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Democrats Threaten Health Insurance Companies; Interview With Maine Senator Olympia Snowe

Aired October 14, 2009 - 16:00   ET


WOLF BLITZER, CNN ANCHOR: Happening now: A watchdog lays blame for outrageous bonuses at the bailed-out insurance giant AIG. Has someone within the Obama administration been asleep at the switch? Stand by.

Governor Arnold Schwarzenegger tells his wife to stop breaking his law -- this hour, the embarrassing photos of Maria Shriver that got her in some hot water with her husband.

And a member of the United States Congress alone for a week on a deserted island. Republican Congressman Jeff Flake joins us to talk about living his dream vacation.

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

But we begin right now with potentially dramatic news, a blow in the fight over health care reform. Top Democrats in the Senate are swinging back at what one senator's office is calling a sucker punch by the health insurance companies. At issue right now, top Democrats wanted to take back a law they say has allowed insurance companies to reap huge profits at your expense.

Let's bring in our national political correspondent, Jessica Yellin. She is here to explain this story.

It seems like all-out war between some of these Democratic senators and the health insurance lobby here in Washington.

JESSICA YELLIN, CNN CONGRESSIONAL CORRESPONDENT: Absolutely, a real show of force, Wolf, by Senator Harry Reid, the speaker -- the majority leader in the Senate.

He has testified now before the Senate Finance Committee, asking for them to repeal an antitrust law that has given certain protections to the insurance industry. His office tells us that -- quote -- "The law allows insurance companies to huddle in a room and come up with rates." They say that other, than Major League Baseball, no other industry has this exemption.

Basically, if they were to repeal this law, which is called the McCarran-Ferguson Act, Wolf, it would be a devastating blow to the health insurance industry, cut into their profits, definitely something that this powerful industry would not want to see. BLITZER: Patrick Leahy, the chairman of the Judiciary Committee, wants it. Chuck Schumer wants it. We're going to be speaking with him live later this hour. Harry Reid, the majority leader, wants it.

The timing is significant, coming at this delicate moment in the overall health care debate.

YELLIN: Timing seems no accident. As we all know, the health insurance industry has just come out with a report that drives a devastating stake in the heart for some -- in some view about the costs of this health care legislation.

The report the health care industry just came out with suggests that everybody's insurance premiums would rise. Well, this made Democrats very angry. And so it seems no coincidence that they would come out with this punch back right after it. Harry Reid's office says, no, the timing is just a coincidence. He agreed to this before.

I should tell you that the health insurance industry has given us a statement, and they say -- quote -- "Health insurance is one of the most regulated industries in America at both the federal and state level. McCarran-Ferguson" -- this law -- "has nothing to do with competition in the health insurance market."

And note this final sentence. "The focus on this issue is a political ploy designed to distract attention away from the real issue of rising health care costs."

BLITZER: It does scare the insurance companies, though, when they even hear that their -- their monopoly status, if you will, is -- the antitrust status exemption could go away.

What are the chances that what Reid and Leahy and Schumer are proposing will actually be included in the health care legislation?

YELLIN: Truthfully, very slim. This is a powerful industry. This is a longstanding law. What this is, is a show of force. This is real brass-knuckles politics being played as this important issue comes closer and closer to a vote.

BLITZER: Jessica, stand by.

Jeffrey Toobin is our senior legal analyst. He's joining us on the phone right now. Let's say this were to happen. You used to work as an assistant U.S. attorney. The Justice Department would then have a new way to go after some of these health insurance companies; is that right, Jeff?

JEFFREY TOOBIN, CNN SENIOR LEGAL ANALYST: It could have enormous impact if it passes, though, as now, it seems unlikely that it will.

But there are criminal penalties for antitrust violations, not usually imposed, but they exist. So insurance executives could go to prison. There are triple damages associated with antitrust violations under federal law. So, if there was collusion, antitrust companies might have to pay triple damages. And, perhaps most importantly, under federal law, insurance companies could be broken up, like AT&T was broken up in the '80s, to foster more competition, to avoid collusion. Those are the threats on the horizon for the insurance industry if this law passes.

BLITZER: So, for example, if Blue Cross/Blue Shield of Alabama controls some 80 percent of the business in Alabama, if this law were to be passed removing the antitrust exemption for the health insurance companies, they -- they might -- they might have to break up Blue Cross/Blue Shield of Alabama; is that right?

TOOBIN: That's exactly right.

And, at the moment, insurance is mostly regulated by state by state. And those regulators don't have the power that the federal government does. So, if this law passes, you could see an effort by the Justice Department to break up the Blue Cross/Blue Shields, the Aetnas, the UnitedHealthcares that so much dominate the industry. And needless to say, that's something what -- these insurance companies want to avoid.

BLITZER: Yes, it's a tough shot. And I'm sure the health insurance companies don't even like to hear about this. We are going to be hearing, though, more about it later this hour. Chuck Schumer, the Democratic senator from New York, who is one of the sponsors, he's going to be joining us. We will talk about that with him. We will also speak later in the hour with Olympia Snowe, the Republican senator from Maine who voted for the health care package that was approved by the Senate Finance Committee yesterday. She will be joining us this hour as well. So, we will have a lot more coming you.

Meanwhile, new outrage and finger-pointing over those massive bonuses paid by the bailed-out insurance company AIG. The bailout inspector general is now telling Congress that the buck stops with the treasury secretary, Timothy Geithner. He says Geithner was involved in throwing AIG a lifeline before he joined the administration, and, in his words, is ultimately responsible for failures in oversight right now.


NEIL BAROFSKY, TROUBLED ASSET RELIEF PROGRAM SPECIAL INSPECTOR GENERAL: Our audit also concludes that Secretary Geithner did not find out, did not learn of these bonus payments until just days before they were made. But this, too, is a failure. It was a failure of communications and it was a failure of management.


BLITZER: All right. Let's bring in Mary Snow. She's working this report.

We have learned a lot about the scope of these proposed bonuses, Mary. What are you digging and what are you finding out?

MARY SNOW, CNN CORRESPONDENT: Well, Wolf, there's still some questions out there, such as questions over future retention bonuses at AIG, like the kind that sparked so much outrage already, and a look at those concerns and address them.

The inspector general of the bailout program audited AIG's bonuses. He says it took five to six months alone just to get basic data.


SNOW (voice-over): Despite all the scrutiny and all the outrage over insurance giant AIG handing out millions in bonuses while taking billions in taxpayer money, getting answers about all the bonuses at stake still isn't easy.

UNIDENTIFIED MALE: Did AIG ever really know where all the money was going?

BAROFSKY: As of the time we have concluded our audit work, that is correct. They did not know. This was an incredibly decentralized system. It was, as -- as I mentioned in my testimony, a mess.

SNOW: Neil Barofsky, the special inspector general of the government's bailout program, testified before the House Oversight and Government Reform Committee about his audit of AIG's roughly 630 bonus program, equaling $1.7 billion in 2008.

The most controversial bonuses center around the financial products unit, the group that nearly crippled the company and led to a $182 billion bail out. AIG said it needed the bonuses to retain key employees who would help unravel the complex financial portfolio that lost so much money.

But a closer look at that unit shows retention bonuses were given to more than just key employees.

(on camera): Within that financial products unit, it turns out that a $7,700 bonus was given to a kitchen assistant and a $7,000 bonus to a mailroom worker. Now, individual bonuses ranged from $700 to a file administrator to $4 million to an executive vice president. And the bonuses to this unit came in three installments. The first $69 million was paid out at the end of 2008.

Then, there was that $168 million bonus that was paid out in March. It sparked outrage. And AIG has yet to pay out another round of bonuses due in March of next year, $198 million. Now, the compensation czar has informally advised AIG not to pay out that full amount, but so far hasn't recommended a specific number.

(voice-over): While Barofsky says these future payments may be renegotiated, the March payments, he says, are ultimately a failure of the Treasury Department, relying on agencies such as the New York Federal Reserve. He says communication between the two were virtually nonexistent.

BAROFSKY: The fact that Treasury had outsourced this and wasn't aware of this information meant that it couldn't be transparent about these payments, because they didn't have that knowledge.


SNOW: Now, Barofsky says, in the future, Treasury should take primary oversight or set up specific procedures, so there wouldn't be a lack of communication, like there was.

He said, while these contracts were legally binding, he also reminded lawmakers that the government owns 80 percent of this company, suggesting it exert more influence on AIG to get in line with taxpayers' sensitivities -- Wolf.

BLITZER: And you can be sure this is going to spark even more outrage out there. Mary, thanks very much for that report.

Let's check in with Jack Cafferty right now for "The Cafferty File" -- Jack.

JACK CAFFERTY, CNN ANCHOR: You know, why wouldn't -- look at those pretty bars next to you -- why wouldn't AIG take it upon themselves to say, hey, guys, we're getting all this taxpayer money to keep us from going in the toilet; maybe we ought to hang off on these extravagant bonuses until we get our financial sea legs back under us? I mean...


BLITZER: Yes. We're talking more than $100 billion. We're talking more than $100 billion.

CAFFERTY: I mean, I -- it's just -- and the -- and the government sits around going, well, they shouldn't have done that. It's -- it's mind-boggling.

Here's some more. Despite all the hoopla over the Senate Finance Committee vote, there is a very long way to go before health care reform becomes a reality, even farther in light of the story we told you about just not five minutes ago about this threat to withdraw the antitrust exemption that is enjoyed by some of this nation's largest health insurers.

President Obama applauded Senator Olympia Snowe for becoming the first Republican to break ranks and vote for health care reform, but the truth is, Snowe is keeping her options very open. Her support sounded conditional when she said -- quote -- "My vote today is my vote today. It doesn't forecast what my show the will be tomorrow" -- unquote.

And another centrist in the Senate, independent Joe Lieberman, he of the many political colors, said that he opposes the health care bill the way it's now written because it would raise insurance costs for most Americans.

Meanwhile, a group of almost 30 labor unions warning, the Senate Finance Committee bill is deeply flawed. They say they will oppose it unless they see changes -- big labor, of course, a key Democratic constituency, insisting that a public option is essential to health care reform.

And they are not in the only ones. As the Senate committee passed its bill without a public option, House Speaker Nancy Pelosi stood on the other side of Capitol Hill and said the House would pass a bill with a public option. Pelosi also says a bill will pass -- quote -- "certainly this year" -- unquote.

Really? There's a lot of people who still are not on board and a lot of legislative steps to go. At the end of the day, a committee vote does not a health care reform law make, not by a long shot.

Here's the question. How confident are you there will be meaningful health care reform before the end of the year? Go to Post a comment on my blog

Were you aware the health insurance industry enjoyed antitrust exemptions?

BLITZER: Yes, I was. And -- and I knew this was a lever over their head. But, you know, it's all-out war right now between these factions. You know, it's -- it's going to be fascinating to see how this unfolds.

CAFFERTY: Well, the industry may have shot themselves in the situation with that little deal they released yesterday from PricewaterhouseCoopers saying that this was going to raise costs for everybody.

BLITZER: Yes. It's -- it's -- this fight is fascinating, and I know you're getting bored, but I -- I'm not.

CAFFERTY: I'm -- I'm getting bored? No. Do I look bored?



CAFFERTY: I'm just old.


BLITZER: Stand by, Jack. We will get back to you.

Bill Clinton suggests he knows the real reason that Republicans are wary of health care reform. Stand by. We will hear from the former president of the United States. He's ready to throw out his own theory.

And hurricane survivors in New Orleans say they might be happy that the president is about to pay them a visit, if they weren't so frustrated.

And scientists are developing astonishing ways to cheat death. Dr. Sanjay Gupta explains how hibernating like a bear could actually save a life.


BLITZER: The last president to push for universal health care reform is talking about the current president's strategy.

In our "Strategy Session": Bill Clinton was at a medical technology conference here in Washington today. He spoke about the milestone health care reform bill passed by the Senate Finance Committee yesterday and the Republican who bucked her party to support it.


BILL CLINTON, FORMER PRESIDENT OF THE UNITED STATES: I'm not sure, by the way, that when we get this bill to the floor, if we get a good one, Senator Snowe may not be the only person -- Republican to vote for it. There's four or five others who want to. Really, they do.

It's just a question they are all arguing in the background that, if we can just say no, we can repeat 1994.

And they can't. It's a different country now. And we -- we watched the movie now. We have seen this movie before. So, I think they are wrong. And I believe there's a real chance that we will have more Republican votes.

Do I wish it? Yes. I liked when we played -- passed telecommunications reform with a bipartisan vote. We passed the world's the -- the biggest after-school program we ever had and summer school program with after -- with bipartisan votes. I passed a lot of things. The balanced budget bill, the welfare reform bill was huge bipartisan votes, two-thirds of both parties in both houses.

I like bipartisan votes. But you have to understand, there's still a contest that goes on behind the scenes here. And they believe that, if we pass health care reform, that it will put the Democrats in a majority for 30 years. And, so, no matter how reasonable they think it is, they think they should oppose it.

As a matter of fact, you know, they may be right about that this time.


BLITZER: Some strategy from the former president.

Meanwhile, Senator Snowe is being called a maverick for bucking her party in that Senate health panel vote yesterday.

Let's bring in our senior political analyst, Gloria Borger.

Gloria, how important is her single vote?

GLORIA BORGER, CNN SENIOR POLITICAL ANALYST: Well, it's not as if she's going to bring a whole bunch of Republicans along with her. I know President Clinton was saying there could be four or five, but I kind of doubt it.

BLITZER: Well, Susan Collins, her colleague from Maine, maybe, in the end.

BORGER: Right. Maybe. Maybe.

BLITZER: George Voinovich from Ohio.

BORGER: Maybe, but I think the real importance is that she provides political cover for moderate Democrats, not Republicans, because there are lots of moderate Democrats, like Evan Bayh, like Claire McCaskill, like Blanche Lincoln of Arkansas, who is up for reelection in 2010, who are a little nervous about this bill.

And they're also happy that she's going to have input on it. And then it depends, Wolf, how far the left pushes back to. To say the president has to thread the needle here is an understatement, you're.


BLITZER: When the president says the country is now much more ready for major health care reform than it was in '93-'94...

BORGER: Right.

BLITZER: ... what's his point? What's he trying to drive home?

BORGER: I think President Clinton is right, because I think there's more of an understanding 16 years later that the current system is really unsustainable.

But, in a way, Wolf, the stakes are higher now for Democratic Party, because they have a mathematical majority, but they have yet to prove that they can govern. And, so, if they pass health care reform, this will be good for Democrats. You know, Republicans are saying in the long term, not so much, because the law of unintended consequences will give them something to oppose.

But the Democrats right now have a lot at stake here, because all their chips are on the table.

BLITZER: So, the basic calculations of the Republican Party right now in this very...

BORGER: Right.

BLITZER: ... intense debate are what?

BORGER: They are saying, look, there's going to be a lot of this that is going to fail.

They believe that it is unsustainable. They believe that the argument that there's too much big government is a very good argument for them, because people don't trust government right now to do what's right. And they believe that's a winning argument heading into the midterm elections and even heading into the next presidential race. BLITZER: Still got some time to go.

BORGER: We do.

BLITZER: All right. Thanks very much, Gloria.

Senator Snowe is also on "GQ"'s list of the most top powerful people in Washington. She's at number 22. The list's top three, White House Chief of Staff Rahm Emanuel, Defense Secretary Robert Gates, and the Federal Reserve chairman, Ben Bernanke.

Someone not in power, but apparently still who wields considerable power, Dick Cheney, he's at number nine. And get this. President Obama and Vice President Biden, they are not on the list, but Washington Capitals hockey player Alexander Ovechkin is. He's number 48, along with the first lady's unofficial fashion stylist at number 46 -- an eclectic list by "GQ" indeed.

Stand by to hear from the one and only Republican who backed the president on health care reform in the Senate Finance Committee. I will be speaking with Olympia Snowe. And I will ask her if she's worried that members of her own party will seek her out and try to get some revenge.

Plus, critics say President Obama's trip to New Orleans tomorrow is too little too late. We will ask hurricane survivors for their take on his long-awaited visit.


BARACK OBAMA, PRESIDENT OF THE UNITED STATES: After many months of thoughtful deliberation...



BLITZER: Fredricka Whitfield is monitoring some other important stories incoming into THE SITUATION ROOM right now.

Fred, what's going on?

FREDRICKA WHITFIELD, CNN CORRESPONDENT: Hello to you, Wolf. Hello, everyone.

Well, some good news for Southern California. The heavy rains that had forecasters predicting flash floods and massive mudslides fell in other areas of California instead. The relatively light rain that did arrive in the L.A. area did, however, make a mess on the roads -- 186 car crashes were reported this morning. Compare that to 19 crashes on a dry day a week ago.

And aimed at creating buzz for its AMP energy drink, Pepsi has created a controversial iPhone app called "Before You Score." It divides women into groups like nerd, rebound girl, or cougar, offers pickup lines for each group, and then suggests posting a brag list online. The company says it's only meant as entertainment.

And, finally, a new way to go for that big payoff. The two largest lotteries in the country, Mega Millions and Powerball, are teaming up. Retailers will now be able to sell tickets for both jackpots, making it easier to double your odds on a multimillion- dollar sure thing.

At least we all like to think it's a sure thing, right, Wolf?

BLITZER: Sure thing.


You -- you buy those lottery tickets?

WHITFIELD: No, I don't.

BLITZER: I don't either, yes.

WHITFIELD: But I'm not much of a gambler, anyway.


WHITFIELD: I'm kind of a cheapskate.



WHITFIELD: I don't like throwing money away.


BLITZER: Just like me.

All right, Fred, thank you.

WHITFIELD: All right.

BLITZER: We have heard the phrase before when someone is dying: If only he or she had more time. Just ahead: Scientists experiment now with a form of human hibernation to help patients try to cheat death. Our own Dr. Sanjay Gupta will join us.

And what California first lady Maria Shriver did to get her husband angry, her alleged law-breaking all caught by the camera.


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

Happening now: Kidnapped and held captive for 18 years, a magazine puts out a picture of what Jaycee Dugard looks like right now, as the world sees the difference between now and when she was abducted. We are going to show you how experts predict how kidnapped children might look as they grow older. Brian Todd will have that report.

And a congressman goes where virtually no one has gone before, on an uninhabited island. How did Congressman Jeff Flake of Arizona survive? I will ask him.

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

It sounds like science fiction, but sick people put into a state of suspend animation to try to help them cheat death, it's actually real science in development right now.

Here's our chief medical correspondent Dr. Sanjay Gupta.


DR. SANJAY GUPTA, CNN SENIOR MEDICAL CORRESPONDENT (voice-over): Mark Roth is a biologist in Seattle. He's at a Fred Hutchison Cancer Research Center. Here in this lab he developed the approach of cheating death through suspended animation.

(on camera): Is the premise that, if we can buy doctors or health care professionals a little bit more time...

MARK ROTH, CELL BIOLOGIST, FRED HUTCHINSON CANCER RESEARCH CENTER: The whole emergency medicine had -- you know, having it -- it takes -- it's a time-dependent thing. And somebody either has enough time or they don't.

GUPTA (voice-over): Enough time, but there's something else. For Roth, the fight against death is also personal. It's grounded in a family tragedy.

(on camera): What happened to your daughter?

ROTH: She passed away when she was 1 after spending a month in the ICU following heart surgery.

GUPTA: Do you think that that had an impact on your choice of scientific pursuits?

ROTH: Oh, it did, yes. Yes. I spent -- there are things that happened. You get -- it focuses the mind when certain things happen to people. And it certainly focused mine.


BLITZER: And joining us now, Dr. Sanjay Gupta.

Sanjay, this whole notion of suspended animation, what exactly does that mean?

GUPTA: Well, you know, the whole thing in medicine is about buying time, trying to steal back some time from death. So, you can buy minutes through CPR, blood flowing through the body. Hypothermia can buy you hours. But with suspended animation, you're essentially putting the body almost completely to sleep. You know, we as human beings carry the capacity to hibernate. We have the genes to do this. If we know exactly how to stimulate that hibernation, if we did, we'd probably eat Thanksgiving dinner then sleep until Easter. But suspended animation sort of corners in on this possibility that you put the body completely to sleep, it's not demanding anything.

BLITZER: Is hibernation the same as being in a coma?

GUPTA: Well, you know, kind of. If you were to look at somebody, they have essentially no heartbeat, hardly any spontaneous respirations. Their brain activity is almost nil, so it's very similar. With coma, we can do it through drugs. We can give people medications and put them in a coma, or a head injury, but we haven't been able to get the human body to just sort of do it spontaneously.

BLITZER: So, essentially, if someone is not breathing and there's no heartbeat, how do you get that person to come back to life?

GUPTA: That's the fascinating thing to me, and to be honest with you, I didn't know how this worked exactly either until I met Mark Roth. Here's the idea -- living species on this planet for most of their existence didn't require oxygen. There was no oxygen.

Oxygen is a relative newcomer to living species. So, what they do is they essentially strip the body of all of its oxygen. They block every oxygen receptor.

But then if you just do that, cells will die. So they also give a fuel for the cells. Block all the oxygen, it stops the body cold, and they just keep the cells alive with a little bit of fuel.

And essentially, what happens, if I were to do it to you, you would immediately turn gray, your heart would stop, your brain would stop, you would stop breathing, but you wouldn't be dead. You would be suspended. I would get you to where I needed you to be, if you had some sort of injury, start giving you oxygen back, and you would reanimate, and doctors or nurses or whoever was taking care of you could go to work. That's essentially the premise of what happens here.

BLITZER: And you talk and write about these amazing stories in your new book, "Cheating Death."

Put your scientific hat on for a moment. Let's look ahead 10 years, 15, 20 years from now, because the technology, the science is amazing, what's going on. You give us some great examples here.

GUPTA: Right.

BLITZER: But what could we expect in this area down the road?

GUPTA: Well, you know, and it's worth pointing out, I don't think I could have written this book 10 years ago. I mean, that's how fast things are moving, even though I've been thinking about these concepts for some time. I think we're really going to be able to define what death is and be able to control it almost at our will. Now, it's not to say that people should live forever. I make a point of, you know, it's not about eternal life, but it's about choosing to die on our own terms, when to die, exactly how we will die.

Medicine is going to get to that point. We're not talking about billion-dollar drugs here or fancy procedures or techniques. We're talking about basically a philosophical change in the way that we look at death and simply stealing time slowly but surely.

BLITZER: But sometimes people come out of this near-death experience very healthy. They go on to get Ph.D.s and become brilliant scholars and live a happy life. But other times they come out almost vegetable-like. Is that right?

GUPTA: That can happen. And, you know, you don't want to provide false hope or in any way malign or indict the system as it stands now.

All I'm saying is that I think it's very arbitrary how we define when to give up, when to stop trying. And another more close example is if you go to nursing homes, for example, about a third of patients who are diagnosed as being in a persistent vegetative state, a third of the time they are wrong. Those patients do come back. It's not that, you know, somebody is doing this maliciously, but how do we better define who is likely to recover and who is not?

BLITZER: And what do we know? What do people remember about these near-death experiences, if anything?

GUPTA: Well, they remember a lot, and they are often life- changing experiences. I mean, oftentimes, they see this tunnel which might be because they are not getting another blood to the retina, but they would say it's more than that. They see bright lights.

Oftentimes, they will have meetings with deceased relatives. They may have an out-of-body experience.

Culturally, it's very different in the United States, for example, than in a place like Eastern Africa. Here we see relatives that we missed and loved. In Eastern Africa, they often reflect on life of things that they wished they had done, so things they were more wistful about. So, there is a cultural aspect to it.

But I'll tell you, I'm a bit skeptical sometimes when it comes to this intersection of science and spirituality, but I think nowhere else in our society does it exist as closely as during one of these near-death experiences. It changes people's lives.

BLITZER: And people always say the same thing, it's a very peaceful, calming situation, and they see a light and they remember it.

GUPTA: Yes. You know, you'd think it would be one of the most panic-stricken times of your life; right? You'd have anxiety just dripping off of you.

You're about to die. But instead, you're right, Wolf, person after person we interviewed said, all of a sudden, they became calm, they became relaxed, and they almost were just accepting whatever was about to happen to them. It may be a reflex of the body, sort of a protective one.

BLITZER: It could be a scientific explanation for this.

GUPTA: Could be. Could be.

BLITZER: The book is entitled "Cheating Death: The Doctors and Medical Miracles that are Saving Lives Against All Odds."

Sanjay Gupta, our chief medical correspondent, is the author.

Sanjay, this is a terrific read.

GUPTA: Thanks, Wolf. I appreciate it Glad you enjoyed it.

BLITZER: Oh, I loved it.

And stay with CNN for Dr. Gupta's special, "Cheating Death." He's going to show us all kinds of medical miracles and how they're extending people's lives. It airs Saturday and Sunday nights at 8:00 p.m. Eastern, only here on CNN.

California's first lady, Maria Shriver, was caught breaking a law her husband passed by talking on her cell phone while driving. Now the governor, Arnold Schwarzenegger, is speaking out about it online.

Let's go to our Internet reporter, Abbi Tatton.

Abbi, what exactly happened here?

ABBI TATTON, CNN INTERNET REPORTER: Wolf, yesterday, the Web site TMZ published not one, not two, but three different images of Maria Shriver with the steering wheel in one hand and a cell phone in another.

Take a look at the video that they posted last night. Here, a cameraman from TMZ capturing her driving yesterday. But there were other images, one from Sunday and one from over the summer.

They're going to slow this down for you so you can see her. There she is, zooming in on her right there.

Now, Arnold Schwarzenegger signed a law last year banning the use of cell phones while driving, and he seemed pretty pleased that this was brought to his attention, thanking TMZ on his Twitter and saying, "There's going to be swift action." The office of the governor said that that swift action took the form of a phone call to his wife saying, "Please stop doing this."

Now, if Maria Shriver had been caught by a policeman and not by the paparazzi, she would have faced a $20 fine for the first infraction, $50 thereafter. As she's clearly being watched right now, we hope that the next picture we see of her is with a Bluetooth in her ear -- Wolf.

BLITZER: Because you can talk on a cell phone, but hands-free.

TATTON: A hands-free device. That's what you need. But you can't be holding it and driving it in the state of California.

BLITZER: Yes. That's a good point.

All right. Thanks very much, Abbi, for that.

When President Obama travels to New Orleans tomorrow, he's likely to get a mixed reaction from some Hurricane Katrina survivors. Are they frustrated with the president?

We're going to New Orleans. That's coming up.

Also, should a nurse be forced to get a swine flu shot or lose her job? The legal battle and tough questions about protecting the health of patients.

And it was a lot like being on "Survivor," but there was no one to throw him off the island. Republican Congressman Jeff Flake of Arizona, he joins us to talk about his dream vacation.


BLITZER: Tomorrow, President Obama will do something he hasn't yet done as president -- visit New Orleans, still recovering after Hurricane Katrina.

Right now, many people are eager for the president's visit, no doubt about that, but others are critical.

CNN's Sean Callebs is in New Orleans for us watching this story.

What's going on in New Orleans, Sean?


We're in front of the MLK Elementary here in the Lower Ninth Ward. I can tell you, it's been quite busy inside today -- teachers, students, even parents sprucing up that school, getting ready for the president's visit tomorrow.

He'll be greeted by a very friendly audience here, but, you know, if President Obama would get out and talk to people in this city, he'd find a lot of dissatisfaction with his administration up until now in terms of focusing attention on the Gulf.


CALLEBS (voice-over): Martin Luther King Elementary in the Lower Ninth Ward of New Orleans, one of the first schools to reopen following Katrina, will be President Obama's first stop in the city. RODNEY GREEN, MLK CHARTER SCHOOL: I would tell him that, "Will you get New Orleans recovered as soon as possible?" Because a lot of people I know have lost their homes and they are not back yet.

CALLEBS: Any excitement about the president's first visit here is tempered with deep-rooted frustration.

More than a year ago, candidate Obama told residents what they wanted to hear, but it's time to speed up the recovery.

BARACK OBAMA, THEN-PRESIDENTIAL CANDIDATE: When the people of New Orleans and the Gulf Coast extended their hands for help, help was not there.

CALLEBS: The administration maintains it's trying to remove red tape to get people back in their homes and spark the economy. Its stimulus package, for example, did pour about $3.8 billion into Louisiana. But ask the head of the state's Republican Party, who also happens to run a major florist business here, about Obama's first nine months in office, and he will not offer glowing reviews. Roger Villere says people are not spending on luxury items like flowers.

(on camera): So, clearly, this is the type of business that would have benefited from the stimulus. Is it working?

ROGER VILLERE, CHAIR, LOUISIANA REPUBLICAN PARTY: It's not. The stimulus is not working.

CALLEBS (voice-over): Volare says for all he calls the hype on hope and change, this state has chiefly seen disappointment.

VILLERE: He hasn't delivered. He's talked about it, but he hasn't done it. So, until he delivers, then all he can say is just all talk.

CALLEBS: Much of the city looks like this: pockets of recovery surrounded by devastation.

Democratic State Representative Juan LaFontas is sure everyone here wants New Orleans to recover fast, but that people need to understand President Obama is dealing with pressing global issues.

JUAN LAFONTA (D), LOUISIANA STATE HOUSE: If he takes back this message to Congress, and the U.S. Senate says, hey, look, the Recovery Act was a great start for us, but we really need to rebuild the city, and we need to because it's not only an important American city, but it's an important international city...

CALLEBS: And now many here argue, it's our turn.


There's also a certain degree of disappointment that the president is only going to be in Orleans Parish. He's not going to visit St. Bernard Parish, Plaquemines or Jefferson Parish, and areas, Wolf, hit very hard by Katrina. And let's remember, Obama did not carry this state. And people point out he carried only about a 14 percent vote total of the white vote here in Louisiana.

So, he still has a long way to go to get a lot of support here in this region -- Wolf.

BLITZER: Well, basically this is a day trip. He's only going to be there a few hours. Is that right?

CALLEBS: Exactly. He's going to be here at the elementary school, then he's going to be at the University of New Orleans. He's going to hold a town hall there, bring a number of his cabinet members, including HUD secretary, homeland security. He's going to answer a lot of questions, but it's going to be a very short visit. People say it's not enough and it should have been here a lot sooner.

BLITZER: Sean Callebs will of course have extensive coverage throughout the day tomorrow here on CNN.

Thank you.

Senator Olympia Snowe, the only Republican in the Senate to vote for health care reform.


SEN. OLYMPIA SNOWE (R), MAINE: Was this bill all that I would want? Far from it. Is it all that it can be? No. But when history calls, history calls.


BLITZER: Senator Snowe is standing by live here in THE SITUATION ROOM. We'll ask her what she needs in order to continue voting for health care reform.

And a nurse says no way to the H1N1 vaccine. The state says get the shot or get fired.


BLITZER: Senator Olympia Snowe probably wouldn't win any popularity contests here in Washington right now within her own party. She went out on a limb yesterday as the only Republican to vote for a health care reform bill that emerged from the Senate Finance Committee. She says she saw something bigger than herself.


SNOWE: Was this bill all that I would want? Far from it. Is it all that it can be? No. But when history calls, history calls.


BLITZER: And Olympia Snowe is joining us now from Capitol Hill.

Senator Snowe, thanks very much for coming in.

SNOWE: Thank you, Wolf.

BLITZER: When you said "When history calls, history calls," explain. What did you mean?

SNOWE: Because these are historic times. It's an historic endeavor in reordering $2.4 trillion in health care expenditures that we provide on an annual basis, and that it's important that we grapple with an issue that's only going to get worse over time.

We know that rising health care costs and the trends that have been predicted, that this really will put our health care system in jeopardy, employer-provided coverage in jeopardy, family coverage in jeopardy. So, if we don't begin to address this issue now, it will grow exponentially worse. So, this is an historic time in which to confront this monumental issue.

BLITZER: But you realize you're not going to get everything want, just as the president is not going to get everything he wants. If this is an historic moment, you're going to have to accept 80 percent or 90 percent of what you want. Is that right?

SNOWE: Well, I think that's true for each and every one of us, both in Congress, as well as the president. He certainly understands that, and I do as well.

We're going to have to reconcile those differences. And, of course, here in the Senate, is to achieve more than 60 votes. I hope we can get broader support than just 60, frankly.

In the past, when we've passed landmark legislation such as Social Security and Medicare, the Civil Rights Act, we got some broad bipartisan support. I would hope that would be the case in this instance as well.

If we take the time, you know, Wolf, to sort through these issues and to figure out what can work, what can't work, it might be helpful to building a broader foundation for the support of this legislation that ultimately I think would create more confidence among the American people that we're, you know, going to get this right.

BLITZER: Is the so-called public option, a government-run health insurance company, in effect, to compete with the private insurance companies, is that a deal-breaker for you?

SNOWE: It's not something that I could support. I have been opposed to a public option.

I think it creates a disproportionate advantage for the government sector. I think it certainly could carve out the private sector. It could be more costly, more bureaucratic. I think we need to do everything we can to enhance innovation.

I could see a fallback mechanism as similar and comparable to what we did in the Part D prescription drug program that was never used, but it was there in the event we could not provide competitive choices to people in any part of the country. And the same would be true in this instance, although we would define affordability and make sure that there were affordable choices available to people in all parts of the country so no one falls through the cracks, and that would happen simultaneously. It wouldn't be that there would be a hiatus or a break in time.

It would happen concurrently. We would measure affordability by examining the bids offered by insurance companies.

BLITZER: Are you with Senator Schumer, Harry Reid, the majority leader, Patrick Leahy, the chairman of the Judiciary Committee? They are now saying, you know what? They need to go after the health insurance companies by removing the protection, the antitrust protection that they have had since 1945.

SNOWE: Well, I think that there are other ways of addressing the issues that are concerned with the insurance industry. I'm not so sure that I would go that far, but certainly there are many things to argue about with respect to the insurance industry.

Most notably, this week, when they issued a report with inaccurate data, not including many of the tax credits and subsidies that were based in -- that were included in the legislation upon which they would base their report, so they skewed the information concerning the legislation. That's disconcerting and troubling given the fact they certainly stand to benefit with half a trillion dollars' worth of tax credits and subsidies to buy their insurance products.

BLITZER: Do you believe other Republicans, your colleague from Maine, Susan Collins, George Voinovich, Republican of Ohio, other Republicans, when the dust settles, when the final piece of legislation comes forward, might join you in supporting it?

SNOWE: Well, you know, I think each and every member of the Senate will look at the Finance Committee provisions and develop a comfort level, determine what he or she can support, not support. I would suspect we're going to have hundreds of amendments offered on the floor of the Senate. Hopefully, that would improve the legislation.

I certainly will be working with my colleagues, Democratic centrists, my Republican colleagues, to do whatever we can to improve the legislation and modify it so that we can engender the broad support that it truly deserves to address this issue at this moment in time. If we don't address it now, Wolf, frankly we're deferring it for generations, frankly, because we've seen in the last century, we could not attempt to reconcile the differences over 100 years.

And if we do it -- if we postpone this issue now, it's going to adversely affect millions of Americans who are going to find that health insurance is going to become more unaffordable and more out of reach, as it already is. It will just be infinitely worse.

BLITZER: When history calls, as you say, history calls.

SNOWE: Yes, that's right. BLITZER: Senator Snowe, congratulations, also. "GQ" magazine says you're one of the 50 most powerful people in Washington. You must have been happy. Or surprised to hear that?

SNOWE: Yes, surprised.

BLITZER: Surprised, good word.

SNOWE: Thank you.

BLITZER: Thanks very much.

SNOWE: Thank you. Thank you.

BLITZER: Colombian drug cartels at war. Karl Penhaul has gone deep inside the battling gangs. You're going to be amazed by his exclusive report.

And surviving for seven days on an island with no hotels, no stores, no other people at all. Republican Congressman Jeff Flake of Arizona brings us the story of a childhood dream come true.


BLITZER: Check out the fiesta at the White House last night. The Obamas celebrating Hispanic Heritage Month with some of the most famous Latino names in show business.

Great music, great dancing.

Marc Anthony was among the headliners, along with his wife, Jennifer Lopez. The event was hosted by entertainers George Lopez, Eva Longoria Parker. You saw her here in THE SITUATION ROOM yesterday. And Jimmy Smits. They had a lot of fun at the White House.

Wish I would have been there.

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

Let's go to Jack right now for "The Cafferty File."

They have too much fun over there, Jack.

CAFFERTY: Yes, it looked like a nice evening, didn't it?

The question this hour is: How confident are you that there will be meaningful health care reform before the end of the year? Remember, they adjourn December the 10th.

Katja, Bradenton, Florida, "Hi Jack. No, nothing. Nothing's going to happen. What we're going to get is the same old thing we always get -- nothing."

"Insurance companies will continue as they are. The uninsured will remain that way. And those wonderful politicians with their designer suits and dresses, really good insurance and really large egos, they will continue to get paid for doing nothing."

Sylvia in California, "There will be reform. Whether it will be meaningful is yet to be seen. Whenever the government sticks its nose into anything, the word 'meaningful' usually does not come into play."

Jerry in Florida writes, "I'll bet you anything there won't be a health reform bill this year, and if there is, it won't be worth the paper it's written on. Unless there's a public health option, there is no bill worth a damn. It will just be another way for the insurance companies to raise rates at the expense of the policyholders. The American people lose again."

Peter writes, "I'm very confident. Speaker Nancy Pelosi is right on and she and Nobel Laureate President Obama will do it."

Figueroa writes, "I find it difficult to find the words, Jack. I drank gallons of the hope-laced Kool-Aid last year. We did our part. We elected huge majorities of these so-called Democrats that now refuse to tow one of the most fundamental and important Democratic Party lines."

"What else can we do? We completely set them up for a long- awaited success for the American people. They are pissing it away. And I, for one, am pissed off."

Pete rights from Augusta, Georgia, home of the Masters, "About as confident as I am about the Chicago Cubs winning the World Series. Wait until next year."

If you didn't see your e-mail here, go to my blog,

Had a woman in the supermarket today come up to me and say, "People who use Twitter are not twits."


BLITZER: They are not. But we're on Twitter, Jack. And I'm happy about that.

CAFFERTY: I know you are.

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