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THE SITUATION ROOM

New Investigations Into Fort Hood Massacre; Health Care Reform Flash Points

Aired November 19, 2009 - 16:00   ET

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


WOLF BLITZER, CNN ANCHOR: Happening now: There are new investigations of the Fort Hood massacre, and they're on the fast track right now. Why were so many red flags about the alleged gunman missed? We're getting new information. This hour, the Pentagon and Congress are demanding answers and vowing to connect the dots.

Flash points in the Senate's newly revealed health care reform bill, the issues dividing Democrats right now, from abortion to attacks on cosmetic procedures.

And no one disputes she cut in line at a Wal-Mart, but should she spend up to 15 years in prison for doing that? A racially charged trial is now under way.

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

Right now, the alleged gunman in the Fort Hood massacre is becoming one of the most investigated men in the world. Congress and the Pentagon are launching separate probes of Major Nidal Malik Hasan and the shootings that left 13 dead. That's in addition to the criminal investigation that is under way as well.

There's a lot to take a closer look at, including Hasan's reported links to Muslim extremists and whether the rampage could have been prevented.

Brian Todd has been following all the threads of this -- these respective investigations.

You're getting some new information, Brian.

BRIAN TODD, CNN CORRESPONDENT: That's right, Wolf, more indications today that potential safety nets may have either broken down or may never have even been in place to prevent Nidal Hasan from allegedly murdering 13 people at Fort Hood.

At the first congressional hearings into these shootings, discussions were made today on what may have been the failure of law enforcement, military, and counter-terror officials to communicate with each other, even though it was discovered last year that Hasan had corresponded with a radical Muslim cleric.

Now, one of the experts called before the Senate Homeland Security Committee today, General John Keane. He was commanding general at Fort Bragg, North Carolina, during the trial of two white soldiers for the murder of a black couple there. Keane said, after that incident, the military took steps to flag racial extremism, but, to his knowledge, never came up with anything like that on radical religious behavior.

(BEGIN VIDEO CLIP)

GEN. JOHN KEANE (RET.), FORMER ARMY VICE CHIEF OF STAFF: It's unclear, in my mind, that we have in the military today and in our Army units clear, specific guidelines as to what is jihadist extremist behavior.

UNIDENTIFIED MALE: Right.

KEANE: How do you identify this behavior? How does it manifest itself?

(END VIDEO CLIP)

TODD: Now, that could be one piece of the puzzle that the Pentagon is going to be looking at now -- Defense Secretary Robert Gates now ordering a sweeping review of military policies, in the wake of the Fort Hood shootings. That review is going to look at security considerations, systemic failures and whether the Pentagon's policies fall short of identifying service members who could threaten others.

Now, Gates was asked specifically today what he would tell people on any military base who might be looking at someone else with suspicion.

(BEGIN VIDEO CLIP)

ROBERT GATES, U.S. SECRETARY OF DEFENSE: You know, I remember being on the outside of the government after 9/11 and the cautions that President Bush and others in the government exercised against identifying certain categories of people as -- as potentially suspicious.

And -- and the thrust of their remarks was that in a nation as diverse as the United States the last thing we need to do is start pointing fingers at each other, particularly when there's no basis in fact for it.

(END VIDEO CLIP)

TODD: Now, Gates says this probe is going to be led by former Army Secretary Togo West and retired Admiral Vernon Clark, who is a former Navy chief. But Gates very carefully avoided specific questions about the current investigation into those shootings -- Wolf.

BLITZER: He was asked, though, about those communications between Major Hasan and that radical Muslim cleric in Yemen.

TODD: He was asked about that. And the refrain was very similar to what Attorney General Eric Holder said yesterday. This is what Gates said. He was, quote, "disturbed." It was disturbing to him to hear that Hasan had been in contact with that cleric, but just like Holder yesterday, not going anywhere beyond that. He's been very cagey right now.

They want to just wait until this investigation plays out. And Gates, for one, has been very upset about the leaks to the media in this case.

BLITZER: Brian, thanks very much -- Brian Todd working this story for us.

And we're going to have a lot more on this story coming up later here in THE SITUATION ROOM.

Meanwhile, check out this gathering up on Capitol Hill. It's sort of a group hug for Senate Democrats. They're relieved that they finally unveiled their own health care reform bill, but there are plenty of flash points in the measure that could potentially blow up in their faces.

Our senior congressional correspondent, Dana Bash, has been reading all the fine print for us. And there's, what, about 2,000 pages of fine print, Dana, which is...

(LAUGHTER)

BLITZER: ... not a huge surprise.

But let's talk a little bit about some of the issues that divide the Democrats. They need all 60 of them, 58 Democrats, two independents, to -- to make sure that they're on board to get this through the process.

On taxes, first of all, there are differences.

DANA BASH, CNN SENIOR CONGRESSIONAL CORRESPONDENT: That's right.

Well, to start with, you said it, Wolf. The big first blockade, really, is going to be that 60 votes to start debate in the Senate, and then eventually passing this bill in the Senate. On the tax issue, the divide is between Senate Democrats and what's in their bill and the House Democrats.

Let's take a closer look. What the House passed was -- to pay for reform -- was a tax on the wealthiest Americans, individuals making more than $500,000. That was a nonstarter for many, many Senate Democrats. So, what is in their bill is a tax on high-cost so- called Cadillac plans.

Well, guess what? That's a nonstarter for many House Democrats and for the very powerful unions. The Teamsters just put out a statement today saying that they don't like it because they say -- and I have talked to a House Democrat who opposes this just a short while ago -- he agrees that this wouldn't be a tax on Cadillac plans. According to this congressman, it would tax people who really drive Chevys. It just hits the middle class too much. That's what many Democrats in the House say. It's going to be very interesting to see how those two issues collide.

BLITZER: If they can resolve that. There's also some differences when it comes -- we're talking about Democrats -- on the issue of immigration.

BASH: Absolutely.

What the House passed a few weeks ago was a ban on illegal immigrants getting any taxpayer money for health insurance. But the Senate bill, what we're seeing now, it goes further than that. What it would actually say is that illegal immigrants can't get any insurance, even with their own money.

And that is something that is likely to -- to get through the Senate. But, again, when you're talking about ultimately merging these bills and getting something to the president's desk, we already have members of the Congressional Hispanic Caucus saying that is just a step too far, calling it mean-spirited.

And they are going to do their best to try to put a stop to that, or block it from going to the president's desk.

BLITZER: Immigration obviously very, very sensitive, taxes very sensitive, but abortion is among the most sensitive of issues right now. And there are deep divisions among Democrats as well.

BASH: Absolutely.

You remember the House health care bill that passed, much to the chagrin of many House Democratic leaders, did have very strict restrictions on abortion coverage. Well, the Senate bill that Harry Reid presented last night, it's not as strict. It does say that no taxpayer money can go for abortions, but it lets the health and human services secretary decide whether or not the public option would be allowed to offer abortion, just to make sure that no taxpayer money would go for it.

And even private plans, Wolf, it would -- they would be allowed to offer abortion, as long as taxpayer money would be separated out to try to ensure that. Well, those were some proposals initially in the House. And anti-abortion Democrats, with the strong backing of the Catholic bishops, put the kibosh on that. They said it just wasn't strong enough.

So, we're waiting to hear more from House Democrats. Already, we heard from one of the leading anti-abortion Democrats in the House, Bart Stupak, who has said that he does not believe that the Senate bill goes far enough. We're told that the Catholic bishops are going to have a statement tomorrow. That is probably going to have the biggest impact on this debate.

BLITZER: And we will watch that closely.

Dana, finally, the first vote, as you say, it will be this Saturday. That will be a critical vote.

BASH: It will be a critical vote.

In fact, our Ted Barrett just spoke to the -- the man in charge of counting votes, the number-two Democrat, Dick Durbin, of Illinois. And he said that the expectation right now is that the vote could be at about 8:00 p.m., 8:00 p.m. on Saturday night. They continue to say they are cautiously optimistic in the Democratic leadership that they have all 60 senators who caucus with the Democrats who will approve at least starting debate.

But Harry Reid said today he's going to know when he sees that vote that he's 100 percent sure he's got the votes.

BLITZER: Yes.

BASH: If not, that would be a huge, huge delay and problem for Democrats.

BLITZER: Yes, because, if they get 59, that certainly is not enough.

So...

BASH: Not at all.

BLITZER: ... every vote counts. Dana, thanks very much.

The senators won't be partying Saturday night. Let's say -- let's see if they will be working.

Let's go to Jack Cafferty, who always loves to see the U.S. lawmakers working on Saturday nights, Jack.

JACK CAFFERTY, CNN ANCHOR: I -- I have a question. The House passed its version of this whatever it is on a Saturday night. And now the Senate thinks it's going to vote -- is that coincidence that they're doing all of our business on Saturday night? BLITZER: I think, in this particular case, Jack, they want to get out before Thanksgiving. So, they're trying to at least get the ball started.

CAFFERTY: Oh.

BLITZER: You know, next week is a -- is a Thanksgiving week. And many of them would like to go back to their districts and states and whatever.

CAFFERTY: Fine.

(LAUGHTER)

CAFFERTY: Good idea.

Most Americans think -- think the authorities could have prevented that massacre at Fort Hood, Texas. And when the politicians get a whiff of this kind of public sentiment, well, they just can't wait to rush into hearings.

A new CNN/Opinion Research Corporation poll shows 64 percent of those surveyed say law enforcement or the military should have been able to stop the shooting rampage. Thirty-one percent say the incident on the Texas Army Base could not have been prevented. The poll also found Americans split as to whether the act was an act of terrorism or not.

U.S. Army psychiatrist Nidal Malik Hasan is a Muslim. He is charged with 13 counts of premeditated murder. He is accused of wounding dozens more. The Senate Homeland Security Committee held its first hearing into those shootings today. They want to know if authorities failed to connect the dots when it came to Major Hasan.

National Public Radio reports, Hasan's supervisor at Walter Reed Army Hospital wrote a memo two years ago that said that he showed, Hasan, a pattern of poor judgment and a lack of professionalism. The committee also plans to look into why federal authorities didn't do anything after finding e-mails that were exchanged between Hasan and a radical Muslim cleric with alleged ties to al Qaeda.

And then there's the question of whether a joint terrorism task force that had information on Major Hasan shared that information with the military or others. Experts say they worry about political correctness and that some signs may have been ignored because Hasan is a Muslim.

President Obama wanted Congress to hold off on hearings at all until after federal authorities finished their investigation. But Congress has begun looking into this already.

Here's the question we have. Could authorities have prevented the Fort Hood massacre? Go to CNN.com/caffertyfile and post a comment on my blog.

It seems like there were a lot of signposts, Wolf, indicating that this guy potentially was trouble.

BLITZER: Yes, plenty, Jack. And that's what the investigations are going to be all about.

Thanks very much for that.

Afghanistan's president is kicking off his second term by making big promises to the Obama administration. Can he live up to ambitious goals of tightening security and ending corruption? Our chief international correspondent, Christiane Amanpour, is standing by.

And, a nightmare in Connecticut, it gets worse. First, officials took over private homes for public use. They forced people to sell their houses for development. But now, guess what? The property is just sitting there, sitting there. These people were forced out of their homes.

And critics say President Obama's Asia trip was more about style than substance. James Carville and Nancy Pfotenhauer, they are here to discuss the accomplishments, or perhaps lack thereof. That's coming up in our "Strategy Session."

(COMMERCIAL BREAK)

BLITZER: Hail to the Afghan chief.

Today Hamid Karzai, was inaugurated to a second term as president of Afghanistan. Amid all the pomp and pageantry, stark words about corruption and security -- President Karzai said he's determined for Afghan forces to control the country's security within five years.

The secretary of state, Hillary Clinton, attending the inauguration, says she's pleased by that. President Karzai also vowed to stamp out corruption.

Let's go to our chief international correspondent, Christiane Amanpour. She's working this story for us.

Five years, he says he hopes that the Afghan security forces will be able to get the job done. It suggests sort of an exit strategy there for the U.S. and the NATO allies.

Is that what he's talking about, Christiane?

CHRISTIANE AMANPOUR, CNN CHIEF INTERNATIONAL CORRESPONDENT: Well, clearly, Wolf, there's been so much pressure on him, ever since the disputed presidential election, and, frankly, even before.

This administration came in really with a great deal of criticism, public criticism, of President Karzai. And so here now, in the inauguration, he's said two things that they wanted to hear and that the American people want to hear. That is that he will tackle corruption and he's sort of mapping out a potential endgame strategy.

We spoke with the Afghan interior minister on the issue of corruption. And we had an exclusive interview with him. We also spoke to one of President Karzai's rivals during the election campaign.

(BEGIN VIDEO CLIP)

HANIF ATMAR, AFGHAN INTERIOR MINISTER: What we are trying to do now is to send a very, very strong message to every corrupt official that the age of impunity is gone. Everybody now is to be held accountable for the authority invested in them.

ASHRAF GHANI, FORMER AFGHAN FINANCE MINISTER: Two thousand individuals in positions that have turned the government into a looting machine need to be changed. People of integrity and judgment need to be appointed.

(END VIDEO CLIP)

AMANPOUR: So, Ashraf Ghani there making a big statement about the number of people who need to be changed, and saying that this is something that's really got to happen, if President Karzai doesn't want to be turned into an outcast, that, if he does tackle it, he could really rise and be -- go down in history as a real statesman.

It's the first time, we're told from the interior minister, that they're setting up this new corruption-tackling unit. But, of course, in the Interior Ministry, there's been a huge amount of corruption over the years. The police, according to Mr. Ghani, have really been, in his words, scandalous. There have been so many bribes that have been given out.

And -- and all of this is going to be a huge challenge to meet. But Ashraf Ghani says it can happen -- they just have to stop the cronyism -- and points out that, in the first couple of years after the U.S. defeated the Taliban and there was the first time President Karzai was in office, there was very good progress towards stamping out corruption.

BLITZER: It's a key issue, corruption going hand in hand with political security and everything else.

Christiane, thanks very much for that.

Christiane's going to be digging way deeper into the issue of Afghanistan, including, can that country actually be governed, and should the United States even trust the president, Hamid Karzai? That's on "AMANPOUR," which airs this Sunday, 2:00 p.m. Eastern, only here on CNN.

They're mad at ever, and they say they won't take it anymore. Students at one of the most prestigious universities in the country, you're going to find out why they are furious. There are furious protests and police officers with shotguns that are -- that are on -- on the stage there. Stand by. We will have details.

And it's the talk of the town. That's because one man purchased the entire town.

(COMMERCIAL BREAK)

BLITZER: Deborah Feyerick is monitoring some other important stories incoming to THE SITUATION ROOM right now.

Deb, what is going on?

DEBORAH FEYERICK, CNN CORRESPONDENT: Well, hey there, Wolf.

In Los Angeles, hundreds of UCLA students engaged in noisy protests and sit-ins protesting tuition hikes at the state university. Police stood by to prevent violence. And the California Board of Regents went ahead and approved a 32 percent increase in undergraduate tuition over the next two years. We will have a live report from Los Angeles in just a few moments.

Also, Governor Mark Sanford of South Carolina is apparently confessing again. Earlier, it was a love affair. Today, it's airplane flights he failed to record on ethics reports. A South Carolina ethics official says he has requested to amend his reports to the state ethics commission a day after the commission announced it would begin an investigation into the flights reportedly provided by friends and campaign donors.

The artist Jeanne-Claude has died from complications of a brain aneurysm. Jeanne-Claude, who like her husband and collaborator, Christo, used her only her first name, was 74 years old. The two, who always worked as a team, created temporary works of art for 51 years, the most recent the installation of more than 7,500 Vinyl gates in New York's Central Park.

Finally, the town where Lyndon Baines Johnson went to school, Albert, Texas, population four, was sold to Brandon Easley from Austin. Price, unknown. Where did the name Albert come from? Well, as it turns out, a young woman who ran post offices back in the 1870s named it after her fiance, Albert Luckenbach. Yes, she also picked the name of Luckenbach, Texas, another tiny town well-known to fans of country music.

And, of course, "Luckenbach Texas" was a hit song for Waylon Jennings and Willie Nelson -- Wolf.

BLITZER: I remember that song. Good song.

FEYERICK: Yes.

BLITZER: Thanks very much, Deb, for that.

If you're a fan of Botox or looking to get some cosmetic surgery, you might want to listen to this. The Senate's new health care reform bill could cost you. We're examining what's being called the "Botax."

And what are credit card companies hiding in the pages and pages of information that you can barely see or read? Jessica Yellin on a plan to get rid of what some consumers view as gobbledygook.

(BEGIN VIDEO CLIP)

JESSICA YELLIN, CNN CONGRESSIONAL CORRESPONDENT: Can you tell me what the...

UNIDENTIFIED FEMALE: That's too much to read. That's why I don't read it.

(LAUGHTER)

UNIDENTIFIED MALE: The contract is verbose.

UNIDENTIFIED FEMALE: I think it tries to make the consumer confused. It takes advantage.

UNIDENTIFIED MALE: There's too much gobbledygook.

(END VIDEO CLIP)

(COMMERCIAL BREAK)

BLITZER: To our viewers, you're in THE SITUATION ROOM. Happening now: A judge rules the Army Corps of Engineers was negligent -- negligent -- in maintaining the canal that failed during Hurricane Katrina, drowning thousands of homes. What does this mean for the hard-hit residents of New Orleans -- huge ramifications. Stand by.

Planes were grounded and passengers fuming as a computer glitch hit air traffic control today. Is the system simply out of date?

And religious broadcaster and former presidential candidate Pat Robertson made a very controversial comment about Islam. We are going to tell you what he said and explain the political fallout.

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

Looking good is big business here in the United States, and it's not just rich people who get plastic surgery or Botox injections. A provision in the new Senate health care reform bill would add a 5 percent tax on elective cosmetic procedures.

People are already calling it the "Botax."

Let's bring in our senior medical correspondent, Elizabeth Cohen. She's investigating this part of the health care reform bill for us.

It's already becoming controversial, isn't it, Elizabeth?

ELIZABETH COHEN, CNN MEDICAL CORRESPONDENT: That's right. It certainly is.

But, Wolf, you have got to pay for health care reform somehow. So, this is certainly a creative way to do it, 5 percent tax on cosmetic procedures and surgeries.

So, since breasts have been in the news so much this week, we decided to see how much money would the government make if they taxed breast augmentation procedures. Those are procedures to give women larger breasts. Take a look at this. A 5 percent tax on breast augmentations would yield a revenue of $1.5 billion over 10 years.

That's pretty good. That's a chunk of change. In total, taxing all procedures, even things like Botox, would come out to $5.8 billion. That's -- that's a -- that's a good bit of money there, Wolf.

BLITZER: Will they really raise this money? Is that what they're -- they're saying?

COHEN: Well, here's one of the concerns. You know, doctors and patients aren't stupid. So, if Mrs. Smith says, oh, doctor, I need larger breasts because psychologically I'm not happy with my body, and I'm having psychological problems and that's why I need larger breasts, then he could maybe try to tweak the system to say that this was medically necessary.

And so it will be interesting to see if patients and doctors try to do that, because that would be quite a loophole.

BLITZER: Yes. And I'm sure there will be others as well.

Elizabeth, thanks very much.

From your health to your wallet, we want you to read this. It's not an eye exam to test your eyesight, but it probably has often strained your eyes. Does something that can completely tie up your finances have to look so small?

Let's bring in our national political correspondent, Jessica Yellin, reading the fine print.

And it ain't pretty.

YELLIN: It ain't pretty and it ain't easy to read.

You know, we have heard endless horror stories about credit cardholders hit by unexpected rate hikes and penalty fees. Well, now I've met one man who says your credit card agreement can be made crystal clear. He just needs Congress' help to make it a reality.

(BEGIN VIDEOTAPE)

YELLIN (voice-over): Americans swipe their credit cards 58 million times a day. But how many cardholders actually understand what they've signed up for?

Some in Congress are trying to get rid of the fine print in contracts like this one...

(on camera): Can you tell me what the annual percentage rate is? What the interest is?

UNIDENTIFIED FEMALE: No.

UNIDENTIFIED MALE: I haven't a clue. It doesn't say. You'd have to give me about an hour. But at the end of the hour, I would say no.

YELLIN: Why?

UNIDENTIFIED MALE: There's too much gobbledygook.

YELLIN (voice-over): To test the point, we sat down to read one.

(on camera): And the person to whom we address billing statements...

(voice-over): So how long did it take? Stay tuned.

Alan Siegel says it doesn't have to be this way. His company specializes in contract simplification. They've done it for the Internal Revenue Service, major banks and insurance companies.

ALAN SIEGEL, SPECIALIZES IN CONTRACT SIMPLIFICATION: It's designed to be readable, and it's totally plain English. And we use personal pronouns instead of the party of the first part.

YELLIN: He says government regulators and credit card companies have both resisted simple contracts.

(on camera): Is it possible to have a credit card contract that anyone can understand?

SIEGEL: Absolutely.

YELLIN: How long does it have to be?

SIEGEL: I believe it can be on one side of one piece of paper.

YELLIN (voice-over): In fact, he's created a sample, one page. Here's the interest rate. Here are the penalty fees. His testing shows a tenth grader could understand it.

(on camera): Have you shown this to any credit card companies?

SIEGEL: Yes.

YELLIN: And what do they say?

SIEGEL: Panicked.

YELLIN (voice-over): Some in Congress think card companies have a stake in keeping their products and their contracts confusing, and have proposed a consumer protection agency that would work to make these agreements less complicated.

The American Bankers Association is fighting it.

NESSA FEDDIS, AMERICAN BANKERS ASSOCIATION: There are other ways to address it rather than having to create an expensive big bureaucracy.

YELLIN: Speaking for the credit card companies, she says government regulators are already working on streamlined new rules that will make credit card agreements clearer. But she insists credit card contracts can never be just one page. Blame the lawyers.

FEDDIS: Those contracts are based on lawsuits that have compelled them to use certain terms, certain words, and to include certain information in order to have an enforceable contract. It's the nature of law.

YELLIN: Back to the current complicated contract.

(on camera): "Authorization for us to collect the amount of the check electronically or..."

(voice-over): It took 10 minutes to read one page, an hour for the whole thing. No wonder so few of us know what we've agreed to.

(END VIDEOTAPE) YELLIN: Now, those drafting the proposed legislation say this new agency could make contracts simpler by requiring that they're written in plain English, by getting rid of some of those mandatory disclosure. But here's the controversial part. They could also push companies to offer simpler credit cards that have fewer tricks and traps.

Industry is fighting that. They say, Wolf, it'll stop choice and fight innovation.

BLITZER: Yes. It took you an hour to read that contract.

YELLIN: The whole thing. And I didn't know what I was reading.

BLITZER: Did you understand it?

YELLIN: No.

BLITZER: And you're a graduate of which university?

YELLIN: I don't want to say.

BLITZER: You're a graduate of Harvard University.

YELLIN: I went to Harvard. I could not make it out.

BLITZER: Yes. That's pretty amazing.

I've tried to read those contracts myself.

YELLIN: It's impossible.

BLITZER: I didn't go to Harvard, but I couldn't figure it out either.

Jessica Yellin, thanks very much.

So what's in your wallet? If you're like millions of Americans, probably credit cards putting you further in debt.

According to the Pew/Nielsen (ph) report, the average credit cardholder has about $2,900 in outstanding balance. How many credit cardholders are out there? It's been growing, growing pretty dramatically, from 159 million back in 2000 to a projected 181 million next year.

A lot of credit cards.

A Connecticut man's home used to sit on what's now a grassy field. The government took his property and hasn't done much with it. And that's re-igniting a huge legal fight and a national debate.

And President Obama returns to the United States from Asia. Does he have much to show from his trip?

James Carville and Nancy Pfotenhauer, they're standing by for our "Strategy Session."

And a crucial piece of evidence in the trial of a woman who cut in line at a Wal-Mart. Does it prove her allegations of racism, or could it help land her in jail?

(COMMERCIAL BREAK)

BLITZER: At this point, this open field is a field of dreams. In wide open spaces in one city, the hope was to build businesses that would eventually benefit the city. Instead, the main thing building is anger, huge anger right now from homeowners who were pushed out of their homes to clear the land for development.

CNN's Brooke Baldwin has been investigating.

Brooke, this is a really heart-wrenching story for a lot of folks there.

BROOKE BALDWIN, CNN CORRESPONDENT: I like that, field of dreams. Some would say dreams deferred. Let me tell you what happened here.

We went to New London, Connecticut, to dig a little deeper on this story, to check in with this community who has recently suffered what they're calling a one-two economic punch.

(BEGIN VIDEOTAPE)

UNIDENTIFIED MALE: Right now I would be standing right in the middle of the bedroom of the house.

BALDWIN (voice-over): What was once Franco Cristofaro's bedroom is now just a grassy field. His was one of at least 70 homes torn down by the city of New London, Connecticut, to make way for a massive building plan. It catapulted the city into a national debate on eminent domain, the statute that allows government to take private property for public use.

FRANCO CRISTOFARO, LOST HOME IN PLAN FOR BIG BUSINESS: Disruption of multiple families, and for what?

BALDWIN: In 2005, Cristofaro's family and several others took their eminent domain case all the way to the Supreme Court. The families lost and all moved out.

CRISTOFARO: This empty lot would have been a parking lot.

BALDWIN: The development was centered around a new research site for Pfizer. The city of New London planned new office buildings and infrastructure all around it, bringing in business and jobs.

JOHN BROOKS, NEW LONDON DEVELOPMENT CENTER: Right now we're going to have to wait until the economy rebounds.

BALDWIN: But, so far, little has been built.

John Brooks heads the agency in charge of the development project, and he says the recession has stalled their plan.

BROOKS: The naysayers that have said that, well, in the last 12 months there hasn't been a ground breaking, that's true. But that's a reflection on the economy.

BALDWIN: Families who feel they moved out for nothing are frustrated. And now, to make matters worse, Pfizer is moving out of town. And it's the city's largest taxpayer.

The former mayor says New London is left in a lurch. He says Pfizer had a specific condition when the company moved in.

LLOYD BEACHY, FMR. NEW LONDON, CONNECTICUT, MAYOR: This is based on the fact that New London is going to have a major development in the Fort Trumbull area. And we literally, each one of us, had to stand up individually and swear allegiance to that plan.

BALDWIN: Pfizer would not go on camera, but told CNN that it was not part of the eminent domain legal battle between the city and the people who live near its research center. "Pfizer was not a party to that litigation, had no stake in the outcome of the case and has no requirements nor interest in the development of the land that is the subject of the case."

Cristofaro says he tries not to come back here often to avoid feeling the heartache he says it caused his family. Not only did he lose the legal battle, he lost his mother to cancer in the midst of their fight. Her memorial, all he has left here.

CRISTOFARO: Standing out here in the field, I mean, you've got memories. That's about all you have. It would be fantastic to see something actually developed here so that it's not for nothing.

(END VIDEOTAPE)

BALDWIN: This week, New London's deputy mayor -- that's John Maynard -- he has proposed an ordinance that in the future here, the city would not declare eminent domain to take property from private citizens for economic development. And he's hoping, Wolf, that other towns or states nationwide take notice.

BLITZER: Yes, because these folks, they gave up their houses, they were forced to sell their houses to the government.

BALDWIN: Right.

BLITZER: But for what?

BALDWIN: And now Pfizer's leaving. And even though those jobs are safe and going across town, that affects local businesses. They're left in a lurch.

BLITZER: I remember when the Supreme Court made that ruling. It was a huge, huge uproar.

BALDWIN: Four years ago. BLITZER: Thanks very much.

BALDWIN: Thanks.

BLITZER: Good work for that.

Brooke Baldwin, reporting.

Four years after Hurricane Katrina, a stunning court ruling of negligence could cost the federal government. And we're talking about billions more dollars in damages.

And later, why Virginia's governor-elect won't condemn Pat Robertson for saying that "Islam..." -- and I'm quote Pat Robertson now -- "... is a violent political system, not a religion."

And time for a political pop quiz. Which state did President Obama name as the 50th one he has visited? It's one of the questions on CNNChallenge.com.

The choice is A, Alaska; B, Idaho; C, Maine; D, Wyoming. The answer and more about our Web site that tests your knowledge in a moment.

(COMMERCIAL BREAK)

BLITZER: Democratic strategist and CNN contributor James Carville is joining us right now. He's in New Orleans. And Republican strategist Nancy Pfotenhauer, who worked in the McCain campaign, she is with us here in Washington.

Guys, thanks very much for coming in.

James, I'll start with you, and I'll read in part from an editorial in "USA Today." "A truism of international relations is that it's better to be respected than liked. Judged by that harsh yardstick, Obama's first trip to China was more successful for its tourism than for its diplomacy."

What do you think? What did he accomplish on this four-nation Asia trip beyond the style? Because a lot of folks are saying there wasn't much accomplished substantively.

JAMES CARVILLE, DEMOCRATIC STRATEGIST: Well, that could very well be true. I'm racking my brain thinking of when a lot gets accomplished on some of these foreign trips.

But, you know, the reality is, is that the psychology that Reagan proved that deficits don't matter, which was the mantra of the Bush administration and Dick Cheney, turned out that the Chinese have $2 trillion of our debt. So, you know, they're our banker and, probably, that's not the best thing that -- not the best thing that can happen. And the truth of the matter is, Obama's having to deal with the policies that caused this enormous debt in this country.

BLITZER: So, basically, trying to reassure the Chinese economically is a significant development...

CARVILLE: Right.

BLITZER: ... given how much the U.S. is in debt to China.

Nancy, what do you think about that?

NANCY PFOTENHAUER, REPUBLICAN STRATEGIST: Well, I think that it's an interesting point, but it doesn't -- you can't escape the reality that this was a disappointing trip. I mean, the White House is spinning very, very hard to try to show that there was something positive and tangible out of this.

He made no progress with North Korea on anything to do with disarmament. He made no progress on China with anything to do with human rights or with trade. And then we had the bizarre circumstance where you have President Obama lecturing or talking to the Chinese about having openness in town halls when they were shutting downtown halls back here in August on health care among our own people. I just think...

BLITZER: Who was shutting down town halls?

PFOTENHAUER: Well, do you remember the Democratic leadership were telling members of Congress not to hold town hall meetings here?

But the point is on this, from the foreign policy perspective, he's produced no real, tangible benefits from this. And then you've got that strange...

BLITZER: All right. Let me let James -- hold on.

PFOTENHAUER: Oh, sorry.

BLITZER: James, go ahead and weigh in on this, shutting down of town halls. That's a new one. I hadn't heard that one.

CARVILLE: I've got to say, I'm befuddled to say that the Democrats are doing like the Chinese communists, shutting down town halls. I'm a little stunned.

But you know what? Obama got criticized for putting mustard on his hamburger, so I guess these guys will criticize anybody for anything.

Look, again, there probably wasn't a whole lot accomplished. This is, as I point out, a result of us putting ourselves in hock to the Chinese.

I think that some of these trips, the first one you go to, you establish a relationship. And I think we can move forward from there in some way or another. But we've got a lot of issues to deal with here and hopefully we'll get them done.

BLITZER: Let me pick Nancy's brain on Sarah Palin, because she's got a new book. I don't know if you heard about it yet, Nancy, but it's called "Going Rogue." You might have heard about it.

PFOTENHAUER: Just a little bit.

BLITZER: She's gotten a little publicity. She's, I guess, going after some of the top McCain aides whom she doesn't like very much.

You worked inside the McCain campaign. What was it like there between, like, Steve Schmidt or Nicolle Wallace and Sarah Palin? Was it as acrimonious as we're getting the impression right now?

PFOTENHAUER: Well, you know, it's interesting. And James, of course, is a veteran of many campaigns as well.

There's always a lot of pressure. It's a pressure cooker environment. Sometimes the chemistry works, sometimes it doesn't. Both the folks who are being discussed here are well-known professionals and have strong track records behind them.

I was not present during some of what was described there. I will say, though, that to be perfectly honest, some of the behaviors that were described did not comport with my interaction with those individuals. So I think it would be much more illuminating to have Nicolle and Mark and Steve respond to what Governor Palin had to say.

But you know what? Campaigns are not for the fainthearted. These are brass knuckle situations, and there's always he said/she said afterwards.

BLITZER: Yes. I think that's a fair point.

James, you've worked on a lot of campaigns. When you win you get a lot less of the back-fighting than when you lose.

PFOTENHAUER: That's right. That's right.

CARVILLE: You do, but, you know, there are two kinds of political consultants, those that worked on campaigns and said that they have lost, and we call them political consultants. And the ones that say they never lost, and we call those guys liars.

But, having said that, it's been this long, over a year after the campaign, and Governor Palin is still out trying to get even back from something during the campaign. It seems that she's a mite looking in the rearview window here.

I know Steve Schmidt and Nicolle Wallace. And they're very professional. And I think what I just heard Nancy say is that Governor Palin's memory doesn't exactly comport what she knew was going on in the campaign. And that makes a pretty interesting topic of conversation here.

BLITZER: Is that what you were trying to say, Nancy?

PFOTENHAUER: Well, it's just that the behaviors that were described did not comport with behaviors that I witnessed in situations. And so, again, I wasn't there. And I can't say this person said this and that person didn't. But all I can speak from is my own experience. And it did not comport with my own experience with those individuals.

I do think, though, that controversy sells books. And let's face it, one of the primary goals here is to sell a lot of books. And that's what she's doing.

BLITZER: She's selling a lot of books. I think 1.5 million already in hardcover, in print right now.

She's going to make a ton of money, James, as you can appreciate and as you know. Nothing wrong with that.

CARVILLE: There's nothing wrong. I wish I'd sell anything close to the number of books that she's going to sell. She's going to sell a bucket load of books.

(CROSSTALK)

BLITZER: Quickly to both of you, as political professionals, James first, is she setting the stage for a 2012 presidential run?

CARVILLE: I'll tell you one thing, she is a force. And it's not lost on people, the number of people that are in sleeping bags, that are sitting out there.

She's on Rush's show. She's discussing the depth and nuances of conservatism. She's with Sean Hannity doing that.

And I think anybody looking says this woman is a force in the Republican Party. And that's for a fact.

BLITZER: All right.

Nancy, she's also with Barbara Walters and Oprah. So go ahead.

PFOTENHAUER: Well, I was just going to say, I agree with James completely. This woman cannot be denied.

She's got a way of connecting with people. And in that Oprah interview, you know, I was talking to folks later, many of whom considered themselves pretty strong critics of Governor Palin. And I've always said, look, any public policy decision you disagree with, that's fair game, go after them, that's your job. But they were really struck by her sincerity and her genuineness.

And they said, look, basically, I believed every word she said. The answers sometimes were hard probably on difficult topics, but she seemed very genuine and sincere. And that's part of why she connects with the American people.

BLITZER: She is a force. There's no doubt about that.

Guys, thanks very much for coming in.

PFOTENHAUER: Thank you. BLITZER: Time for the answer to our question on CNNChallenge.com. We asked it before the last break.

Which state did President Obama name as the 50th one he has visited? Your choices were Alaska, Idaho, Maine, Wyoming. The answer is Alaska.

You can find many more questions to test your news knowledge on our CNN news site, CNNChallenge.com. Check it out.

If you plan to watch football during the Thanksgiving holiday, you might see more of President Obama than you expected.

Also, video evidence in a racially-charged trial. What does it tell us about the woman who cut in line at a Wal-Mart and now could face jail time?

(COMMERCIAL BREAK)

BLITZER: President Obama's helping the National Football League tackle a big problem -- childhood obesity. And he's doing it just in time for Thanksgiving.

Several White House officials confirm Mr. Obama will appear in a public service announcement with several NFL players, encouraging kids to exercise. The 90-second spot will air during pro-football games this Thanksgiving holiday.

We'll be watching.

Concern about energy-sapping TVs goes national. Senator Dianne Feinstein is urging the Obama administration to adopt new energy standards for TVs across the country. Her home state of California just approved new requirements to make many TVs more energy efficient beginning in 2012.

For the latest political news any time, you can always check out CNNPolitics.com.

Let's go back to Jack for "The Cafferty File" -- Jack.

CAFFERTY: We've still got these Hummers running all over the roads. And we're worried about how much juice my TV uses?

BLITZER: Apparently.

CAFFERTY: Apparently. All right.

The question is: Could authorities have prevented the Fort Hood massacre?

Anthony in New Jersey says, "As long as this country pacifies illegal immigrants, embraces Islamic sensitivity and handles our minorities with kid gloves for fear of legal repercussions, they will use our system to gain advantage. We're becoming increasingly predictable because of our political correctness." "Those not willing to assimilate use our tolerance as an advantage to undermine us While trying to be the freest country on earth, we're being too tolerant and risk destruction from within. Our authorities can't even use profiling as a legitimate means of policing. Thus, you have the atrocity that was Fort Hood."

Joe in Colorado, "Jack, what a dumb question. We could have maybe prevented this if we had an SS Nazi-type organization in this country. What's next, detention camps for all Muslim-Americans and people with poor judgment performance reviews?"

Harrison in Alabama, "Yes, but had they done so, instead of talking about how this could have been prevented there would have been a ton of complaints from the general public and the media about how the military is racist, they profile, they hate Muslims, which almost certainly would have been coupled with unnecessary congressional hearings and widespread artificial outrage at said military practices."

Which would have been a small price to pay given the alternative.

Jafsie writes, "The investigation by Homeland Security has just begun, and yet Congress is already barreling forward, politicians on both sides spouting their rearview wisdom. And now you're inviting CNN viewers to weigh in with their verdicts as well. Pleases, Jack, stop encouraging Americans to mouth off on yet another subject they know next to nothing about."

Carole in West Palm Beach says, "This tragedy should have been averted. Is everybody colorblind? There were red flags all over this field -- e-mails to an extremist cleric, poor performance reviews from his fellow mental health professionals, PowerPoint presentations extolling the virtues of suicide bombers."

"He was a loner. Where is Nancy Drew when you need her?"

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

BLITZER: Jack, thanks very much.

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