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Stock Market Rises; GOP Party of Angry White Guys?

Aired October 14, 2009 - 18:00   ET

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


WOLF BLITZER, CNN ANCHOR: All right, Abbi, thanks very much.

And, to our viewers, you're in THE SITUATION ROOM.

Happening now: the best political team on television on these stories, 10,000 new reasons for the president to say the economy is in fact getting better -- this hour, a progress report on the economic stimulus package and its so-called dark side.

Also, is the GOP the party of angry white guys? Republican Congressman Ron Paul of Texas joins us to respond to criticism from a fellow Republican, Senator Lindsey Graham.

And if President Obama orders more troops to Afghanistan, will it be time for Joe Biden to go? A rather provocative proposal for the vice president to step down.

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

A potentially dramatic blow. Democrats are swinging back at what one senator's office calls a sucker punch by health insurance companies -- at issue, top Democrats want to take back a law they say has long allowed insurance company monopolies and allows them to reap huge profits at your expense.

Senator Schumer is specifically talking about a law that exempts health insurance companies from national antitrust laws.

Let's bring in our national political correspondent, Jessica Yellin. She's walking into THE SITUATION ROOM right now to give us some more background on what's going on, because, potentially, Jessica, this could be significant.

JESSICA YELLIN, CNN CONGRESSIONAL CORRESPONDENT: Could be huge, Wolf. The gloves really are off. It is reform advocates vs. the health insurance industry.

And two big developments happened today. First, this afternoon, the insurance industry dropped a second bomb in a week. It is a new study out from Blue Cross/Blue Shield arguing that different health care bills working their way through Congress would actually raise premiums.

Well, that means more cost to you and me. And it's a big deal because it's the second such study in a week. Democratic leaders in Congress are angry. They say the health insurance industry is trying to derail reform.

Today, a second real power move. Majority Leader Harry Reid says it's time to overturn a law that gives special protections to the insurance industry and lets them make huge money. He testified before the Senate Judiciary Committee for the repeal of something called the McCarran-Ferguson Act. It protects the insurance industry from antitrust rules.

And Reid's office says the law lets insurance companies huddle in a room and comes up with rates. They say, other than Major League Baseball, the industry is the only one with this exemption and it's driving up costs and needs to end -- Wolf.

BLITZER: So, it's going to be a big fight. They have got the chairman of the Judiciary Committee, Patrick Leahy. He wants to remove this law that protects the health insurance companies, Senator Schumer of New York. And the Senate majority leader, Harry Reid, says he wants to get rid of it as well.

YELLIN: They are all on board, all those leaders you talked about. And the insurance industry, though, is not taking this lightly. In a statement, they say that -- quote -- "Health insurance is one of the most regulated industries in America at both the federal and state level."

They say "McCarran-Ferguson" -- that's this law -- "has nothing to do with competition in the health insurance market."

Here's the key sentence. They say, "The focus on this issue is a political ploy designed to distract attention away from the real issue of rising health care costs" -- Wolf.

BLITZER: Let's talk about the timing of all of this right now. It comes at a rather sensitive moment.

YELLIN: It really does.

But obviously members do say this was a pre-scheduled hearing. Senator Reid was scheduled to testify, but Democrats as we say are furious with the health insurance industry right now. Many feel that after participating in talks for several months, now that it's really starting to count, they left the table.

BLITZER: What are the chances that it will pass when the dust settles?

YELLIN: Well, interesting because we spoke to a number of people who follow this issue closely. They say it could pass. This time the bill has been written to apply only to the health insurance industry. Democrats are talking about attaching to it the larger health reform bill.

So, if people vote yes for health reform overall, this could be attached and it would pass. The health insurance industry will fight it vigorously, so it is a huge battle ahead.

BLITZER: It's a declaration of war I should say between these Democrats and the health insurance lobby right here in Washington.

YELLIN: Big fight.

BLITZER: We will see how it unfolds.

Jessica, thanks very much for that.

Here's something you haven't seen in more than a year, the Dow Jones industrials closing today above 10000, the rebound in stock prices fueling hopes that the economy is in fact on the upswing right now.

Indeed, President Obama tried to reinforce that message today. He toured a construction site in Virginia and he rejected Republican criticism that his economic stimulus package has been a failure.

(BEGIN VIDEO CLIP)

BARACK OBAMA, PRESIDENT OF THE UNITED STATES: As difficult as these times are, and they're profoundly difficult for a whole lot of people all across the country, we are moving in the right direction. Our economy is in better shape today than it was when I took office.

(END VIDEO CLIP)

BLITZER: All right, let's bring in CNN's Kate Bolduan. She's digging deeper on the impact of this economic stimulus package.

One person you found calls -- calls -- says there's a dark side, and I'm quoting now, a dark side to this stimulus package. What is it?

KATE BOLDUAN, CNN CORRESPONDENT: Especially when you're looking in Virginia, Wolf, that's right.

Well, as national unemployment is creeping toward 10 percent, President Obama as you mentioned is trying to show the stimulus package is working, is creating jobs. And today he stopped in Virginia.

(BEGIN VIDEOTAPE)

BOLDUAN (voice-over): President Obama used this planned highway project in Virginia to tout stimulus success.

OBAMA: If we get the economy moving in Fairfax County, we get it moving across Virginia, and if we get it moving across Virginia, we're getting it moving all across America.

The Fairfax County Parkway Extension is the same project Mr. Obama visited in February to lobby for the $787 billion package. So how is the $60 million project going? The White House calls it the largest stimulus of its kind in Virginia. Now eight months in, design on part of the project is under way, but construction won't begin until early next year.

MICHAEL FREY (R), FAIRFAX COUNTY SUPERVISOR: You only stimulate the economy if you put people to work right away.

BOLDUAN: County Supervisor Republican Michael Frey says Virginia is dragging its feet getting transportation money out the door. And he's not alone.

This month, the Congressional Transportation Committee ranked Virginia the slowest state to put highway stimulus money to use. The report found construction under way totaling just 16.5 percent of the state's highway stimulus cash. That compared to nearly 43 percent nationally.

The Democratic chairman, James Oberstar, even wrote a letter to Virginia's Governor Tim Kaine, saying -- quote -- "I strongly urge you to refocus your efforts to implement the Recovery Act and use the available jobs to create and sustain family wage jobs."

FREY: When you tell people that you're going to put people to work immediate and eight months into it you have only spent 17 percent of the money, that creates cynicism.

(END VIDEOTAPE)

BOLDUAN: So how many jobs will this project create? I spoke with the construction company that won the bid for part of this Fairfax extension project. A spokesperson saying that until construction starts next year, they cant estimate.

But I should add, Wolf, that everyone, the people we spoke to on both sides of the aisle today, did agree that Virginia needs the jobs and new highways and roads. But it's just how quickly or not the stimulus money is getting out the door.

BLITZER: Yes, they would like it to get out there really, really quickly...

BOLDUAN: A little faster.

BLITZER: ... to further stimulate the economy. Lots of work to do, even though the Dow ended up above 10000 for the first time in more than a year.

All right, thanks very much for that, Kate.

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

JACK CAFFERTY, CNN ANCHOR: No surprise here, Wolf. Americans are mad as held. The surprise is they have both big business and the government in their crosshairs.

"The Wall Street Journal" reports historically the public anger is usually focused on one institution or the other, but not this time. This time, it's both.

On the one hand, people are frustrated with the -- the Wall Street failures that led to the financial wreckage. They're outraged at ongoing situations like bonus payouts at AIG. Gee, I wonder why. But Americans also see too much involvement by Congress and the federal government, accusing the administration of socialism and a takeover of the economy.

What's interesting here is, some don't see government and business as opposing forces. Rather, they see a unified elite pursuing one big swindle, for example, the government using hundreds of billions of dollars in taxpayer money to bail out the banks and the automakers.

This anger at government and business makes it difficult for either Democrats and Republicans to connect with the voters. A founder of one tea party group says the greatest movement within the tea party is none of the above, a belief that lawmakers in both political parties are not cutting it and need to be removed.

You see, people really do get it. The question I keep coming back to is this. Why do we continue to reelect incumbents? We can impose our own term limits. Throw them out. Democrats says once their agenda is in place, it will prove that they can solve problems and people won't distrust the government as much, just like that report you just saw. Eight months later, they have spent 17 percent of the money they're supposed to spend to stimulate the economy on a road project in Virginia. Talk is cheap.

So far, the Democrats don't have a lot to show for their control of both the executive and legislative branches of government.

So here's the question. At this point, do you have more faith in government or big business -- or the fortune teller over the hardware store?

(LAUGHTER)

CAFFERTY: Go to CNN.com/caffertyfile and check out my blog.

BLITZER: Stock market is doing relatively well, but there's still millions of people looking for jobs, Jack.

CAFFERTY: Well, the stock market's doing well for an entirely different reason.

The stock market had its legs cut out from under it when the economy melted down last fall, and there's been about a 50 percent rally back off the lows. But these businesses have cut costs to the bone.

BLITZER: Yes.

CAFFERTY: So now when the quarterly profits come out, they're putting more money on to the bottom line. They're realizing more profits because their costs have come down so much. So, the market's rocking along, but it's kind of an artificial prosperity there.

Until jobs return, we're not going to see a permanent prosperity.

BLITZER: Yes, it's a good point. Jack, thanks very much.

Republican Party family feud. Republican Congressman Ron Paul is being criticized by Republican Senator Lindsey Graham. Why is Senator Graham saying -- and I'm quoting him now -- "We're not going to be the party of the angry white guys"?

Congressman Paul, he's here in THE SITUATION ROOM.

And Arianna Huffington with an eye-popping message for the vice president, Joe Biden. Wait until you hear what she is now urging him to do. Arianna is here in THE SITUATION ROOM.

(COMMERCIAL BREAK)

BLITZER: One Republican says this about some other Republicans -- and I'm quoting him now -- "We're not going to be the party of the angry white guys."

Why is Senator Lindsey Graham saying that?

Let's talk about that and more with our senior political analyst, Gloria Borger, Republican strategist Kevin Madden, our senior political correspondent, Candy Crowley, Arianna Huffington of TheHuffingtonPost.com, and Republican Congressman Ron Paul. He's here in THE SITUATION ROOM.

Congressman, thanks very much for joining us and the entire panel.

I'm going to play the little clip of Lindsey Graham. He was in South Carolina, Congressman Paul. He was heckled by some of your supporters. And this was the exchange. It's hard to hear, but we have got the words up on the screen as well.

(BEGIN VIDEO CLIP)

SEN. LINDSEY GRAHAM (R), SOUTH CAROLINA: I am not going to leave the Republican Party. I'm going to grow it.

UNIDENTIFIED MALE: Yes, right.

GRAHAM: We're not going to be a party of angry white guys.

UNIDENTIFIED MALE: Ron Paul will grow it.

(CROSSTALK)

UNIDENTIFIED MALE: Ron Paul.

UNIDENTIFIED MALE: Ron Paul will grow it.

UNIDENTIFIED MALE: Ron Paul.

GRAHAM: We're not going to be the Ron Paul party.

(END VIDEO CLIP) BLITZER: All right, you got the gist of that, Congressman. He says he doesn't want to be the party of the -- "We're not going on the Ron Paul party" was what he said at the very end.

I wonder if you want to react to your colleague, Lindsey Graham?

REP. RON PAUL (R), TEXAS: Well, my first reaction would be what does he have against the constitution and the supporters I have support me because I'm a traditional conservative and I defend the constitution. And I place every vote I can depending on the constitution.

Somebody should ask him what does he have against that and why does he vote for TARP funds and the bailout funds and -- and Kerry (ph) taxes and all the big government things?

Why -- why does he support Obama in expanding the war?

Why does he support The Patriot Act?

These are the things that constitutional conservatives don't support and we want to hold the Republicans to their -- what -- the things they think they believe in or say they believe in. They believe -- they claim they believe in limited government and that's what we're all about.

BLITZER: Congressman, I -- I want everyone on the panel to -- to weigh in, as well, and ask you a question.

But you don't want your supporters out there to be heckling a senator like Lindsey Graham in the midst of his presentation, do you?

PAUL: No. I think that goes against the grain. But for him to turn that in and say that -- that everybody who's upset with the government and upset with his type of voting record are angry white people or white men, that is -- that is preposterous. That's a -- that's a real insult.

But let me tell you, if anybody comes to our rallies -- and I continue to hold them -- we get thousands of people out and there's a lot of angry people there.

But I'll -- I'll tell you what, it's very diverse. And anybody who wants to challenge me on that should come to our rallies.

But to try to paint our group into that corner, it's just wrong. But you're right, I think decorum is very important and I try to protect against that and urge not to participate in it.

GLORIA BORGER, CNN SENIOR POLITICAL ANALYST: Congressman, it's Gloria Borger here.

Do you think you represent the Republican Party more than Lindsey Graham?

PAUL: Well, if you did a statistical vote today, probably not. But that isn't necessarily the right question. The right question is what should the Republican Party believe in?

Should the Republican Party follow through on their promises and their platforms...

BORGER: Or...

PAUL: ... of limited government and personal liberties, a strong national defense without perpetual war and without, you know, an unconstitutional Patriot Act. Just because you get a majority vote doesn't mean that you should give up on your rights and your constitution.

So I have no idea how it would come out. But I'll tell you what, I'll bet you the vote would come out a lot closer right now if you compared the supporters of Lindsey Graham to Ron Paul than it was two or three years ago, because in the Republican Party, they're angry and upset and they want changes. And there's quite a few.

And the one thing that nobody seems to pay attention to is that why should they run us off?

We're the ones who reach the college kids, the young people.

How many Republicans really reach the teenagers and the college kids?

Those are the people that are gathering at our rallies and, you know, they have to ask why.

What are they going to do with the -- with pandering to the old country club Republicans and acting like Democrats and bailing -- and bailout funds and TARP funds. And these kinds of things just won't -- won't hold up for the Republican Party. That's why the Republican Party has been losing.

CANDY CROWLEY, CNN SENIOR POLITICAL CORRESPONDENT: Congressman Paul...

PAUL: And we're suggesting that they -- that they live up to what they profess to believe in.

CROWLEY: Congressman Paul, it's Candy Crowley.

I think the larger issue here is, if you take the personalities out of it, that politics, as you know, is a lot about image. And here we are in a time when the economy is terrible and people are in real need. We are in two wars with American lives at stake. And that requires the federal government to take some action and spend some money.

Does it not look and has the Republican Party now -- yourself and others -- not become vulnerable to the imagery -- the imagery, at least, of the party of no -- no. No money for this no money for that, no money for that?

PAUL: No. CROWLEY: And how do you change that image?

PAUL: Well, we'd have to change your questioning. This idea that we're a party of no or we represent no, we represent free markets, sound money.

Take, for instance, our bill that we have pushed and I've introduced to audit the Fed to get to the bottom of this. This idea that you prefaced your question by saying the government -- the Congress has to do something. Well, it's because the government has been spending too much, borrowing too much, printing too much, interfering too much, regulating too much.

So maybe we -- the government ought to be doing a lot less.

But I have every single Republican in the House of Representatives supporting my bill. And there are 30 senators who also support this bill. And 125 Democrats in the House support this bill. I would say that is doing something -- getting to the heart of the matter...

BLITZER: All right...

PAUL: ... trillions of dollars by the Fed being spent...

ARIANNA HUFFINGTON, EDITOR IN CHIEF, HUFFINGTONPOST.COM: Congressman...

PAUL: ... and there's no auditing.

BLITZER: Arianna, hold your thought for a second.

Arianna is going to come into this conversation in a moment.

Congressman Paul, don't go away.

Kevin Madden is here, as well.

We'll continue our conversation.

We're just getting started with Congressman Ron Paul and the best political team on television.

We'll be right back.

(COMMERCIAL BREAK)

BLITZER: We're back with the best political team on television and Congressman Paul of Texas. Arianna Huffington is here, as well, from HuffingtonPost. com.

Arianna, I want you to get into this conversation with Congressman Paul. This is your chance to ask him a question. You've heard his point. And he makes some really passionate arguments.

HUFFINGTON: Yes. Congressman Paul, you mentioned the bill that you have co-sponsored with Congressman Alan Grayson, a liberal Democrat.

Also, in Afghanistan, you are basically in agreement with another liberal Democrat, Senator Russ Feingold.

So do you think that it's becoming obsolete to keep looking at American politics through this filter of right versus left when, on so many critical issues, there are many strange bedfellows these days?

PAUL: Oh, I think you're absolutely right. I try to avoid it all the time. I sometimes resent it when they call me a right-winger or somebody else goes and calls somebody else a left-winger.

I look at intervention or non-intervention as a general principle, whether it's overseas, in our personal lives or in the economy.

But the thing that should bring us together is our constitution. And -- and the constitution does. If you believe in the constitution and follow it, lo and behold, you believe in civil liberties. You don't want to run people's lives. You don't have the authority to police the world and run the world. And you don't have the authority to run the economy.

So, this, to me, is the rallying point. And if we have disagreements, then we change the constitution. But no, there -- I work in the Congress just like I demonstrated, you know, with my bill to audit the Fed -- progressives and liberals and socialists and libertarians and conservatives all say yes, we should have oversight. We should find out what they're doing.

And we can bring together -- freedom brings people together as long as we're not judgmental and tell people how to run their lives or what their religious values ought to be.

And we certainly don't need to be doing this around the world. And right now, I really am distributed by the support that the Republicans give to Obama's war in Afghanistan. He wants to expand it and people like Lindsey Graham are urging him on to do more and more. And we have no right to be there. We need to bring our troops home.

BLITZER: Congressman...

PAUL: We don't need that kind of...

BLITZER: Congressman, Kevin...

PAUL: ... of brush-up.

BLITZER: Kevin Madden is a Republican strategist. He's here and he'd like to weigh in, as well.

Go ahead, Kevin.

KEVIN MADDEN, REPUBLICAN STRATEGIST: Well, Congressman, as a party, we always flourish when we talk about what we're for and we talk about a more modernized agenda that we for the American public. Don't you think that we need to do more to talk about what unifies us as a party and not talk about our limitations and what we disagree on in the party?

PAUL: Well, do you think you should maybe pass that message on to -- over to Lindsey, who said something about it, because he hasn't exactly welcomed us in.

In some -- some places, they do. They invite us in. And I think you're absolutely right.

And -- and that's why I'm such a strong defender of individual liberty and the constitution, because it isn't a negative thing. It's very, very positive. And you find your answers, whether it's monetary policy or foreign policy or domestic policy.

And I just think that that is an absolute good piece of advice that we should do. We should try to bring people together, discuss the issue and show what we're for. And I am strongly for the principles I think the Republican Party have claimed they're for -- for freedom and individualism and free markets and sound money, no -- no special interests and Eisenhower said no military-industrial complex.

So I think these are things that I'm for -- strongly for...

BLITZER: All right...

PAUL: But the real principle that we have to be for is individual liberty.

BLITZER: Congressman, I know you've got to go. You've got other activities up on Capitol Hill. We're going to let you go.

But everyone else is staying, because we have a lot more to discuss, especially, Congressman, you'll be interested in this, the latest post on HuffingtonPost. com by Arianna. What she wrote about the vice president today is fascinating material. It's going to be a source of good discussion here.

But what has she written about?

She's written about the vice president. And she's suggesting, perhaps, this might be a good moment for him to think about resigning.

Why?

Why would the vice president, Joe Biden, want to resign?

The best political team on television and Arianna Huffington -- they're here to dissect this high drama idea.

And Republican Party Chairman Michael Steele is no stranger to criticism. This time, he's apparently doing something about it. An update on what some are calling a red hot mess online.

(COMMERCIAL BREAK)

BLITZER: We're just getting word here in THE SITUATION ROOM of a major new development involving Rush Limbaugh and his desire to become a part owner of the Saint Louis Rams.

Stand by. The information is just coming in. We will get to that shortly.

When it comes to the future of the war in Afghanistan, there clearly is a lot for President Obama and his war council to talk about, yet another high-level meeting today over at the White House as the president moves closer and closer to deciding whether to send in thousands of additional troops.

Let's go to our White House -- our senior White House correspondent, Ed Henry, who's getting some new information -- Ed, what are you learning today about the latest meeting at the White House Situation Room?

ED HENRY, CNN CONGRESSIONAL CORRESPONDENT: Well, Wolf, as you know, this was fifth meeting in THE SITUATION ROOM the White House has had in just the last few weeks. And what we're hearing is the president was really zeroing in in this meeting on resources finally. Most of the previous meetings were about strategy. This one was about the troop levels -- finally getting to will they follow through with what General Stanley McChrystal wants, which is at least 40,000 more troops going to Afghanistan.

I'm told by participants the president still has not made a final decision. But it certainly seems sounds like he's leaning toward sending more troops. It's just a question of how many -- Wolf.

BLITZER: But the president has, in fact, already made a decision?

HENRY: Well, it's interesting. You know, there was this BBC report today suggesting the president has made a decision and is going to send more than General McChrystal wants, he's going to send at least 45,000 more U.S. troops. It was hotly denied by Robert Gibbs. And, in fact, what we're being told now is another meeting has been added. They've already done five. They're going to add another one for next week so that the president can deliberate some more. And he's not going to make this final decision until probably the end of this month -- Wolf.

BLITZER: All right. Ed Henry, thanks very much for that.

These power players from the White House and Congress have one of the hardest jobs in Washington right now. They're trying to combine two very different health care reform bills that have come out of Senate committees. And that puts a centerpiece of the president's agenda squarely on their shoulders.

Our Congressional correspondent, Brianna Keilar, is up on Capitol Hill follow the negotiations -- Brianna, what's the latest? BRIANNA KEILAR, CNN CONGRESSIONAL CORRESPONDENT: Well, Wolf, Democrats are really trying to create a sense of momentum in the Senate following that historic vote yesterday in the Senate Finance Committee. Today, the chairman of that Committee, Max Baucus, said the train has left the station and Republicans are making it clear they want to slow it down.

(BEGIN VIDEOTAPE)

KEILAR: (voice-over): The conference room that health care champion Ted Kennedy used as a makeshift office during his final days on Capitol Hill -- a symbolic setting for a symbolic meeting -- the first time White House officials, top among them, President Obama's chief of staff, Rahm Emanuel, have sat down with key Senate Democrats to work out the most controversial provisions of health care reform.

These negotiators must combine two very different plans. The Senate Health Committee bill includes a so-called public option, the government run-insurance plan, as well as a requirement for employers to cover their employees. The more conservative Senate Finance Committee bill does neither. And if Democrats are to keep the support of a lone Republican, Olympia Snowe, they can't stray too far from that more conservative plan. Her support is conditional.

SEN. OLYMPIA SNOWE (R), MAINE: Well, it depends on -- on the type of changes that occur. If this bill becomes much bigger in different ways, more government, it's hard to measure.

KEILAR: Short on votes, Snowe's fellow Republicans are pressing to delay a final vote past the end of the year, when President Obama wants health care reform on his desk.

SEN. MITCH MCCONNELL (R-KY), MINORITY LEADER: We will not be intimidated, if you will, by sticking us up against some recess.

SEN. LAMAR ALEXANDER (R), TENNESSEE: We need a full amount of time, maybe a couple of months, to discuss this bill.

And why do we need it?

Because there are a lot of important questions.

KEILAR: Senate Majority Leader Harry Reid said Republicans are trying to kill health care reform.

SEN. HARRY REID (D-NV), MAJORITY LEADER: I believe that the Republican leader and all of his colleagues, with the exception of a couple there, one of whom is Senator Snowe -- and there are a couple of others -- want to do anything that they can do not to have a bill.

(END VIDEO TAPE)

KEILAR: Now, the soonest that we will see the Senate begin debating its bill will be that last week in October -- Wolf.

BLITZER: Arianna Huffington watching all of these negotiations. Thank you.

Arianna Huffington calls it a crowning moment for the vice president.

But what does she want Joe Biden to do?

Arianna is standing by. She's got a bombshell of a report -- of an essay she's just written. The best political team on television will join her.

(COMMERCIAL BREAK)

BLITZER: We're back with our senior political analyst, Gloria Borger; Republican strategist, Kevin Madden; our senior political correspondent, Candy Crowley; and Arianna Huffington of The Huffington Post, who has written a rather provocative essay today, Arianna. It involves the vice president of the United States.

Tell our viewers in the United States and around the world what you think.

HUFFINGTON: Well, Wolf, reading the cover story on Joe Biden in "Newsweek" this week, I was really moved by his clear opposition to the war and some of the methods he's using in the Situation Room in the White House to try and actually shape the president's decision.

So given that, I thought it would be really important if the vice president, instead of waiting until after the fact, to write the inevitable mea culpa memoir telling us how forceful he was behind-the- scenes in opposing the war and how sorry he was that he wasn't listened, that he can actually do the right thing right now. And if this president chooses to escalate, he should resign.

That would be such a powerful statement of principle. That would really make a fundamental difference, because, Wolf, there is nothing more important than a matter of war and peace like this -- a matter that affects our national security. And Joe Biden could provide the leadership that is really needed...

BORGER: Ari...

HUFFINGTON: ...if we're going to change course.

BORGER: Arianna, wouldn't you argue, though, that Joe Biden has had a tremendous amount of influence, he's changed the arc of the conversation and that he's more likely to influence the president of the United States being inside that room -- not only now, but in the -- in the future -- than he would if he just said oh, OK, fine, I'm just going to resign?

HUFFINGTON: Well, Gloria, I completely agree that he has influenced the arc of the conversation. He has had a big difference.

BORGER: Right. HUFFINGTON: But right now, the president is about to make up his mind. And I'm told by my own sources -- and I'm sure that you're being told by yours -- that the decision is going to be the president will split the difference. And he's not going to give General McChrystal the 40,000 troops that he's asked for, but he's not going to give him nothing.

And that is the moment for Vice President Biden to resign. That is the moment when he can have a real impact on the president's decision.

BORGER: How can you expect a vice president to resign every time the president doesn't take his advice totally?

It's better to have him in that room. You know, resigning would be just...

HUFFINGTON: I don't...

BORGER: ...empty.

HUFFINGTON: Gloria, I'm sorry to disagree with you, but I don't consider a matter of war and peace every time. I don't ask him to resign over the Recovery Act or the bailout or any number of things over which he may disagree with the president. But we've seen historically, over Vietnam, over Iraq, how many great leaders, including Colin Powell did not do the right thing at the moment when it could have made a difference.

This is another critical moment. This is a moment when, actually, many forces across the political spectrum are coming together to oppose escalation in Afghanistan, ranging from George Will and Rachel House, the head of the Council On Foreign Relations, and Chuck Hager. This is not a right versus left issue. This is the moment for real leadership. And there is nothing more novel than resigning over a matter of national security, which is at stake here. As Congressman Jim McGovern has said, we are becoming less safe because of Afghanistan.

BLITZER: All right...

HUFFINGTON: This country is becoming less safe because of what's happened.

BLITZER: Kevin Madden, Republican strategist, wants to weigh in.

KEVIN MADDEN, REPUBLICAN STRATEGIST: Arianna, with all due respect, don't you believe that you're kind of misreading the role of the vice president?

Joe Biden signed onto this administration, agreed to be President Obama's running mate, with the full knowledge that the president was going to make these decisions and with a -- a good two year evidentiary trail of what the president's plan would be for Afghanistan. The president himself said on -- on the campaign trail that we took our eye off the ball by going to Iraq and we need to put it back on Afghanistan.

So by keeping his word, why should a vice president, who signed onto that very word that he gave to the American people, resign?

HUFFINGTON: Everybody who is in the administration needs to be loyal to the president. No question about that. But there's a higher loyalty. And the higher loyalty is to the American people. And this is really this moment.

As for the facts about Afghanistan, we have so much new information, Kevin. We know, for example, as General Jones himself said, that there are now 100 Al Qaeda members in Afghanistan. They have moved to a different neighborhood. They've moved to Pakistan. And yet, as Vice President Biden effectively says in the "Newsweek" article, he elicits that information, we're spending $65 billion this year in Afghanistan and $2.5 billion in Pakistan. There's a huge disconnect between the reality on the ground and the illusions that are, at the moment, guiding our foreign policy in Afghanistan.

BLITZER: I want everybody to stand by for just a moment.

ANNOUNCER: This is CNN breaking news.

BLITZER: And the breaking news just coming into THE SITUATION ROOM involves Rush Limbaugh and his interest in becoming a part owner of the NFL's St. Louis Rams. Brian Todd is getting the story for us -- Brian, what are you just learning?

BRIAN TODD, CNN CORRESPONDENT: Wolf, we just got word that the ownership group that is bidding to buy the La -- the St. Louis Rams, excuse me -- has just dropped Rush Limbaugh from its list of potential partners. That group just releasing a statement from Dave Checketts, its chairman, saying, quote -- of Limbaugh -- "It has become clear that his involvement in our group has become a complication and a distraction to our intentions, endangering our bid to keep the team in St. Louis. As such, we have decided to move forward without him and hope it will eventually lead us to a successful conclusion."

Of course, this has kind of reached critical mass over the past couple of days, ahead of the NFL players union coming out very strongly against Mr. Limbaugh's effort to join that group or to be a part of that group bidding for the Rams. And, also, the NFL commissioner, Roger Goodell, coming out in the last couple of days, expressing his reservations, as well.

This, of course, all goes back to Rush Limbaugh's comments in years past about race, making a comment that watching an NFL game was a little bit like watching the Bloods and the Crips without the weapons. He also intimidated some years back on ESPN that Philadelphia Eagles quarterback Donovan McNabb was overrated and being overrated over hyped because he is African-American.

All of that coming back to bite Rush Limbaugh a little bit. He is dropped now as part of that ownership group bidding to buy the St. Louis Rams.

BLITZER: All right, Brian.

Thank you.

Kevin Madden, what do you think?

MADDEN: Well, I think this was a business story that, unfortunately, became a political story. And now it's going to go back to being a business. And the business part of it just goes to show you that, at the end of the day, business is about doing business. They had to move forward because of the distractions.

On the political side, I'm somewhat troubled that someone in America who would want to join in a business venture would be dissuaded from being -- discouraged from doing so because he has political adversaries out there that want to prevent him from doing so.

BLITZER: And how do you feel, Arianna?

HUFFINGTON: Well, I don't think it's a question of having political adversaries. It's more the fact that he's radioactive. And the truth is, that it's not just political adversaries -- people who disagree with him -- who object to Rush Limbaugh. It's anybody who wants a civil discourse in this country, even when we don't agree with each other.

BLITZER: We're going to leave it there. But I want -- I want Arianna, just to note, based on everything I've heard from the vice president's aides, he supports keeping the troops at the current level, around 68,000; wants there to be a counter-terrorism, as opposed to a counter-insurgency strategy. But to say that he opposes the war, I think, probably goes too far. But go ahead and correct me if you think I'm wrong.

HUFFINGTON: Well, he opposes the escalation of the war. That's what I'm writing about.

BLITZER: The escalation is correct.

HUFFINGTON: Yes. And that is...

BLITZER: But he doesn't oppose the war in Afghanistan.

HUFFINGTON: No. But -- but opposing the escalation of the war, which is what I'm writing about today, is really what this is all about. You know, if you oppose the escalation and you allow the war to escalate, where is the end?

At what point do you say no more?

At what point do you put principle above power?

That's really the question I'm raising.

BLITZER: All right. Well, it's an excellent point. I just wanted to clarify where the vice president stands. Arianna Huffington, thanks very much.

HUFFINGTON: Thank you.

BLITZER: Kevin Madden, thanks to you.

And Gloria and Candy, of course, you guys have no choice. You've got to be here. Thanks to you, as well.

The wife of the California governor, Arnold Schwarzenegger, caught talking and driving. Now late breaking developments on that front.

Guess what?

She's speaking out.

(COMMERCIAL BREAK)

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

WHITFIELD: Hello again, Wolf.

Hello, everybody.

Well, Russian Prime Minister Vladimir Putin says that talk of sanctions against Iran was, quote, unquote, "premature." It comes a day after Secretary of State Hillary Clinton was in Moscow pressing for a united front against the threat of an Iranian nuclear weapons program. Because of its close ties to Iran, Russia's cooper -- cooperation, rather -- is seen as essential in any effective use of sanctions.

And under a bill passed by the House today, regional airlines would be required to upgrade pilot training, qualifications and work schedules. The bill, which had overwhelming support from both parties, was sparked by testimony that pilot errors led to February's crash near Buffalo, where 50 people died -- Wolf.

BLITZER: A sad story.

Barbara, thanks very much for that update.

Is the GOP responding to criticism of its new Web site?

The launch of the revamped site yesterday was not a resounding success. And it now appears some changes have been made.

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

What are they -- are they listening to the critics -- Abbi?

ABBI TATTON, CNN INTERNET REPORTER: Wolf, those critics were pretty deafening, weren't they? It was called a head hot mess, downright embarrassing. And that was on conservative blogs. I'm not about to tell you that all that criticism has gone away. It certainly hasn't, if you look around Twitter or YouTube.

But the GOP seems to be responding to one aspect of criticism at least. Some of the biggest laughs yesterday online were at this section of the Web site, the blog by Chairman Michael Steele called What Up?

Roundly criticized as a blatant attempt to try and be cool that wasn't really working.

Well, we checked back this morning and it's changed. The blog remains the same, but the name is Change the Game by Michael Steele, which is exactly what the Republican Party is trying to do with this Web site.

We told you yesterday it was crashed and down for most of the day yesterday because there was so much traffic. If the GOP was trying to create buzz online with this site, they certainly managed it -- Wolf.

BLITZER: Abbi, thank you for that update. Abbi Tatton.

Let's check in with Lou Dobbs.

I'm tempted to say, Lou, what up?

LOU DOBBS, HOST, "LOU DOBBS TONIGHT": Well, OK. You go right ahead and I'm going to -- I'll have the same answer.

Wolf, thanks.

Divided over the war in Afghanistan, the top general wants now to escalate with a troop surge. The vice president wants a new focus on Al Qaeda. President Obama's new strategy is expected to be decided upon in a matter of weeks.

The one scenario not being considered is one we're going to consider here tonight -- a complete of our forces. And pressure from all sides on health care. Lawmakers and the White House going behind closed doors after the historic Senate vote -- Liberals pushing for the public option, that is, government health care -- to be put back in or no deal at all.

Also, concerns about the swine flu. Thirty-seven states have now reported outbreaks. Parents can't find the vaccine seemingly anywhere.

Doctors don't even know when or how much of the vaccine they'll receive.

What is our government doing to fix the situation?

What should you be doing to protect your family?

We'll have those answers.

And new calls to grant unconditional amnesty to illegal immigrants. We'll be talking with the man behind the newest proposal, Congressman Luis Gutierrez.

Join us for all of that and a lot more at the top of the hour -- Wolf, back to you.

BLITZER: All right, Lou.

Thank you.

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

CAFFERTY: The question at this hour is, at this point, do you have more faith in your government or in big business?

Brett writes from Hamilton, Ohio: "I have faith in the free market. Big business exists as a direct result of big government."

L.E. in Westminster, Ohio.: "They act like the same thing -- scratching each other's backs while the rest of us break ours. Neither has any trust left. AIG is a case in point."

Sierra in Dallas: "I trust government to do what's best for business. And I trust business to do what is what's best for their profit lines. I also trust that neither will do what's right or what's best for we, the people."

Bob in Stillwater, Oklahoma: "Government. After all, we are the government. We elect the people to represent us. True, they don't always do what we might like, but we do have the option of voting them out.

Jim writes: "They have both have huge failures. But government fails more often. I'll take my chances with business."

Terry in Florida: "Americans rose up and took out the British government and the high taxes in 1776. Americans need to do the same thing today."

Jim in Chicago: "I have total faith that big business will do what's in their best interests, not mine. With government, depending on who's in control, at least I figure I have some chance. Part of something is better than all of nothing.

Jack in Wisconsin: "Are they not the same?"

And Derrick in Cincinnati: "The little remaining faith I have is reserved for you and Wolf.

Don't blow it, please, because I probably won't be able to cope."

If you didn't see your e-mail here, you can go to my blog at CNN.com/caffertyfile -- Wolf.

BLITZER: We'll do our best here.

CAFFERTY: Yes, we will.

BLITZER: Thanks very much, Jack.

See you tomorrow.

You could call her a Moost Unusual suspect.

Jeanne Moos coming up.

(COMMERCIAL BREAK)

BLITZER: Late today, the wife of California's governor issued a statement saying she's sorry after getting caught using a cell phone while driving. Maria Shriver says she'll donate the phone to a domestic violence charity.

CNN's Jeanne Moos reports he's not alone with her bad habit.

(BEGIN VIDEOTAPE)

JEANNE MOOS, CNN CORRESPONDENT: (voice-over): When the governor of California's wife...

UNIDENTIFIED MALE: No more in the cell, Maria.

MOOS: ...got nabbed by TMZ on camera, many of us felt a twinge of guilt. Drop that phone.

(on camera): We're wondering what you think of Maria Shriver getting nabbed talking on the phone while driving.

UNIDENTIFIED MALE: Damn. Well, since I just I got caught myself, I guess it's kind of silly and it's not right.

UNIDENTIFIED MALE: You should always use a blue tooth. She's a nice lady. The governor's a good guy. But it's a shame that she's breaking his law.

MOOS: The one banning handheld cell phone use while driving that Governor Schwarzenegger signed into law. Back then, he threatened to follow his two daughters of age.

GOV. ARNOLD SCHWARZENEGGER (R), CALIFORNIA: I will find out if you raise your hand up there and hold a phone to your ear. And then the car will be gone.

MOOS: Instead, his wife is caught holding the phone. And since the governor has promised there's going to be swift action, will the threat to his daughters apply to his wife?

SCHWARZENEGGER: The car will be gone and the cell phone will be gone.

MESERVE: Hey, look who's talking. Arnold caused havoc talking on the phone while driving in "Twins."

(BEGIN VIDEO CLIP FROM "TWINS," COURTESY UNIVERSAL PICTURES)

UNIDENTIFIED MALE: Now, I want to you take your foot off the gas, apply it to the brake.

UNIDENTIFIED MALE: You've got it.

(END VIDEO CLIP)

MOOS: At least Maria stayed on four wheels. And hands-free technology has its own drawbacks.

(BEGIN VIDEO CLIP, COURTESY UCG/SKYLER STONE)

UNIDENTIFIED MALE: Yes, I'm on my new blue tooth, man.

UNIDENTIFIED MALE: It's liberating, dude. And you get so much done while you're just driving.

UNIDENTIFIED MALE: Who's up, Cubs or Cardinals?

Of course they are. Chicago sucks.

(END VIDEO CLIP)

MOOS: Maria Shriver's cell phone use was the talk of "The View," though online "The View," that had some LOL related to the size of her phone. Ginormus -- that's a monstrosity. It reminded us of old movies.

(BEGIN VIDEO CLIP FROM "WALL STREET," COURTESY TWENTIETH CENTURY FOX)

UNIDENTIFIED MALE: This is your wake up call.

UNIDENTIFIED MALE: Yes, we did. We won.

(END VIDEO CLIP)

(BEGIN VIDEO CLIP FROM "LATE NIGHT WITH JIMMY FALLON," COURTESY NBC)

JIMMY FALLON, HOST: Sorry, I've got to answer that.

(END VIDEO CLIP)

MOOS: At least the newer, little phones are easier to hide.

(on camera): And weren't you going to use your phone there just now?

UNIDENTIFIED MALE: Me?

MOOS: Yes.

(BEGIN VIDEO CLIP FROM JUPITER JACK COMMERCIAL)

UNIDENTIFIED FEMALE: Are you guilty of driving while talking on your cell phone?

(END VIDEO CLIP)

MOOS: Yes, I'm guilty. But do you have to take my picture?

UNIDENTIFIED MALE: I'm guilty.

MOOS: Did you see Maria Shriver got nabbed on the cell phone in her car?

UNIDENTIFIED MALE: Yes, but I'm just walking.

MOOS: Yes, yes. No you're OK.

(voice-over): But she's not.

MOOS: Jeanne Moos, CNN, New York.

(END VIDEO TAPE)

BLITZER: I'm Wolf Blitzer in THE SITUATION ROOM.

Up next, "LOU DOBBS TONIGHT" -- Lou.