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President Obama to Address Joint Session of Congress; Battling California's Fires

Aired September 2, 2009 - 18:00   ET

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


SUZANNE MALVEAUX, CNN ANCHOR: Wolf Blitzer is off today. I'm Suzanne Malveaux in CNN's command center for breaking news, politics and extraordinary reports from around the world. You're in THE SITUATION ROOM.

Breaking news this hour: President Obama is pulling out the stops to try to salvage health care reform. CNN has learned that he's going to address the joint session of Congress on September 9. That is a week from today. That high-stakes format drives home just how desperate the administration is to get legislation passed, this after a month of angry venting by opponents.

Let's go to our senior White House correspondent, Ed Henry.

There's going to be some private talks, obviously, some arm- twisting, along with that big speech to Congress.

What do we know, Ed?

ED HENRY, CNN SENIOR WHITE HOUSE CORRESPONDENT: That's right, Suzanne.

The arm-twisting may come next Tuesday, the day before the big speech. We're told the president is going to be meeting with Harry Reid, the Senate Democratic leader, and Speaker Nancy Pelosi here at the White House to go over the final details about what will be in that urgent speech to the nation on Wednesday night.

We're told that there are more and more signals here behind closed doors that the president is not necessarily in favor of a public option to be in this plan. In fact, just a moment ago, I spoke to the president's senior adviser, David Axelrod.

He again suggested that a public option is not the president's top priority and he also made a big vow about the fact that next week the president will get more specific than ever.

(BEGIN VIDEO CLIP)

HENRY: So, why this speech? Did it feel like the debate was slipping away from you?

DAVID AXELROD, SENIOR WHITE HOUSE ADVISER: No. I think that we have gone through months and months of debate and discussion. All the ideas are on the table now. It's a new season, it's a new phase of this debate, and it seems appropriate as we enter the final weeks for the president to address the nation and talk about how we're going to provide stability and security to people who have health insurance and help those who can't afford insurance get the coverage they need.

HENRY: How specific will he get?

AXELROD: I don't think anybody will leave the speech without a strong sense of how the president feels we believe -- he believes we should proceed. I think that's going to be...

HENRY: But will he spell out five, six points where he -- this is what has to be in the final...

(CROSSTALK)

AXELROD: Again, I think it's going to be very, very clear by the time the speech is done that he sees a clear path about how to provide stability and security to people who have insurance and how we can help those who didn't have insurance get the coverage they need.

HENRY: Can you clear up, where is the public option? Is it still on the table or is it off?

AXELROD: The president embraced the public option because he believes that we need to have competition and choice in the insurance system, in this pool that will be created for uninsured workers and small businesses who can't afford insurance now to buy it. And he believes that would be a boon for consumers, help them get the best deal, keep the insurance companies honest. He still believes that competition and choice is important.

HENRY: But does that mean the public option is still alive?

AXELROD: I'm not going the deal with the details of the president's speech. Otherwise, there would be no point in giving it. But it's fair to say that he believes strongly in the notion of competition and choice to keep the insurance companies honest.

(END VIDEO CLIP)

HENRY: Now, the instant reaction from Republican leaders on the Hill, John Boehner and Mitch McConnell, has been that the president doesn't need to change his message; he needs to change the substance. We will see how much he does change that substance between now and next Wednesday.

I can tell you David Axelrod made me another promise. He said the president will sign health care reform into law by the end of the year. We will see, Suzanne.

MALVEAUX: We will see if he keeps the promise.

When the president addresses Congress next week, he's going to be speaking to the American people as well. And they're going to need some convincing about health care reform, but perhaps not as much as you might think.

Our national political correspondent, Jessica Yellin, she's here with some new poll numbers.

And what do they show, Jessica?

JESSICA YELLIN, CNN CONGRESSIONAL CORRESPONDENT: It's interesting, Suzanne.

Our new poll shows that there is still plenty of support for health care reform of some sort.

(BEGIN VIDEOTAPE)

YELLIN (voice-over): You have heard the noise around health care reform.

(SHOUTING)

YELLIN: How much of a difference has it made? The latest CNN/Opinion Research poll shows it has not killed Americans' appetite for some kind of reform.

According to our polling, 53 percent of Americans want Congress to continue working on the bills they started before recess. Compare that to 25 percent who want Congress to start from scratch, and 20 percent who want no reform at all.

As for the president's reform plans, 48 percent like them. That's down only two points since early August,before the town halls began, but it's no longer a majority. Most of those polled say the town halls had no effect on their views about health care reform at all.

Now, it's not all good news for the White House. Most say they would feel more secure with the current system than with the president's plan. And the numbers are worse among seniors.

(BEGIN VIDEO CLIP)

MICHAEL STEELE, CHAIRMAN, REPUBLICAN NATIONAL COMMITTEE: Stop bureaucrats from getting between seniors and their doctor.

(END VIDEO CLIP)

YELLIN: According to CNN's polling, a majority of senior citizens, 60 percent, oppose the president's reform proposals. There is real concern that Medicare recipients will be worse off if the current reforms pass. Perhaps the best sign for the Democrats is this message seems to be penetrating.

BARACK OBAMA, PRESIDENT OF THE UNITED STATES: Without real reform, the burdens on America's families and businesses will continue to multiply.

YELLIN: Sixty-five percent say problems with the current health care system will eventually affect most Americans, and almost all Americans believe some reform is necessary.

(END VIDEOTAPE)

YELLIN: And something else to note: CBS recently released a poll showing that Americans are confused about what's in the health care bills.

Well, when we polled, we asked a slightly different question. We asked if people understand the major points in Obama's proposals. And a majority say they do understand.

So, the bottom line here, folks seem to be confused about the details of the bills, but, Suzanne, they get the general thrust of the health care debate.

MALVEAUX: OK. Thanks for explaining it all, Jessica.

Well, checking our "Political Ticker," former Boston Red Sox pitcher Curt Schilling says that he has been contacted about running for Ted Kennedy's Senate seat in January's special election. Schilling says he will probably not run because -- quote -- "I have got a lot on my plate," but he also is not ruling it out. Schilling is a Republican who campaigned for John McCain in last year's presidential race.

Well, do you recognize this guy? Well, that is former Congressman James Traficant being released from a federal prison in Minnesota today. The Ohio Democrat's famously wild hair, well, it was pulled back in a ponytail as he got into a cab. He served just over seven years in prison for accepting bribes and kickbacks.

Traficant was booted from Congress because of it. And he made a dramatic exit, living up to his reputation as one of the more colorful members of the House. And it's worth hearing again.

(BEGIN VIDEO CLIP, JULY 24, 2002)

REP. JAMES TRAFICANT (D), OHIO: Now, I'm going to get right to the point.

I want you to imagine there's a small army of patriots, and they're facing a gigantic army armed to the teeth. And the captain, trying to show strength, calls his assistant and says go, go to the tent and get my bright red vest. Goes, gets him the red vest. He puts the red vest on, and he said, to show the power and courage of our people, without a sidearm, I am going to carry this sword, and I am going to attack the enemy. And, as they slay me, the blood will not be seen because of my bright red vest. And you will be encouraged to fight for our homeland.

He gave a banshee cry. He ran out into battle and was destroyed. His assistant come up and he called his attendant. He said, go to the tent and get me those dark brown pants.

Think about it.

(LAUGHTER)

TRAFICANT: Tonight, I have dark pants on.

Am I scared to death? No. I will go to jail before I will resign and admit to something I didn't do.

(END VIDEO CLIP)

MALVEAUX: James Traficant a free man today.

Well, Jack Cafferty is joining us this with "The Cafferty File."

Hey, Jack.

JACK CAFFERTY, CNN ANCHOR: Hi, Suzanne.

California wants to delay an order requiring the state to reduce its prison population by more than 40,000 inmates over the next two years.

Last month, a three-judge federal panel gave California 45 days to decide how to cut its prison population, saying that was the only way to improve medical and mental health care for the inmates. And, of course, we need to do that, right?

Governor Arnold Schwarzenegger says the courts cannot order the state to release prisoners. He's set to appeal to the U.S. Supreme Court. Schwarzenegger says cutting the state's inmate population must be done in a responsible way.

His administration is backing legislation that would cut the number of inmates, now at around 170,000, by about 37,000 over two years. Part of the plan would be to send more convicts to county jails or home detention.

And it's not just California where this is going on -- several states under pressure to reduce prison populations in order cut costs as their deficits increase and the recession means less and less tax money coming in.

But wait a minute. This all comes as details continue to unfold in that horrific kidnapping case that broke near San Francisco last week, where a paroled sex offender was arrested for abducting an 11- year-old girl, holding her captive for 18 years and fathering two children with her.

The outrage over this story just might shape the debate over the early release of prisoners, as it should. This creep was released early only to go back to doing the same thing all over again.

So, here's the question: How will a recent California kidnapping case affect the push for states to release prisoners early in order to save money?

Go to CNN.com/caffertyfile, and post a comment on my blog -- Suzanne.

MALVEAUX: Thank you, Jack. Well, wild naked parties are shocking enough, but there is more. The fooling around by American guards at the U.S. Embassy in Afghanistan goes even deeper. Wait until you see the new pictures.

He guards a bridge that terrorists could want to hit. So, why was he and another guard asleep on the job?

And man vs. fire. You will meet firefighters willing to do virtually whatever it takes to get their arms around a raging fire in California.

(COMMERCIAL BREAK)

MALVEAUX: New evidence that the federal government could have done more to prevent this monster wildfire near Los Angeles. It's about 219 square miles right now and about 22 percent contained.

Our Brian Todd is on the front lines with strike teams with a report that you're only going to see here on CNN.

First, Brian, tell us about the new report on the brush that was supposed to be clear it and wasn't. What do we know?

BRIAN TODD, CNN CORRESPONDENT: Well, Suzanne, fire officials, Forest Service officials are looking into this report.

The gist of it is the Associated Press reporting that months before this fire began, federal authorities obtained permits for prescribed burns that would have covered decades-old flammable brush over about 3,000 acres of where this fire has occurred, and that by the time this fire actually did start, only 13 acres had actually been cleared.

Now, I talked to a Forest Service official just moments ago about this. He said they're not commenting on the specifics of the AP report, but that Forest Service officials are pulling all the relevant documents, looking at them, looking to see who got the permits when. And then they're going to hopefully give us some clarification on that.

But let me tell you, at least for the moment, what we're looking at as far as the area this fire is covering. This is a map here at the command center. This -- this red area here is kind of the hot spot area. This is the overall area of the Station fire. But the hot spots today were this area around Tujunga Canyon, which we were at yesterday and today.

And you can clearly see that a lot of fires are still burning in this area. This is the western fringe of the Station fire. Also, the eastern fringes are an area of concern around the San Gabriel Wilderness Area. We were up around here today as well. Some towns around here could be threatened.

Now, oftentimes, the difference between homes in areas like this being threatened and fires actually being contained is the work of special teams of firefighters that have to be ready to move around at a moment's notice.

(BEGIN VIDEOTAPE)

TODD (voice-over): Constantly shifting directions, threatening homes and highways, this temperamental wildfire had formidable adversaries. They're called strike teams, special units of firefighters that take on any tactical maneuver needed in an instant.

(on camera): This is the front lines of what a strike team really has to do. This is the Station fire coming down Tujunga Canyon just a few yards from us, threatening a residence. Look over here. These guys are supposed to hold the fire right along here because it's threatening a residence just over to our left.

But these guys are doing it with shovels and they have got a tanker here. They think they can hold the fire off if it comes right here.

(voice-over): As this swathe of flames creeps closer to the property, I approach strike teamer Wykin Harris.

(on camera): What's been the toughest part of this so far in this fire?

WYKIN HARRIS, STRIKE TEAM MEMBER: This heat. The heat is drying out the vegetation. And it's a vegetation that's been stacked up for years. So, it's burning through it and it's keeping itself going. So, that's been the toughest part, the heat.

HENRY (voice-over): Harris is part of a force of more than 80 strike teams fighting this fire. They do a little of everything, confronting fires head on, steering the flames into areas where they're less threatening, often battling the unexpected.

(on camera): This strike team is on its way to a fire in Chilao, California, several miles away. This is typical of what they encounter, though, a burnt-down tree fallen on the side of the road. They have got to chop it down. But here's an added problem. Take a look. The tree is burning from the inside.

You can see it smoldering there from inside the trunk.

(voice-over): A few minutes later, they slice through. Smoke billows out of the tree, and they have to clear it from the road to get to the next crisis.

Strike teams are combined forces, sometimes with bulldozer operators, hot shot teams that take on the blazes at close range, and tankers. They have to be flexible, but one of their main jobs, structure protection, sometimes involves spraying a house, digging in, and waiting.

I talk about that with Chief Randy May (ph), who's been a strike team leader for a decade.

UNIDENTIFIED MALE: Stand by the house. They wait for the fire to come. And they want to make sure the fuel burns up all the way, but they want to be able to protect the house, so that it doesn't catch fire.

HENRY (on camera): So, is that called kind of a defensive posture?

UNIDENTIFIED MALE: Yes, it is.

HENRY: And why take an defensive posture, rather than an offensive posture?

UNIDENTIFIED MALE: Because, when you take an offensive, we may leave unburned fuel, and we may have a rekindle. And we don't have to come back to that house again. We want to get rid of all the fuel.

(END VIDEOTAPE)

HENRY: And the conditions that these strike teams work in is very grueling, very steep terrain, bone-dry conditions, searing heat. And I can tell you the heat has shot up today. It's not helping them any. Still they have made a lot of progress in containing the fires and protecting homes, so much progress that fire officials tell us they hope to release some of these strike teams from duty very soon -- Suzanne.

MALVEAUX: Thank you very much, Brian. Excellent reporting.

California firefighters got a pick-me-up this morning. They were served a meal by Governor Arnold Schwarzenegger. Later, he praised their hard work and he put it all into perspective.

(BEGIN VIDEO CLIP)

GOV. ARNOLD SCHWARZENEGGER (R), CALIFORNIA: I was glad to be able to serve breakfast today, give them a lot of spinach and protein, so they get all pumped up for the next fight out there with those fires.

But just, if you think about it for a second, when we go to work in the morning, we put on comfortable clothes, soft clothes. They put on this hot gear that right off the top is extremely hot. Then they put on top of that the gear that weighs endless amount of pounds. What does it weigh?

UNIDENTIFIED MALE: It's 25 to 35...

(CROSSTALK)

SCHWARZENEGGER: Twenty-five to 35 pounds that they put on. We put on nothing.

Then they go out there and they climb the steep hills and the terrain, very, very steep and very tough. Then they pull the hoses. And then, when we go into an air-conditioned building and go to work, they go close to that fire and fight that fire with tremendous heat. So, this is why I say that they're true heroes. And that's why I'm so proud of them.

(END VIDEO CLIP)

MALVEAUX: Schwarzenegger also gave a nod to law enforcement agencies responsible for evacuating about -- thousands of homes.

Well, disturbing new pictures of contractors gone wild, acting recklessly, possibly endangering security, a stunning story that takes a shocking new turn.

Also, reunited with her family after 18 years -- the bizarre case of Jaycee Dugard is giving new hope to the parents of other missing children. Will her case help solve theirs?

Plus, more than two months after his death, finally, a funeral for Michael Jackson -- we have new details of where and when.

(COMMERCIAL BREAK)

(NEWS BREAK)

MALVEAUX: We have more evidence today that contractors hired to guard a U.S. embassy have engaged in reckless, dangerous and improper behavior. We are following up on a report about their wild, naked parties.

And there are many more dark secrets for kidnap suspect Phillip Garrido to reveal. A past victim speaks out as police look for links to unsolved crimes.

(COMMERCIAL BREAK)

MALVEAUX: Right now, we are trying to figure out just how the U.S. State Department could possibly have missed this.

We told you yesterday about naked parties and lewd conduct of private guards at the U.S. Embassy in Afghanistan. Well, now we have uncovered new pictures of these contractors acting recklessly and possibly endangering security.

A warning: Some viewers may find images in this report quite disturbing.

Our foreign affairs correspondent, Jill Dougherty, she has been digging deeper on this story.

And I understand we have new pictures and new information -- Jill.

JILL DOUGHERTY, CNN FOREIGN AFFAIRS CORRESPONDENT: Right, Suzanne.

Well, for the first time, the State Department is admitting that it was blindsided by some of the allegations in that report.

(BEGIN VIDEOTAPE) DOUGHERTY (voice-over): Embarrassment grows for the State Department over guards hired to protect the U.S. Embassy in Afghanistan in the middle of a war.

IAN KELLY, STATE DEPARTMENT SPOKESPERSON: There were some things going on in Kabul which we were not aware of, but, frankly we should have been aware of them.

DOUGHERTY: A watchdog group reports and CNN confirms this past spring, guards from ArmorGroup owned by Wackenhut Services Inc. left the embarrass for downtown Kabul on a self-styled armed reconnaissance mission. It wasn't part of their job and they weren't trained for it.

Individuals with direct knowledge of the events pointed CNN to these pictures posted on the guards' Facebook pages. The report says those pictures show them hiding out in abandoned buildings and wearing Afghan dress against contract requirements to be in uniform.

What's more, they took the embassy's night-vision goggles and other equipment with them, sources confirm, leaving the embassy largely night-blind for several days.

The company management gave them a letter of commendation, improperly using the State Department seal. It's all detailed in a report by the Project on Government Oversight, which also reveals drunken parties with lewd sexual conduct, including ritual hazing of recruits by supervisors.

Guards who objected were punished, the report says, describing "a pervasive breakdown in the chain of command and guard force discipline and morale," too few guards, overworked guards on duty, a majority of them speaking very little English. Commanders had to use pantomime to convey orders.

CNN has corroborated the charges in the report with several of the ArmorGroup guards.

For more than two years, the State Department sent letters to the contractor criticizing its poor performance. In this letter last September, the State Department warned the company its staffing shortages and long hours "gravely endanger performance of guard services in a high threat environment such as Afghanistan."

Yet just this past June, a senior State Department official told a Senate subcommittee security officers at the U.S. embassy were satisfied.

WILLIAM MOSER, DEPUTY SECRETARY OF STATE: The regional security officer in Afghanistan has always reported that despite the contractual deficiencies, the performance on the ground by Armored Group North America has been and is sound.

DOUGHERTY: Senator Claire McCaskill, whose subcommittee on contractor oversight has investigated the contractor, says the warning signs were clear. SEN. CLAIRE MCCASKILL (D), MISSOURI: This is a contract that anybody with a cold, cruel eye, looking at the oversight of this contract, would say that there had been serious performance issues.

DOUGHERTY: Yet the State Department insists the embassy was well protected.

IAN KELLY, STATE DEPARTMENT SPOKESMAN: We don't believe that security has been compromised.

DOUGHERTY: The report's author says, "heads should roll, both in the private company and in the government."

UNIDENTIFIED FEMALE: The State Department has got to treat this as an urgent matter. I mean, we really are concerned about the quality of security at the embassy itself.

(END VIDEO TAPE)

DOUGHERTY: And now the State Department, in light of that watchdog report, is sending a diplomatic security team to Kabul to investigate. And so far, the company has not commented on the allegations concerning Afghanistan -- Suzanne.

MALVEAUX: Thank you, Jill.

Two guards on the George Washington Bridge between New York and New Jersey were fired after a cyclist snapped photos of them asleep on the job.

Let's go to our Abbi -- and, Abbi, you've got the evidence.

ABBI TATTON, CNN INTERNET CORRESPONDENT: I do, right here. These are the photos from Monday morning on the George Washington Bridge. Clearly, a tiring place to be if you're a guard. Another picture from rush hour, a Wednesday in August -- again, a guard asleep at his post.

These photos were posted to a New Jersey local news Web site, Cliffview Pilot, by a bicyclist who says he repeatedly rides this route and he has repeatedly seen guards sleeping at their posts. So he took his camera along to do something about it.

This is the George Washington Bridge, a major artery in and out of New York City and also a landmark that's long been cited as a potential terrorist target. Operated by the Port Authority, who say they take safety very seriously. The guards have been fired. And they're saying, Suzanne, that if the public sees something like this, they want to hear the reports -- to see the reports.

MALVEAUX: Are there other agencies that are asking people to -- to make these kind of reports?

TATTON: It's something we seem to be seeing more and more of. There's more digital cameras out there. It was earlier this summer when we saw these pictures posted to YouTube. This is a Metro Rail driver here in the District of Columbia who was operating a train. He seemed to be sleeping. He was actually texting -- not much better. But Metro, at that point, here in the District of Columbia, saying if you see anything, let us know about it.

It's one of these things that so many people have cameras, they're going to post it online if they see something like this.

MALVEAUX: All right. Absolutely.

Thank you, Abbi.

Well, we are learning more about the past crimes and dark fantasies of the man accused of kidnapping Jaycee Dugard 18 years ago. Right now, police are looking for possible connections between Phillip Garrido and the disappearance of some other young girls.

Our CNN's Dan Simon is following the investigation.

(BEGIN VIDEOTAPE)

DAN SIMON, CNN CORRESPONDENT: (voice-over): Phillip Garrido fantasized about raping women -- one of the starting admissions he made during his 1977 rape trial. In court documents obtained by CNN, Garrido also testified during that case that he used LSD and cocaine as sexual stimulants and masturbated in public places -- at the side of schools, grammar schools and high schools "and in my own car while I was watching young females."

Garrido made these confessions while on trial for raping then 25- year-old Katharine Callaway Hall, who told Larry King that Garrido raped her after she offered to give him a ride.

(BEGIN VIDEO CLIP FROM "LARRY KING LIVE")

KATHERINE CALLAWAY HALL: I just turn around the corner and pulled over and he slammed my head into the steering wheel and he pulled out handcuffs. He took my keys and threw them on the floor and pulled out handcuffs and handcuffed me and -- and said, I just want a piece of ass. If you're -- if you be good, you won't get hurt.

SIMON: Does Garrido have other dark secrets in his past that have not been revealed?

Police confirm they are investigating Garrido as a possible suspect in the disappearance of two young girls in the area, including then 13-year-old Ilene Misheloff, who went missing 20 years ago while walking home from school.

(on camera): What do we know in terms of how she was abducted?

MIKE MISHELOFF, FATHER OF MISSING GIRL: The only thing that we know, we know that she was last seen at a -- an intersection very close to here.

SIMON (voice-over): Misheloff's father tells me that the Jaycee Dugard case has given him new hope, even if it turns out Garrido is not involved.

MISHELOFF: It shows that somebody can be found after all these -- all these years. You never know what could happen. And so what it -- it has reinforced the hope that -- that perhaps Ilene is still alive and we will find her.

SIMON: And take a look at this. This is a composite sketch of the suspect who abducted 9-year-old Mikalea Garrett outside a store in 1998. Police say they think it resembles Philip Garrido, though it's tough to tell with the passage of time.

Mikalea's mother tells CNN there are other similarities.

SHARON MURCH, MOTHER OF MISSING GIRL: The method of kidnapping was the same. They were both dragged into cars. The description of the cars was very similar. The girls looked very much like each other. There have been points in the past where the investigations have crossed with the same suspects.

SIMON: Police searched Garrido's home for several days, but have not revealed if there's any evidence linking him to other abductions. Garrido and his wife have pleaded not guilty to rape, kidnapping and false imprisonment charges.

Cadaver dogs, meanwhile, found a bone fragment on a neighbor's property that authorities say Garrido lived on at one time, but say it could take weeks to determine if it's from an animal or human.

(END VIDEO TAPE)

SIMON: Authorities are ending the speculation on one aspect of this case. They've investigated Phillip Garrido as a possible suspect in the murders of several women back in the 1990s -- prostitutes. They say they looked at the evidence and determined that there is none.

Dan Simon, CNN, Antioch, California.

(END VIDEO TAPE)

MALVEAUX: President Obama makes a dramatic bid to regain the advantage -- can an address to the joint session of Congress give him the upper hand in the debate over health care reform?

And the father of Sarah Palin's grandchild takes off the gloves in one magazine.

Will he take off more for another?

(COMMERCIAL BREAK)

MALVEAUX: Joining us for a political Time Out, CNN's senior political analyst, Gloria Borger; former Bush speechwriter, David Frum; and "Mother Jones" Washington bureau chief, David Corn.

But first, our CNN national political correspondent, Jessica Yellin, to kick it off all -- hey, Jessica.

JESSICA YELLIN, CNN NATIONAL POLITICAL CORRESPONDENT: Hi, Suzanne.

We knew it was coming, now we know when. President Obama is going to address a joint session of Congress September 9th. It will be all about health care reform. Now remember, Bill Clinton did it, too, September 22, 1993. He kicked off the health care debate, laying out the broad principles of a plan that his own White House task force was still writing.

Listen.

(BEGIN VIDEO CLIP FROM 1993)

BILL CLINTON, PRESIDENT OF THE UNITED STATES: After decades of false starts, we must make this our most urgent priority -- giving every American health security, health care that can never be taken away, health care that is always there. That is what we must do tonight.

(END VIDEO CLIP)

YELLIN: Remember, the president that night also held up a health insurance card that he envisioned every American carrying. That image was quickly lampooned by "Saturday Night Live." The White House bill was eventually presented to Congress in November. But by then, the administration had already lost control of the discussion.

Well, clearly, President Obama has learned from Clinton's mistakes. And he seems to be doing it in reverse. He let Congress run with health care reform. And now that the debate has devolved into polarized squabbling, this speech is intended to get the train moving.

And the president has choices. He could simply restate principles and demand Congress get something done or -- our guess -- he could pitch his own health care proposal, something that costs less and pleases moderates. But that would leave a lot of folks asking why didn't he unveil his own proposal from the start.

Our question, what should the president say in his speech to Congress -- Suzanne?

MALVEAUX: Let's kick it off with Gloria.

GLORIA BORGER, CNN SENIOR POLITICAL ANALYST: Well, first of all, I have -- I think he has to deal with this huge question lingering out there, which is what happens to this public option?

I mean, the president has a choice. He can decide to abandon the public option, but then liberals, like David Corn over here, are going to be very upset about it. He also has to decide whether he's going to scale back the size and scope of his proposal so he can start saving some money. And then he has to figure out whether, after doing all of this, he's actually going to get any Republicans to sign on, because that's not really clear.

MALVEAUX: David, does he have to be specific?

DAVID FRUM, FORMER BUSH SPEECHWRITER: I -- I like Jessica's Option B. I think that's -- that's the way -- way to go.

Look, he -- the system -- this approach has collapsed. The House has become -- the House bill has become his bill and that's an untenable situation for him.

I think there are a couple of things he needs to answer.

I'd like to hear an answer to the question, if not the public option -- which Republicans hope he'll drop -- how do you intend to restrain prices?

Because the liberal ideas will have this public, basically monopoly or monopoly to be. It will crush providers.

If we're going to use competition, how do we make that effective?

Competition state by state by state isn't working very well.

Are you going to have some kind of new approach?

I -- I'll be listening for that.

MALVEAUX: David if he doesn't include the public option, how much of a split is that going to be for the Democratic Party?

DAVID CORN, "MOTHER JONES": I think it's a big split. I mean, he does have to address the issue. I think he has to make his fight clear. I think right now the debate has gotten very muddy. And he doesn't have to go through the laundry list, but he has to make it sound clear to the public that he's in charge and that he knows what he's going to give him.

And on the public option, though, if he doesn't fight for that, if he lets it just slip to the side, saying I'm for it but does nothing for it, you have up to 60 -- maybe more -- House Democrats who've already declared they won't vote for a bill with a -- without a public option.

(CROSSTALK)

CORN: You take those...

BORGER: Are they going to vote against health care reform

CORN: Some...

BORGER: ...and kind of doom health care reform?

CORN: Some -- some might, some might not. Their argument is with -- going to David's point -- that without that, you have nothing that will control the costs of insurance. And you need that in the bill, otherwise the bill is not workable as a...

BORGER: But the president could thread the needle. He could say, OK, we're not going to have a public option for two years and if the insurance companies behave, maybe we won't have the need for a public option.

CORN: Well, perhaps he could. And they would peel -- the closer you come to this, the more of those 60 votes you peel off. But there are at least 20 to 30 who are pretty dead set against anything without a public option.

FRUM: But prices don't go up because the insurance companies are bad. Prices go up because the insurance companies are weak. They are not powerful enough to act to restrain providers and to act like competition. And that -- that's one -- I mean the idea that I think the president needs to come to that we all need to come to is if not a public option, which I oppose, let us have national competition.

Why are -- why do we have 50 state markets for health insurance?

Why not a national market?

Get the states out of this business, get the federal government in. Let's have eight or 10 national health insurers. That's the way America delivers.

(CROSSTALK)

MALVEAUX: All right, wait a second.

(CROSSTALK)

MALVEAUX: Let's take a quick break. We'll just take a quick break and we'll be back with more.

(COMMERCIAL BREAK)

MALVEAUX: We are back with Gloria Borger, David Frum and David Corn and CNN national political correspondent Jessica Yellin.

And the lively conversation continues -- he, Jessica.

YELLIN: Hi, Suzanne.

You know that saying, it take two to tango?

Well, the Democrats thought they had at least three dance partners -- three Senate Republicans willing to negotiate on a bipartisan health care reform bill. Senator Mike Enzi of Wyoming, Senator Chuck Grassley of Iowa and Senator Olympia Snowe of Maine. Well, now Democrats are wondering if two of them are ready to hang up their dance shoes.

First, in a radio address, Senator Enzi said that Democrats' bills don't meet his goals and then went on to say this.

(BEGIN VIDEO CLIP)

SEN. MIKE ENZI (R), WYOMING: The Democrats are trying to rush a bill through the process that will actually make our nation's finances sicker without saving you money.

(END VIDEO CLIP)

YELLIN: And Senator Grassley -- "The Washington Post" got its hands on this fundraising letter that the senator sent in early August. In it, he writes that: "The Democrats' bills would be a pathway to a government takeover of the health care system" and he asked his supporters immediate support in helping defeat Obama Care.

That has a lot of Democrats asking if either man is really ready to negotiate. Spokespeople for both men say that they have been open about their positions, this is nothing new, they don't like the Democratic bills. Grassley's office says Obama Care refers to a public option, which the senator has always opposed. And they say both men want to negotiate. They want a bipartisan approach.

The question is, are these Republicans winnable -- Suzanne?

MALVEAUX: Gloria, I'll kick it off with you.

BORGER: I think it's much less likely. When you talk to folks at the White House today, they -- they point to these two gentlemen and say, look, they pulled the plug, as one said to me, on health care reform on these bipartisan negotiations. We haven't heard from Senator Snowe yet, but it seems very clear that these senators have really started to back away.

MALVEAUX: Are they being disingenuous here, David?

FRUM: No. The White House has confronted them with this invitation -- we'd like you, in a bipartisan way, to do exactly what we tell you to do. And that is understandably resented.

The White House has to decide are they going to placate Democratic liberals with a public option or are they going to work with Republicans?

And here's why, from the White House's own terms, they'd be better off working with Republicans. The reason you do things in a bipartisan way is not because there's anything magic about it. It's because if there are problems later, it gives everybody cover. You can say, look, we all agreed. We all thought it was a good idea. We were all wrong in the same way at the same time.

If you do it just with Democrats, then you lose that excuse. And...

CORN: It's sort of like the Iraq War.

FRUM: Sort of.

CORN: But hope -- but hopefully it won't go so badly this time. FRUM: But they...

(CROSSTALK)

FRUM: They have to -- they have to mobilize these people. But there is a price. And they have to jettison the public option and work the private markets.

CORN: But listen, that means they're not getting enough in return to, you know, to -- to weaken the bill, to turn it into a bunch of moosh for the -- for the price of two or three Republican senators, that won't give you enough political cover of the type you're talking about. Believe you me, the Republicans will still be able to run against this bill, even if they get two or three Senate votes for this.

So if -- if Obama sort of, you know, turns on his own party and produces a bill that nobody can quite understand because it's got so many compromises, it doesn't, I think, you know, offset what you would gain -- the will you gain from appeasing these cranky Republicans.

BORGER: Well, there...

MALVEAUX: Are the Democrats partly to blame for this?

BORGER: Well, sure. Yes. I mean, you'd probably disagree, but I think -- I think they are. But that's because...

FRUM: Oh, I would disagree, but...

(CROSSTALK)

BORGER: But that's because they gave the Democrats so much rope in Congress and they actually expected Congress to legislate or to come up -- come together, which, of course, doesn't happen these days. But in a perfect world, what you would like on legislation of this magnitude is, you know, 70 votes for it, 80 votes for it in the Senate. But given the political reality...

(CROSSTALK)

FRUM: ...in a perfect world.

(CROSSTALK)

FRUM: That's the only world we live in. If you don't have 70 votes, it won't happen.

But President Obama inherited a bipartisan framework -- the Wyden-Bennett Bill, The Healthy Americans Act, I believe it's called, that laid out an approach that was broadly acceptable to a lot of Republicans, not just three. But he jettisoned that because of this grail that many Democrats have of moving toward (INAUDIBLE)...

(CROSSTALK)

BORGER: Well, they went to Congress work first and that may have been...

(CROSSTALK)

FRUM: They -- because they wanted to see...

(CROSSTALK)

FRUM: ...step by step by step.

CORN: This is the plan he ran on. (INAUDIBLE) that many Democrats have of moving toward...

(CROSSTALK)

BORGER: Well, he...

(CROSSTALK)

BORGER: ...to the Congress work first and that may have been the problem.

(CROSSTALK)

FRUM: They -- because they wanted a single payer system...

(CROSSTALK)

FRUM: ...step by step by step.

CORN: This is the plan he ran on. They do have whopping majorities, the Democrats, in both bodies.

MALVEAUX: All right...

CORN: So, I mean, what's wrong with giving...

MALVEAUX: We've got to leave it there.

CORN: ...the people what you say you would?

MALVEAUX: We've got to leave it there.

David, David, Gloria, thank you very much.

Back to Jack Cafferty -- Jack.

CAFFERTY: The question this hour is how will the recent California kidnapping case affect the push for states to release prisoners early in order to save money?

Mary Jo writes: "It may have some impact, but any lawmaker who votes in favor of the releasing prisoners into the general population for the sole reason of saving money should be removed from office. What do these idiots is going to have to happen to the number of police on the payroll after these folks hit the streets early? Haven't these people learned yet there are no jobs out there for people who are not convicted felons?"

F. writes: "Excuse me, but you are an idiot" -- meaning me. "Please explain to me how releasing petty criminals is the same as releasing convicted sex offenders and murderers. If we decriminalize victimless or moral crimes, it would relieve overcrowding and free up tons of money to maintain the main prison systems. Tax drugs, alcohol, guns, tobacco and prostitution, and you would have all the tough on crime cash you could desire. When the state went into the numbers business, any moral arguments were lost."

Kal in New Jersey: "As a volunteer, I taught a writing class at the New York State Prison -- 1,800 inmates for five years. It costs $40,000 a year to house, feed and guard each inmate. The population is quite diverse. At least a third of the men are sociopaths who should never see the light of day. Others committed stupid crimes while young and are capable of rehabilitation if there were more efforts made to teach them and help them reenter society, where they could then support their families and pay taxes."

Joe writes: "As a retired homicide detective, I'll say there's no excuse for the poor police work and failure by state parole in the follow-up on Garrido's case. But we simply cannot continue to lock up so many persons in any of our states. We need to take a realistic look at the cost of state corrections and the court systems. The criminal justice system has been completely ineffective for years."

And James in Anaheim, California: "Any of those prisoners can say the same things and act the same way that that creep Garrido did to get out of jail early. Releasing prisoners from jail due to the deficit sends the wrong message -- that anyone can and will get away with anything. I myself was molested for six years and I don't want to see an eyeball of any of those rapists and drug addicts near me or any member of my family."

If you didn't see your e-mail here, you can go to my blog at CNN.com/caffertyfile and look for yours there, among hundreds of others -- Suzanne.

MALVEAUX: All right. Thank you, Jack.

Well, Sarah Palin's own son-in-law lashes out in "Vanity Fair." But he has -- he may have more vanity to reveal. Jeanne Moos is next.

(COMMERCIAL BREAK)

MALVEAUX: Levi Johnston is back in the spotlight.

Here's CNN's Jeanne Moos.

(BEGIN VIDEOTAPE)

JEANNE MOOS, CNN CORRESPONDENT: (voice-over): Don't jump, Levi Johnston, not when you've just made it into "Vanity Fair." And to add to your vanity, now "Playgirl" tells CNN it's finalizing the details, that they're very close in negotiations to have Levi pose at least semi-nude. Even at the "Vanity Fair" shoot, Levi and his manager were talking about "Playgirl".

(BEGIN VIDEO CLIP, COURTESY "VANITY FAIR")

LEVI JOHNSTON: I'd do it.

UNIDENTIFIED MALE: (INAUDIBLE).

JOHNSTON: I'm guessing it's a dude posing for women.

UNIDENTIFIED MALE: You know, you've got to have some Johns (ph). You can't come in there lacking in the Johnson.

MOOS: Hey, he's already posed half naked in "GQ" and his baby was totally nude. For "Vanity Fair," the clothes make the man.

(BEGIN VIDEO CLIP, COURTESY "VANITY FAIR")

UNIDENTIFIED MALE: What you see right here is Wasilla wear. We're going to show you "Vanity Fair" wear.

(END VIDEO CLIP)

MOOS: And when he stepped outside to pose on a ledge, he was also wearing a harness that Levi explained back when he escorted comedian Kathy Griffin to the Teen Choice Awards.

(BEGIN VIDEO CLIP)

JOHNSTON: I was looking down about 25 stories. I was all harnessed up, but, you know, it was a little scary.

KATHY GRIFFIN, COMEDIAN: By the way, we're going to re-create that later tonight at my place.

UNIDENTIFIED FEMALE: OK. Sounds good.

GRIFFIN: I've got the harness, the camera. It's going to be great.

(END VIDEO CLIP)

MOOS: To think that it was just last summer that Levi Johnston was awkwardly holding Bristol Palin's hand on stage, getting patted by John McCain as he was welcomed into the political family. And now...

(VIDEO CLIP)

MOOS: ...he's in "Vanity Fair" video waving a mask of his almost, but not quite, mother-in-law.

He's spilling more beans, writing that Sarah Palin nagged him about a great idea she had: "We would keep it a secret. Nobody would know that Bristol was pregnant. She told me that once Bristol had the baby, she and Todd would adopt him."

No comment from Sarah Palin.

"Playgirl" isn't the only racy outfit out to get Levi. The gay magazine "Unzipped" has a standing offer, says its editor.

RICK ANDREOLI, EXECUTIVE EDITOR, UNZIPPED MEDIA: He's a really handsome guy. He's rugged. He's a real guy's guy.

MALVEAUX (on camera): And who knew?

"Playgirl" magazine doesn't even exist anymore. All there is, is an online version.

(voice-over): "Playgirl" says it's hoping for a long-term relationship with Levi Johnston. Of course, so were the Palins. Reports are that he wants to keep his skivvies on, though everyone is trying to separate Levi from his Levis.

Jeanne Moos, CNN, New York.

(END VIDEO TAPE)

MALVEAUX: Up next, "LOU DOBBS TONIGHT."