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Bailout For Main Street?; United Obama Administration Front on Afghan War?; Interview With Senior Presidential Adviser Valerie Jarrett

Aired December 8, 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: President Obama says it's time to bail out Main Street, instead of Wall Street.

This hour, the bottom line on his new jobs and stimulus plan and why one Republican leader is suggesting it's -- quote -- "repulsive."

Should stimulus money be spent to study ants? It was. Some Republicans are bugged about it. They have got a new list of projects that they describe as wasteful.

And traveling overseas with the president of the United States isn't as glamorous as you might think. Trust me. I know. Stand by. We're going to take you behind the scenes, where only a select group of correspondents gets to go.

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

President Obama says America still needs to spend its way out of recession. He laid out his new multibillion dollar jobs and stimulus plan today. He says the nation can afford it because the Wall Street bailout is actually costing taxpayers less than he originally thought.

Budget hard-liners see it differently, though, accusing him of ignoring the soaring federal deficit.

Let's begin our coverage this hour with our White House correspondent Dan Lothian -- Dan.

DAN LOTHIAN, CNN WHITE HOUSE CORRESPONDENT: Well, Wolf, you know, the White House really sees this as a program to get people back to work, to help small businesses. They are not calling this a second stimulus because of political reasons.

Now, top aides see this as really a shift away from focusing on Wall Street and the bankers there, and now focusing on people on Main Street. But some Republicans aren't buying this whole package.

(BEGIN VIDEOTAPE)

LOTHIAN (voice-over): Just in time for the holidays, the White House is re-gifting, looking to tap unused bailout funds to increase lending to small businesses and tax credits to encourage them to hire, although that would require congressional approval. BARACK OBAMA, PRESIDENT OF THE UNITED STATES: And given the challenges of accelerating the pace of hiring in the private sector, these targeted initiatives are right, and they are needed.

LOTHIAN: Laying out his plan at the Brookings Institution, the president also called for more infrastructure investment to create jobs modernizing highways, railways, bridges, seaports, and the new proposal to give Americans rebates for making their homes more energy- efficient.

But Republican critics are already picking the president's proposal apart, especially on using TARP money to create more jobs.

REP. JOHN BOEHNER (R-OH), HOUSE MINORITY LEADER: This makes me so angry. I -- I was there, all right? I know all about TARP. First, it was never intended that all of this money would ever have to be spent, but any money that wasn't spent was to go to the deficit. And the idea of taking this money and spending it is repulsive.

LOTHIAN: But the Obama administration sees more spending as a way to lift the economy and create more jobs.

OBAMA: Now, there are those who claim we have to choose between paying down our deficits on the one hand and investing in job creation and economic growth on the other. This is a false choice.

LOTHIAN: It's false, says the president's top economic adviser, because employed Americans are an asset.

CHRISTINA ROMER, CHAIRWOMAN, COUNCIL OF ECONOMIC ADVISERS: We know that putting people back to work is the -- one of the crucial things you can do to help the -- the deficit, because, when people are working again, they're paying taxes again.

(END VIDEOTAPE)

LOTHIAN: What they're trying to do here at the White House, Wolf, is really strike a balance between paying down the deficit and also creating more jobs.

And a senior administration official is saying that they hope that they can put between tens of billions of dollars, perhaps as much as $100 billion, from those TARP funds into paying down the deficit -- Wolf.

BLITZER: By doing this today, is the Obama administration, Dan, sort of admitting that the overall economic stimulus package didn't really work all that well?

LOTHIAN: Well, some critics would say that, but the administration says that's simply not the case. They said that jobs have been created, that there really has been a spark to the overall economy.

They also say that the stimulus has put the United States in a much better place now than it was a year ago. Having said that, though, they think that all of this is necessary because they want to accelerate the pace because so many Americans are still out of work.

BLITZER: A lot of people are, 15 million at least, maybe a lot more certainly underemployed as well. Dan Lothian, thanks.

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

Gloria, what's the political calculation now behind this latest move by the president?

GLORIA BORGER, CNN SENIOR POLITICAL ANALYST: Well, if you're a Democrat right now, Wolf, you're looking towards the 2010 elections. You're asking a question. And the question is, what does the American public care more about? Does the American public care more about the deficit or does the American public care more about creating jobs?

And when you look at polls, you will see that, right now, voters care about these jobs. And, so, the administration saw that this TARP money was there, $200 billion of it. It's a pot of gold sitting there. And while it was not intended for this, for jobs, they decided, look, we can use it and spend it to create more jobs.

It's clearly a political decision they made, although the president, as you heard with Dan, made the case that you can have it both ways, because, if you create jobs, you create tax revenues, and that goes to reducing the deficit.

BLITZER: Because, at some point, he's got to show -- instead of simply...

BORGER: Right.

BLITZER: ... talking about deficit reduction, he's got to show some deficit reduction.

BORGER: He does. And there's a lot of talk about what he's going to say in his State of the Union address about deficit reduction. He also has to come up to Capitol Hill and present a budget in February.

And there are moderate Senate Democrats who are saying, look, unless you propose a very serious deficit reduction commission that has teeth, that can actually tell Congress what to do about reducing the deficit, we're not going to vote to raise that debt ceiling in the next few weeks. And that's going to be a very tough vote coming up, because members of Congress are going to have to hold their noses, and say we're going to vote to raise the debt ceiling in this country above $13 trillion.

BLITZER: And -- and that new commission would have the authority of a base closure commission?

BORGER: Exactly. But there are folks in the White House and there are also House Democrats, in particular, who are saying, we don't want to give the commission that kind of power. Even if there are legislators on the commission, we don't want to take that power away from ourselves. But it looks like they may have to start outsourcing these tough decisions, Wolf, because we haven't been able to reduce the deficit yet.

BLITZER: Not yet.

(LAUGHTER)

BLITZER: We will see when.

BORGER: Right.

BLITZER: Gloria, thanks.

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

JACK CAFFERTY, CNN ANCHOR: Majority Leader Harry Reid is the top cheerleader for health care reform in the U.S. Senate. His support for that bill might wind up costing him his Nevada Senate seat. That's because a growing number of Nevadans don't support health care reform.

A "Las Vegas Review-Journal" poll shows 53 percent of registered voters in Nevada oppose the president's health care plan. Only 39 percent approve of it.

Majorities of Nevadans are also opposed to a public option. They think the reform plan would raise taxes and that it will lead to the rationing of health care. Worse yet, ahead of his reelection bid next year, only 39 percent approve of Reid's efforts to get a bill through the Senate.

Evidence suggests that, although most Democrats support Reid's efforts, that probably won't be enough to outweigh the disapproval of most independents and Republicans. One pollster says Reid is carrying the flag for this reform and -- quote -- "You remember what historically happens to flag-bearers in war. The flag-bearer gets shot first" -- unquote.

Meanwhile, Harry Reid managed to get both feet in his mouth when he compared Republicans' opposition to health care reform to people who opposed ending slavery. That bit of stupidity was delivered on the floor of the United States Senate. Republicans call Reid's comment an ignorant moment, and they're demanding an apology.

Here's the question. Could Harry Reid's support of health care reform cost him his Senate seat? Go to CNN.com/caffertyfile and you can post a comment on my blog -- Wolf.

BLITZER: Jack, you remember Tom Daschle, the Senate majority leader, in his bid for reelection, didn't exactly work out all that well for him.

CAFFERTY: No. If I had to make a bet, which they do that in Nevada, which is my home state, I would -- I would bet against Mr. Reid at this point, I think, in the election next year. BLITZER: Yes, he's got a little bit less than a year to go. We will see how he does.

CAFFERTY: Yes.

BLITZER: Thanks very much for that.

Two key players in running the war in Afghanistan insist their marching in step. They're speaking out about reports that they skirmished over the president's new strategy. Stand by. We have new information.

And you have probably seen the signs at some construction projects across the country letting you know that stimulus money is being spent there. Wait until you hear how much those signs are actually costing all of us.

(COMMERCIAL BREAK)

BLITZER: In Afghanistan, Defense Secretary Robert Gates is hearing firsthand why U.S. troops may not be able to start withdrawing in 2011, as hoped -- Gates making an unannounced visit to the war zone today and meeting with the president, Hamid Karzai.

Karzai says it may be five years before his army is ready to take on insurgents. Gates told him, the U.S. commitment in Afghanistan is in fact long-term, but with limits.

(BEGIN VIDEO CLIP)

ROBERT GATES, U.S. SECRETARY OF DEFENSE: President Obama has made very clear this is not an open-ended commitment on the part of the United States. And as I expressed it to President Karzai, our hope is that, over time, we will see a changing balance in our relationship, in which the security component diminishes as the security situation improves.

(END VIDEO CLIP)

BLITZER: More questions, meanwhile, about the U.S. exit strategy on Capitol Hill today. The top U.S. war commander and the U.S. ambassador to Afghanistan were both grilled by lawmakers.

Let's bring in our foreign affairs correspondent, Jill Dougherty. She was watching what was going on and some fascinating information that was being released.

JILL DOUGHERTY, CNN FOREIGN AFFAIRS CORRESPONDENT: Yes, it really was, Wolf.

You know, they were looking for daylight. They were looking for daylight between the top general in Afghanistan, the top diplomat, and their president on the policy that's now guiding this war. Were they really on board with it?

(BEGIN VIDEOTAPE) DOUGHERTY (voice-over): Two key players running the war in Afghanistan, a few months ago, they appeared to differ on more troops. Now they're marching together...

GENERAL STANLEY MCCHRYSTAL, U.S. COMMANDER IN AFGHANISTAN: Ambassador Karl Eikenberry, an old friend.

KARL EIKENBERRY, U.S. AMBASSADOR TO AFGHANISTAN: And friend of many years.

DOUGHERTY: ... and saluting President Obama's strategy.

MCCHRYSTAL: The mission is not only important; it is also achievable. We can and will accomplish this mission.

DOUGHERTY: Members of Congress itching to question General Stanley McChrystal on President Obama's target of July 2011 to begin withdrawal. McChrystal says, it's not a deadline.

MCCHRYSTAL: And by the following summer of July 2011, I think the progress will be unequivocally clear to the Afghan people. And when it's unequivocally clear to them, that will be a critical decisive point.

DOUGHERTY: But McChrystal says he will do what the president wants.

MCCHRYSTAL: It is a solid decision the president has made. And I -- I operate under the assumption that we will begin to decrease our forces beginning in July of 2011.

DOUGHERTY: The general appears to further than his president, repeatedly talking about winning, defeating the Taliban by making them irrelevant.

MCCHRYSTAL: Preventing the Taliban from being an existential threat to the government of Afghanistan and thus to the Afghan people. So, rather than wipe out every Taliban member, what we need to do is lower their capacity.

DOUGHERTY: Ambassador Karl Eikenberry brushes off reports that, in leaked cables to Washington, he opposed sending large numbers of new troops.

EIKENBERRY: That at no point during this review process, Mr. Chairman, was I ever opposed to additional troops being sent to Afghanistan.

DOUGHERTY: And sharp questions about Afghan President Hamid Karzai.

UNIDENTIFIED FEMALE: We know that it's been completely and totally corrupt.

DOUGHERTY: But, despite misgivings Eikenberry expressed to President Obama in private, he now says: EIKENBERRY: President Karzai, in his inauguration address, he did talk about efforts to go after corruption.

(END VIDEOTAPE)

DOUGHERTY: And, in a striking moment, General McChrystal said he did not make a recommendation to the president on the 2011 date for beginning the withdrawal of forces. And that's the keystone of President Obama's strategy, Wolf.

BLITZER: What did General McChrystal say about looking for, capturing Osama bin Laden?

DOUGHERTY: Oh, yes, that was another very interesting moment. He called him an iconic figure that emboldens al Qaeda, but he said capturing or killing him would not defeat al Qaeda, but al Qaeda cannot be defeated unless they capture or kill Osama bin Laden.

BLITZER: We are going to have more on General McChrystal and Ambassador Eikenberry, himself a retired lieutenant general, later here. And we are going to try to delve deeper into this -- these reports that they strongly disagree on some aspects of the president's strategy, had different recommendations going in. But that's going to be coming up later.

Jill, thanks very much.

How did all this happen, with all the red flags raised about the Fort Hood shooting suspect before the massacre? The FBI has just announced a major step towards investigating its own policies. Stand by for details.

And will the woman in charge of the White House state dinner guest list open up about the embarrassing security breach at that dinner? The White House social secretary, Desiree Rogers, we're talking about her. I will be speaking about that and a lot more with top presidential adviser Valerie Jarrett. That's coming up.

(COMMERCIAL BREAK)

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

Mary, what's going on?

MARY SNOW, CNN CORRESPONDENT: Wolf, although it may not seem like it at the moment in many parts of the country, 2009 could go down as one of the warmest years in recent world history.

That's the latest from the World Meteorological Organization at the climate summit in Denmark. The U.N. Weather Agency also says this decade could be one of the warmest since the records began back in 1850. We will have much more on the climate change issue in the next hour. And CNN's Dan Rivers takes us to Thailand, where sea levels are on the rise. An Ohio inmate has become the first in the U.S. to be executed using what is called the single-drug method of lethal injection. Kenneth Biros, who was convicted of murdering a young woman in 1991, underwent the new untested procedure earlier today. He was the first inmate to be executed in Ohio since September, when the state halted all forms of capital punishment following the botched execution attempt of another prisoner.

Just one month after that brutal massacre at Fort Hood, the FBI has announced that an outside investigation of its policies will now be conducted. The review will be led by former FBI and CIA Director William Webster. The suspect in the shooting, Army Major Nidal Hasan, was brought to the FBI's attention last year. But the bureau says no red flags were raised at the time. The Pentagon is conducting a similar review.

And finally, HBO sports personality and former "Today Show" host Bryant Gumbel announced today that he underwent lung cancer surgery two months ago. Gumbel sprang the news while guest-hosting the program "Live With Regis and Kelly." He said doctors removed a malignant tumor in part of his lung. Gumbel underwent additional treatment following the surgery, but now says -- quote -- "It's done now."

And, Wolf, he say he even kept it from his staff at HBO.

BLITZER: Yes. We wish him a very, very speedy recovery. Hope he's going to be just fine.

Bryant Gumbel, good luck to you.

Mary, thanks.

Attention, President Obama: Some members of your own party are now speaking out rather aggressively against you. In fact, one Democratic lawmaker goes so far as to claim that the president is -- quote -- "bowing down to every nutty right-wing proposal about health care."

I will speak with the presidential adviser Valerie Jarrett about that and a lot more. That's coming up within a few moments.

And regarding health care, is the idea of a government alternative to private health insurance simply dead right now? Our political strategists getting ready to weigh in.

(COMMERCIAL BREAK)

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

Happening now: blood in the streets of Iraq, not one or two, but five bombings, one after another, shattering a stretch of relative calm. -- the latest from Baghdad on the dozens upon dozens of dead and the hundreds of people hurt. We will go to Baghdad shortly.

And it's compared to the Berlin Wall, a massive barrier around a poor neighborhood in Rio de Janeiro. Some say it protects the surrounding environment. The people behind the wall say it's like a prison, keeping the poor away from the rich.

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

Americans are desperate for jobs. President Obama says the nation can afford to create more. As we have reported today, the president laid out his new multibillion-dollar jobs and stimulus plan. The president says the Wall Street bailout is costing less than expected. Critics say any bailout savings, though, should go directly to reducing the deficit.

(BEGIN VIDEO CLIP)

BOEHNER: This makes me so angry. I -- I was there, all right? I know all about TARP. First, it was never intended that all of this money would ever have to be spent, but any money that wasn't spent was to go to the deficit. And the idea of taking this money and spending it is repulsive.

(END VIDEO CLIP)

BLITZER: "Repulsive," his word.

Let's go to the White House right now. Valerie Jarrett is a senior adviser to President Obama.

Repulsive, he says. He was there at the creation of TARP, and he says there was never any notion that this TARP money, which was supposed to help the financial sector, would be used to try to do something else.

VALERIE JARRETT, SENIOR PRESIDENTIAL ADVISER: Well, the whole point in helping the financial sector was to jump-start the economy and help bring down the unemployment rate.

Let's face it, Wolf. We still have a 10 percent unemployment rate. And although certainly as a result of the president's bold action when he first took office, he brought the economy back from the brink of disaster, and we're beginning to turn it around, but we still have far too many Americans who are unemployed.

And, so, I think it's very prudent to do what we can to bring down that unemployment rate. To the degree we are able to bring down the -- the unemployment and get the economy going again, that will help bring down the deficit. That's the way we have a long-term, sustainable, healthy economy, both in the public and in the private sector.

BLITZER: But -- but he says -- and a lot of other Republicans agree -- that TARP, troubled asset, that's what we -- what you were talking about when you created this whole program, and it had a specific purpose. And if you want to try to redirect that money, you need to go back to Congress and authorize it.

JARRETT: Well, let's talk about it in segments. The small-business initiative that the president announced today that will help small businesses have a better way of growing and expanding and investing in our country, that is eligible for TARP. Now, in terms of the infrastructure and the second -- third piece, which is to help consumers retrofit their homes, we're going to work with Congress. This is going to be a collaborative effort.

(CROSSTALK)

BLITZER: So, there will be legislation required to make this change?

JARRETT: There probably will be legislation. We're going to be working with Congress.

The president announced today what he thinks are the three critical initiatives that will help jump-start the economy, bring down unemployment in a very targeted and focused way, where we get the biggest bang for our buck. And -- and this didn't happen in a vacuum.

Let's face it, Wolf. The president and his economic team have been working on initiatives for a long time. His financial economic recovery board has recommended a series of initiatives that are included in today's announcement. And, just last week, we had a jobs forum where also several of the initiatives that he included today were a part of the jobs forum recommendations.

And this is an ongoing effort.

BLITZER: All right.

JARRETT: This is something that he's been focusing on, as you know, Wolf, since the day he took office.

BLITZER: And we're talking about $200 billion. Is that what the president wants to take away from TARP and use for these other initiatives?

JARRETT: There isn't a dollar amount that has been established yet. This is -- these are three key initiatives. We're going to be working and figuring out what is the right dollar amount. And we're going to figure out how much should go for these initiatives.

BLITZER: But is that the ballpark?

JARRETT: I don't even want to say what the ballpark is, because some of it may go to reduce the deficit. Some of it may go to the new programs.

But what I think the real message here today is, is that we have to do everything within our power to bring down the unemployment rate and to help small businesses grow, put investments back in our infrastructure, which will be good for our country and also create jobs. And we have to be more energy efficient.

And, so, what better way than have consumers get a credit for working to retrofit their homes? So, these are key initiatives that are at the backbone of the president's way of helping bring down the unemployment rate.

BLITZER: All right.

JARRETT: And we're also open to new ideas. So, as opposed to people being critical...

BLITZER: Let me...

JARRETT: ... let's figure out a way to work with us and let's see how we can get Americans working again.

BLITZER: As you know, you're getting a lot of grief from some of your closest allies on the Hill, including some really strong supporters of the president, like John Conyers of Michigan.

Listen to what he recently said.

(BEGIN VIDEO CLIP)

REP. JOHN CONYERS (D), MICHIGAN: You know, holding hands out and beer on Friday nights in the White House, and bowing down to every nutty right-wing proposal about health care, and saying on occasion that public options aren't all that important is doing a disservice to the Barack Obama that I first met.

(END VIDEO CLIP)

BLITZER: And today he told "The Hill" newspaper that the president recently called him and asked him to stop "demeaning him." That's John Conyers, who is a close friend and ally of this administration.

Is this what's going on right now, that you're losing some of your most ardent supporters?

JARRETT: No, I don't think so. Listen, we have a great deal of respect for Congressman Conyers. He's a huge supporter. He's worked very closely with the administration.

He represents a state, Michigan, that has been very, very hard hit, has one of the highest unemployment rates in the country. Certainly he's frustrated. We share his frustration, and of course look forward to working with him and all the members of Congress to figure out how we can tackle the problems that we have ahead.

The president inherited a mess. Let's face it, the largest national deficit in our nation's history, an economy on the brink of a meltdown, two wars, a health care crisis, an energy crisis, a public education crisis, a confidence crisis in terms of how we're perceived around the world. He inherited a full plate. And what he has done every day, Wolf, is to reach out and work with members of Congress and try to deliver on behalf of the American people.

BLITZER: How often does he call friends of his up on the Hill and ask them, you know what, stop demeaning me?

JARRETT: Wolf, listen, I don't know. I know that he and Congressman Conyers have a very close friendship. I think they have the kind of relationship where they can call each other any time they want and talk about issues that are important to the two of them. But I don't think you should be distracted by that.

I think you should be focused on, what are the two men doing to work together? And nine times out of 10 we're agreeing on issues, we're working constructively together. And if once in a while they blow off a little steam and have some frustration, I think that's fine, too.

BLITZER: All right. Let's quickly talk about Desiree Rogers and the White House's decision not to let her go testify before the House Homeland Security Committee.

This is what the president, then senator, said about transparency and executive privilege back in 2007.

(BEGIN VIDEO CLIP)

SEN. BARACK OBAMA (D), ILLINOIS: There's been a tendency on the part of this administration to try to hide behind executive privilege every time there's something a little shaky that's taking place. And I think, you know, the administration would be best served by coming clean on this.

(END VIDEO CLIP)

BLITZER: That's what he said about the Bush White House back in 2007. Tomorrow, we expect the House Homeland Security Committee to issue subpoenas to the Salahis to come and testify.

Is the White House rethinking its decision to prevent Desiree Rogers from testifying?

JARRETT: Listen, Wolf, with the full support of the president, Mark Sullivan, who is the director of the Secret Service, went forth last week and testified openly and fully and transparently before Chairman Thompson's committee. The Secret Service is solely responsible for the president's safety. They took responsibility for what happened when the family -- uninvited couple was admitted into the White House at the State Dinner, and they have had an open and transparent discussion with the committee.

And, moreover, deputy chief of staff Jim Messina released a report he did taking a look at what the White House did overall, including the Secret Service, and he said, yes, we should have done a better job. We should have had people at the gate working hand in glove with the Secret Service to make their jobs easier.

That's really it. That's all there is.

BLITZER: But what would have been the big deal if Desiree Rogers would have actually gone up to the Hill and said, you know what, we probably should have had a representative from the Social Office there checking off names at the gate, we made a mistake but, you know, it's not going to happen again? What would have been the big deal if she would have gone before the committee?

JARRETT: Well, I think what's important is that we were open and transparent. If you look on our Web site, WhiteHouse.gov, you will see Jim Messina's memo. It's open, it's clear.

We accepted responsibility, we shared responsibility with the Secret Service. And case closed. And so, now, ,I think it's important that we move on.

And the Secret Service will continue their investigation. They'll determine what to do in terms of safety. But they're the ones who are principally responsible for the president's safety, and they assume that level of responsibility. And we're going to do our job to make their job easier.

BLITZER: So if they continue to seek her testimony, she's not going to go?

JARRETT: Well, I don't think so, Wolf. I don't think so.

BLITZER: Valerie Jarrett, thanks very much for coming in.

JARRETT: You're welcome.

BLITZER: Some Republicans have a new list of some questionable stimulus projects, and they're asking how many jobs are created by, what, studying ants?

And later, one suicide bombing after another and another and another. Indeed, five in all. The Iraqi president says the timing of those deadly explosions is no coincidence.

(COMMERCIAL BREAK)

BLITZER: Let's bring in our "Strategy Session."

Joining us now, our CNN political contributor, Democratic strategist Paul Begala, and Republican strategist John Feehery.

You know, the Congressional Research Service did this report to Congress, Paul, updated July, 2008. All the times the White House officials have been allowed to go up, wave executive privilege and testify before Congress. You remember the Bill Clinton administration. Some of your colleagues, John Podesta; George Stephanopolous, back in 1984, when he was a senior adviser; Maggie Williams, Capricia Marshall.

Who was Capricia Marshall?

PAUL BEGALA, DEMOCRATIC STRATEGIST: She was the social secretary of the president of the United States.

BLITZER: The social secretary to President Clinton. Went and testified before Congress.

BEGALA: Testified before Congress.

BLITZER: You remember that. So, isn't this decision by the current Obama White House to prevent Desiree Rogers from testifying a smart one?

BEGALA: No. No, I don't think it's politically wise. But more importantly, I don't think it's substantively wise.

The most important thing here is to protect the president and his family. It's the most important thing. And the Secret Service clearly made a mistake.

You see I wear their pin every day. But those are men and women who would give their lives to protect the president.

They also, though, have to look at what the non-Secret Service, what the White House staff did wrong. And it looks like people on the White House staff made a mistake.

You can't investigate yourself. I think they should go up and be accountable.

By the way, when Capricia testified, my recollection was it was about the tragic suicide of Vince Foster, a private matter that had nothing to do with Capricia. This is about, at least allegedly, Ms. Rogers' job, which is to make sure that the social stuff is coordinated with the security stuff. So I think, yes, I think they ought to send her up there.

BLITZER: You worked on the Hill for 15 years. You remember a lot of those appearances by White House officials.

JOHN FEEHERY, REPUBLICAN STRATEGIST: The thing that's completely stunning about this is Bennie Thompson is the home team. They're going to get all...

BLITZER: He's the chairman of the House Homeland Security Committee.

FEEHERY: They're going to get all kinds of puffball questions to Desiree Rogers, some tough questions from the Republicans. But this should be an easy call for the White House and, frankly, they're screwing it up.

BLITZER: All right. We'll see if they change their mind, because we expect subpoenas for the Salahis tomorrow to go forward, and invite them. We'll see if they get immunity or what happens next, but that story is not going to go away.

Here's another story. Let's show our viewers some live pictures of the Senate floor right now. They're getting ready for a key vote on abortion.

There's Ben Nelson of Nebraska right now. He's a key Democrat on this issue.

What's going to happen? What's about to happen, Paul?

BEGALA: Well, Senator Nelson has an amendment restricting funds for abortion in the most strict language that anyone has proposed. It parallels the language that's in the House bill that was sponsored...

BLITZER: The Stupak Amendment.

BEGALA: ... by Bart Stupak of Michigan, a Democrat who is pro- life.

By all -- I was on the Hill today and I saw folks in the Senate. Senator Nelson does not have the votes. He'll have to get 60.

Headcounters I talk to think it's going to be closer to, like, 45, so he won't even be close to getting this in there. The question then becomes, does Ben Nelson support a bill that does not have this most -- very most restrictive language on abortion in it?

You know, my bet is probably no. But for that reason and others, I don't know that they can get it.

BLITZER: Because the difference between 59 votes and a final passage and 60 votes and final passage is you need 60, is all the difference in the world.

FEEHERY: I think this amendment -- I think Paul's right, this amendment goes down. I think Nelson ends up voting against the bill.

I think that they end up really throwing the public option out the window in the Senate, which means that they're going to try to get Olympia Snowe and Joe Lieberman to vote for this. They both said they would vote for this without the public option, so the public option in the Senate is probably dead.

BLITZER: Probably dead. You agree?

BEGALA: It's in triage, as a friend of mine said this afternoon. But, you know, there's an interesting development that's come up.

It actually came originally from Joe Lieberman, who says he hates the public option. It's expanding Medicare. Medicare, of course, is the ultimate public option. It is socialized health insurance, and we Americans love it, but it's only for people age 65 and over.

What Senator Lieberman proposed many years ago, and Democrats now look like they're moving toward, is lowering that age to 55, maybe making people pay premiums to get in, but opening Medicare a little bit. I think that's great. I would open Medicare not to 55, to maybe 5, or five days.

(CROSSTALK)

BLITZER: That's a single payer option though.

BEGALA: Absolutely.

FEEHERY: A program that's currently going broke.

BEGALA: It's the most popular thing the federal government does, though, John.

FEEHERY: Well, yes. Of course, it's also going broke. And if you don't fix Medicare fundamentally, it's going to keep going broke. And that's the problem with this proposal.

BEGALA: This would help Medicare because younger people tend to be healthier. Fifty-five-year-olds...

(CROSSTALK)

FEEHERY: It's still going broke, and that's a huge problem.

BEGALA: If you look at the actuarial tables, 55-year-olds coming in would strengthen Medicare, not weaken it. That would be a good thing for Medicare.

BLITZER: The president is going to be in Oslo, Norway, this week to receive the Nobel Peace Prize. In this Quinnipiac University poll, "Did President Obama deserve to win the Nobel Prize?" Twenty-six percent of the American public said yes, 66 percent said no, nine percent said they don't know.

Is this an awkward moment for the president to go and receive this Nobel Peace Prize?

BEGALA: You know, it's interesting. Barack Obama does not have an awkward bone in his body. He is the most gracious and graceful politician we've seen maybe since Ronald Reagan, who could handle any situation with great ease. So, no, I don't think so.

The day that this award came down, we were all shocked, frankly. And I talked to one of the president's closest political aides who said, "My prediction is it will be a slight net positive overseas to help advance America's agenda, but a slight negative here at home."

Now, the president himself acknowledged receiving the award with great humility and said he didn't feel like he deserved to stand in the company of other winners, so I think he's handled it just right.

FEEHERY: It's cool to get a Nobel Prize, and I applaud him for it. I think it's great.

The problem for him politically, back home, is he's done a lot of foreign travel. And his popularity ratings in Oslo are very high. Back home, though, they're sinking like a rock because people don't feel that he's doing enough to tend to their problems, which includes job creation and all these big issues that need to be handled on the domestic front. So, for the president, it's all fine and dandy to get this beautiful prize, and I'm all for it, but he's got to get back home and start doing some hard work for the American people. BLITZER: He's going to fly to Oslo to receive the Nobel Peace Prize this week, then fly home, then fly back to Copenhagen next week for the climate...

FEEHERY: It's too bad they don't get frequent flier miles on Air Force One.

(LAUGHTER)

BLITZER: But they get other perks on Air Force One. They don't need those frequent flier miles.

BEGALA: Secret escape hatch in the Harrison Ford movie. Remember that one?

BLITZER: Yes.

FEEHERY: Yes.

BLITZER: Thanks, guys.

BEGALA: You got to ride in that escape hatch. Didn't you?

BLITZER: Oh yes.

(LAUGHTER)

BLITZER: Several times. Ejected.

Want to ride with President Obama, by the way, and see what it's like behind the scenes? And now's your chance. Our White House reporter, Ed Henry, is going to show you.

(BEGIN VIDEO CLIP)

ED HENRY, CNN SR. WHITE HOUSE CORRESPONDENT: We do travel in packs. We call it the wolf pack for THE SITUATION ROOM.

(END VIDEO CLIP)

BLITZER: You're going to see that report.

And also, rebuilding a Nevada railroad, $2 million; research on ant behavior, $500,000; finding agreement on stimulus projects -- what's going on -- priceless. Senator John McCain and another Republican say your money is going towards many questionable stimulus projects.

(COMMERCIAL BREAK)

BLITZER: Here is something not many people ever get to experience, life on the road with the president of the United States. Those of us who have worked as White House correspondents know it's a great job, a fabulous experience, but you might be surprised about what goes on behind the scenes.

Here's a glimpse of what happened when our Ed Henry and Dan Lothian traveled with the president to Asia.

(BEGIN VIDEOTAPE)

LOTHIAN: We're wrapping up here in the filing center, at least for now.

This means that you can attend the press conference with the president and the prime minister. So there we go.

We were supposed to leave about 10 minutes ago, but this is how it is. You just hurry up and wait.

UNIDENTIFIED MALE: Two hours left.

HENRY: We spend most of our time in conference rooms in the hotel where we sleep. And he's got such a small bubble around him, that we've got to work out of the hotel and watch every movement of his. A lot of times, we don't get a chance to actually go out an experience the scene.

UNIDENTIFIED MALE: So you tried to eat the mackerel (ph)?

HENRY: I don't know. I'm not going to go for it. It's not my cup of tea.

LOTHIAN: At the end of the day, there's not a whole lot that got done, right?

HENRY: They've bunted on climate change.

LOTHIAN: Right.

HENRY: They're sort of -- I mean, the biggest thing is something that happened on the sidelines instead of the actual summit is President Obama just met with the Russian president.

Both leaders expressing confidence that they'll be able to agree on a new START treaty by the end of the year.

UNIDENTIFIED FEMALE: Do you all travel in packs?

HENRY: We do travel in packs. We call it the wolf pack for THE SITUATION ROOM.

UNIDENTIFIED MALE: Just pick your favorite spot. Hop on.

LOTHIAN: It's rare that we get this close to the president's vehicle known as -- I guess "The Beast." The president is inside. We're going to the (INAUDIBLE) meeting right now.

HENRY: We're on a bus in Beijing, about to interview the president. It's 7:48 p.m. Tuesday night, East Coast Time. But it's 8:48 a.m. here in Beijing. So we're 13 hours ahead.

So we're operating on very little sleep. I'm not sure how that will affect our performance. We'll find out. But you'll take responsibility if it goes wrong?

OBAMA: I always have to take responsibility. That's my job.

HENRY: There's an adrenaline rush because it's finally over. After all the waiting, all the -- it went really well.

LOTHIAN: This is unbelievable.

The president's on another section of the wall. We're over here so that we can bring you these beautiful pictures and this story from the Great Wall of China.

We'll be going down on some toboggans, so that will be interesting to see how this all works out.

HENRY: You guys ready? Here we go. We're going to rock and roll.

LOTHIAN: This is pretty good. If you're coming down a mountain, this is the way to do it.

(END VIDEOTAPE)

BLITZER: It looks like fun.

Let's go to Ed Henry and Dan Lothian. They're joining us.

Was it fun, Dan?

LOTHIAN: It was a lot of fun, Wolf. And, you know, beyond just the fun, it was great to be up there on the wall.

I mean, this is one of those things that growing up, I've never been to China before. You read about it, you see the pictures in "National Geographic," and you get a chance to go there. You don't spend a lot of time, but we got a chance to see it.

It was a great moment. It really was.

BLITZER: And Ed, it's always exciting. I'm sure you, like all of us, you pinch yourself sometimes and say, ,you know what? This is a pretty cool job I have.

HENRY: It is. It's long, it's grueling, and yet it's a high honor to be following any president of the United States around the world, just as when I covered President Bush. President Obama right now as well.

I mean, the most traveled freshman president in American history. We've been to something like 20 countries or so.

Dan is going to Norway with Suzanne tomorrow morning.

LOTHIAN: Tomorrow, right.

HENRY: Yes. And so I guess it's up to 21 countries.

It is a high honor and a privilege. It's grueling, the hours are long, but we love it.

BLITZER: You might be going to Norway, but I suspect that's going to be a brief trip, Dan. You're not going to have a whole lot of free time.

LOTHIAN: You're not. And I think that's the downside of these trips that we take.

A lot of people say, oh, you're going all around the world, you get to see all these great places. And it's wonderful, I'm not complaining. But when you go on these trips, you're spending a lot of time working, following the president, covering these various bilateral meetings, and you don't get a lot of opportunities to go out and see things in town.

And I describe it this way -- when you go on these trips, it's kind of like the buffet at a restaurant. You get a chance to taste a little bit of all these different countries, and then perhaps at some other point you'll get a chance to go back and enjoy the whole meal.

HENRY: Wait, I just saw you sliding on a toboggan. You got to go out a little.

LOTHIAN: That's right. Well, I was working and that's how you got to the bottom of the mountain.

BLITZER: We want both of you to work really, really hard, and we know that you do.

Guys, thanks very much. Stand by.

HENRY: Thanks, Wolf.

BLITZER: Republicans are raising red flags about bugs in the stimulus package. Real bugs. We're talking about ants being studied with your tax dollars.

And later, a new wave of suicide bombings in Iraq, the death toll and a possible motive.

(COMMERCIAL BREAK)

BLITZER: Get this -- President Obama's unveiling another spending jolt for the U.S. economy. Some Republicans are calling him on the carpet. They claim millions and millions of dollars of the stimulus money simply have been wasted, and they say they have a list to prove it.

Brian Todd has that list. He's joining us here in THE SITUATION ROOM -- Brian.

BRIAN TODD, CNN CORRESPONDENT: Wolf, the Obama administration says it's thoroughly policing stimulus money, but this new list unveiled today singles out 100 stimulus projects which two Republican senators call pure waste.

(BEGIN VIDEOTAPE)

TODD (voice-over): Rebuilding a historic railroad for tourists in Nevada, $2 million. Upgrading a police boat near Seattle to detect explosive traces in the water, $190,000. Research on the behavior of ants, $500,000.

Two Republican senators say these are just a few of their top 100 questionable projects financed with taxpayer stimulus money.

UNIDENTIFIED MALE: This is about highlighting the inefficiency of the wasteful stimulus program that isn't going to do what it said it was going to do.

TODD: Also on the list, signs paid for with stimulus money that tell you when a road construction project is paid for with stimulus money. Price tag for just the signs, $1.3 million.

Senators John McCain and Tom Coburn say the stimulus should be more focused on highways and bridges and less on specials projects. But defenders of the individual projects claim they do have value.

Regarding the Seattle area project, Bainbridge Island police say upgrading that one boat will help them make the waterways around Seattle safer. An official with the tourist railroad says completing it will employ workers and create tourism jobs.

UNIDENTIFIED MALE: This is the perfect use for the stimulus dollars. We're creating over 885 new jobs and sustaining current jobs.

TODD: What about research on ants? Will that help the economy or just pay the researchers?

UNIDENTIFIED MALE: If you're talking about repairing and rebuilding and constructing projects, then the multiplier for those kinds of projects is much larger. If, on the other hand, you are engaged in basic scientific research, then that multiplier is much lower because you're not doing as much direct spending immediately.

TODD: The White House says it's acting swiftly if any of the 40,000 projects is being mishandled.

UNIDENTIFIED MALE: And every time we hear about a problem, we jump on it in a New York minute.

(END VIDEOTAPE)

TODD: Still, Senator John McCain says a lot of these projects do not add to any payrolls.

Now, anyone who wants to decide for themselves can have a look at the Web site Recovery.gov. You can type in your zip code and see each project, look at the administration's description and how many jobs the recipients claim they are creating or saving, or you can vote on what you think of them at another Web site, StimulusWatch.org.

We went there. We clicked on a category for what is called the least satisfying projects to voters. The top two, a project to explain how people vote in Africa. That's a California-based initiative costing nearly $234,000. You see that price tag up there.

And a project to furnish picnic tables in Cherokee, Iowa. That is number two, at more than $30,000, Wolf.

So, you know, these lists come out all the time and there's a lot of political back-and-forth. The White House is defending it, saying it's just a handful of the several -- tens of thousands of projects out there.

BLITZER: To scrutinize everything, taxpayer money.

TODD: Sure.

BLITZER: Thanks very much, Brian, for that.

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

CAFFERTY: I love the Republicans' righteous indignation about wasting money on stimulus projects. I wonder if they voted to support the war in Iraq. Think any money was wasted on that deal? That was a Republican enterprise, as I recall.

The question this hour: Could Harry Reid's support of health care reform cost him his Senate seat?

I heard from a lot of people in Nevada. Jim writes, "I think Senator Reid's seat could be in jeopardy, and I hope it is, and also for any other elected official in Washington that thinks we can afford this health care bill. I say throw all the bums out. There is no cake to eat."

Rob in Nevada writes, "Senator Reid's days have been numbered since he took the side of the resorts and supported an open border. I can only hope Governor Gibbons doesn't decide to run for his job. Honestly, they have both made such a mess of things here that after 35 years of being proud to tell people where I live, I'm now moving out of the state."

Marta (ph) writes from Henderson, Nevada, "No, Harry Reid's support of health care will not cost him his Senate seat. Most Nevadans like me are aware that we have a champion for ordinary people in Senator Reid. Why would we ditch a senior statesman like Harry in favor of electing someone who has considerably less clout and understanding...