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The Next Democratic Senator to Fall; Mumbai Suspect May Plead Guilty; Spat between Israel and U.S.

Aired March 16, 2010 - 17:00   ET

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


WOLF BLITZER, HOST: Thanks very much, Rick.

Happening now, breaking news -- a top administration official predicts Osama bin Laden will never be caught alive. This hour, the attorney general's surprising remark and what it says about the hunt for America's most wanted terrorist.

Plus, House Democrats dig deep into their rule book to come up with a way to pass health care reform and try to protect their members on election day. This hour, a reality check on the strategy and whether it will backfire.

And Tiger Woods makes his comeback official -- we'll look at his master plan to play at The Masters and whether the timing is right.

I'm Wolf Blitzer.

You're in THE SITUATION ROOM.

ANNOUNCER: This is CNN breaking news.

BLITZER: Let's get to the breaking news right now -- the long and fruitless search for Osama bin Laden. The attorney general of the United States has just made an eye-popping new prediction about the way bin Laden's years as a fugitive will end.

Let's go straight to our homeland security correspondent, Jeanne Meserve.

She's got the details -- Jeanne, pretty surprising, tough comments from the attorney general.

JEANNE MESERVE, HOMELAND SECURITY CORRESPONDENT: Yes, Wolf. To put it in context, as is so often the case when the attorney general has lately appeared on Capitol Hill, there was animated debate about whether Guantanamo detainees should be tried in civilian courts or military commissions. Although some only want to see military commissions used, the attorney general wants leeway to use both venues. He insists detainees would not be coddled in civilian court. He testified today that they would be treated not like an innocent citizen, but like a mass murder, like Charles Manson. And that let to some more colorful language when Texas Republican John Culberson said that reflected a profound disconnect with the American people.

(BEGIN VIDEO CLIP) REP. JOHN CULBERSON (R), TEXAS: Granting Osama bin Laden the right to appear in a U.S. courtroom, you are clothing Osama bin Laden with the protections of the U.S. Constitution. That's unavoidable.

ERIC HOLDER, ATTORNEY GENERAL: Well, let...

CULBERSON: And it's something that you've skipped right past.

HOLDER: Let's deal with the reality...

CULBERSON: And it's giving Constitutional rights...

HOLDER: (INAUDIBLE)...

CULBERSON: -- to enemy soldiers, that is the profound problem, sir.

HOLDER: I mean, you're talking about a hypothetical that will never occur. The reality is that we will be reading Miranda rights to the corpse of Osama bin Laden.

(END VIDEO CLIP)

MESERVE: Holder did not elaborate. It is not clear if he believes bin Laden will die in battle or kill himself if there's the prospect of being captured -- Wolf.

BLITZER: That's the end of this debate over this whole notion of military commissions?

MESERVE: Absolutely not. The attorney general started questioning Culberson.

And here's a bit of that exchange.

(BEGIN VIDEO CLIP)

HOLDER: In those military commissions, those people are given Constitutional rights, are they not?

CULBERSON: Well, they are, in a military commission, not clothed with all of the protections of the U.S. Constitution. They are treated by the military as enemy combatants captured at time of war. And the question is...

HOLDER: But they're not put up against the wall and shot...

CULBERSON: -- as...

HOLDER: They have the ability to confront those who accuse them. They have the rights to lawyers.

CULBERSON: It's...

HOLDER: They have many of the same Constitutional rights (INAUDIBLE)... CULBERSON: Severely restricted rights in military tribunal is the problem. We're at war.

(END VIDEO CLIP)

MESERVE: Clearly, again, no meeting of the minds. And the attorney general said today that there has been no new decision on where to try self-professed 9/11 mastermind, Khalid Sheikh Mohammed. The attorney general said to expect that in the next couple of weeks -- Wolf.

BLITZER: So just to recap, the attorney general of the United States, Jeanne, made it clear to Congress today that under no circumstances would bin Laden ever be captured alive, he would die one way or another?

MESERVE: And that's what he said, Wolf. We'll see if he'll revise and extend those remarks.

BLITZER: Jeanne Meserve with that.

Thank you.

We're going to have much more on the hunt for bin Laden and the terror trials in the United States. Later, in our Strategy Session, James Carville is ready to square off with Eric Erickson. Stand by for that.

Let's get to the final big push right now for health care reform. It's teaching all of us about the unusual ways a bill can become a law -- stuff kids never learned on "Schoolhouse Rock."

Right now, watch this.

(BEGIN VIDEO CLIP FROM "SCHOOLHOUSE ROCK," COURTESY ABC)

UNIDENTIFIED CHILD: Whoooo. You've sure got to climb a lot of steps to get to this Capitol Building here in Washington.

But I wonder who that sad little scrap of paper is?

UNIDENTIFIED MALE: I'm just a bill. Yes, I'm only a bill. And I'm sitting here on Capitol Hill.

(END VIDEO CLIP)

BLITZER: All right. We want to explain exactly what the House Democrats may -- repeat may -- do to get this legislation passed in the coming days, as simply as we possibly can.

Our national political correspondent, Jessica Yellin, is here with us -- Jessica, "Schoolhouse Rock" -- even some members are -- are talking about this today.

JESSICA YELLIN, CNN NATIONAL POLITICAL CORRESPONDENT: They are. Everybody loves "Schoolhouse Rock". Wasn't that the best?

OK, we're trying to putting this in "Schoolhouse Rock" terms, Wolf. So first, we have the Senate version of the health care bill. He's just a law -- he's just a bill trying to become a law.

Now, this is still awaiting action by the House. Democrats -- some of them in the House really don't like what's in that Senate version of the bill. And they're worried that if they vote for it, they will pay a big price on election day. So Democrats in both the House and Senate are drafting a series of changes or fixes to the bill under the suddenly famous process now called reconciliation.

And -- those are the fixes.

And in the House, leaders are considering a sort of two for one deal to get it all done. That two for one deal is called a self- executing rule. It would just deem the Senate bill passed once the fixes are approved by the House.

BLITZER: So how does that help Democrats?

YELLIN: OK. Here's the bottom line. Under this plan, that rule, House Democrats would never have to take a direct vote on the Senate bill. Again, they'll never have to vote on the bill they don't like.

Now, that bill is unpopular with some of them. So these House Democrats could go home and tell constituents, hey, I voted for the rule, not for the bill. And they hope that that would give them some political cover.

But, as you've probably guessed, some Republicans are not buying it. They say the whole thing is shady. And it's just not the way major legislation should be passed.

(BEGIN VIDEO CLIP)

SEN. JOHN CORNYN (R), TEXAS: And I guess what I would call it is Nancy Pelosi is trying to come up with an immaculate conception. Somehow she's going to try to claim that they didn't vote on the Senate health care bill when, in fact, that's necessary under the Constitution before it can be signed into law and then the reconciliation process move forward.

(END VIDEO CLIP)

(BEGIN VIDEO CLIP)

REP. JANICE SCHAKOWSKY (D), ILLINOIS: News flash -- people in the real world don't care about self-exacting -- executing rules or reconciliation and don't even know what it is. What they do care about process is the process of the insurance companies, the process of refusing a child who has asthma, the process of raising prices 39 percent, 50 percent, 60 percent for your insurance policy.

(END VIDEO CLIP)

YELLIN: And news flash, Wolf, both Republicans and Democrats have used this very procedure before.

BLITZER: And they may -- repeat, may -- use it again this week if they have to.

Stand by, Jessica.

I want to bring in our senior Congressional correspondent, Dana Bash -- Dana, Republicans are criticizing it. Democrats are defending it.

What are you hearing on the Hill?

DANA BASH, CNN SENIOR CONGRESSIONAL CORRESPONDENT: Well, Jessica's absolutely right when it comes to Republicans, they have used it before. Both parties have used this process before for one reason. And that is to try to protect their members from tough political votes. Republicans, for example, they -- when they were in charge, they used this self-executing rule on everything from immigration -- which, of course, is a big political wedge issue for them -- and the line item veto. So it is absolutely correct, despite Republicans screaming, which we've heard all day today, they used it when they were in charge, also.

BLITZER: You spoke with the chair of the House Rules Committee, Congresswoman Louise Slaughter.

What does she say?

BASH: She was very much defending this idea, obviously. It is hers. And not only that, she was pretty candid in explaining why Democrats are doing it. And that is, from her perspective, to protect House members from voting for the Senate bill, specifically from voting on something that they don't like. That is that Nebraska deal -- Medicaid subsidies for -- specifically for Nebraska. That is something that they don't like substantively and definitely don't like politically. She said that's one main reason why they're doing this.

(BEGIN VIDEO CLIP)

REP. LOUISE SLAUGHTER (D), NEW YORK: And it's used often. It's been used by both parties. And there's nothing unconstitutional about it. It's perfectly legitimate and legal procedure.

QUESTION: Why not just take a vote on it?

SLAUGHTER: Because we don't want to have to take a vote on Mr. Nelson's projects and other things. We -- we see no necessity and need to do that when we have this procedure at hand.

(END VIDEO CLIP)

BASH: And, Wolf, I spent a lot of time today talking to rank and file Democrats, some of those the leadership is trying to protect. Now, most said that it doesn't really matter if they vote on a rule or if they vote on the actual bill. They know that if it's politically dicey for them, they are going to get hit by the Republican opponents no matter what the technical thing that they vote for is.

BLITZER: And I know you've been speaking with a lot of Democrats. They need 216 votes in the House to get it passed. They clearly don't have 216 votes today. That's why it's not coming up for a vote yet. But you've been speaking to some members who are still on the fence.

BASH: That's right. I spoke to one in particular who is one of those who was at ground zero of the fight that Democratic leaders are having to get those votes. It is John Boccieri. He voted no last time. He's a freshman from Ohio. He's in one of those swing districts. And he says that he is actually considering voting yes. So he is under -- under a lot of pressure. He's an undecided.

(BEGIN VIDEO CLIP)

REP. JOHN BOCCIERI (D), OHIO: The decision I'm faced with is voting on an imperfect bill or doing nothing. And we just had calls from constituents. My chief of staff, his wife works for a small business and understands that they just had an increase in -- in premiums. I'm not afraid to stand up and take a tough vote. And even if it means taking on, you know, our leadership.

And it was a very difficult decision to come to, you know, on the first -- on the first version.

Our office is under siege right now. And we're getting calls from not only in the district you, but all over the country.

BASH: Look at this. I mean the phones have not stopped ringing.

BOCCIERI: You should see our district office. I -- I answer my calls from time to time and hear what -- hear what folks have to say.

This is Congressman Boccieri.

We can agree on this, that the system does need to be reformed. And we need to do it in a way that allows folks to have better choices.

Would you agree?

BASH: You're a freshman. This is a very tough vote. This could be a make it or break it vote, maybe decide whether you come back or not.

BOCCIERI: And, like I said, I -- whether I serve two terms or 20, we want to make the right decision for the people of our district and Ohio and the country.

(END VIDEO CLIP)

BASH: And just a footnote. You saw the phones ringing off the hook there. The House administrator said today, Wolf, that the system is simply overloaded because of health care call. We know that Rush Limbaugh told his listeners to call in, but this was happening before he made that call.

BLITZER: It's getting intense out there. These are the -- the crisis days right now.

Thanks, Dana.

We'll check back with you.

Toyota Prius owners aren't the first drivers to complain about cars careening out of control. We're digging deeper into gas pedal problems.

Have officials been too quick to blame drivers instead of carmakers?

And some Republicans are accusing the president of turning Israel into a diplomatic punching bag.

Is the White House leaning too hard on a staunch U.S. ally?

James Carville and Eric Erickson -- they're here. They're standing by for our Strategy Session.

(COMMERCIAL BREAK)

BLITZER: Let's get right to Jack Cafferty for The Cafferty File -- Jack.

CAFFERTY: Just when you think you've seen it all in Washington, along comes something like this. House Speaker Nancy Pelosi may try to pass the controversial health care reform bill without making members vote on it. Simply unbelievable.

Pelosi says she might use a procedural tactic where the House will vote on the package of fixes to the Senate bill and then that vote would signify that lawmakers, "deem the health care bill to be passed."

Politically speaking, this is beyond sleazy. It's meant to protect House Democrats, who are all running for re-election in November, from having to make a tough vote up or down on health care reform. Pelosi says of this process, "I like it because people don't have to vote on the Senate bill," unquote.

In Nancy Pelosi's world, accountability is a dirty word.

The Senate bill, of course, contains many provisions that are unpopular among some House Democrats, including language on abortion funding and taxes on high cost so-called Cadillac insurance plans.

This tactic has been used in the past, but never -- never for something as big and important as the $900 billion health care reform bill. Never. Republicans are jumping all over this, rightfully so. They're painting it as a way for Democrats to avoid taking responsibility, which is exactly what it is. Some even suggest it's unconstitutional.

Meanwhile, President Obama is campaigning relentlessly, calling on lawmakers to pass health care reform. Quote, "I want some courage. I want us to do the right thing," unquote.

Well, the irony here is that if Nancy Pelosi gets her way, it won't take much courage at all on the part of our so-called representatives, will it? Here's the question -- should Nancy Pelosi be allowed to push health care reform through the House without a vote?

Go to CNN.com/caffertyfile and post a comment on my blog -- Wolf.

BLITZER: We're learning a lot about reconciliation, about deeming bills passed into law. We're -- we're getting a little civics lesson out there, aren't we, Jack?

CAFFERTY: We're learning a lot more about lack of political guts.

BLITZER: Yes. But -- but you and I know that's been around for a while, right?

CAFFERTY: Not quite in this -- this obnoxious form or noxious form. This -- this reeks.

BLITZER: Jack Cafferty telling it the way it is.

Jack, thank you.

Honda is recalling more than 400,000 vehicles for potential brake problems. The automaker says Odyssey, Minivans and Element small truck models -- model years 2007 and 2008 may have defective brake pedals that could make stopping the vehicle much harder.

It's just the latest in a series of auto recalls, including more than eight million Toyotas flagged for potential accelerator problems. But Toyota is by no means the first automaker to deal with this issue. And that's triggering accusations government regulators are asleep at the wheel.

CNN's Brian Todd has been investigating for us.

He's here with more on the story .

It's pretty eye-opening -- Brian.

BRIAN TODD, CNN CORRESPONDENT: It is. And what they're saying, Wolf, is that they're -- the regulators are essentially a little overwhelmed in this instance. There fresh concern today that the federal agency charged with ensuring the safety of our cars, that agency that's holding Toyota's feet to the fire, is overwhelmed in dealing with those problems of unintended acceleration. This agency, the National Highway Traffic Safety Administration, NHTSA.

Now, an investigation by the Bloomberg News Agency found that unintended acceleration is certainly not a new problem, that NHTSA has been tracking this for years and that it's found more deaths due to that problem in vehicles made by Ford, Chrysler and other companies combined than it's found in Toyotas over the past decade.

NHTSA itself sent us figures that back that up -- a total of 59 fatalities due to unintended acceleration in vehicles other than Toyotas over the past 10 years. The companies with the most -- Ford with 19, Chrysler with 12. They still pale in comparison to Toyota, which had more than 50 deaths, Wolf. But the figures illustrate that NHTSA has spent decades trying to get a handle on this problem, not always successfully.

BLITZER: What do the automakers say?

TODD: Well, that's interesting. Ford says it hasn't identified any major defects in its vehicles. A Chrysler spokesman told us that the problem was identified as driver error. But safety advocates say that that is the major problem. They say that NHTSA, over the years, has been too quick to close the books on the investigations and blame driver error.

Bloomberg reports that since 1980, NHTSA has run 141 investigations into unintended acceleration and closed 112 of them without any corrective action.

I spoke with Joan Claybrook, a former NHTSA administrator, who's now professor emeritus of the safety watchdog, Public Citizen.

(BEGIN VIDEO CLIP)

JOAN CLAYBROOK, PUBLIC CITIZEN: They found sort of an easy out, in my view, on this by just blaming the driver. But any driver who puts their foot on the accelerator by mistake will take their foot off the accelerator instead of jamming it to the floor and keeping it there until they have a crash. I mean that is just not reasonable.

(END VIDEO CLIP)

TODD: And we contacted NHTSA about this charge. A spokeswoman there issued us a statement saying, quote: "Safety is our top priority and we are committed to getting to the bottom of these unintended acceleration issues. That's why we're undertaking a new, comprehensive review that will look at a wide range of possible causes of unintended acceleration, including potential electronics problems."

And that is at the heart of, of course, Toyota's issues, which Toyota, of course, denies, that it's a widespread electronics problem.

BLITZER: But there's another issue -- a longstanding issue involving NHTSA's own resources. TODD: That's right. Joan Claybrook says that the agency has long been grossly under funded, that the investigations de -- the defects investigations department just does not have enough engineers and enough investigators.

NHTSA's administrator, David Strickland, was asked about that at a Congressional hearing this month. He didn't come out and openly complain that they don't have enough resources, but he did say that they have been given the resources to hire about 60 more people in some of those key departments that investigate.

But here's a figure for you, Wolf. They have 57 people working for their Office of Defects Investigation. And they investigate 30,000 consumer complaints a year. That's not many people. They have a budget -- NHTSA does -- of $856 million. You compare that to the FAA, $17 billion.

They -- you could make an argument that they are grossly under funded and they have a huge task -- to monitor the safety of every American vehicle on the road.

BLITZER: And, yes. That -- that's a big job.

TODD: Right.

BLITZER: Brian thank you.

Brian Todd reporting.

Any safety concerns could have a devastating impact on auto sales, even if there are no defects in the cars -- a fact that Audi knows all too well. Back in the 1980s, the German automaker faced allegations of unintended acceleration that was linked to hundreds of crashes and six deaths. The National Highway Traffic Safety Administration concluded the problem was caused by drivers -- people were hitting the gas instead of the brake.

But it led Audi to install the automated shift lock, which forces drivers to put their foot on the brake before the vehicle can be shifted into drive or reverse -- the feature that's in every automatic car today. But Audi's actions didn't stop the scare. Sales plunged more than 80 percent between 1985 and 1991. And Audi didn't regain its market share until 2000, after a 15 year slump.

Some towns are pulling out all the stops to keep young workers from leaving for bigger cities. We're going to tell you why and what they're willing to shell out in order to entice those workers to stay put.

And thieves set their sights on a drug company warehouse. Just wait until you hear how he carried out their heist and the value of what they stole.

(COMMERCIAL BREAK)

BLITZER: Deborah Feyerick is monitoring some of the other top stories in THE SITUATION ROOM right now -- Deb, what's going on?

FEYERICK: Well, hi there, Wolf.

Well, this sounds like something from a movie. Thieves in Connecticut have made off with $75 million in prescription drugs. Authorities say the sophisticated heist appears well planned. The thieves scaled the side of an Eli Lilly drug warehouse, cut a hole in the roof, rappelled inside, then deactivated the alarm. This apparently took place around midnight early Sunday during a rain storm.

And February's extreme winter weather puts a deep freeze on home building. The Commerce Department reports new housing construction fell by 5.9 percent last month, slightly higher than expected. It's considerably lower than January's very strong showing. Home builders are trying to dig out from the severe housing slump. A rebound is seen as crucial for overall economic recovery.

And a magnitude 4.4 earthquake shook Los Angeles during the predawn hours today. It rippled just east of the city, jolting people awake and snarling the early morning commute. A 10 foot stretch of concrete on crowded Interstate 5 buckled, backing up traffic for miles. It's unclear if the quake caused that damage. Crews patched the roadway and it reopened about an hour later -- Wolf, all I can say is I -- I much prefer waking up to an alarm clock.

BLITZER: I'm with you totally, Deb.

Stand by.

Thank you.

In the run-up to the 2010 midyear elections, there's a powerful California Democrat, Senator Barbara Boxer, on shaky ground right now.

What's happening out in California?

The mayor of Los Angeles, Antonio Villaraigosa, he's here in THE SITUATION ROOM, walking in right now. We'll assess what's going on in the world of politics in California, right after this.

(COMMERCIAL BREAK)

BLITZER: Republicans are promising to hang health care reform around the Democrats' necks in the upcoming November elections. Their warnings are being heard a long way from Washington.

Time for our America Votes 2010 segment.

Joining us here in THE SITUATION ROOM, the mayor of Los Angeles, Democrat Antonio Villaraigosa.

And joining us in the questioning, our senior political analysts, Gloria Borger and David Gergen.

Mr. Mayor, welcome to Washington. MAYOR ANTONIO VILLARAIGOSA (D), LOS ANGELES: It's good to be here.

BLITZER: Barbara Boxer, she's the incumbent. She's up for re- election.

Can the Republicans do in California what they did in Massachusetts and get a Republican elected to the Senate?

VILLARAIGOSA: I don't think so. I can tell you I've been supporting Barbara Boxer since the early 1990s. She's a tough campaigner. She works hard for California. She's working hard for Los Angeles as we speak on a 30/10 plan to create jobs. I expect that she's going to have a tough campaign but I expect she'll ultimately prevail.

BLITZER: Gloria --

BORGER: Hi. Can you sort of fill in the blank for me since you're here in Washington and we're all in the middle of this health reform debate. If the Democrats don't get health care reform, blank?

VILLARAIGOSA: It's unacceptable. It just is.

BLITZER: How much damage would that cause?

VILLARAIGOSA: I think it's going to cause a lot of damage to the country. In California one out of four Californians don't have health care. That number is higher in Los Angeles. The fact is there are 50 million people without health care and the time is now to pass the health care.

BORGER: But politically, if the Democrats don't get health care reform then --

VILLARAIGOSA: I think we will have wasted an opportunity, and that's why I'm hoping that both the liberal and conservative members of the Democratic party will come together and support President Obama in this overhaul of health care.

BLITZER: David Gergen has a question. Go ahead, David.

DAVID GERGEN, FORMER PRESIDENTIAL ADVISER: Well, I'm just curious, do you think California's different from the country with regard to its popularity of health care? Some polls I've seen show that 55 percent of Californians actually favor the Democratic health care plan that's emerging and in most parts of the country it seems much lower. I wonder if that works in Barbara Boxer's favor?

VILLARAIGOSA: I think it does and I do think that Californians understand how important health care is. I authored the Healthy Families Act which about 950,000 kids have health care in California as a result and there's still too many children and families that go without health care in California. And I think that's why a majority of Californians do support this plan. BORGER: Do you -- there's a lot of talk today in Washington about this unorthodox procedure Democrats are thinking of using to get health care reform passed. Is it OK with you if they do it any way?

VILLARAIGOSA: Well, I used to be speaker of the California State Assembly and I certainly understand that rules are sometimes used in a way to move legislation. I hope that whatever happens that there will be a vote. I think it is important that people stand up and say that health care's a right, not a privilege, that we can disagree on the details but that we ought to pass this health care issue.

BLITZER: But let me ask David Gergen because he's been around for a while. How much of an issue is this, this maneuvering around rules? The Democrats, a lot of Democrats in the House, they don't want to vote for the Senate approved legislation, so they've got this new concoction to go around that. In all your years watching this, have you ever seen something like this before?

GERGEN: I haven't, Wolf. Not that I can recall. I recall fierce debate, but I must say I think this right now is a Washington story, but it's rapidly going out into the country. There is a very serious danger here for Democrats. After all the deal making that went on to get this deal passed in the Senate with the Cornhusker and all of this, which did help to elect Scott Brown, and then they went to reconciliation on top of that and now they may go to this new dodgy procedure in the House.

They run a real risk of the public saying, hey, wait a minute, guys, we want an up or down vote. Let's have a clean vote, not a dirty vote. I want to come back to mayor if I may about California politics. What striking, Mr. Mayor, I would agree with you that is certainly Barbara Boxer links, California links for Barbara Boxer.

But what has been striking is how close Tom Campbell, one of the three Republicans, a former congressman, how close he's come to her in some of the polls. Former Republican congressman, very popular, widely respected. Does he have a real chance of pulling off an upset there?

VILLARAIGOSA: He's actually a friend of mine. I served in the legislature with him, but I don't --

GERGEN: Yes, he's a friend of mine, too.

VILLARAIGOSA: I don't believe that he can beat Barbara Boxer. I think she represents the values, the issues, the priorities of our state in a much better way. She's been a great senator for the state of California. I think the people will re-elect her.

BLITZER: Mr. Mayor, you have to make some tough choices as the mayor of Los Angeles. The budget is in trouble. The whole budget in California is supposedly near bankruptcy right now. As you try and make these choices, education, the notion of, you know, four-day school days, the notion of kids not getting the education they need, is that your priority number one? VILLARAIGOSA: Well, it has to be our priority. I went to public schools in California when they were the envy of the nation. Now we're close to the bottom per people spending, we're cutting teachers, we're cutting classrooms and class size and I think it's absolutely --

BLITZER: How bad is the situation in California?

VILLARAIGOSA: I think it's very, very bad. It's hurting our city. It's hurting every part of the state.

BLITZER: Because, as you know, a lot of people look at California and say what happens in California is eventually going to happen in the rest of the country. Is that possible?

VILLARAIGOSA: Well, we're seeing that this is happening all across the country, that these kinds of massive cuts in education and the safety net and the basic services that cities, counties and states have to provide.

BORGER: You're the incumbent and lots of folks are also saying this is an anti-incumbent year. You see that in California?

VILLARAIGOSA: Without question. Anybody in public service today is not doing as well as they might have last year or the year before just because so many people are out of work, and they're losing confidence in our government.

BLITZER: We always like to touch base with you, Mr. Mayor, when you're in town. Thank you very much for joining us. David and Gloria as well.

Top members of the Obama administration gave Israeli leaders an earful and now they're an earful themselves from Republicans who say they're being way to tough at a crucial U.S. ally. James Carville is ready to sound off on that.

And we've traced the guns used in two high profile shootings. How did they get from the hands of authorities to the hands of criminals?

And California teachers, speaking of a bellwether state, they're drowning in pink slips. Right now, we're going to show you the tough choices the state is making to deal with massive budget cuts.

(COMMERCIAL BREAK)

This just coming in to "THE SITUATION ROOM." Let's go Jeanne Meserve. I think there's a plea in the case of David Headley.

JEANNE MESERVE, HOMELAND SECURITY CORRESPONDENT: Well, there's a change of plea hearing that's been scheduled for Thursday in the case of David Headley. We spoke to Headley's office. He said that indeed his client has been cooperating and discussing with the U.S. government and he expects that there may be a plea agreement on Thursday, although the exact details won't be set until they're in that courtroom. Headley, 49 is a U.S. citizen, lived in Chicago. Picked up last October and faces 12 counts in connection with the attacks in Mumbai and also plotting against a Danish cartoonist. So we don't know the specifics, except that he did plead not guilty to all charges in his initial court appearance. It is clear he's going to plead guilty to some of those if indeed this plea change hearing goes forward. But we don't know if he's going to plead guilty to one or all or something in between.

BLITZER: All right, Jeanne, thank you. We'll stay on top of that story.

Would Osama Bin Laden ever face trial in the United States? The attorney general of the United States, Eric Holder, today says, no and Bin Laden will never be captured alive. That story just ahead, here in the "Situation."

(COMMERCIAL BREAK)

Let's get right to our strategy session. Joining us two CNN political contributors. The Democratic strategist James Carville and the conservative editor of redstate.com, Eric Erickson, he's the newest member of the best political team on television. Eric, welcome to CNN.

ERIC ERICKSON, CNN CONTRIBUTOR: Thanks for having me.

BLITZER: Let's talk, first of all, about Israel and the United States, James. Anthony Wiener, the Democratic congressman from New York, he says this fight has gone on way too long already. He says this, "The appropriate response was a shake of the head, not a temper tantrum. Israel is a sovereign nation and an ally, not a punching bag. Enough already." Anthony wiener is a big Democrat, a major supporter of the president, but he's telling the Obama administration calm down.

JAMES CARVILLE, CHIEF STRATEGIST, CLINTON-GORE CAMPAIGN, 1992: Right, and of course you have Tom Friedman who is hardly anti-Israel in "The New York Times" saying that the vice president should have left. But the truth of the matter is we're having a spat with an ally. A little bit like my daddy's fighting with my uncle here. You know, understand that.

But the United States is not happy with what happened in terms of these settlements. You got people like General Petraeus who is probably putting pressure on them, the military is putting pressure on them to distance themselves from this also saying this has an adverse effect on what's going on in Afghanistan and Iraq.

So the administration is under a lot of competing pressures here. I hope they can get this thing resolved at some course. But right now seems like pretty raw between Israel and the United States.

BLITZER: It's quite tense, Eric. John McCain who's a key member of the Armed Services Committee in the Senate, he says it's not just the tensions between the Obama administration and the government of Prime Minister Netanyahu that he sees as a problem, but he also blames the administration for other issues in the Middle East. Listen to this.

(BEGIN VIDEO CLIP)

SEN. JOHN MCCAIN (R) ARIZONA: I'm concerned that we are heading toward a situation in the broader Middle East where our friends don't trust us and our enemies don't fear us. Because both doubt our staying power, our determination and our resolve.

(END VIDEO CLIP)

BLITZER: What do you make of this tension?

ERICKSON: You know, by and large, I think John McCain tends to be right on these issues, and there is some concern.

There's concern among Jewish voters here as to the faith of the Obama administration puts into the alliance with Israel. There is concern that maybe we don't recognize who our real friends are and our enemies are in the Middle East.

It's a difficult no-win situation for any American president. But because of some missteps made coming into the White House, the Obama administration is going to have a tough time with this.

And going into the November elections in places like Florida and New York where you've got a lot of swing voters who happen to be Jewish and Israel is a big issue for them, if they don't play their cards right, it's not just going to hurt them internationally, it's going to hurt them politically here as well.

BLITZER: But, James, would you say that a lot of American Jewish American voters right now -- and you're pretty well plugged in -- tend to agree with Biden and Obama as opposed to Netanyahu, that when Biden arrived in Israel and they made that announcement about 1600 new housing units in east Jerusalem, that was a slap in the face?

CARVILLE: Right. And you know -- and there's some concern in Israel. I made some phone calls this morning. And obviously it's a big issue in Israel.

You know, the Jewish community in the United States and certainly as you and I well know, Wolf, in Israel is hardly united on anything. Any number of different opinions here.

I know a lot of people, myself included, hope that we can get better relations, but that was the head (INAUDIBLE) and the secretary of state who I happen to know is not very happy about this, neither was the vice president.

And it's sort of understandable. That we need to re-establish -- I think the ambassador that Israel has here to the United States is a smart guy. And they need to work on this thing more. But right now, the feelings are raw and they're kind of understandably so. BLITZER: All right. Let me move on to this other big story today, Erick. The Eric Holder comments before Congress and his testimony saying that bin Laden is never going to face trial in the United States if captured. Listen to what he said.

(BEGIN VIDEO CLIP)

ERIC HOLDER, ATTORNEY GENERAL: The reality is that we will be reading Miranda rights to the corpse of Osama bin Laden. He will never appear in an American courtroom.

(END VIDEO CLIP)

BLITZER: Music to your ears?

ERICKSON: Yes, you know, in other breaking news, the sun rises in the east and sets in the west. I mean, this is -- seems to me to be a no-brainer and I hope no Republicans in Congress were shocked by this. Good for him to take the position. I hope it comes to be and I hope it comes to be quickly.

BLITZER: James?

CARVILLE: Well, first, I forgot -- let me also welcome -- Erick, welcome and we can agree that welcome to CNN family. Now we can go back to arguing.

(LAUGHTER)

ERICKSON: Thank you.

CARVILLE: Yes, I think bin Laden has said himself that he would never be taken, that he would commit suicide and has instructed his body guards to kill him and everything.

Look, I have a -- I probably don't have a popular view on this, I think we should -- I think civilian courts is the way to go. That's exactly what we did with the Nazis. We took Chief Justice Jackson, have him established civilian courts because they're criminals. And, again, I think they should be treated as criminals.

When Israelis, they're talking about them, when they captured Adolf Eichmann they took him back to Israel and actually gave him a trial and a lawyer and let him testify on his own behalf.

I think -- I have ultimate confidence that our federal courts are able to prosecute these criminals because I have to rely on our courts because I step out on the streets all the time.

BLITZER: We're going to continue this conversation on another occasion.

James Carville and Erick Erickson, guys, thanks very much.

ERICKSON: Thank you. BLITZER: The Republican Senator Lindsey Graham is standing by to join us live. We're going to talk about an important new change in the way U.S. troops can hold terror detainees and why he fought for it. Stand by for that.

And CNN learns that the gun used in a shooting near the Pentagon came from a very surprising place many miles away.

(COMMERCIAL BREAK)

BLITZER: Right back to Jack for "The Cafferty File" -- Jack?

JACK CAFFERTY, CNN ANCHOR: The question this hour: Should Nancy Pelosi be allowed to push health care reform through the House without a vote?

Dan says: "This is what we've come to expect from Pelosi and her ilk. It explains the shocking January revolt in Massachusetts and hints at a possible Democratic slaughter in November of 2010 if they use such a tactic. I suppose saying no to such an unaffordable monstrosity doesn't qualify as being courageous in Obama's world. So typical."

Tom in Las Vegas writes: "I voted for Reid and Obama, but I can tell you I was sadly mistaken. I was taken in, like so many others, but I will reflect my anger in November and again in 2012 against Obama. People I talked to consider Nancy Pelosi to be an idiot. How she got where she is mystifies us. Our government's acting just as the communists do, and they have forgotten that they all work for the American people."

Michael writes: "I'm not exactly a humongous fan of the bill and I'd rather see the Medicare buy-in, but this is a standard procedure used extensively by both political parties."

Pam in Tennessee writes: "OK, what do we have representatives for? To vote in our interests? Speak the will and desires of the people? If the health bill has so many issues, should not someone stand up and say, hey, maybe we need to go back to the drawing board? Maybe we need solutions proposed not by lawyers but by educated, caring, American physicians, administrators and people who actually work in the trenches of health care who know what the real problems are."

Nathaniel writes: "At this point anything that gets this thing passed is a good thing. This bill will save a lot of lives and a lot of money, and the sooner we can get to doing those two things, the better."

And Bill writes: "I couldn't agree with you more. The president says he wants an up-or-down vote on health care and for people to show some courage. I guess Pelosi didn't get the memo."

If you want to read more on this subject, we got, I think, 3,000 letters in the last 40 minutes or so on this subject, go to my blog, CNN.com/caffertyfile. Wolf? BLITZER: Three thousand e-mails just like that, huh?

CAFFERTY: In, like, 40, 45 minutes, yes.

BLITZER: And most of them pretty angry?

CAFFERTY: Well, no, I mean, there's some on each side. But this is generally perceived as being a little sleight of hand, a little three-card Monty, a little which walnut shell is the pea really under? The answer is none of them.

(LAUGHTER)

BLITZER: We're going to learn more about this legislative process in the next 48 hours. I suspect there are a few more maneuvers coming our way.

CAFFERTY: You may want to put on a gas mask.

BLITZER: Thanks. Stand by.

Tiger Woods formally announces his comeback today. We're going to take a closer look at how much he and his corporate sponsors stand to win or lose now that he's returning to golf in the coming weeks.

And we'll travel to Alabama to see how companies are building up America one young worker at a time.

(COMMERCIAL BREAK)

BLITZER: Building up America by holding on to young talent in the workplace. It's certainly a goal with an economic payoff. Especially for smaller cities and towns that often see younger workers leave in droves for bigger job markets.

CNN's Tom Foreman is joining us now from Montgomery, Alabama where they're working on this problem.

Tom, what are you finding out?

TOM FOREMAN, CNN CORRESPONDENT: And they really are, Wolf. This is a town that appreciates its history as both the Cradle of the Confederacy and of the civil rights movement all starting right here. But right now the focus is on the future, and that means on keeping younger workers to help them build up.

Take a look.

(BEGIN VIDEOTAPE)

FOREMAN (voice-over): On a highway north of Montgomery, in a building you'd hardly notice, Jerry Monroe is growing a heck of a business.

JERRY MONROE, ONLINE COMMERCE GROUP: Every day, you've got to make something happen. You see opportunities, and because, you know, we develop everything ourselves, we just -- you know, we start hammering on those ideas.

FOREMAN (on camera): How important do you think that is in a difficult time in the economy?

MONROE: Oh, it's critical.

FOREMAN (voice-over): His company -- the Online Commerce Group -- specializes in Internet sales of custom-made cushion covers, drapes, pillows, but what it's really doing is fulfilling a dream Jerry has had since college -- of succeeding in his home state of Alabama.

(On camera): Is this good business?

MONROE: It is an absolute blast.

FOREMAN (voice-over): Keeping young talent from running away to the big cities is a serious matter especially in hard times. Chamber of Commerce formed this group called "Emerge" to foster leadership, success, and community among young professionals, whom they know have different needs and wants from older workers.

HANNAH CHADEE, "EMERGE MONTGOMERY": Well, I think excitement, activities, nightlife -- especially nightlife.

JASON GOODSON, "EMERGE MONTGOMERY": Another issue that a lot of people don't normally think about is education and things for kids.

ASHLEY BRANDLE, "EMERGE MONTGOMERY": I want to be able to just really know that I -- my voice is heard.

FOREMAN: So the city is expanding its entertainment venues, offering more activities, improving schools, and Mayor Todd Strange said it's all to keep young talent around.

MAYOR TODD STRANGE (R), MONTGOMERY, ALABAMA: All of those things taken together really do offer the opportunities. But we have just begun to fight.

FOREMAN: This is not all about the future. Jerry Monroe has found immediate rewards.

MONROE: We've got young people that don't have a lot of experience with business, but they have a tremendous amount of knowledge about the Internet, about technology, and they've lived it.

FOREMAN (on camera): And about that community. Yes.

MONROE: How people communicate.

FOREMAN: Exactly.

(Voice-over): By tapping that knowledge, he's more than doubled his business almost every year since it started six years ago, creating 30 jobs, along with a reason and a way for that talent to stay. (END VIDEOTAPE)

FOREMAN: Simple equation, Wolf, that can work anywhere like they're to make it work here. Keep the young people around for keeping building blocks for the future -- Wolf?