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'Don't Ask, Don't Tell' to End?; Administration Takes Credit for Pushing Toyota to Announce Recall

Aired February 2, 2010 - 17:00   ET



Thanks very much.

Happening now, the beginning of the end of "don't ask/don't tell" -- U.S. Military chiefs explain how they're carrying out the president's new orders. This hour, how the troops feel about fighting alongside openly gay service members.

The Obama administration takes some credit for pushing Toyota to confront safety problems.

Was the company, though, too slow to recall millions of popular cars?

Stand by for a new claim that Toyota was a little deaf to the danger.

And it's being called a game changing study on delaying teens from having sex. Now social conservatives who've been preaching abstinence are saying we told you so.

Will the Obama administration respond?

I'll ask the secretary of education this hour.

I'm Wolf Blitzer.


In the midst of fighting two wars, the U.S. Military is starting a major retreat on its longstanding policy of gays in the military. Pentagon officials told Congress today they're already laying the groundwork for the end of "don't ask/don't tell" six days after the president called for the repeal this year, in his State of the Union Address.

The Joint Chiefs chairman, Admiral Mike Mullen, delivered a powerful statement supporting the repeal.


ADM. MIKE MULLEN, JOINT CHIEFS CHAIRMAN: Speaking for myself, and myself only, it is my personal belief that allowing gays and lesbians to serve openly would be the right thing to do. No matter how I look at this issue, I cannot escape being troubled by the fact that we have in place a policy which forces young men and women to lie about who they are in order to defend their fellow citizens.


BLITZER: A strong voice against the repeal in today's hearing, the Republican senator, John McCain.


SEN. JOHN MCCAIN (R), ARIZONA: At this moment of immense hardship for our armed services, we should not be seeking to overturn the "don't ask, don't tell" policy.


BLITZER: Let's bring in our Pentagon correspondent, Chris Lawrence.

He recently spent some time in Norfolk, Virginia, meeting with the troops on this issue -- Chris, what did you find out?

CHRIS LAWRENCE, CNN PENTAGON CORRESPONDENT: Wolf, the same kind of disagreement we saw with Admiral Mullen and John McCain -- a lot of difference of opinion on this issue. We talked to not only members of the military, but also people who wanted to join the service, but were kept out by "don't ask/don't tell".


LAWRENCE: (voice-over): Coming out of Columbia Medical School, Robert Cavanaugh wanted to be an officer. (AUDIO GAP)


BLITZER: All right, unfortunately, Chris, we've got a little technical problem right there. We're going to try to fix that -- that package that you prepared.

But let's talk a little bit about what's going on.

Give us a sense of what these -- what these troops -- or prospective troops were saying to you.

LAWRENCE: Wolf, we got, really, a wide range of opinion. Some people said they already know that there are openly gay people serving. They've seen them on ships. They've seen them in their units. They sit and nobody asks, nobody tells. The policy seems to be working. They said it would be a lot of problems to change it.

On the other hand, we talked to people who said, you know, if they do their job, which we see them doing every day, what does it have to do with anything?

You know, it doesn't matter. So I think there's still a lot of discussion going on. And from what we've seen, the military is now pushing this discussion to social media, online. What -- we've seen the U.S. Army's Facebook page now saying let's talk about "don't ask, don't tell." We've seen over 1,000 responses to some of the questions there.

And Admiral Mike Mullen himself Tweeted, reiterating what he said before Congress, saying allowing homosexuals to serve openly is the right thing to do, it comes down to integrity -- Admiral Mike Mullen on Twitter.

So again, Wolf, a -- a new vision, new thinking on "don't ask, don't tell" and new ways of using technology and media to push that discussion out there.

BLITZER: All right. Chris, stand by, because we're going to have a lot more on this story.

Also coming up here in THE SITUATION ROOM, two lawmakers square off on this very important and heated topic of gays in the military and whether the Obama administration is making the right move.

Much more coming up on this story.

But let's turn now to another dustup for the Obama administration. The president is promoting his plan to recycle $30 billion in federal bailout money to invest in community banks and boost lending to small businesses. He made the pitch during a town hall in New Hampshire today. And the state's Republican senator, Judd Gregg, wasn't happy about it. Up on Capitol Hill, Senator Gregg laid into White House budget director, Peter Orszag, during a hearing on the administration's 2011 spending plan, which was released yesterday.

You'll remember Senator Gregg almost became President Obama's Commerce secretary, although he withdrew his nomination at a -- at a relatively early point in that process.

Listen to this.


SEN. JUDD GREGG (R), NEW HAMPSHIRE: The law is very clear, the monies recouped from the TARP shall be paid into the general fund of the Treasury for the reduction of the public debt. It's not for a piggy bank because you're concerned about lending to small businesses...


GREGG: ...and you want to...

ORSZAG: legislation.

GREGG: ...get a political event when you go out and make a speech in Nashua, New Hampshire. That's not what this money is for. This money is to reduce the debt of our children that we're passing on to our children. And you ought to at least have the integrity to be forthright about it and say that's what you're doing. You're adding to the debt that our kids are going to have to pay back, when you're claiming, at the same time...


GREGG: ...that you're being fiscally responsible.


GREGG: Well, let me ask you another question because, clearly, we're not going to agree on this and you're not going to follow the law.


ORSZAG: I'm sorry, I do -- excuse me. We will be following the law. This would involve legislation (INAUDIBLE)...

GREGG: Well, then you're not going to be able to do it unless Congress...


GREGG: you the authority to do it.

ORSZAG: Exactly.

SEN. BERNIE SANDERS (I), VERMONT: That is how laws are made, usually. Congress passes them.


BLITZER: That was the senator from Vermont, Bernie Sanders, weighing

Orszag, by the way, stressed more than once that the administration is fully aware it needs Congress to OK any change in the way that TARP money is used, since Senator Judd Gregg is right, that is the law right now.

But Peter Orszag and Senator Bernie Sanders both insisted adamantly they want that law to be changed. They want to amend the law. But it was a heated exchange, underscoring the passions on this issue right now.

Meanwhile, there's new evidence today of how Toyota is reeling, even as it tries to fix its massive recall crisis. Toyota's sales here in the United States dropped 16 percent last month from a year ago, while G.M. and Ford saw their sales rise.

The Transportation secretary is revealing today that Toyota needed convincing from federal safety officials that it was dealing with a very serious problem.

Let's bring in our own Brian Todd.

He's looking into the story that's got huge ramifications -- Brian.

BRIAN TODD, CNN CORRESPONDENT: It certainly does, Wolf. And very extraordinary comments from the Transportation secretary today. The fallout from Toyota's recall now at critical mass. Some very pointed comments at the highest levels here in Washington.

Today, Transportation Secretary Ray LaHood vigorously defended his agency's handling of the situation, saying that Toyota was too slow in addressing the safety problems regarding its gas pedals and that it took pressure from the government to get the automaker to take action.

A statement from LaHood reads, quote: "Since questions were first raised about possible safety defects, we have been pushing Toyota to make -- to take measures to protect consumers. While Toyota is taking responsible action now, it unfortunately took an enormous effort to get to this point."

And he went even further in an interview with the Associated Press. He said official from his department went to Japan in December to reminded Toyota about its legal obligations then they brought Toyota officials to Washington last month to insist that they address the central problem there of gas pedals sticking and unintended accelerations in some vehicles.

Now, in an interview with the AP, LaHood said, quote, "that officials in Washington's North American safety office were," as he put it, "safety deaf about the problem" and said if his department hadn't pushed the company, "I don't know if the recall would be taking place."

Now, we contacted Toyota's North American headquarters for a response. They sent us a statement saying that nothing is more important to them than the safety and reliability of their vehicles; also, this quote: "Secretary LaHood said to us that the soonest possible action would be in the best interests of our customers and we took his advice very seriously and instituted a recall. We are very grateful for his advice and we feel that we have been given a chance to regain our customers' trust."

Wolf, but clearly -- clearly some heavy fallout here in Washington, some extraordinary finger-pointing at levels that we've not seen in a situation like this in a long, long time.

BLITZER: Brian, this isn't the -- the end of this story, by any means, is it?

TODD: Absolutely not. As a matter of fact, in his statement this afternoon, LaHood said "We're not finished with Toyota." He said that his department will continue to monitor the recalls and -- and review the safety defects in the situation.

And we also have information from another Transportation Department official, who said that the National Highway Traffic Safety Administration, NHTSA, which is a division of the Department of Transportation, said that they are considering a civil penalty against Toyota. They did not give any further detail other than that. We just got an e-mail just a couple of minutes ago from Toyota in response to that saying: "We have not received an official communication from NHTSA, so we can't comment on that at this time."

But, clearly, Toyota and the U.S. government not done with each other right now.

BLITZER: Brian Todd is working that story.

We're going to have a lot more.

Steve Wozniak, the Apple co-founder, he's got some strong words to say -- to say. He owns four Toyota Priuses and he says there's a serious problem he has had to endure. We're going to speak with him live. That's coming up later here in THE SITUATION ROOM.

All right, this story just coming into THE SITUATION ROOM -- a new warning that terrorists are certain to try another attack on the United States in the coming months -- keyword, certain.

Listen to the heads of the major U.S. intelligence agencies answer a question from the chairman of the Senate Intelligence Committee, Senator Dianne Feinstein.


SEN. DIANNE FEINSTEIN (D), CALIFORNIA: What is the likelihood of another terrorist attempted attack on the U.S. homeland in the next three to six months, high or low?

Director Blair?

ADM. DENNIS BLAIR, DIRECTOR OF NATIONAL INTELLIGENCE: An attempt attack, the priority is certain, I would say.

FEINSTEIN: Mr. Panetta?

LEON PANETTA, CIA DIRECTOR: I would agree with that.

FEINSTEIN: Mr. Mueller?


FEINSTEIN: General Burgess?


FEINSTEIN: Mr. Dinger?


(END VIDEO CLIP) BLITZER: An attempted attack -- terrorist attack -- they all agree is certain. That's a very chilling warning. We'll speak about that and more. Our national security contributor, Fran Townsend, will be joining us later in THE SITUATION ROOM, as well.

We heard the U.S. military is bracing for a big change -- the repeal of "don't ask/don't tell." We want to pull back the curtain a bit and how this policy on gays in the military came about in the first place.

Stand by. Our senior political analyst, David Gergen, he was in the room in the White House when President Clinton and other top officials made that decision two decades ago, back in 1993. David Gergen recalls what happened, when we come back.


BLITZER: Let's get back to Jack Cafferty with The Cafferty File -- Jack.

CAFFERTY: You're still in New York.

BLITZER: It's a lovely place you've got here.

CAFFERTY: You like it up here in the big city?

BLITZER: Yes. A big city. A very big city.

CAFFERTY: It could be the biggest shakeup in the military since the integration of the armed services under President Truman in 1948. President Obama calling for the repeal of "don't ask/don't tell" -- the policy that bars gays from serving openly in the military and prevents the military from asking soldiers about their sexual orientation. Congress will have to sign off on the president's request.

A few hours ago, the military's top uniformed officer went before Congress to support openly gay members serving. Chairman of the Joint Chiefs of Staff, Admiral Mike Mullen, says it's a matter of integrity and that it's wrong to force people to, quote, "lie about who they are in order to defend their fellow citizens," unquote.

The military is set to begin a year long study into how "don't ask, don't tell" can be repealed without causing major problems in the service.

Critics say it's a bad idea to change the policy now, while the U.S. is involved in two wars and faces the ongoing threat of terrorism. Republican Senator John McCain says he's, quote, "deeply disappointed." And he says while the policy has not been ideal, McCain says it's been effective. His word.

Meanwhile, a poll from late 2008 suggests more than 80 percent of Americans believe openly gay people ought to be allowed to serve in the military. It's estimated more than 13,000 people have been kicked out of the service under "don't ask, don't tell" since it was implemented in 1993, including -- and this makes no sense -- dozens of service members who speak Arabic, which is a highly prized skill given the fact that we're fighting two wars in the Middle East.

Our government at work.

Here's the question -- how would the repeal of "don't ask, don't tell" affect the military?

Go to and post a comment on my blog.

Well, since Congress has to eventually sign off on this, I'm sure we can look forward to some long, drawn out...

BLITZER: It could take...

CAFFERTY: ...nasty.

BLITZER: It could take a while.



All right, Jack.

Thanks very much.

The Pentagon's "don't ask/don't tell" policy, as Jack mentioned, dates back to 1993, when President Clinton was struggling to find a compromise on gays in the military.

Our senior political analyst, David Gergen, is a former adviser to President Clinton. And he was on hand when the decision on "don't ask/don't tell" was made.

There's some video of a younger looking David Gergen over at the White House with President Clinton.

David Gergen is joining us now with some insight.

What was it like then -- David?

Take us inside the room when President Clinton made that decision to accept that compromise.

DAVID GERGEN, CNN SENIOR POLITICAL ANALYST, FORMER PRESIDENTIAL ADVISER: It was an agonizing evening at the White House, Wolf -- very late, as I recall -- a -- another late night with Bill Clinton. But he had campaigned -- it wasn't much of an issue in the '92 campaign, the -- for lifting the prohibition against gays. And then just after he was elected, he said, in answer to a press conference, that he did intend as -- as president, to lift the ban. And -- and all hell broke loose.

So there was a period just after he was inaugurated, the Joint Chiefs came to see him in the White House and said don't do this, Mr. President. They were unanimously against lifting the prohibition.

And then members -- the leaders of the Congress came. And -- and the president resolved that he wanted to find a compromise position. And that's how "don't ask/don't tell" evolved.

He sent George Stephanopoulos, who was one of his most trusted aides, over to work with Les Aspen, the Defense secretary, and others to -- to figure out what kind of compromise would work. And they came up with the "don't ask, don't tell," which was a step forward for gays, but obviously was a compromise and brought that back in.

BLITZER: And Colin Powell was the chairman of the Joint Chiefs.

GERGEN: Colin Powell was chairman of the Joint Chiefs. And I -- I had just joined that White House team in -- with Bill Clinton in June of that year. And I remember very distinctly an evening this late night with the president when he had to make his final call -- was he going to do this or not?

And we were sitting upstairs in the residence at the White House, a group of around 12 or 13 people, all the nat -- top national security people, including Colin Powell, top White House aides, Mike McLarty, chief of staff. George Stephanopoulos was there. I was there and others.

And after a -- a heated discussion, the president said, OK, I want -- I want your advice one by one by one. He went around in this circle. And I think there were about 12 of us, Wolf, who all said, Mr. President, this isn't perfect, but the military does not want you to lift this ban. This is a compromise. We think you should accept it.

There was one vote the other way. And that was Vice President Al Gore, who spoke last and said, "Mr. President, I disagree with this. I think we should lift the ban against gays. I think -- I do not like this compromise. I think it smacks of immorality. I don't like it. I think we should get" -- and so, it was basically 12-1. And the president decided to go with the -- go with the compromise. And he announced it in the next couple of days, over at the National Defense University.

So it was -- he was under -- he was almost under unanimous pressure. But it was interesting, Al Gore argued that case. He did it with great eloquence and -- and a passion. But the president sided on the compromise.

And, Wolf, I have to say, times are different today than they were then. A lot has changed since then.

BLITZER: And, Al Gore, as you say, he was the only one who said you know what, just let gays serve openly in the United States military back in 1993?

And that recommendation from the vice president was rejected by the president...

GERGEN: It was.

BLITZER: ...who accepted "don't ask, don't tell?"

GERGEN: It was. And, Wolf, it was rejected, in part, because the military and Colin Powell, one of the most highly decorated and most respected people in the country -- it's like George Marshall telling Harry Truman not to recognize Israel at one point. Truman overrode him in that case. But in this case, the president decided to go along with General Powell.

But I have to tell you, at that time, you had to also go through Congress to get it done. And there was strong opposition in Congress. He -- I don't think he could have gotten it passed.

And, very importantly, the public was opposed to it. He had -- the president had a poll, 48-45, in the public, against lifting the ban. Very strong opposition for -- from the religious right.

And today, you look at the polls and they're very different. You've got 69. Jack Cafferty just mentioned the 80 percent poll. There's another Gallup Poll with 69 percent -- a big generational difference.

And I think most of the people in that room, virtually to a person today, Wolf, I think would tell President Obama time to lift the ban. I think that would be led by General Powell.

BLITZER: Sixteen years later, so things change.

All right, David, good -- good historical review.

We appreciate it very much.

GERGEN: Thank you.

BLITZER: David Gergen was in the room when that decision was made.

Coming up, he apparently made an off-color comment about opponents to the administration's health care plan. Now Sarah Palin -- Sarah Palin is lashing out at the White House chief of staff, Rahm Emanuel -- why she's so mad.

Stay with us.

We'll explain.


ANNOUNCER: This is CNN breaking news.

BLITZER: There's a major development happening right now.

Let's bring in our homeland security correspondent, Jeanne Meserve -- Jeanne, tell our viewers what we're learning right now. JEANNE MESERVE, HOMELAND SECURITY CORRESPONDENT: Wolf, from a law enforcement official, we're learning that Umar Farouk Abdulmutallab, that man who allegedly hid explosives in this underwear in a flight on Christmas Day, has been talking to investigators since last week.

According to this law enforcement official, he has been providing what is called useful, current and actionable intelligence -- leads that are being followed up by the FBI and the intelligence community.

As you know, there's been a firestorm of controversy about the decision to read him his Miranda rights and try him in the federal courts. Many people have said that cut off the possibility of getting additional information from this man.

From the beginning, Justice Department officials and FBI officials have said there is a possibility, when someone is facing prosecution, that they will decide to cooperate. Apparently, that is what Mr. Abdulmutallab is doing now -- Wolf, back to you.

BLITZER: He -- he does have a public defender. He's represented by attorneys, who presumably have approved his decision to go forward and cooperate and tell what he knows about his situation, how it developed in Yemen and elsewhere. And I assume this is because he thinks he could get a reduced sentence, that's what -- that's what's going on here?

Is that the incentive for him?

MESERVE: Well, we don't know. I asked that question specifically. And the official with whom I'm speaking declined to give me an answer to that. It is certainly possible that when faced with the prospect of spending his life -- the rest of his life in prison, he decided to talk.

It's also possible that some sort of relationship developed between him and the people who were questioning him -- Wolf, we just don't have all the answers at this point in time.

BLITZER: All right. We'll get much more, certainly, over the next few hours. Just coming in, a major development that Jeanne Meserve is reporting on.

Stand by. We'll get more information for you, our viewers.

He's taken heat for saying Hurricane Katrina may have been the best thing to happen to the school system in New Orleans. We're talking about the Education secretary, Arne Duncan. He's here in THE SITUATION ROOM. He'll explain why he says that massive disaster was a powerful wake-up call.

Stand by.


BLITZER: Happening now, Steve Wozniak has a bone to pick -- a serious one -- with Toyota in the midst of its massive accelerator recall. Computers are his business and the Apple co-founder says his problem may be in his Prius software. Stand by. I'll speak with him live.

Sarah Palin throws down the gauntlet to White House Chief of Staff, Rahm Emanuel, for a salty remark she calls a slur on all of God's children with disabilities.

And why Education Secretary Arne Duncan says Hurricane Katrina was the best thing to happen to the education system in New Orleans. The Education secretary is here to explain.

I'm Wolf Blitzer.


The United States is in debt up to its eyeballs -- more than $12 trillion in debt already. And Congress poised to raise the ceiling by almost $2 trillion more.

If someone ran his or her household budget this way, he or she would be in bankruptcy court.

Here's what President Obama had to say about that today.


BARACK OBAMA, PRESIDENT OF THE UNITED STATES: These deficits won't just burden our kids and our grandkids decades from now, they could damage our markets now. They could drive up our interest rates now. They could jeopardize our recovery right now.

Responsible families don't do their budgets the way the federal government does, all right?

When -- when times are tough, you -- you tighten your belts. You don't go buying a boat when you can barely pay your mortgage. You don't blow a bunch of cash on Vegas when you're trying to save for college.

You prioritize, you make tough choices. It's time your government did the same.


BLITZER: All right, joining us now in THE SITUATION ROOM, CNN's Lisa Sylvester and our senior political analyst, Gloria Borger.

Lisa, does the president have a point on how families manage their money, the reference he made?

LISA SYLVESTER, CNN CORRESPONDENT: Well, in fact, you know, we want to show you first the budget of an average American household and do a comparison to the government's budget.

According to the latest Census figures available, median household income, $50,233, the average household annual spending, $49,638. That includes basics, you know, food, gas, housing utilities.

And at the end of the year there's a little bit left over, a little slight surplus, and we got it there, $595, but the average consumer also does have debts, $16,635 is the average amount, when you add things, for instance, like car loans and credit cards, plus mortgages.

And that's going to average out -- the mortgage is going to average out to about $100 to $120,000 that they pay off monthly.

But we want to then take a look at the perspective from the government. We've got figures from the Office of Management and Budget, projected for 2011, the government will take in -- this is in revenue -- $2.5 trillion, but it will spend $3.8 trillion. And that's the federal budget deficit. For that one year alone, $1.3 trillion projected.

Now then you have to add that deficit to the government's publicly held debt which in 2011 is going to be $10.5 trillion. You know, and that doesn't even include what the federal government owes to itself in the form of trust funds and something like Social Security.

Without changes, that number is going to continue to grow and grow until we get to 2020 when the federal debt is projected to be $18.5 trillion. That's just for the budget part of it. The implications of all of this, of course, is there are going to be some really tough choices to be made.

They're going to either have to increase taxes or unfortunately cut spending. Wolf?

BLITZER: And cut spending in some sensitive areas potentially like entitlements spending on Social Security, Medicare, or the Defense Department is going to have to go somewhere.

Gloria, it's not just the debt that's being accumulated, the money the government is spending, but the interest...


BLITZER: ... that the government is now forced to pay to all sorts of creditors out there.

BORGER: Well, it's kind of like a runaway credit card, as you saw with all of Lisa's numbers before. And we were looking into this. And in 10 years, by 2020, the number Lisa was talking about, we will spend almost as much money as the interest on our debt as we do on our entire national security budget, Wolf.

Imagine that? As much on the interest as we spend on national security. So something has to give here because this is completely unsustainable. I think people are realizing this as they see the numbers that Lisa was pointing out, but you have to have the political will.

And that's a big thing, to get something done on those programs, those automatic spending programs like Medicare and Social Security. And that's where the tough votes are going to come. And right now people aren't just willing to do it.

BLITZER: Yes, it doesn't look like they're ready for some tough votes right now.


BLITZER: Guys, thanks very much. We'll continue this conversation. Lots of money involved.

A new announcement by President Obama likely to tick off leaders in China. Is he making the right decision about meeting with the Dalai Lama? Donna Brazile and Mary Matalin, they're standing by for our "Strategy Session."


BLITZER: Let's get back to Lisa. She is monitoring some other top stories in THE SITUATION ROOM right now.

What else is going on, Lisa?

SYLVESTER: Hi there, Wolf. Well, new figures released by the Labor Department today showed that the number of U.S. metropolitan areas with a jobless rate above 15 percent increased in December.

Of the 372 areas surveyed, 19 posted unemployment rates of at least 15 percent. That number is up from 17 in November. The metro area with the highest unemployment rate in the country was El Centro, California at 27.7 percent. Fargo, North Dakota has the lowest with 4 percent.

And Democratic congressman John Murtha of Pennsylvania is in intensive care this hour, following complications from gallbladder surgery. The 77-year-old chair of the House Subcommittee on Appropriations on Defense Spending underwent the scheduled procedure last week.

Now despite of a gallbladder issue back in December, Murtha was able to help oversee the final passage of the Defense Appropriations Bill.

And a California federal appeals court ruled today that a sentence of 22 years in prison is not enough for the man convicted of plotting to bomb Los Angeles International Airport at the turn of the millennium.

The three-judge panel threw out the original sentence of the al Qaeda-trained terrorist, Ahmed Ressam. He was arrested back in December of 1999 after entering the U.S. from Canada in a car laden with explosives. And the National Transportation Safety Board says pilot error is one of the main causes of last winter's fatal Continental connection crashing near Buffalo, New York. NTSB chairwoman Deborah Hersman detailed the findings at today's final meeting on the cause of the crash.

Hersman also criticized the FAA for a delayed response to concerns raised by the investigation. The board is questioning whether regional airlines are held to the same level of safety as major airlines.

And the French court is trying to determine who's to blame for the deadly crash of an Air France Concorde almost 10 years ago. Continental Airlines along with five other people went on trial today facing charges of involuntary manslaughter in the crash back in July of 2000.

Three of the five on trial were responsible for the design, testing and certification of the Concorde. A part that fell off a Continental jet was found to have played a key role in that crash. Wolf?

BLITZER: Thanks very much, Lisa. Stand by. We're going to get back to you.

A new study suggests teaching abstinence only in schools may cut down on teen sex. Is it enough to warrant a wholesale shift of sex education in the public schools? I'll ask the education secretary Arne Duncan. He's standing by live here in THE SITUATION ROOM.


BLITZER: Let's get to our America votes "Strategy Session" right now. Joining us are two CNN political contributors, the Democratic strategist, Donna Brazile, the Republican strategist, Mary Matalin.

Rahm Emanuel, the White House chief of staff, has caused a little bit of a stir, ladies. The -- Sarah Palin referring to an article that was in "Wall Street Journal," in which he supposedly used the "F" word and spoke about some Democrats liberals as being F-retarded.

Sarah Palin wrote this on Facebook. She said, "Just as we'd be appalled if any public figure or Rahm's stature ever used the 'N-word' or other such inappropriate language, Rahm's slur on all God's children with cognitive and developmental disabilities and the people who love them, is unacceptable and it's heartbreaking."

A White House official tell us that, "Rahm called Tim Shriver on Wednesday to apologize and the apology was accepted. He runs the Special Olympics. The White House remains committed to addressing the concerns and needs of Americans living with these disabilities and recognizes that derogatory remarks demean us all."

All right, let me go to Donna first.

Donna, what do you think about Sarah Palin's response and the White House's reaction?

DONNA BRAZILE, DEMOCRATIC STRATEGIST: First of all, Rahm has apologized and, you know. I also believe that it was the wrong word to use, and I'm glad that his apology has been accepted by so many people. And I hope Governor Palin will accepted his apology in the spirit that he has given it.

Now I don't know about liberals and whether or not they will accept it, because it's clear to me based on the article that she read that Rahm was upset with some people in the liberal community that wanted to really go after centrist Democrats, but not fully backing the president's agenda.

So that appears to be the reason why Rahm said that, but, Wolf, I've been in a lot of meetings with Rahm. He's tough, he's a tenacious fighter, but you know what? He's helping the president move the country forward.

BLITZER: All right. Let me let Mary weigh in. You know Rahm for many years as well.

MARY MATALIN, REPUBLICAN STRATEGIST: Yes, and that's the kind of language that would just go in one ear and not the other because that is his vernacular, and he did apologize. But that's -- Donna is exactly right, this is not about that, it's about the inner essence, the civil war, going on between the far left, the cranky far progressive left, and centrist or moderate or center left Democrats.

And the irony of this is is that Rahm Emanuel almost single- handedly recruited every one of those guys for whom -- to whom they owe their majority. In '06 and '08 he was recruiting congressional candidates. That's why the Democrats have the majority, not because of these cranky progressives.

And Rahm is in the epicenter of that but he's the architect of it. And if he doesn't want the presidency to implode further, he needs to support the centrist Democrats. That's where the country is.

BLITZER: Should he call up Sarah Palin and apologize to her?

BRAZILE: Well, if you start apologizing to Sarah Palin, let me just tell you as on the special needs children, I'm sure Mary have friends or relatives -- I mean there are so many people -- that's why he apologized, I believe, to Tim and members of the Special Olympics.

It was the wrong thing to say, but if you look at Rahm Emanuel's voting record in the United States Congress, look at his life and his life history, this is a man who has always devoted himself to helping children with special needs and helping others in this country.

So I hope we don't get into who should go back and apologize. He's a good person.

BLITZER: Do you agree, Mary?

MATALIN: I think there should be a -- what Donna just said is correct, that when people whose life is an exemplar of what's in their heart and they've walked the walk, then we should -- right and left -- everybody should be -- have the same standard, judge somebody by their whole life.

Again, this is not -- this is super-secret, sworn to secrecy meeting, and they have violated -- they the progressive violated the trust that was bestowed upon them by ratting out Rahm, not about this issue, but because they don't like that he's supportive of politics that isn't as fringy as theirs.

BLITZER: Let me switch gears to China and the president's upcoming meeting with the Dalai Lama.

Donna, the Chinese government in Beijing, they're very unhappy about this, and they have a lot of U.S. treasury bills at the same time. Should the president go forward and have a meeting with the Dalai Lama as President Bush and other presidents have done?

BRAZILE: Absolutely. And you know, the day that we kowtow or bow to any other foreign nation just because they own some of our debt would be a terrible statement that we could make as Americans.

I hope he meets with the Dalai Lama. The Dalai Lama is more than just a spiritual leader, he is the leader of a movement of a league of people, so I'm glad that he plans to meet with the Dalai Lama.

Now let's hope he meets during the day so we can cover it here live on CNN.

BLITZER: What do you think, Mary?

MATALIN: Absolutely. And the hesitancy with which he supported -- or seemed not to support the Freedom Fighters in Iran, we still are the bastion of human rights. We have to stand up for it. We have to meet with the Dalai Lama.

We can't capitulate just because they have $800 billion worth of treasuries, but it's interesting -- this is an interesting that people need to understand the intersection of our unsustainable debt, structural debt, and national security.

This is where it comes into play. They own us and they also are a key vote on Iran and lots of other national security issues, so we can't forget to make people understand about this structural debt is not just accruing to our own detriment domestically, but it affects our foreign policy as well.

BRAZILE: But I want to also say, Wolf, that the United States has also agreed to sell arms and other products to Taiwan. The Chinese are not happy with that. So get over it.

BLITZER: Yes, well...

BRAZILE: We're the United States of America. We're proud of it.

BLITZER: They hate both of these policies. BRAZILE: Yes.

BLITZER: Meeting with the Dalai Lama and selling arms to Taiwan.

All right, guys, thanks very much. Donna Brazile and Mary Matalin.

The secretary of education, Arne Duncan, is here. He's in THE SITUATION ROOM. He says he's sorry about something, but is the political damage in New Orleans done? What's going on? I'll speak about that and a lot more with the education secretary when we come back.


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

JACK CAFFERTY, CNN ANCHOR: The question this hour, Wolf, is how would the repeal of "Don't Ask, Don't Tell" affect life in the United States military?

Loren in Chicago writes, "In the long run, it's not going to make a difference. Gays are tolerated in society at large for the most part. And for all the macho posturing that can go on in the military, it's ultimately a brotherhood of believe in protecting our country. Some may question the inclusion but ultimately, they'll understand that the flag is the same."

Bill in Arizona writes, "I don't believe they should repeal the 'Don't Ask, Don't Tell' policy in the military. I'm a former sergeant in the Marine Corps and I have found that some, not all, use the uniform to hide behind. 'Look at me, I'm a macho Marine,' when all the time they're gay. I don't want my grandson sharing a foxhole with someone who's gay."

George writes, "I served 27 years in the Army. At that time would never support gays in the military. I believe the public support of gays is much higher now that it was in 1993 when the ban was put in place. The stigma associated with being gay is not as big a problem with the men and women in uniform today as it was in the past."

Albert in Los Angeles, "Ending 'Don't Ask, Don't Tell' will have the same impact as every other growing pain our nation has survived. Positive. At first only white land owning males could vote. The road to today's integrated combat force has been an uphill battle all the way. But every time our troops become more integrated they become a stronger diplomatic symbol to the world of America's commitment to defend the rights of mankind."

Ed in Georgia writes, "The real problem will be the homophobic bullies who will not conform to the social norms. Not the gay service members who have spent their lives striving to conform."

And Bruce says, "Remember how the U.S. was worried when Harry Truman wanted to integrate the military in the 1950s? There were all kinds of excuses then but we survived. Now we have another step to take so that our military can join the 21st century. Just do it. As a decorated veteran of Vietnam, I served with men I knew were gay and I trusted them with my life."

If you want to read more on this, you can find lots more on my blog, Wolf?

BLITZER: Jack, thank you. Stand by.

As Toyota copes with a sweeping recall, the Apple co-founder Steve Wozniak airs a complaint. The computer wizard thinks there's a software glitch in his car that causes Prius to speed up.

One car owner's gripe or a widespread problem that needs Toyota's attention right now?


BLITZER: Apology today from the Education Secretary Arne Duncan. He says it was dumb for him to suggest that Hurricane Katrina was a good thing for the New Orleans failing school system.

The secretary is joining us now here in THE SITUATION ROOM.

Mr. Secretary, thanks very much for coming in.

ARNE DUNCAN, U.S. EDUCATION SECRETARY: Good afternoon. And thanks for having me, Wolf.

BLITZER: I want to you explain your comments because it caused quite a little stir. You said, "This is a stuff thing to say but let me be really honest. I think the best thing that happened to the education system in New Orleans was Hurricane Katrina. That education system was a disaster and it took Hurricane Katrina to wake up the community to say that we have to do it better."

All right. Explain what you meant.

DUNCAN: Yes, very simple. What I said was dumb and I didn't say it clearly and as well as I should have. I was simply trying to make the point that subsequent to that devastating tragedy, Hurricane Katrina, there's been remarkable, remarkable progress in New Orleans.

I wanted to thank the teachers, the principals for their hard work and most importantly for the students for their perseverance.

I think New Orleans is like many places that is making great, great progress. What we want to continue to do here at the federal level is support excellence, to reward excellence, to learn from that innovation.

And I think there's a real model there of extraordinary improvement given an unspeakably tough tragedy. I couldn't be more proud of the progress they're making there collectively as a community.

BLITZER: And you called the mayor, Ray Nagin, to apologize, right?

DUNCAN: I talked to the mayor. I talked to the governor. People really understood what I was trying to say. I just said it poorly and that was my fault.

BLITZER: All right. Fair enough. Let's talk a little about "No Child Left Behind." This is the program that George W. Bush as president and the late senator, Ted Kennedy, they were colleagues, effectively worked it out. You want to tweak it now.

What's the most important thing you want to change?

DUNCAN: I said more than to tweak. We want to fix "No Child Left Behind". We want to really reward excellence. There are many, many ways to fail under "No Child Left Behind," very few ways to signal excellence.

We want to evaluate growth, how much you're improving each year. We want to make sure we have high standards. Under "No Child Left Behind" standards in many states got dummied down due to political pressure.

That's not good for children. That's not good for the country. We want to raise the bar. College ready, career ready standards for every child.

BLITZER: And your -- in the new budget the president has a lot more money for education. Do you have any indication this -- education is an area where you can work cooperatively with the Republicans in the House and Senate?

DUNCAN: Absolutely, Wolf. This is the issue around which the entire country can rally behind. Doesn't matter politics or ideology. All of us understand the sense of urgency. We have to educate our way to a better economy.

If we're serious about making sure folks have a chance to get a good job, we have to do a much better job of educating them. We all have to rally behind this and the president's increased investment in education demonstrates his extraordinary commitment.

And we are absolutely committed to working in a bipartisan matter to fix "No Child Left Behind" and take education in our country at every level, early childhood, K-12, and higher education to an entirely different level.

BLITZER: Let's talk about sex education in the public school systems around the country. I assume you saw this new study that just came out suggesting that these abstinence only programs do have an effect in reducing teen sex.

I wonder if you want to react to that and if you think that there's now an opportunity to use some of this abstinence only policy in public schools.

DUNCAN: The funding for those programs comes not from the Department of Education but from Health and Human Services, so Secretary Sebelius would be much better than I to articulate what's going on there. She's doing a phenomenal job.

I would just tell you that we should go where the evidence leads us. The goal, which again we can all rally behind, is we want to have less teens become pregnant. And whatever's working, whatever local communities can demonstrate to us as making a difference in reducing those teenage pregnancy rates, keeping students in school, keeping them graduating, we need to support that work.

BLITZER: Are you ready to take on the teachers unions around the country so that the good teachers are rewarded and the bad teachers, even the awful teachers, could get fired?

DUNCAN: Well, I've said repeatedly that student achievement has to be part of teacher evaluation systems. Teacher evaluation systems in this country are broken. They don't work for good teachers. They don't work for teachers for improving or they don't move out teachers who frankly need to find another profession.

Everyone agrees with that. I have said repeatedly we absolutely have to recognize excellence, great teachers, great principals, make a huge difference in students' lives. We need to spotlight them. We need to learn from them. And yes, we need to reward them.

And in the president's budget we have significant money to create incentives to reward great talent, those teachers and principals who are making a huge difference in students' lives, and to encourage them to work in historically underserved communities. Be that inter-city urban or rural.

If we're serious about closing the achievement gap in this country, which we have to do, we have to close what I call the opportunity gap, and we have to get great, great talent into communities that need that help and those students that need that support.

Very, very important for us to do.

BLITZER: Nothing is more important than educating the nation's young kids and not so young kids at the same time.

Mr. Secretary, thanks very much for coming in. Good luck.

DUNCAN: Thanks so much for having me. Take care now, Wolf.