOHN KING, HOST, "STATE OF THE UNION": Some in this town, in Washington, especially House Democrats, more liberal Democrats, who have said that that is critical, that they will not support health care without a public option, they take that as message from the president that the votes aren't there, it's time to come up with a Plan B.

KATHLEEN SEBELIUS, HEALTH AND HUMAN SERVICES SECRETARY: Well, I think, John, that the president is absolutely right. This piece of the puzzle has had enormous focus, and the president continues to believe that it's good to have consumer choice, let people choose an option in the new marketplace, and it's good to have competition for the private insurers who will inherit a lot of new customers. And without competition, costs could skyrocket in a monopoly system. It's not a great way to hold down costs.

So, he continues to be very supportive of some options for consumers. What we don't know is exactly what the Senate Finance Committee is likely to come up with.

They've been more focused on a co-op, a not-for-profit co-op as a competitor, as opposed to a straight government-run program. And I think what's important is choice and competion. And I'm convinced at the end of the day the plan will have both of those. But that is not the essential element.


BLITZER: The public option, she's saying, not the essential element. And we're hearing a lot more about these proposed health care co-ops instead of that public option.

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

Elizabeth, what do these co-ops mean?

ELIZABETH COHEN, CNN SENIOR MEDICAL CORRESPONDENT: OK, Wolf. The way it stands now is that most people either get their insurance through the government, a Medicare or a Medicaid situation, or through a private company, like United or Cigna or Aetna, one of those.

A co-op is something completely different. What it is, it's a nonprofit organization where patients actually elect the governing board. So, you can sort of think of it as something that patients run.

And also, you need tens of thousands of members at least in order to make a co-op work. Again, it's nonprofit. Any money that it makes goes right back into the co-op, Wolf. Some people say you need hundreds of thousands of members in order to make a co-op work -- Wolf.

BLITZER: Is there evidence, though, that if you create these co- ops around the country, it's going to bring in some of those 46 million uninsured people living in the United States?

COHEN: You know what, Wolf? To get an answer to that, what I did was I asked two people who were involved with two health care co- ops out there. There aren't many, but there are two prominent ones, one in Seattle and one in Minneapolis.

I said, "Gee, would having co-ops all over the country help take care of those 46 million uninsured?" And they both said, "Oh, no, I don't think so." And I have to tell you, I was sort of surprised to hear that.

But they said, look, it costs money to join a co-op. One of them said, "Our premiums are about the same as anybody else's premiums, and we do reject people sometimes because they have pre-existing conditions."

So, these folks said no, they didn't think it was going to necessarily help those 46 million who don't have insurance.

BLITZER: We're going to be hearing a lot more about these co-ops in the coming weeks, though, no doubt about that.

Thanks very much for that, Elizabeth.

To keep track of all the town halls, the health care debate, and to learn what reform efforts might mean for you, go to our new "Health Care in America" Web site. You can check out the facts, the statistics, read the blogs, see videos. It's all at

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


The city of Chicago is mostly closed for business today as a way to save money. Most city employees are off without pay. Emergency services -- police, fire department -- they're not affected. But city hall, public libraries, garbage pickup, health clinics, most other city services and offices, closed.

Chicago's facing an estimated budget shortfall of about $250 million to $300 million for this year. So, as part of the effort to close that gap, the city included three reduced service days. The other two are the Friday after Thanksgiving and Christmas Eve.

The city anticipates these reduced service days will save more than $8 million, but city workers are losing more than just the pay for these three days. They have also been asked to take six furlough days and six unpaid holidays this year.

Mayor Richard Daly says every dollar the city saves from these measures "helps to save jobs and in the long term maintain services for Chicagoans." He thanked city employees for making the sacrifice and being part of the solution to the budget problem. The employees were not given any choice. But some city workers say they don't mind taking the unpaid days if it means holding onto their jobs in the long run.

So, here's the question: Should perhaps all government employees at every level be forced to take time off without pay as a way of saving money?

Go to and post a comment on my blog.

It's an interesting concept.

BLITZER: It's an intriguing question. Anxious to hear what our viewers think about that, especially those who work for government.

CAFFERTY: Well, they probably won't be as much in favor.

BLITZER: No, they probably won't. All right, Jack. Thanks very much.

Hurricane Bill is churning in the Atlantic right now, expected to grow in strength. Our severe weather expert, our meteorologist, Chad Myers, is tracking the storm in our hurricane headquarters. We're going to get the latest forecast for you.

Also, a wildfire burning tens of thousands of acres in California. Now officials are blaming -- get this -- a Mexican drug cartel.

Plus, targeted for torture and murder. There's a disturbing new report that's coming out detailing the growing threat faced by gay men in Iraq.


BLITZER: Dry conditions and strong winds have wreaked havoc on firefighters battling wildfires out in California. Tens of thousands of acres have now been charred by flames across the state. One week- long blaze is burning in southern California's Santa Barbara County.

CNN's Ted Rowlands is there, and he's joining us now live.

That fire was touched off, we're now hearing, Ted, by a most unusual source.

TED ROWLANDS, CNN CORRESPONDENT: Yes, Wolf. Really, the state is very vulnerable, as you mentioned. Dry conditions and wind, anything can really start a fire, but this fire that is happening in the Los Padres National Forest is now being blamed, believe it or not, on Mexican drug dealers.


ROWLANDS (voice-over): The 87,000-acre wildfire burning in the Los Padres National Forest started, authorities say, by a Mexican marijuana grower's cooking fire. Investigators found pot plants near the fire's origin and evidence they say that it was an operation run by a Mexican national drug organization. Authorities believe the pot growers are still in the forest, most likely armed, trying to find their way out without getting caught.

Growing marijuana in national forests in California is nothing new. Of the 5.2 million pot plants seized last year, 70 percent were on public land. The dense canopy of trees in the national forests afford growers a perfect hiding spot from air patrols.

This summer, CNN's Randi Kaye went along with authorities on a raid of one of these operations in the same forest where the fire is now burning. They found more than 7,000 plants.

CAPT. DEREK WEST, VENTURA COUNTY SHERIFF'S DEPARTMENT: We believe it's the cartels from Mexico. We find our seeds. We find sometimes books. We've made arrests in some of the groves.


ROWLANDS: Now, this is the first time, Wolf, that one of these fires has started from these Mexican pot growers, and the reason is, authorities say, is, typically, these guys hate fire. They don't want to use fire so, they use propane gas stoves to survive for cooking. They don't want to build fires, because, of course, smoke is a dead giveaway. So, hopefully this isn't a trend, and this was a unique group that, for whatever reason, started this fire.

BLITZER: Let's hope it's not a trend.

You're also hearing about another fire, Ted, that was started in a rather unusual way itself.

ROWLANDS: Yes. The bottom line here is this state is so vulnerable because of the conditions, one of the fires was lightning strikes going on right now, but another was started by a bird that went into a power line. And you think, well, how did that happen, because I see birds standing on power lines all the time?

Well, apparently, larger birds hit these high-voltage power lines. One of their wings touches one power line, the other hits the other one, and they literally become a current between the two and they combust, they drop to the ground. They're so hot, they actually catch on fire. That's one of the fires they're battling in northern California, in Yuba County, started by a bird hitting the power line.

BLITZER: It's a huge problem in California right now.

Good luck to all the folks out there dealing with it.

Ted, thanks very much.

We're tracking tropical weather threats, including Hurricane Bill that's out of the Atlantic right now.


BLITZER: Hundreds of people still await evacuation on Taiwan a week after the island took a huge pounding from a typhoon. The weather is improving now and humanitarian efforts are picking up.

Our senior international correspondent, John Vause, has gotten a ground-level look at the aftermath.


JOHN VAUSE, CNN SENIOR INTERNATIONAL CORRESPONDENT: This is the main road of a town called Limbian (ph). It's now actually more of a muddy river. And the people who live here are now starting to dig themselves out and clean up.

Now, keep in mind, it's been more than a week since Typhoon Morakot. The residents who live here say at its worst, the mud was about five feet deep. It inundated all of these shops and restaurants and office buildings.

They say during the typhoon, a nearby dike was breached and the floodwaters rushed in. It happened in about 20 or maybe 30 minutes.

Take a look at some of these piles of debris coming from inside these buildings. There's furniture here. There is the kitchen sink. Even just here, there is a child's rocking horse.

The army has come here to help with the cleanup. There are hundreds of volunteers, as well. And across Taiwan, cleanups like this are now under way in many parts. But in some places, in particular those mountainous isolated villages, the cleanup will have to wait because work crews simply can't get in.

Now, despite all of this devastation, all of this damage, the people who live here tell me they consider themselves lucky because no one died.

John Vause, CNN, Limbian (ph), Taiwan.


BLITZER: It's a magazine generations of Americans have enjoyed and used to stay informed. Now its future may be in doubt as "Reader's Digest" falling on some pretty hard times.

Plus, a deadly blast at a power plant. The latest toll, plus the search for dozens of missing people.



BLITZER: Debate over health care reform, it's boiling over, over the public option. The question could pit the White House against some liberal congressional Democrats.

We're going to hash it out with one of them, Congressman Anthony Weiner of New York.

And he danced out of Congress and onto the stage. The former congressional leader, Tom DeLay, get ready. He's getting ready to dance with the stars.


BLITZER: It's make-or-break month for health care reform, and now there are hints from President Obama and his administration that they might -- repeat, might -- be willing to drop a so-called public option, and those hints are drawing fire from some fellow Democrats, especially the liberals.

Our senior congressional correspondent, Dana Bash, is working this story for us.

Dana, lots of sensitivity on this matter. What are you hearing?

DANA BASH, CNN SENIOR CONGRESSIONAL CORRESPONDENT: Well, particularly among the so-called progressives. In fact, I'm told by Democratic sources that the Progressive Caucus, a big and powerful bloc of liberal Democrats in the House, they're working on a letter expressing their displeasure.

And I already have a letter from the chairwoman of the Congressional Black Caucus, Barbara Lee, and we'll put it on the wall. She said, "Recent comments by the Obama administration officials regarding the public option and health reform are deeply troubling. Any bill without a public health insurance plan like Medicare is not health reform."

I actually spoke to the congresswoman, Wolf, just a short while ago, and she said that she was -- just a little bit of a sense of what's going on behind the scenes. She was waiting for a call back from the secretary of HHS, Kathleen Sebelius, about what she said right here on CNN's "STATE OF THE UNION" to try to get some clarification, because from her perspective, there is no health insurance without the public option. She won't vote for it.

BLITZER: And we just got a statement -- I have it right here -- from Nancy Pelosi. She's saying she's fully behind that so-called public option.

BASH: And the big issue is that the next step is a House vote in September when they come back.

BLITZER: The full House.

BASH: The full House, which has not happened yet. And so, she had to, because of the White House statements, reaffirm her commitment to a public option, which is now the plan for that particular vote.

And here's what she said. She said, "There is strong support in the House for a public option. A public option is the best option to lower costs, improve the quality of health care, ensure choice and expand coverage."

The problem she has -- and that means it's a problem for the White House, Wolf -- is that I talked to several Democratic leadership sources. They said that this bloc of progressives is so big, that they don't think that they can pass a bill in the House without that public option. They think it's so essential.

BLITZER: So, what's the explanation why, in the past few days, we've heard these hints from the president on down, from the administration that, in the end, there might not be a public option?

BASH: It is the pickle that the administration is in when it comes to congressional Democrats.

A bill without a public option is going to be very tough in the House, but it's going to be even tougher when it comes to the Senate, where they have those conservative Democrats -- not just Republicans, but conservative Democrats.

I spoke to several sources, including an administration source, today who said that they wanted to use this time, strike at this time, to send a signal, because it is so tentative and tenuous, that the president is -- quote -- "willing to be reasonable." That is a quote from an administration official.

BLITZER: Dana Bash, thanks very much.

Let's talk a little bit about this with Democratic Congressman Anthony Weiner of New York. He's one of those progressives, or liberals, that is apparently concerned that the so-called public option might not make it, when the dust settles.

Are you concerned, Congressman?

REP. ANTHONY WEINER (D), NEW YORK: Yes. I mean, look, I would love to be one of the big supporters of the Obama plan, but I have got to know that it includes a public option. I, frankly, believe that we should have a single-payer plan, like Medicare, for all Americans.

But, at very least, we need something that the government offers to compete with insurance plans. Now, I know that that's important to the president -- or at least I thought it was, because he said it repeatedly over the course of the last several weeks, which is why this walking away from the public option seems to me a surefire way to walking away from passing something in the House, as Dana just reported.

BLITZER: Here's what he said at that town hall Saturday night in Colorado. Listen closely.


BARACK OBAMA, PRESIDENT OF THE UNITED STATES: A public option, whether we have it or we don't have it, is not the entirety of health care reform. This is just one sliver of it, one aspect of it.


BLITZER: All right, he made it sound like it's just a marginal, tiny little thing. He said one sliver. And he put his two fingers together to suggest, you know what, it's not that big of a deal. At least, that's the way I read what he was saying.

You must have been pretty concerned when you heard that.

WEINER: Well, at least he said it was part of the plan. Now I'm not even sure that it's going to be.

Look, let's be very clear about this, that, if we don't have a public plan, then we're leaving it up to the insurance companies to somehow get up one morning and say, OK, I want to make less profit, I want to have less overhead, I want to bring down costs on our own.

That's not going to happen. And at the very foundation of all of this discussion is that we need to curb down the health care costs that are plaguing not only people that have insurance, but all of us who pay taxes, who are paying too much to cover the uninsured.

BLITZER: If, in the final language that emerges from a House- Senate conference committee -- because they're going you have to reconcile, as they say, the differences -- there is no public option, will you vote against it?

WEINER: You know, not only -- well, I don't even think I will have to, because they won't even bring that to the floor. In the House of Representatives, without a strong public plan, even stronger than the one we reported out of committee, I think it would have a very difficult time getting 218 votes.

Look, the president has to lead on this, and he has to say very clearly a public option is important, that we -- we hold these insurance companies accountable and provide some competition. I would love to be the one carrying the ball for him, but, unless he says a public option is the way to go, I'm going to be a no, and so will a lot of people.

BLITZER: Because the former president of the United States, Bill Clinton, he said, you know what, don't -- don't make everything perfect, because you're not going to get perfection. You have got to get what you can get. Listen to what Bill Clinton says.


BILL CLINTON, FORMER PRESIDENT OF THE UNITED STATES: I want us to be mindful that, sometimes, we may have to take less than a full loaf.


CLINTON: We can't be in the peanut gallery. We have to be actors. We can't ask the president to do it alone. We can't ask the Congress to do it alone.



BLITZER: Because there's a lot of concern that the public option simply doesn't have the votes in the United States Senate, what Bill Clinton is suggesting, Paul Begala, among others, you know what, maybe that could happen down the road, but accept what you can get right now. That's better than nothing.

But you don't believe that.

WEINER: Well, perhaps it is.

I mean, look, I -- I have said all along that I think the best play is a single-payer plan, like Medicare, for all Americans. We're going to have a chance to vote on that. I think that's the best thing. I'm prepared to say, all right, we will try this idea of competition with a private plan -- with a public plan.

But, once you take away the public plan, I don't think we are going to be achieving anything more than we did with Medicare Part D, where we give the insurance industry hundreds of billions of dollars and hope for the best.

I simply don't think it would work. If it doesn't reduce costs, what are we even doing here?

BLITZER: Anthony Weiner, the congressman from New York.

Congressman, thanks very much for coming in.

WEINER: Thank you. BLITZER: Horrific torture, organized death squads and more all detailed in a disturbing new report on the violence faced by gay men in Iraq -- we have the details.

Also, some very unstarlike treatment for a Bollywood celebrity. Details of his run-in with U.S. airport immigration officials. It's causing a huge international stir.

Plus, President Obama's strategy for Afghanistan. What is it? And how does it differ from that of President Bush? Donna Brazile and John Feehery, they're standing by live -- here in our "Strategy Session."


OBAMA: Thank you.


OBAMA: Please be seated. Thank you so much.



BLITZER: As the worst horrors of the Iraq war seem to be winding down -- key word, "seem" -- a new nightmare is unfolding for one segment of the population. That would be gay men. They are being targeted, tortured and killed in growing numbers.

CNN's Arwa Damon is in Baghdad.


ARWA DAMON, CNN CORRESPONDENT (voice-over): When this video sprung up on YouTube back in January showing Iraqi gay men partying, it caused a terrifying backlash.


DAMON: In this report released on Monday, Human Rights Watch warns of a -- quote -- "spreading campaign of torture and murder" against Iraq's gay community.

"They always used to hunt us. But after this video posted, it became much worse," this gay man tells us -- he and his three friends brave enough to speak out, but too frightened to have their identities revealed.

(on camera): What are some of the atrocities that are being committed against the gay community that you know of?

"Many of my friends were killed and many others wounded or harmed," the eldest among them says. "Some were tortured. They shot glue up their anus. They have started a war against us." "I was with my boyfriend driving around. I had my head on his shoulder," this man remembers. "Security forces stopped us and ordered us out of the car. They beat my boyfriend severely and put him in jail. He's been there for four months."

This list was posted in Baghdad's Shia slum of Sadr City. It lists names of individuals accused of being gay. Part of it warns, "If you do not end this shameful behavior, your fate will be death."

Some gay Iraqis have even been killed by their own families, ashamed of the stigma surrounding homosexuality.

This widely-circulated cell phone video shows a transsexual being harassed by Iraqi police.

"He was a hairdresser," his friend tells us. "He was killed by his family, after the Iraqi police threatened to kill him. I heard that they even wanted to burn him alive or stone him to death."

These young men tell us how they were captured by militias, who hacked off their hair. One shows the scars left by acid doused on his leg. The other displays a slash on his wrist.

(on camera): Members of Iraq's gay community have to try to blend in when they are out on the streets, or face the consequences. The Iraqi government says it condemns the murder or abuse of any of its citizens, but has done little else to protect the country's homosexuals. Those who we spoke to say they are left to fend for themselves.

(voice-over): According to Human Rights Watch, it is difficult to place an exact number on homosexuals killed. Indications are that the number is in the hundreds.

(on camera): Homosexuality is not actually illegal in Iraq, but there are very few, if the any, laws that protect homosexuals. In fact, it's quite to the contrary. According to the Human Rights Watch report, Iraq's vague criminal code actually gives police and prosecutors broad scope to punish people whose behavior, mannerisms or looks they quite simply just don't like -- Wolf.


BLITZER: Arwa Damon, reporting from Baghdad, thank you. Important story.

Veterans who served in Iraq and elsewhere won't see any changes in benefits under health care reforms being considered in Washington -- that word today from Veterans Affairs Secretary Eric Shinseki, who spoke at a Philadelphia town hall meeting hosted by Senator Arlen Specter.

He said the department is getting a 15 percent increase in its 2010 budget. And he promised to modernize the VA for the 21st century. CNN Pentagon correspondent Barbara Starr has a look now at a program for troubled vets trying to find their way back after coming home -- Barbara.


BARBARA STARR, CNN PENTAGON CORRESPONDENT (voice-over): Wolf, we're here at a homeless camp that has sprung up under one of L.A.'s busy freeways. This city has the largest population of homeless veterans in the country, about 15,000, many from the Vietnam War. But now the first young troubled vets of Iraq and Afghanistan are beginning to appear.

SERGIO ARIAS, IRAQ WAR VETERAN: You know, it kind of helps me forget about anything, you know, helps me stay calm.

STARR (voice-over): A calm far from Sergio Arias' combat duty in Iraq. He served as a Marine during the 2003 invasion.

ARIAS: We have apricots up here.

STARR: Sergio, now 28, says he came home from war with post- traumatic stress. He wound up in jail for possession of drugs, and, when he was released, he had nowhere to go. Sergio came here, to New Directions, a recovery center for addicted and homeless veterans.


STARR: And he found John Keaveney, a Scottish-born Vietnam veteran who started the program after he served nine years in prison on a stabbing conviction.

KEAVENEY: He's going to get the honest truth from me.

STARR: Blunt talk from John. Still with a metal plate in his head from being shot in Vietnam, he mentors this young Iraq vet 32 years later.

KEAVENEY: He will have to make a choice what he wants to do, you know? But, you know, he's got -- he's got all the potential in the world. He really does.

ARIAS: I look up to John, you know, because, you know, he tells me that -- that I shouldn't be ashamed of having PTSD. I shouldn't be ashamed that I have problems.

UNIDENTIFIED MALE: And let's do this poem right here.

STARR: Sergio suddenly finds another mentor, 60-year-old Michael Anderson (ph), a fellow Marine who served during Vietnam. Michael started writing poetry while he was in jail.

UNIDENTIFIED MALE: "As the bell tolls, I offer a salute to our fighting men in uniform, brave and resolute."

STARR: The vets decided to collaborate. ARIAS: I already have a picture in my mind of what I want to paint for that poem.

STARR: While this Iraq and this Vietnam vet are separated by generations, they are now joined by their art and their battle against the demons of homelessness, addiction, and combat duty.

(on camera): New Directions says they're finding today's troubled young vets, like Sergio, often already in prison, so they're trying to get them help as fast as they can, so they don't wind up here -- Wolf.


BLITZER: Barbara Starr, in L.A. for us, thank you. What a story that is.

He lost his grandmother in the past year. Now President Obama is invoking the loss to make his case for health care reform. We're going to get the -- the latest on what's going on. He's getting personal on what he wants.

Plus, John Yoo and the Berkeley campus -- his presence there sparking controversy and protests. We will tell you what is going on.


BLITZER: Let's get back to health care reform, the president of the United States invoking the death of his own grandmother to counter those so-called death panel critiques.

Let's talk about that and more in our "Strategy Session."

Joining us, the Democratic strategist and CNN political contributor Donna Brazile, and Republican strategist John Feehery. He's president of The Feehery Group here in Washington.

I will play a little clip of what the president said over the weekend, when he was hammering the insurance companies. You could see it's a personal matter with him as well.


OBAMA: I just lost my grandmother last year. I know what it's like to watch somebody you love who is aging deteriorate and have to struggle with that.

So, the notion that, somehow, I ran for public office or members of public -- of Congress are in this so that they can go around pulling the plug on grandma?


BLITZER: Is that an effective response to Sarah Palin and other critics? JOHN FEEHERY, REPUBLICAN STRATEGIST: You know, I don't know. I think that there's a lot of rhetoric, too much rhetoric, in this debate.

What the president needs to do is, he needs to sit down and start cutting deals and getting progress on this thing. And I think how he does it is work with the Republicans. I think he's already starting to signal how he's going to do it, which is dropping the public option and moving...


BLITZER: But, even if he drops that public option, do you think Republicans then will support his -- his vision?

FEEHERY: I think -- I think a lot of them will, yes. I think Chuck Grassley, for example, will. And I think you will get a much better package that won't scare the bejesus out of people.

BLITZER: Do you think so?

DONNA BRAZILE, CNN POLITICAL ANALYST: Well, first of all, I hope we don't drop the public option, because we -- we -- we must...

BLITZER: But you see the handwriting on the wall.

BRAZILE: No, I do not.

BLITZER: You don't?




BLITZER: Do you think they could pass legislation in the Senate with the public option?

BRAZILE: I -- I trust the Senate leaders who believe that they don't have the votes.

But I also believe that, in the House, they -- they have the vote. Sixty-eight Democrats have signed a letter saying that they will not support a bill without the public option. There are many senators, including Jay Rockefeller, who support a public option. So, I'm not ready to put the -- the nail in the coffin on the public option. I think it's the only way to lower the costs and keep insurance companies honest.

BLITZER: Are you ready to put that nail in the coffin of the public option?

FEEHERY: Boom. It's done.


FEEHERY: I think the public option is going to go. It's going to drive the left crazy. But if the president wants to get a deal that is actually going to -- something that will pass both chambers, he will get rid of the public option.

I think that they understand that, which is why they're starting to walk themselves away from the public option.

BRAZILE: Well, how do you expand coverage, John, without a public option?

FEEHERY: Well, this co-op idea by...


BRAZILE: How do you lower costs without a public option? How do you give people more choice and more quality without a public option?

So, I think the Republicans, before they go around cheerleading killing this -- this part of the bill, they should probably come up with...


BRAZILE: ... options.

BLITZER: What about a government-funded, at least in the beginning, seed money, cooperatives around the country?

BRAZILE: I'm interested. I'm intrigued by that idea. I think Congressman -- Senator Dorgan is doing a great deal of work in putting that together. But I haven't seen the details, so I don't want to endorse something I haven't seen.

BLITZER: Will Republicans support these co-ops?

FEEHERY: I think some will. I think some will.

I think some will support a system -- a system that cuts down costs, without this huge government takeover that will lead to people getting on to government health care, which I don't think the American support.

BRAZILE: But no one is talking about a huge government takeover, John. That's a...

FEEHERY: Sure they are.

BRAZILE: ... another one of those lies...

FEEHERY: Sure they are.


BRAZILE: But the Center For American Progress... (CROSSTALK)

BRAZILE: ... is trying to put out the facts. Get the facts before we put the lies out.


BLITZER: People are talking about it, but you may not agree with it. But they're talking about that.


BLITZER: Some people are, the critics -- the critics -- the critics.


BLITZER: All right, let me make -- play a little clip. When I listened to the president's speech before the Veterans of Foreign Wars out in Phoenix today, this line intrigued me. Listen to this.


OBAMA: That's why I have made this pledge to our armed forces. I will only send you into harm's way when it is absolutely necessary. And when I do, it will be based on good intelligence and guided by a sound strategy. I will give you a clear mission, defined goals, and the equipment and support you need to get the job done.


BLITZER: Did that sound to you like implicit criticism of the Bush administration's strategy in Iraq?

FEEHERY: I don't look at it that way. I think every president makes that -- basically, that hope and that promise, that they will have a clear strategy, that they will have overwhelming force.

And, then, sometimes, especially when you go into Afghanistan, the facts get in the way, and the situation on the ground changes. I mean, I think that's the problem that the president's got here, which is, what's the end strategy in Afghanistan, what are the goals you want to get out of there, and can you have a -- so many empires have died in Afghanistan.

You have to be very careful of the troops you commit. And the political support back home, that's the biggest part for the president. How much political support...


BLITZER: Because, when I heard him talk about, you know, I promise -- when he promised, I will only do this, I will only send troops into harm's way based on good intelligence, it sounded like an implicit reference to the bad intelligence that led to the war in Iraq. BRAZILE: Well, I think president was also saying that the administration, as you well know, is reassessing their policy in Afghanistan.

And the August 20 election is critically important in stabilizing that country. We have to stabilize Afghanistan, help them rebuild, and to get rid of the Taliban and al Qaeda.

BLITZER: Donna is going to be back in the next hour.


BLITZER: Guys, thanks for coming in.

He has kept a relatively low profile since leaving Congress. Now the former House Republican Leader Tom DeLay is coming back in a big and surprising way, on prime-time TV. Get ready to dance.

And we're standing by for a new forecast on Hurricane Bill. We will get the latest from our hurricane headquarters. That's coming up.

Plus, the college student who lobbed a rather hard question at President Obama over the weekend, challenged him directly to a health care debate, that college student is standing by to join us live -- here in THE SITUATION ROOM.


BLITZER: On our "Political Ticker": Senator Kay Bailey Hutchison is making it official. She's running for governor of Texas, challenging fellow Republican incumbent Rick Perry. Hutchison says she will give up her Senate seat this year to focus on the governor's race.

And get this. Tom DeLay, he certainly wasn't known for stepping lightly when he was a House Republican leader, but we will soon be seeing a very different side of him. DeLay is among 16 celebrities competing on the new season of "Dancing With the Stars."

DeLay left Congress back in 2006, after being indicted for violating campaign finance law. The case, by the way, is still pending. DeLay tells the "USA Today" he's been working out like crazy, getting ready to compete.

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

They used to call -- Jack Cafferty, they used to call Tom DeLay the Hammer. So, maybe he will do the Hammer when he's dancing with the stars.

CAFFERTY: Isn't it -- isn't it interesting that, in our society, somebody who is indicted for violating campaign finance law is now a celebrity? He ought to be running for, like, prom queen in San Quentin or someplace, shouldn't he? BLITZER: Well, he hasn't been convicted yet.


Got a quick correction on this story out of Chicago, where city offices are closed today as a way to save money. The mayor's name in Chicago is Richard Daley, not Robert Daley, as we earlier said. And I knew that. I just wasn't paying attention.

So, my apologies to his honor, the mayor of Chicago.

The question this hour is, should government employees be forced to take time off without pay as a way of saving money?

Derek in California writes: "No. Better yet, reduce the excessive benefits most public employees have these days, and fire people who don't produce, kind of like the real world that most of us have dealt with for many years."

David in Las Vegas says: "Jack, I think any government agency could cut back 10 percent to 20 percent, and you wouldn't notice any change. It happened all the time when I was an aerospace engineer. We had layoffs. The rest of us became more efficient and made up the difference. Lean and mean works every time."

Jack in Phoenix writes: "As a former big-city employee, I know government workers are the most open to sacrificing for the citizens. They have done it for years with various cutbacks. Most of them do feel lucky to have jobs that are not dependent on bottom-line revenue or production goals, like they are in the private sector. Believe it or not, many will feel grateful they can do their part for this very challenging economy."

Bobby says: "Most government employees can retire in 20 years, get two-thirds of their pay for the rest of their life. Those in the private sector don't make as much and will likely die on the job, because none of them will be able to retire. The government has way too many employees. There are too many who sit around not doing much of anything."

And Bob in South Carolina: "Jackson, about some of you overpaid media types take some time off without pay, instead of putting it on the backs of underpaid public servants? I suspect the average American could get along very well without you or Wolf for a day or two better than they could do without parole officers doing the business of keeping our society running."

Bob, I expect you're probably right about that.

If you didn't see your e-mail here, you can go to my blog at Look for yours there, among hundreds of others.

What do you think, Wolf? Want to donate some time off without pay?

BLITZER: I think Bob's got a good point. The -- a lot of those jobs are critical. You and me, Jack, maybe not.

CAFFERTY: No, I'm -- I'm sure they could get along just fine without us. But I -- but I hope they don't.

BLITZER: National -- national security will survive.



BLITZER: All right, Jack, thanks very much.

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

Happening now: difficult days ahead in Afghanistan. President Obama gives a sober assessment to the Veterans of Foreign Wars. And he's shadowed by some anti-war protesters.

The student who challenged the president to a health care throw- down -- I will speak with the college student who made waves and actually got the president to make some headlines.

And beneath the waves off the coast of Israel, could there really be a mermaid? We're on the scene for you.

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