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Afghan President: We'll Take Over Security; America Losing Out to China; Air Travelers Wait For Hours; Accused Line Cutter Could Face Prison

Aired November 19, 2009 - 17:00   ET


WOLF BLITZER, CNN ANCHOR: Jack, thanks very much.

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

Happening now, New Orleans applauds a judge's ruling that negligence by the U.S. Army Corps of Engineers led to catastrophic flooding during Hurricane Katrina.

Will the federal government now be on the hook for billions in damages?

And the latest fallout from California's budget crisis -- hundreds of protesters march at UCLA and take over a campus building to protest steep tuition hikes.

And she was a college student who cut in line at a Wal-Mart. But in what has become a racially-charged court case, she could now face -- get this -- years in prison.

I'm Wolf Blitzer.


In New Orleans, Hurricane Katrina is just a disaster -- is a disaster that just won't quit. Massive sums have already been spent on rebuilding the devastated city. But now the federal government could be responsible for billions more in damages, after a federal judge's stunning ruling that negligence by the U.S. Army Corps of Engineers led to catastrophic flooding.

CNN's Sean Callebs is here in THE SITUATION ROOM.

He's been in New Orleans for a long time working that story for us.

All right, so tell us what's going on here and how the mayor, Ray Nagin, is reacting.

SEAN CALLEBS, CNN CORRESPONDENT: Well, this is significant, because it's the first time the Army Corps of Engineers has been called in for a what a lot of people said was "their fault." That -- what the judge in this case has said, that the Army Corps of Engineers basically did a negligent job -- a lousy of maintaining something called the Mississippi River Gulf Outlet. Now, for people in the New Orleans area, that's called MR-GO. And the reason this is important, this has nothing to do with flood protection. This was a navigation channel that the Corps dug about half a century ago and the judge said that he is utterly convinced that the Corps just did a negligent job of maintaining it.

We have some flooding pictures. And the reason this is important is that some engineers have said that about 80 percent of the flooding that happened in New Orleans was caused because of MR-GO.

But don't expect the money to begin pouring in as fast as the floodwater did.

Listen to what Mayor Nagin has to say about this.


MAYOR RAY NAGIN (D), NEW ORLEANS: I'm sure the federal government will appeal, because if this is allowed to stand -- and I think you will see a multitude of lawsuits, the City of New Orleans included. And I think it will create a lot of liability for the federal government. But it also may ensure justice at the end of the day.


CALLEBS: Now, see what happened, Wolf, there was a handful of people who brought a lawsuit. And these people won about $700,000. It doesn't sound like a lot of money. However, the judge opened the door for perhaps, as many as 100,000 people and businesses to pile on, to join this lawsuit.

So if you talk about the $11 billion for repairing the floods, the hundreds of millions of dollars that flowed in to take care of the road home money for people who didn't have insurance, now you're talking about more than a billion dollars that the federal government would have to pay because the Corps did a lousy job of maintaining the Mississippi River Gulf Outlet.

It just never stops. And this is why taxpayers need to know what the Corps is doing down there.

BLITZER: Yes. I want Tom Foreman -- stand by.

I want Tom Foreman to explain what's going on.

And let's walk over to Tom right now.

You've got the Magic Map over here. You've got New Orleans, a city where you lived for several years.


BLITZER: Your -- you reported from there, just like Sean has. Explain this situation -- why the U.S. Army Corps of Engineers could be responsible for some of this damage. FOREMAN: You know, this is really an interesting scenario that's played out here, Wolf. If you've been in New Orleans, you know the Superdome down here. And this is New Orleans proper as you generally know it. The area we're talking about is up here. That was down there. Now we're moving up here. Here's the Lower Ninth, we heard so much. Here's some of the other areas up in here, all -- all up toward the East, toward New Orleans East -- Sean, draw on this map, if you would, because it will be easier to do, where MR-GO fits in.

CALLEBS: Well, MR-GO actually carves its way down. It goes 50 miles down into the Gulf of Mexico. This is MR-GO. And what happened, when that counterclockwise spin, Wolf, from the storm came down, it pushed this wall of water straight down MR-GO. People likened it to a bowling alley -- a bowling ball hitting and then pow. It hit right here and just devastated the levees that were here. They had no chance.

And so basically, a lot of flooding in and around here, the Lower Ninth Ward, St. Bernard Parish, it's blamed on this. And as I said, engineers say as much as 80 percent of the flooding caused by this. And you know why this is important, so many of the deaths -- 1,800 deaths in Katrina -- were right in this area. So this -- this was a real problem, something people have watched down there for a long, long time.

FOREMAN: And something worth bearing in mind, really, is that, you know, all of the focus -- when we look at the video that we saw so many times here -- and we've watched this over and over again.

And when we've watched this video of the people being rescued and all of the flooding that happened in this area, so many times, Wolf, one of the things we focused on were the levee failures that were up in this area. That was where the focus was. We kept talking about that.

What they're saying here is that really wasn't the problem. It was a problem, sure. But this was the big one. And you can see, as Sean said earlier, this was a navigation channel. That's why it's all long and straight like this. It was designed for ships to go down. They never really used it that way. And when it was allowed to fall into disrepair -- essentially what the court was saying -- it left this channel -- this giant opening from the Gulf of Mexico.

BLITZER: So I guess a lot of people are asking the question, did the Army Corps of Engineers screw up and, in effect, was it responsible not only for the destruction, but for the deaths of so many people?

CALLEBS: I think that this ruling says yes. And one other thing about this. When they said it was negligent at maintaining it, when they carved this, it was 150 feet wide. OK. Now we're talking about something up here close to two miles wide. We have video of something called a surge barrier. The Corps of Engineers has spent a lot of time and a lot of -- it was really hot this day. You'll see these pictures here. The Corps put these things up. They're 24 feet high. So now, they have closed the Mississippi River Gulf Outlet. So now this water -- now this water can't roll back up in there.

FOREMAN: So they closed it right about in here now?

CALLEBS: Exactly. So now it can't happen. They also put rocks down the very top.

But look at this thing. I mean, this cost a ton of money. They did it just like that.

FOREMAN: And your -- and your point is to say that initially, this was a narrow channel that came up here that was designed for shipping.


FOREMAN: But over the years, because it was neglected, it gradually started broadening out and broadening out until you had a very broad channel that allowed a tremendous amount of water to come up and was utterly unstoppable when it hit this area and started fingering out into these areas?

CALLEBS: Exactly.

BLITZER: All right. What a story.

All right. We're going to stay on top of it.

Tom, Sean, thanks to both of you.

For a closer look at what we're talking about, we're going to continue our assessment. That's coming up in a little while.

But let's go to Jack Cafferty right new.

He's got "The Cafferty File" -- Jack, it's a painful thing to be reminded about all that devastation and destruction in New Orleans.

JACK CAFFERTY, CNN ANCHOR: It was a horrible time. It was shortly after THE SITUATION ROOM started, as I recall, what, was it four years ago?

BLITZER: Yes. It was August -- August of 2005. And we were on the air in THE SITUATION ROOM just within a matter of a couple of weeks once Katrina hit.

CAFFERTY: Yes. And it not only was the hurricane itself horrible, but the government response in the days that followed was even worse. I wonder how much progress has been made now in protecting that city from this kind of thing ever happening again. They will find that out later.

With the Senate health care bill now weighing in at 2,074 pages, this means we have 4,000 pages of proposed health care legislation -- 4,000. One Republican senator is threatening to read the Senate bill on the floor. That could take up to two days. But some are wondering if anybody is going to read this thing at all. Another question we have, with Thanksgiving and Christmas coming, are people simply getting tired of this months -- months long ongoing mammoth debate?

It's been all summer long -- a lot of media focus on health care reform since those town hall meetings, Tea Party protests of last summer. And yet it seems like we're nowhere near the end yet, because we're nowhere near the end yet.

The Senate and House bills have some significant differences when it comes to things like taxes, abortion coverage and the so-called public option. And if the bill makes it through the Senate -- the House has already passed theirs -- that's still very much an open question, the fate in the Senate. Then these two chambers have to merge these two bills -- 4,000 pages -- into one final product that then has to go back and pass both houses again before it's sent to the president for his signature.

Experts suggest that Americans are more tuned in than ever. A Senate historian says what's unusual about this debate is that people have been following it closely from the beginning, watching the bills go through committee, the markups, etc. He says the public has paid a lot more attention to this than almost any other piece of recent legislation.

So here's the question: Are you losing interest in the health care reform debate?

Go to and post a comment on my blog.

It does become kind of background noise some days, doesn't it?

BLITZER: Yes, I know. It's because your eyes can start to glaze.


BLITZER: But, you know, it's really critically important, as you...

CAFFERTY: Oh, no question.

BLITZER: you know, so...

CAFFERTY: I wonder if -- I wonder if the public is going to be well served by them trying to run this thing through the Senate over the holidays. You know, It's a time when -- when, as I mentioned, people's attention is elsewhere.


CAFFERTY: So, we'll see.

BLITZER: And the fact that there's 2,000 pages in the Senate bill, 2,000 pages in the House bill. I know you're going to read both of them again, Jack... CAFFERTY: I've got it.

BLITZER: ...and try to differentiate between the whereases and all those clauses, right?

CAFFERTY: I'll give you a full report on Tuesday.

BLITZER: Yes, thanks, Jack.


BLITZER: We have a new way for you to follow what's going on here in THE SITUATION ROOM -- relatively new, I should say. As you probably now by now, I'm on Twitter. You can get my Tweets at -- all one word. Try it. You might like it.

A televangelist triggers an uproar -- Pat Robertson says Islam is "not a religion" but a "violent political system." Why the political shock waves are especially strong right now in Virginia with the governor-elect.

And marches, sit-ins and a building takeover -- California's budget crisis parking a big protest by university students.

And a Congressional advisory panel says Chinese spies are aggressively stealing America's secrets. I'll speak with two members of the commission.


BLITZER: Stunning remarks about Islam from the religious broadcaster, Pat Robertson. They've sparked a growing uproar, especially in Virginia. He spoke after the rampage at Fort Hood.

Listen to this.


PAT ROBERTSON, RELIGIOUS BROADCASTER: Islam is a violent -- I would consider it a religion, but it's a religion, it's a political system. It's a violent political system bent on the overthrow of the governments of the world and -- and world domination. And I think we should treat it as such and treat its adherents as such, as we would members of the Communist Party or members of some fascist group.


BLITZER: Our senior political correspondent, Candy Crowley, is here.

It's causing a big stir, in part because the governor-elect of Virginia is an old friend of Pat Robertson and what he's saying is causing some commotion.

CANDY CROWLEY, CNN SENIOR POLITICAL CORRESPONDENT: And old friend and a current ally of Pat Robertson. Even though the televangec -- televangelist still is someone who has lost most of his power within the Republican Party, he still holds sway within Virginia. He has been not just an ally of the Virginia governor- elect, he has contributed to his campaign. And the governor has, in fact, turned up on television with Pat Robertson.

So a number of Muslim groups, in particular CAIR, which is the leading national group defending Muslim rights and -- and looking at cases where they think there has been discrimination against Muslims, has asked the governor-elect for some sort of renunciation of this.

So we put it to the governor recently, just today, can you renounce this?


BOB MCDONNELL (R), VIRGINIA GOVERNOR-ELECT: Well, I've got probably 15,000 donors for the campaign. And I can't -- I can't stand and defend or support every comment that any donor might make.


CROWLEY: This is a longstanding problem for politicians because, of course, there always are people who give money to their campaigns, or, indeed, who are friends that cause them trouble on the political campaign. So while you saw the governor-elect of Virginia not renouncing it, he does say he disagrees.


MCDONNELL: Again, I think there are -- no, I think that there are people in various religions that do some violent things and they ought to be judged according to their acts. But I believe that there are people of all the great religions that can be enormously helpful in our multi-cultural in Virginia.


CROWLEY: From a political point of view, Wolf, this is -- is probably without much meaning in Virginia simply because he's the governor-elect. He's going to be governor.

So what political damage there may be, if any, will be gone long before he moves on in the political world.

Nonetheless, it's the sort of thing that we saw, obviously, with President Obama, with his then Reverend Wright. We saw him try to grapple with a friend versus what the friend says and separate it. And that's a tough thing to do.

BLITZER: And he went to school -- he studied at Pat Robertson's university...


BLITZER: Virginia, as well. So that's -- it was an issue during the campaign, as -- as you recall.

But this is now becoming more of just a Virginia issue, isn't it?

CROWLEY: It is and it's because of Fort Hood and -- and the sort of balance that people are trying to find between respecting the diversity of this country -- just a founding principle of this country -- and finding some sane security inside the need for diversity. So it was no surprise when the remark by Pat Robertson came up on Capitol Hill, where Joe Lieberman's committee is looking into what exactly happened and were there -- was there anything that could have been done to prevent what happened at Fort Hood.

An interesting comment about Robertson from a Republican, Fran Townsend, who was a homeland security adviser for President Bush.


FRANCES FRAGOS TOWNSEND, CNN NATIONAL SECURITY CONTRIBUTOR: I think it is offensive. It's ignorant. It lacks a basis in fact and knowledge. There is a very small extreme wing not only, by the way, of Islam, but there are extreme wings of other religions.


CROWLEY: Other members of that panel today testifying before the Lieberman committee also saying similar things. But again, it's that balance.

Were there signals that were missed at Fort Hood and elsewhere in -- in the Army complex that should have been picked up, but was there political correctness at play?

So -- so this statement coming from Robertson at this time certainly does play on the national level.

BLITZER: Yes. Brian Todd's got some new information.

He's going to be joining us in our next hour.

Stand by, Candy, for that.

We should point out, Fran Townsend is also, now, a CNN national security contributor.

CROWLEY: Yes. I had forgotten -- got a new job.

BLITZER: That's right.


BLITZER: Thanks very much, Candy, for that.

To Los Angeles now, where UCLA students are protesting major tuition hikes being put in place across the state university system.

Let's go to L.A. CNN's Thelma Gutierrez is standing by -- Thelma, how big are these protests?

THELMA GUTIERREZ, CNN CORRESPONDENT: Wolf, I can tell you, there are about 125 students who are now sitting on the ground and are blocking the exit to the parking garage that you see right behind me. The board of regents just announced a short time ago that they will increase tuition by 32 percent and the students say they are angry and they want their voices heard.


UNIDENTIFIED FEMALE: (INAUDIBLE). I'm a fourth year English major. I'm already working two jobs. So then I -- I would have to find some other job, probably on the weekends.

UNIDENTIFIED FEMALE: No cuts. No fees. Education should be free.

UNIDENTIFIED FEMALE: I'm here protesting the increased fees for U.C. tuition. They want to raise it by 32 percent for this coming winter and then an extra 32 percent for next year. And that's just something me and my family really can't afford to pay.

GUTIERREZ (voice-over): A tense day on the UCLA campus. Students awaited their fate as the U.C. Board of Regents met. At issue -- an unprecedented 32 percent fee hike in tuition, to close a $535 million budget deficit. The regents say they simply didn't have the money. The faculty was in furlough. The staff had been laid off or had their salaries cut and students will have to share the pain.

But Marisa Santian (ph) says the budget shouldn't be balanced on the backs of middle to lower income students.

MARISA SANTIAN: I try to pay as much of my fees on my own. I -- I don't use my family's money because they -- they have a house to pay for and like they have kids to feed. And I -- I try to not be a burden on them.

GUTIERREZ: Steffi Yutan says her mother, who's a nurse, works three jobs just to pay for her education. And Steffi doesn't qualify for government help.

STEFFI YUTAN, UCLA STUDENT: To see her struggle so much, it pains me. And it makes me feel selfish for wanting to be educated. And that's not fair, because I know more than anything that's why she came here. She came here so that I could get the education that she didn't get in the Philippines.


GUTIERREZ: Police are out here, Wolf, keeping an eye on things, making sure that the regents are able to leave this parking lot.

Now, under the new budget, in-state tuition will go up to $10,302. That doesn't include their books, their fees or even their housing. Some of the students that we talked to say that is very worrisome. They say that just may tip the scales in their ability to go to school -- Wolf.

BLITZER: Thelma, so, that's, what, a 30 percent increase for these students?

What is the tuition now?

GUTIERREZ: Tuition now -- well, what it's going to go up -- it's going to go up by $585. That's next semester. So we're talking about a huge amount of money. They're saying an additional $1,000 more. They're saying already they're saying they're hit by the economy. Many of them have found it very hard to go out and even find a part- time job to help supplement that income. And as you heard, Wolf, so many of these students are paying for all of it on their own.

Still, though, the U.C. System is much, much less expensive than if these students were to go to some of the other schools, like USC or even Stanford.

BLITZER: Yes. Well, those are private schools and they're always much more expensive.

All right, Thelma.

GUTIERREZ: Yes. Exactly.

BLITZER: Thanks very much.

A computer failure leads to major problems for air travelers around the country today -- we're going to tell you what to expect if you're scheduled to catch a flight. This is information you need to know. A lot of us are getting ready to fly around Thanksgiving.

Also, remember the South African runner whose gender was questioned after she won a Gold Medal at the World Athletics Championship last August?

Now there's a ruling in the case and we're going to tell you what happened.

Stick around.



BLITZER: Debra Feyerick is monitoring some other important stories incoming into THE SITUATION ROOM right now -- Deb, what's going on?

DEBORAH FEYERICK, CNN CORRESPONDENT: Well, Wolf, the owner of a bus company says that one of its drivers suffered an aneurysm and lost consciousness before his bus swerved off the highway, flipped over and ended up in a ditch. The crash near Austin, Minnesota killed two people and sent 14 to the hospital. A state police spokesman say it's too early to determine the official cause of the accident.

The Associated Press, quoting an unnamed source, is reporting that retired basketball star Jason Williams will agree to a plea deal tomorrow and face up to three years in prison for allegedly shooting one of his employees to death while showing off a shotgun. A retrial had been scheduled for January, after a deadlocked jury ended an earlier trial.

And it took a while, but the results are in. South African runner Caster Semenya will keep the Gold Medal she won in the women's 800 meters at the World Athletics Championship last August. Semenya's speed and muscular build led to doubts about her gender, but officials have now ruled that she was innocent of any wrongdoing and that the results of tests will not be made public -- Wolf.

BLITZER: All right, thanks very much.

Deb Feyerick reporting.

She's going to be standing by.

It's called the push button war, but critics say that as the U.S. steps up its use of remotely controlled drones to kill militants in Pakistan, civilians are also dying.

And is America losing out to China?

I'll speak with members of a Congressional advisory panel which report that Chinese spies are aggressively stealing U.S. secrets.

And she was a college student who cut in line at a Wal-Mart. Now, she's on trial and -- get this -- could face 15 years in prison.


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

Happening now, more evidence is coming to light indicating that Major Nidal Hasan should have been tagged as a danger long before he allegedly opened fire on his fellow soldiers. Representative Peter Hoekstra of Michigan, who was just briefed on all the latest findings -- Peter Hoekstra, the congressman, is going to be here in THE SITUATION ROOM. Stand by.

Are the credit cards in your wallet robbing you blind?

With all that small print, how would you know if they were?

Jessica Yellin will try to make all of this clear.

And did billions in stimulus funds go to phony jobs in places that don't exist or did the administration just not keep track?

I'm Wolf Blitzer.

You're in THE SITUATION ROOM. As President Obama weighs whether to send thousands of additional reinforcements to Afghanistan, President Hamid Karzai makes a stunning inaugural vow about his country's future security.

Our Pentagon correspondent, Chris Lawrence, is in Kabul.

He's joining us now.

He's got more on some bold statements from President Karzai -- Chris, what's he saying?

CHRIS LAWRENCE, CNN PENTAGON CORRESPONDENT: Yes, you said it, Wolf. And I spoke with General Stanley McChrystal. He told me he was encouraged by what President Karzai promised, but he wasn't entirely sure he could deliver.


LAWRENCE: The beginning of Hamid Karzai's second term started with a promise on how it will end.

HAMID KARZAI, PRESIDENT OF AFGHANISTAN (through translator): Within the next five years, the Afghan forces will be capable of taking the lead in insurance security and stability across the country.

LAWRENCE: Karzai said Afghan security forces will take the lead in three years and full control within five. U.S. secretary of state Hillary Clinton called the goal ambitious.

HILLARY CLINTON, SECRETARY OF STATE: It is a goal that he believes can be met. We want to assist him.

LAWRENCE: But outside the safety of the presidential palace, Kabul was on virtual lockdown. Check points everywhere. The airport and major roads closed. And southern Afghanistan, a suicide bomber blew himself up, killing or wounding more than 20 people. Secretary Clinton's visit comes just as President Obama is finalizing his decision whether to send more troops here to Afghanistan. Clinton met with nearly 100 NATO troops and said their time in Afghanistan is directly tied to the improvement of Afghan forces.

CNN was one of the few western news crews allowed into the inauguration. More than 800 people attended. No more than a handful were women. Karzai received his biggest applause when he promised to create an accountable government. If Karzai doesn't take real steps to root out corruption, international allies have threatened to cutoff financial aid. Thursday he offered one new example directed at the people who run his ministries.

CLINTON: Government officials will have to register their assets. So that any money or other influence can be more easily tracked is a very bold proposal.

(END VIDEOTAPE) LAWRENCE: And at one point Karzai tried to separate local militants from al Qaeda, inviting, quote, disaffected compatriots who are not directly linked to international terrorism to return to their homeland. It was a direct appeal to Afghans who have been recruited by the Taliban. Wolf?

BLITZER: Our Pentagon correspondent, Chris Lawrence on assignment in Kabul, Afghanistan, for us. Chris, thanks very much.

We have another pentagon correspondent as all of our viewers know as well, Barbara Starr. She's taking a closer look now at the CIA's use of remotely controlled aircraft to kill militants in Pakistan. Critics say that a number of civilians are also dying, though, in the process. Let's go to Barbara. She's digging on this story for us.

Barbara, what are you finding out?

BARBARA STARR, CNN PENTAGON CORRESPONDENT: You know, Wolf, while we're all waiting for that decision about the way ahead in Afghanistan, what we are not hearing a lot about is that secret CIA war against militants across the border in Pakistan.


STARR: Pakistan, August 2009, an unmanned aircraft takes off from a secret base inside Pakistan. The Central Intelligence Agency has a tip where the Taliban leader, Baitullah Mehsud, is hiding. The CIA drone flies in. Piloted by personnel miles away in front of a computer screen. Its missiles fire. Mehsud is killed. It's called push-button war. Targeted killing by remotely controlled planes. The growing reliance by the Obama administration on these drones to kill inside Pakistan, a U.S. alley, is increasingly controversial. Philip Alston, the United Nations special investigator, questions if this is legal warfare or targeted assassination.

PHILIP ALSTON, U.N. SPECIAL INVESTIGATOR: Under what program, under what authorization, under what sort of laws is the CIA actually operating? This is the CIA. This is not the department of defense. Normally, wars are fought by a defense department, not by an intelligence agency.

STARR: In 1976, President Gerald Ford banned political assassination. Since 9/11 the Bush White House and now President Obama have insisted the drone campaign in Pakistan is part of the war against the Taliban and al Qaeda, not the Pakistani people. Since Obama took office the number of attacks has jumped. 45 this year so far compared to 34 for all of 2008, according to a study by CNN contributor Peter Bergen. But hundreds of civilians may also have been killed.

PETER GERGEN, CNN NATIONAL SECURITY ANALYST: Over the life of the program, we calculated that up to 1,000 people have been killed. And we calculated that up to a third were civilians.

STARR: CIA director Leon Panetta tersely defended the once secret program earlier this year. LEON PANETTA, CIA DIRECTOR: Very frankly, it's the only game in town in terms of confronting and trying to disrupt the al Qaeda leadership.

STARR: But Alston says if the U.S. wants to claim the attacks are vital, there must be changes.

ALSTON: The fears of the international community that the U.S. is operating perhaps a targeted assassination program that's not constrained by the appropriate rules will simply be increased.


STARR: So if President Obama's decision on the way ahead in Afghanistan also includes more CIA missile strikes in Pakistan, experts like Alston say there is going to be very growing public pressure on the White House to explain what it's doing and the legal justification for it, Wolf.

BLITZER: Barbara Starr is working this story at the pentagon. Thank you.

Pay attention to this story. Hijacked by pirates and left floating in the ocean. Three Yemenese soldiers have been rescued by the United States navy in the Gulf of Aden. The men lost control of their ship and lost out in a harrowing ultimatum to those who jumped aboard. Either jumped overboard or be killed, they were told, by pirates. Guess what. They jumped. Clinging to a board, the fishermen survived for three days on a few bottles of water until a passing ship alerted authorities. Then the "USS Chosen" arrived and pulled the men to safety. The vessel is the flag ship of a multinational anti-piracy task force. The sailors are OK.

Senate majority leader Harry Reid is trying to muster 60 votes to a filibuster on his health care reform proposal. It has major differences with a house bill that has passed. We'll give you details of the differences, talk about how the differences could be revolved or not.

On the heels of the president's chip to China, new allegations that the Chinese are aggressively stealing America's stop secrets.

Stay with us. You're in THE SITUATION ROOM.


BLITZER: A Congressional advisory panel says Chinese spies are aggressively stealing America's secrets and that the United States is losing its wealth and power to China at an increasing and alarming rate. Let's talk about this with the chairman of the U.S. China Economic and Security Review Commission. That's Carolyn Bartholomew and commission member Peter Brookes who worked in the Bush administration and is now with the Heritage Foundation, former deputy assistant secretary of defense.

How much spying, Carolyn, are the Chinese up to right now? CAROLYN BARTHOLOMEW, U.S. CHINA ECON. & SECURITY REVIEW COMM.: There's a significant amount of spying that's taking place, Wolf. And of serious concern is the fact that the spying seems to be increasing. One of the things that the commission did this year is it commissioned a report. Northrop Grumman did an investigation and analysis of an infiltration of a U.S. company, attributed it back to servers in China, and a lot of the hallmarks of it make it look like it's the Chinese government.

BLITZER: What do they want here?

PETER BROOKES, HERITAGE FOUNDATION: Everything. Government secrets, military secrets, economic secrets. This is industrial espionage, too. Why develop a technology if you can steal it. And via the internet, now this is possible. If the property security is not put in place.

BLITZER: Are they aggressively recruiting Americans inside to become agents, if you will?

BROOKES: No. This is where it's really different. It could be somebody sitting in China or anywhere else with a laptop accessing the internet and then working its way into a government and an industrial, you know, company or another organization's computer network. Then they go ahead and they just exfiltrate that information they're interested in.

BARTHOLOMEW: There are estimates that two times the amount of the information that's in the library of Congress has been stolen from U.S. servers and sites.

BLITZER: You can't blame the Chinese for wanting this. But you can blame the U.S. for not having the defense that protects this kind of information.

BARTHOLOMEW: Indeed. Indeed. What Peter said was really important. This is both military information that they're getting, but it's also commercial information. So they're building their technological base without having to pay any of the research and development --

BLITZER: Why hasn't the U.S. and government done a better job and U.S. industry, for that matter, high-tech industry, the defense establishment done a better job protecting this kind of information?

BROOKES: I think they're doing a lot. The problem is, is that people are continually innovating on the other side. Computer hackers are also trying to become better at what they're trying to do. Put up a wall, they find a way to get over that wall. You have to build another wall. It's a real challenge. It's evolutionary. It's revolutionary.

BLITZER: Let me just point out that a spokesman for the Chinese embassy here in Washington told the Associated Press after your report was released that your findings are, his words, baseless, unwarranted and irresponsible. That you're just trying to foment strains between the U.S. and China.

BARTHOLOMEW: It actually is coincidental, the release. We set the release date eight months ago so that we didn't know this trip was taking place. We wouldn't have expected the Chinese government to step up and say, yes, we are responsible for hacking into U.S. computers. We're not surprised. They don't like the work we do at the China commission. They have complained about our work before. We are tasked with looking at some of the challenges of the relationship.

BLITZER: By the way, we asked the Chinese embassy for a response ourselves. We didn't get one from that yet. That's why we're quoting the response they gave the Associated Press. Fact that the U.S. right now is in debt to China hundreds and hundreds of billions of dollars and t-bills or whatever, how much does that play into this, that the critics suggesting the United States government, the Obama administration has to treat China with kid gloves?

BROOKES: I think there's a tremendous amount of give and take in this relationship right now. There's the military buildup, the espionage.

BLITZER: When you say the military buildup, the Chinese military?

BROOKES: The Chinese military buildup. There's a tremendous amount of concern. These two countries are increasingly important to each other. Many think these bilateral relationship capital is important. There's a will the going on. Economic, security wise, espionage. Things along this line. This is something any government has to take into account.

BLITZER: Make your point.

BARTHOLOMEW: For 20 years we've been hearing we can't use U.S. leverage to get progress on issues we're concerned with. The most recent one, of course, is the debt. It's really clear that the Chinese have got to continue to acquire U.S. dollars in order to keep the peg on their currency. In order to do the kind of export-led growth that they are doing. That's their economic strategy.

BLITZER: One thing, we're almost out of time. Peter, very quickly, you make the point in your report to Congress that the Chinese military, especially their navy, they're really dramatically building up right now. Whenever I've spoken to Chinese officials, they make the point that their defense budget is a drop in the bucket compared to what the U.S. defense budget is. You shouldn't be so alarmed.

BROOKES: It's the world's third largest. The defense budget is going to buy more in China than the United States. The question is what's the intent? If you're going to build up power protection forces, such as the navy, you got to ask what is this all about? Nobody threatens China. Why this mayor military buildup?

BARTHOLOMEW: The Chinese have acquired the capability now to impede U.S. operations in the western Pacific. That has got to be of concern to the U.S. government.

BLITZER: I guess people should read the report.

BARTHOLOMEW: They should.

BROOKES: Absolutely.

BLITZER: It's out there on the web. Thanks for coming in.

Major delays in airports around the country today. We're going to tell you why and what to expect if you're scheduled to catch a flight. This is very worrisome on the eve of the Thanksgiving holiday week.

Congress is demanding answers about why so many red flags on the Ft. Hood gunman were missed. The ranking member of the intelligence committee has just been briefed on the investigation. He's standing by now live to join us.

Stick around. You're in THE SITUATION ROOM.


BLITZER: If you were catching a flight this morning, there's a good chance you waited and waited and waited. A computer failure bogged down the entire system, causing air traffic delays across the country. Our homeland security correspondent, Jeanne Meserve has been watching this story unfold. I was very worried when I heard about it. I assume a lot of people were. Because Thanksgiving coming up next week. A lot of people expecting to fly.

JEANNE MESERVE, CNN HOMELAND SECURITY CORRESPONDENT: Hopefully next week will be calm. Today, let's sum it up this way. It was a great day to drive.


MESERVE: Air travel was snarled all over the country Thursday morning. Cancellations. Delays. Angst.

UNIDENTIFIED MALE: We were in there for almost two hours on the plane on the runway.

UNIDENTIFIED FEMALE: We had about a 30-minute delay.

MESERVE: The problem started with a single faulty circuit board at a federal aviation administration computer system in Salt Lake City. When a backup system didn't operate properly, air traffic controllers were forced to enter flight plans by hand. The FAA says safety was never an issue. Radar and communications with aircraft were up and running. But it took four hours to fix. Some are blaming antiquated air travel control system. But a union representing some FAA employees says in this case that wasn't the problem.

TOM BRANTLEY, PROFESSIONAL AVIATION SAFETY SPECIALISTS UNION: This is one instance where the old systems actually were operating, it was the new telecommunications system failed and as a result the old systems couldn't communicate with each other. While modernization absolutely needs to occur, in this case it was the cause rather than the solution.

MESERVE: And the union says it would have been fixed quicker if the FAA had not outsourced maintenance to a contractor. This isn't the first time FAA computer glitches have grounded and delayed planes, there were similar widespread disruptions in 2007 and 2008. The FAA says it is investigating to try to ensure it does not happen again.


MESERVE: By this afternoon, the impact of the out and seemed to be fading, more and more flights were on schedule. Airlines were giving passengers the flexibility to rebook travel on another day without penalty and there was relief that the Thanksgiving travel period had not yet begun.

BLITZER: So it could have been worse?

MERSERVE: Absolutely could have been much, much worse.

BLITZER: Jeanne Meserve, thanks very much.

The question, are you losing interest in the health care reform debate? That's Jack Cafferty's question actually. Let's go to Jack right now because you got some e-mails, Jack?

CAFFERTY: Yes, I do. Allow me to read them to you at this time.

Betsy writes: "No, I'm not losing interest at all, I'm a registered nurse and have been for health care reform for about ten years. We have made this debate unnecessarily complicated and divisive, I say drop the public option, main date that everyone has health insurance and call it a day. Perhaps the major insurance carriers and the drug companies need not make huge profits on the backs of ill and injured Americans."

Bud in Virginia writes: "Yes I have, Jack, I follow the debate closely; even watch the markups the hearings. I was energized about the prospect of meaningful reform."

Anna in Colorado says: "I'm tempted to tune out the debate's tiring, but I know that's exactly what the liberals want, they want Americans to tune out so they can pass sweeping health care reform the majority of Americans don't want. Don't let Congress decide what's best for us despite what we want."

Dorothy says: "This bill is so loused up, most people are fed up. No one really knows what's in it including the senators and Congressmen."

Buddy makes a good point with this: "I'm only interested in seeing the bill fail because it's been negotiated entirely behind closed doors. What about this promise from President Obama, I'm going to have all the notions around a big table, we'll have doctors and nurses, and hospital insurance companies, they'll all get a seat at a table. We'll have the negotiations televised on CSPAN so people can see who's making the arguments. Just more broken promises from Obama."

And Bob in Pennsylvania writes: "How can you afford to lose interest with this government? If they pass this, kiss your grandmother goodbye."

If you didn't see your e-mail, go to my blog were equally tasteful offerings are offered in abundance. And thanks for your help Wolf. I appreciate it.

BLITZER: Next time I'll try to do better. Thanks Jack. That's a very tasty blog you have there.

Pay attention to this next story, you're going to like it. It started with a dispute over a place at a checkout line at a Wal-Mart but it becomes very serious after that. Guess what? A woman could face up to 15 years in prison.

Also, what are credit card companies hiding in the fine print, we're going to take a closer look at what you might not know is in your credit card contract. And a plan that could simplify it.

And think you know the news in prove it, play the CNN challenge. Here's one of the questions, why did the Republican National Committee instruct its insurance company to change its policy? We'll have the answer when we come back.


BLITZER: The answer to the question we asked just before the break, why did the Republican National Committee instruct the insurance company to change the committee's health insurance policy? The answer a because it provided funds for abortions. That's just one of the questions you can find at the CNN challenge. For more, go to CNN You can play whenever.

A dispute over cutting in line at a Wal-Mart opened a racial line in one Missouri community. And a woman is now facing charges that could carry up to 15 years in prison. CNN's David Mattingly is closely following the case for us. He's joining us now live with more -- David?

DAVID MATTINGLY, CNN CORRESPONDENT: How indeed does something like this happen, Wolf? The prosecutor would like the jury to believe that in this case Heather Ellis, then 21 years old cut in line in Wal- Mart and then he says went ballistic, making crude comments, making insults, using profane language with the Wal-Mart staff and with the police who were called to escort her from the property as she was leaving the building. They also testified that she threatened a police officer. That's when they decided to arrest her. She resisted arrest. And she's now facing charges of resisting arrest and injuring two police officers in the process.

We have seen videotape from surveillance taken at Wal-Mart that captures some of this as it's playing out. The first thing we see Ellis's arm in the frame as she's pushing away the items of the customer behind her who was already being waited on. She did this several times trying to get the attention of the cashier because the cashier said that she had cut in line and she was not going to serve her. Now we have a second video that shows her leaving the Wal-Mart, she's turned around and seems to be waving her hand in the air and saying something to the police officers. But officers say she was using profanity and saying things the entire time leaving the building and out into the parking lot.

One last piece of video that we see is her on camera with the police officers, this is after they decided to arrest her, they take her to the police car, the officer on the stand just a few minutes ago said if you look closely enough at that video, you can see her kicking him in the shins leading to one of those two counts of assault on a police officer.

Right now we're hearing a lot more testimony from police officers, this is going to be a tough one to sort out because the defense is trying to cast a different story here to say that Ellis belonged there, that she did not cut in line, she actually joined her cousin who was already in line and that she had every right to be served and all of this precipitated because she was not being heard and not being paid attention to -- Wolf?

BLITZER: David Mattingly reporting for us. Thanks very much for that.