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Health Care Puzzle; Perils of Voting Yes; Trip Delayed; Gay Soldiers Protest; Terror Conspiracy Charges; Fighting against Reform

Aired March 18, 2010 - 19:00   ET


WOLF BLITZER, CNN ANCHOR: Happening now, President Obama delays his overseas trip once again as House Democrats push toward weekend votes on health care reform, this hour the House speaker is gushing over a new set of numbers, but her vote count still isn't where she says it needs to be.

Also, the man who changed everything in the United States Senate, Republican Scott Brown of Massachusetts, he's here in THE SITUATION ROOM, this hour how far is he willing to go to stop health care reform?

And new controversy surrounding a soldier who admitted he's gay on national television. He apparently was arrested outside the White House today in a protest over "don't ask, don't tell".

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

Democrats now have an important piece of the puzzle as they try to put together enough votes to finally pass health care reform. The nonpartisan Congressional Budget Office released its analysis of a compromise version of reform. They released that today and it estimates that the compromise would cost $940 billion over the next 10 years and reduce the deficit by under $138 billion during that decade.

Let's bring in our senior congressional correspondent, Dana Bash. She is working the story for us. Dana, the Democrats are pretty excited by these numbers, but the key number is 216.

DANA BASH, CNN SR. CONGRESSIONAL CORRESPONDENT: The key number is 216, but it looks at least in the short term as if the numbers that Democrat leaders have been touting specifically, that number of deficit reduction that you mentioned, $138 billion over the first 10 years so far that seems to be helping in their quest to get that 216. Just, for example, two Democrats, Wolf, who vote no for the House bill, have said that they are going to vote yes today, since seeing those numbers and the language, Betsy Markey of Colorado and Bart Gordon of Tennessee.

They said in their statements, for the most part, it was because of the cost issue. These are conservative Democrats from Republican districts and they were concerned very much about deficit reduction. And that helped. There are other Democrats who voted yes before who are getting hit back home, battered back home, for this issue of cost. One is Baron Hill of Indiana. He also said he was happy with what he saw. (BEGIN VIDEO CLIP)

REP. BARON HILL (D), INDIANA: I'm encouraged about the numbers, the deficit, that $1.2 trillion in the second 10-year period and the $130 billion in the first 10 years. So, it is even better than what the House and the Senate passed out. So, I'm pretty happy about the numbers.


BLITZER: And Dana in this compromise, the reconciliation language, the separate legislation beyond the Senate version, what happens to those special favors for Louisiana, Nebraska, Florida, that $100 million hospital they were going to give to people in Connecticut, what about all those special deals?

BASH: Well the biggest one, the most politically charged special deal was, of course, to Nebraska. And I think if you look on the wall, you will see some of the many, many Democrats who said no way will we vote for a bill that gives money for the state of Nebraska, federal money for -- to help with Medicaid that no other state has.

That has changed and so people feel better about that. But there are still other deals in here and that's something I asked the House speaker earlier today.


BASH: Aside from the Nebraska issue, did you remove the money for Connecticut hospitals? Did you remove extra money for -- to help Florida for Medicare Advantage, things like that? Was everything removed, all the special deals?

REP. NANCY PELOSI (D-CA), HOUSE SPEAKER: Well it is not a question of special deals. Whatever is in there can be subjected to many people competing for it. There are caps -- there is a comfort level with why they are in the legislation. We thought that Nebraska was, indeed, a special deal.


BASH: So they are comfortable with things like $100 million that will be competed for but will most likely, people think, go to the state of Connecticut and extra help for the state of Louisiana. And Wolf, it seems as though there might have been a couple of more things added, maybe not as controversial as the Nebraska deal but we just found out that there is a little bit of extra money for hospitals in Tennessee that serve large numbers of low-income -- low-income patients.

I mentioned Bart Gordon. He is from Tennessee. He is now switching from a yes to no. They are hoping to get another House Democrat from Tennessee to switch as well. And there's one other thing that's new, that is North Dakota. That state will actually be exempt from something that has to do with student loans that no other state is. There's a special reason for it, but this is something that might help bring one of the key Democrats from that state along as well.

BLITZER: We'll watch it together with you. Thanks very much, Dana Bash, on the Hill.

Let's talk about the possible fallout of voting yes or no for that matter with our senior political analysts, Gloria Borger and David Gergen. David, this is about as tough a vote for some of those Democrats, moderate Democrats who are in districts that John McCain carried over Barack Obama in 2008 as it comes.

DAVID GERGEN, FORMER PRESIDENTIAL ADVISER: Well that's exactly right, Wolf. There are some 49 Democrats who are in districts that John McCain did carry in 2008. So a number of them are safe but there -- by some estimates, there are as many as three dozen Democrats who are still in play who could be vulnerable if they go to yes on this vote, and as you say earlier it does very much recall, Marjorie Margolies-Mezvinsky in 1994 when she went to bat for President Clinton on a budget and then went down in Pennsylvania, as a first-term congresswoman went down in the election that followed.

BLITZER: She wrote an article in the op-ed page of "The Washington Post", Gloria, today. You know Marjorie Margolies- Mezvinsky. "There are times -- she writes -- in all our careers when we must ask ourselves why we are here. I urge you simply to cast the vote you can be proud of next week, next year and for years to come. Given the opportunity, I wouldn't change my vote. Then again what I do know? I was a lousy politician."

She is giving some advice to those Democrats right now who have to make a decision and potentially could remove them from Congress like she was removed, after she supported President Clinton.

GLORIA BORGER, CNN SR. POLITICAL ANALYST: You know Wolf, I actually covered that, and the problem that Marjorie Margolies- Mezvinsky had was that she had gone on television that morning and said she was against this budget. Then President Clinton, who is very persuasive, called her up. She changed her mind and so she voted with him and she voted for him.

So the problem was that she was telling her constituents one thing all along, had been very vocal against it and then came out and flip-flopped. So it is really not a question for a lot of these members now whether they can vote their conscience. It's just that you can't do one thing and say another.

BLITZER: You know it's interesting that Gloria says that, David, because I was speaking to some Democrats who are on the fence right now and those who are going to vote no, what they're saying is they are going to go into the House chamber, vote no and then run out of there as quickly as they possibly can so Nancy Pelosi or Steny Hoyer can't grab them and convince them to do what they did to Marjorie Margolies-Mezvinsky, get her to change her mind.

GERGEN: Well that is exactly right. If you -- and that's -- you know Nancy Pelosi has to flip some of the no's to yes's and they will be the ones who will be most vulnerable on this flip-flop charge and -- but you know hey, for Marjorie, there was this ironic twist to the tale, of course that her son, Mark (ph) is now engaged to Chelsea Clinton, so maybe good things do come out for her in the end --

BORGER: Right, had nothing to do with it.

GERGEN: Yes, exactly, nothing to do with it --


GERGEN: -- but is still one of those ironies of history.


BLITZER: She may have lost -- she may have lost a race but she did get a wonderful daughter-in-law, Gloria --

GERGEN: Exactly.

BORGER: That is right. But the thing is -- but the thing is Wolf, I think the lesson here is that your constituents will say to you, look, if you change your mind, you're allowed to do that but you have to tell us why. And there better be a good reason for it. But if you do it on the floor of the House in the 11th hour and nobody knows why and you have been talking about it for months and then suddenly you change your mind that is not going to be really well received.



BLITZER: I think those are good points, guys. Thanks very much.

President Obama is making sure he will be around for whatever happens next in this push for health care reform. Today, we learned from the White House he has now postponed his trip to Indonesia and Australia again, this time until June. Our senior White House correspondent Ed Henry is joining us now with the back story on what is going on over there -- lots of nervousness, I guess, Ed?

ED HENRY, CNN WHITE HOUSE CORRESPONDENT: That's right, Wolf. I mean the bottom line is the drama was going on all night through the night. We are told the president's scheduling team was working through the night trying to figure this out and come up with one all the permutations could they delay it by a few hours on Sunday, could they delay the trip to Monday?

In the end they finally decided, let's just postpone it until June, give the president some breathing room and that's because this is not just about this weekend with the House, making sure that goes through on Sunday, but then immediately the White House has to turn its attention to making sure the Senate follows up in the next few days on passing that sort of fix-it bill, those changes that Dana was talking about. And so the bottom line is one top Democratic aide on the Hill told me there is absolutely no room for error and in the end that is why this president had to delay the trip -- Wolf. BLITZER: So he's rolling up his sleeves and he's going to stay on top of it. We'll see what happens. Ed Henry thanks very much.

"Don't ask, don't tell", an openly gay Army officer handcuffs himself to the White House fence, protesting the Pentagon's policy on gays.


UNIDENTIFIED GROUP: "Don't ask, don't tell" has got to go, hey, hey --



BLITZER: (INAUDIBLE) shocking testimony today during a Senate hearing on gays serving openly in the United States military. A retired U.S. Marine Corps general said Dutch troops failed to defend against an act of genocide in the Bosnian War, in part, because gays serve openly in the Dutch military. Listen to retired General John Sheehan talk about the 1995 massacre at Srebrenica during his testimony against allowing gays to openly serve in uniform.


GEN. JOHN SHEEHAN, U.S. MARINES (RET.): Case in point that I'm referring to is when the Dutch were required to defend Srebrenica against the Serbs, the battalion was under strength, poorly led and the Serbs came into town, handcuffed the soldiers to the telephone poles, marched the Muslims off and executed them. That was the largest massacre in Europe since World War II.

UNIDENTIFIED MALE: Did the Dutch leaders tell you it was because there were gay soldier there?

SHEEHAN: It was a combination --

UNIDENTIFIED MALE: But did they tell you that, that is my question --

SHEEHAN: Yes -- they included that as part of the problem.


BLITZER: The Senate Armed Services Committee Chairman, Carl Levin, you just heard him asking the question, told General Sheehan his claim was quote, "totally off target" and the Dutch ambassador here in Washington issued a strong statement saying, "I couldn't disagree more. I take pride in the fact that lesbians and gays have served openly and with distinction in the Dutch military forces for decades, including in leading operational positions such as in Afghanistan at the moment" -- that statement from the Dutch ambassador here in Washington.

While that hearing, by the way, was going on, there was a protest over at the White House against the policy of "don't ask, don't tell". And take a look at this. Openly gay Army National Guard Lieutenant Dan Choi, a West Point graduate, handcuffed himself to the fence along with another man. Both were arrested. Let's talk about it with our CNN political analyst, Roland Martin. You happened to have been --


BLITZER: -- at the White House on other business and you saw what was going on.

MARTIN: Yes, I was actually having lunch and then all of a sudden you saw the folks coming by. In fact, there was a rally; the human rights campaign had a rally at Freedom Plaza. Kathy Griffin was a part of it and I talked with some of the folks there. Choi wanted to speak there as well. Griffin brought him on and so he say we're doing this. So they literally left Freedom Plaza, walked to the White House, led some two, 300 people along with them carrying U.S. flags.

They had this frankly impromptu protest. They had no permit and so the police, they were very hesitant to boo (ph) them away. Then finally, they moved all the protesters to Lafayette Park and then they began to talk to them, gave them a public warning and then they took the handcuffs off, arrested them and took them away.

BLITZER: And the theory behind the protest today -- because the president himself has now said he wants to do away with the policy of "don't ask, don't tell", the chairman of the Joint Chiefs, Admiral Mullen says they now have a committee that is looking into it over the next year, how to do it, not necessarily whether they will do it, but how to do it, so why were they protesting today?

MARTIN: For that very reason. I mean so what has happened is look, gays and lesbians, huge supporters of President Barack Obama in his campaign. And what they are saying is we gave you support, we gave you money, we want something in return. We are hearing the exact same thing when it comes to African-Americans, saying you got 95 percent of the black votes.

Now, remember the scene and debate on MLK Day, then-Senator Obama (INAUDIBLE) endorse a candidate. He said no. But this was important. He said the people arguing, mobilizing, agitating and ultimately forcing elected officials to be accountable, I think that is the key. And so what you are seeing from HRC (ph) is saying, yes, you said you want to do this, but we are going to continue to agitate to make sure you get it done.

And so other folks are saying the exact same thing. They want the president to deliver on change so he himself said change happens, bottom up. They are saying, we on the bottom, we are going to push you to actually make this a reality and not just sort of wait back for it all to take place based upon some kind of committee.

BLITZER: And you're saying there's a similar like undercurrent of resentment in the African-American community as well?

MARTIN: I don't think it's a question of resentment, but what you are hearing is people are saying, look, you got our votes, 95 percent. You got money. We want to see in terms of -- we want to see policies delivered, so we issue (ph) the Congressional Black Caucus. We see others there saying, yes, you are the black president, first black president, you made history, but we are going to do what we have always done, agitate, mobilize and push.

I talked to the White House. They said, look, the president recognizes that he's limited in what he can do, in terms of administratively, Congress needs to act. But they are saying, and rightfully so, we are going to push you into greatness, Mr. President to do what we need you to do. So that is what activists do. And so whether they supported him or not, they're saying we are going to hold you accountable.

BLITZER: Mr. Dan Choi arrested there at the White House. We will update our viewers on what exactly the charge is and how long he's going to serve, if he's going to do any jail time or anything like that. I suspect he won't, but we will see what's going on. Thanks very much, Roland, for that.

MARTIN: All right. Thanks, Wolf.

BLITZER: She is an American from the suburbs. She even lived on Main Street, literally on Main Street, but she's now known as "Jihad Jane" and today she was arraigned on charges that she plotted to aid terrorist and commit murder abroad. Our national correspondent Susan Candiotti has the story.


SUSAN CANDIOTTI, CNN NATIONAL CORRESPONDENT: We are outside the federal courthouse in Philadelphia where, as you know, Colleen LaRose, the woman known as "Jihad Jane", pleaded not guilty as expected to some very serious terrorism-related charges. The thing about the hearing today is it was our first chance to see her in person. Until now, we've only seen those photographs of her posted on the Internet, including her wearing a traditional head scarf.

Today's hearing only lasted about two minutes. And the one thing that struck me -- this is our courtroom sketch artist, Christine Cornell (ph) -- Christine, is how short she was and her attitude, as she came into court. What did you try to capture and what did you observe?

UNIDENTIFIED FEMALE: Well, she came in with an awful lot of energy. I mean, her hands were behind her back so it's --


UNIDENTIFIED FEMALE: Yes, it's hard to know how she carries herself, but she -- she was animated. She turned to smile at her attorney. She seemed very comfortable in the courtroom.

CANDIOTTI: And she is less than five feet tall as well.

UNIDENTIFIED FEMALE: She's a small woman. CANDIOTTI: Hearing was very short and we only heard her say "not guilty" when they asked her to plead to the charges.


CANDIOTTI: Exactly and so the next thing coming up is a trial date that was set for May. We will have to see if that trial date stays on the schedule. Until now, we will continue to monitor this very serious case -- Wolf, back to you.


BLITZER: All right, Susan. Thanks very much -- Susan Candiotti watching "Jihad Jane", as she is called.

He turns things upside down in the U.S. Senate by winning the seat of the late Senator Ted Kennedy. Now Republican Scott Brown takes a seat right here in THE SITUATION ROOM.

And Toyota's grappling with recalls involving millions of vehicles, but its latest recall involves just two, not two models, but two vehicles.


BLITZER: Jessica Yellin is monitoring some of the top other stories in THE SITUATION ROOM right now. Jessica, what do you have?

JESSICA YELLIN, CNN CONGRESSIONAL CORRESPONDENT: Hi Wolf, Secretary of State Hillary Clinton is in Moscow, calling on Russia to delay Iran's first nuclear plant. She says Iran is entitled to nuclear energy for civilian purposes, but she wants Tehran to prove that it's not trying to develop nuclear weapons. Russia insists it will go ahead with plans to launch Iran's nuclear reactor this summer.

Former Presidents Bill Clinton and George W. Bush will make their first joint trip to Haiti on Monday. President Obama asked them to spearhead U.S.'s fund-raising efforts in the wake of January's deadly earthquake. Next week's visit is meant to assess the needs of the recovering Caribbean nation. Haiti's government estimates that quake killed more than 230,000 people and left another 1.3 million homeless.

A U.N. trade group is rejecting a proposed export ban on a prized sushi delicacy. Conservationists say the Atlantic bluefin tuna is severely over fished, but officials shot down the plan after Japan, Canada and several poorer countries argued that it would devastate fishing economies. The U.S. was among the countries supporting that proposal.

And embattled automaker, Toyota is not taking any chances with its latest recall. It issued another recall today, for two, yes just two Tundra pickup trucks that were assembled in San Antonio, Texas, last October. They are being called back because of a faulty weld that could separate. Tests, we are told, discovered the problem but only after the vehicles made it to the customers. Clearly, Wolf, Toyota wants to be thorough, but you'd think they could just track down those two truck owners and call them and tell them to bring home their truck.

BLITZER: Yes, now full transparency whether they recall two trucks or 200,000 trucks --

YELLIN: Pretty amazing --

BLITZER: -- or two million trucks, they going to be fully upfront right now, for good reason. All right, Jessica. Thanks very much.

His pivotal election changed everything in the U.S. Senate -- we're talking about Republican Scott Brown of Massachusetts. He stops by here in THE SITUATION ROOM. How far is he ready to go to stop health care reform? Can it be stopped?

And later, school-issued laptops equipped with cameras. Some parents are accusing schools of spying on their kids. We will hear why it is bringing so many parents to court.


BLITZER: If you had to name one Republican who makes Democrats downright nervous right now it just might be Senator Scott Brown of Massachusetts. He single-handedly deprived the president's party of its filibuster-proof super 60-seat majority in the U.S. Senate. Now, what is he doing for an encore? One thing he is doing -- he's here in THE SITUATION ROOM -- Senator, welcome.

SEN. SCOTT BROWN (R), MASSACHUSETTS: Good to be here. Thank you.

BLITZER: Hope you will be a frequent visitor in THE SITUATION ROOM, not very far from Capitol Hill.

BROWN: Thank you.

BLITZER: And thanks for driving your pickup truck all the way from Congress here.

BROWN: It's how I get along; it's no secret.

BLITZER: Well it's a nice little truck. Let's talk about health care right now, a priority number one. What's wrong with giving 30 million-plus more Americans access to health insurance?

BROWN: Well part of the problem is after a year of doing this it still raises taxes. It cuts Medicare half a trillion dollars, cuts Tricare for military people. It's going to cost a trillion plus and while it is certainly important to provide care for those people, I believe that individual states could do it better and that we can do it better because the car votes and all the special interests issues that we were talking about that we all shook our heads about, a lot of those are still in that bill.

BLITZER: But let me -- I guess I should rephrase the question. What's wrong if spending money, the costs, if it winds up costing money, if it winds up raising taxes on multimillionaires or millionaires, or people even earning more than $250,000 a year if it is going to give access to 30 million Americans so they don't have to worry about getting sick? What's wrong with that?

BROWN: There's nothing wrong with that, but more importantly it does raise taxes and it does raise taxes for people who are earning less. It is going to affect businesses. It is also -- as I said before, I have felt, as we did in Massachusetts, we provide almost 98 percent of our people with insurance and individual states would like to have that right to do the same thing and ask the federal government, how can you help us do that? Can you incentivize us to do it better? Maybe they will do it better than Massachusetts and get costs under control, but this one-size-fits-all plan really hurting businesses and hurting individual citizens right now with all the carve-outs is not appropriate.

BLITZER: Because you do have nearly universal health insurance in Massachusetts for everyone. Did you have to raise taxes in order to do it?


BROWN: No, it didn't raise taxes --

BLITZER: How did you do it?

BROWN: It didn't cut services. Well we provided a competitive plan with the so-called Cadillac plans all the way down to Commonwealth Care which is a fully subsidized plan. We are having trouble right now with costs because we involve mandates and a whole host of other things that we can do better --

BLITZER: Will you have to raise taxes to pay for it?

BROWN: No, I believe we can actually do some internal reforms --

BLITZER: You like what has happened in Massachusetts --

BROWN: Well I voted for it --


BLITZER: You don't want to change it --


BROWN: Listen, it is completely different than what they are trying to do here. People say oh you voted for Romney-care, what about Obama-care? Two different things -- our plan didn't raise taxes. The plan that's being pushed right now, the biggest thing that the people have a problem with is the back room deals, the lack of transparency and the fact that they are using political chicanery and parliamentary maneuvers to ram this bill through when the people don't want it.

BLITZER: If they'd get rid of some of those back room deals, in the sidecar, as it is called, the separate reconciliation bill, it still wouldn't be good --

BROWN: It's not going to be good for a lot of people, not just me. And to put it all on me I think is inappropriate. This bill is really resonating throughout the country. Steve Lynch from my state said he's voting no, and I certainly commend him for that because that bill hurts our state and quite frankly the way they have done it, they can do better. They should do better.

BLITZER: How far are you willing to go -- when I say you, I mean the Republicans, in the Senate to try to block it?

BROWN: Well, I don't -- I don't speak for all the Republicans. I speak for Scott Brown. I'm a Scott Brown Republican as we've talked about before. And I'm going to look at each bill and every bill and be an independent voter.

And the way that they -- I think the House or maybe some members in the House think it's going to come over and through this magical form of reconciliation, it's going to be fixed.

It's not going to be fixed. They're going to go line by line and you're going to get a health care bill that's going to be challenged based potentially by the attorneys generals in the state on its constitutionality.

BLITZER: You think what is a good idea?

BROWN: I don't have an opinion on that. I'll leave that to the legal people. But I do feel that we can do better and we should allow the states to participate more instead of this one-size-fits-all approach that is not good for my state and potentially not good for the rest of the country.

BLITZER: I have been told by some of your colleague, Republicans, that if the House passes it including the separate reconciliation part, making the fixes, the changes whatever you want call it -- they're going to introduce amendment after amendment after amendment in the Senate to try to delay it for as long as possible to change it as much as possible.

BROWN: Well, you know, once again, I said in the beginning it's been a year and we should be talking about jobs right now and we're not talking about jobs. We're doing this and we may be doing illegal immigration, we may be doing financial reform.

The people in Massachusetts, when we have unemployment almost at 10 percent and unemployment is rising or at least stable or rising in the country, we need to talk about jobs and we haven't done that now.

So I'm not interested in the political maneuvering and the parliamentary maneuvering right now. I'm interested in getting people back to work and this bill hurts Massachusetts jobs dramatically.

BLITZER: What has surprised you the most since you've come here to Washington?

BROWN: Actually being here with you.

BLITZER: Why -- why did that surprise you so much?

BROWN: Well, I mean -- I'm home -- I've been home forever watching THE SITUATION ROOM, I always wanted to see how big it was, and certainly participate in the process. And it's been a lot of fun and people -- I guess I'm surprised at the way people have been so receptive and respectful and that means a lot to me and my family.

BLITZER: I know you've met the vice president, and Joe Biden, he swore you in as a United States senator. Have you had a chance --

BROWN: He almost swore at me last night.


BLITZER: You just told a few jokes, but have you had a chance to meet with the president yet and the first lady?

BROWN: No. Not yet. I certainly look forward to it. I haven't heard from them.

BLITZER: But on some of these issues, you're what they call a moderate Republican from Massachusetts. You're willing to work with them on some of these issues.

BROWN: Well, I've already shown that. I'm a fiscal conservative but -- for example, in the first jobs bill, I worked across party lines to get that passed, the president signed it today and for Massachusetts and for the rest of the country that creates jobs.

I spoke to Chambers of Commerce today and a lot of businesses from New England and they were very, very thankful for those opportunities, for those small tax breaks that will help stimulate their businesses and hopefully stimulate the economy.

So yes, I look at each and every bill in an independent manner and will continue to do so.

BLITZER: And so where else do you think, looking ahead on a positive side, where do you want to cooperate with the White House?

BROWN: Well, I've already worked with --

BLITZER: Jobs you want to cooperate. Where else?

BROWN: Yes. Job is the most important thing. Chuck Schumer and I will have an amendment on the FAA bill. We're working on that now. I think it's a good bill. Unless something strange happens, I'll be supporting that in a bipartisan manner.

I think terrorism and taxes are, our deficit, really the three most important issues behind jobs. So I'm looking forward to just solving problems because right now, Wolf, as you know, and you've reported it many times, the system's broken. People are angry. They want better, they want us to do better, and I feel my being here helps that as evidenced by my first vote, as evidenced by the fact that I'm willing to work and listen, and be respectful in doing so. And I'm trying to, you know, get the process moving because people are hurting.

They want jobs, they need jobs and they deserve and want better from us.

BLITZER: The vice president gave you a shout-out last night at the Radio TV Correspondents Association dinner here in Washington. Let me play that little joke.


JOE BIDEN, VICE PRESIDENT: You know, I -- I do have to defend our administration here a little bit here, especially the Recovery Act, which I have been put in charge of. Republicans keep saying it hasn't created a single job.

Well, tell that to Senator Scott Brown.


BLITZER: You got a nice laugh out of that. But you were sitting at my table with your wife, Gail, you were laughing.

BROWN: Of course. Listen, the vice president, I saw him for breakfast. I was at the White -- his mansion --

BLITZER: The vice president --

BROWN: The vice presidential residence and he told me, I'm going to take a few cracks at you, I hope that's OK. And I said, yes, just remember what goes around comes around.

I have a sense of humor. I know that he does and I have enjoyed meeting him and I look forward to spending more time with him.

BLITZER: What about all this talk that Scott Brown has higher political ambitions?

BROWN: I just got my business cards last week. We just had our offices painted. I am up to my eyeballs in doing the people's business. I'm going to let the political pundits have fun and do that. But right now, I'm going to focus on doing my job.

BLITZER: That's the correct answer.

BROWN: It's the right -- it's how I feel.

BLITZER: Well, we hope you'll be driving your pickup truck here to THE SITUATION ROOM on a frequent basis.

BROWN: Thank you.

BLITZER: Good luck to you.

BROWN: Glad to be here. Thank you.

BLITZER: Scott Brown is the newest member of the United States Senate, Republican of Massachusetts. Hard to believe. Republican of Massachusetts.


BROWN: And the people's seat. Not the Ted Kennedy seat. The people's seat.


BLITZER: Thanks for coming in.

BROWN: Thank you, Wolf.

BLITZER: Tension between Israel and United States at a high level right now but there's new word just coming into THE SITUATION ROOM that the Secretary of State Hillary Clinton will meet in the coming days with the prime minister of Israel, Benjamin Netanyahu. We'll have a full report.

And food stamp fraud. Undercover video shows how your tax dollars are being scammed. This is a CNN exclusive.


BLITZER: Officials for both sides say the Secretary of State Hillary Clinton will meet on Monday with the Israeli prime minister, Benjamin Netanyahu, here in Washington. Talks aimed at trying to repair some of the rift that has developed in the relationship.

At issue, Israeli plans to build some new housing units in east Jerusalem, something that was sprung on the vice president, Joe Biden, during a visit to Israel last week.

Let's talk about what's going on in U.S./Israeli relations with John King, whose brand-new show starts Monday. We'll talk about that in just a moment.

But this tension between the U.S. and Israel has been pretty serious. Looks like they're trying to calm things down a little bit.

JOHN KING, CNN'S JOHN KING, USA: Wolf, you've covered this issue for a very long time and you know how fascinating and high stakes it is. A bit of a thaw today. Prime Minister Netanyahu did call Secretary of State Hillary Clinton who herself is traveling overseas. They spoke for about 20 minutes.

What's very interesting about this is the U.S. side is saying very little about the details of the call. They had laid out for the Israelis a very specific list of things. They said the Israeli government had to do to make up for that major snub of Vice President Biden. They had the phone conversation. As you noted, Prime Minister Netanyahu will be here for the American-Israeli Political Action Committee meeting next week. The secretary of state will meet with him. I was just talking to a source who said Vice President Biden most likely will meet with him. That will be an interesting meeting if I could be (INAUDIBLE).

At the moment, at the moment, there are no plans in the work for a meeting with the president of the United States. And that would be quite telling. If the prime minister comes to the United States, the president will now be in town since he's cancelled that foreign trip. If they don't meet, that would tell you something about the frost in the relationship.

In the meantime, Special Envoy George Mitchell will go to the Middle East this weekend. Prime Minister Netanyahu says he has plans for a couple of confidence building measures, he calls them -- that's diplomatic language you're familiar with -- to try to convince the Palestinians that he is ready to begin a dialogue.

So we'll watch how all this plays out over the weekend but it'll be fascinating here in Washington next week.

BLITZER: Yes. I don't remember a time when a prime minister of Israel has come to Washington and has not been received by the president of the United States. It may have happened, I just simply don't remember.

KING: I was talking to sources within the White House and also in the Israeli government and both -- you sense this feeling out. At the White House, inside the National Security Council, they say we'll see what happens. We're not ready to commit to a meeting with the president. We want to see what happens.

It is very clear from them and the Israelis fully understand this that the prime minister has to have a productive meeting with the secretary of state and it looks like a productive meeting, and maybe a fence mending meeting with the vice president, before they will even entertain the notion.

BLITZER: But are you hearing that George Mitchell, the special envoy, has resolved some of these difference and these so-called proximity talks between the Israelis and the Palestinians will go forward?

KING: That is still a big open question because the Palestinians have now said since Prime Minister Netanyahu announced the expansion of the settlements with the U.S. vice president right there they had said, look, they see no climate for peace talks right now.

And so that is special envoy, Ambassador Mitchell -- I call him ambassador, he doesn't have title -- that is his mission to try to get everyone to calm down and say, look, we understand, as always, there's a level of mistrust. Let's try to take a few steps forward.

BLITZER: You ready for Monday? KING: I'm ready for Monday and we're going to have a great special treat tomorrow, if you're -- around noon tomorrow, we're going to have a special online launch. We're going to try a few things out and have the Internet community get the first peek at "JOHN KING USA." It'll be a lot of fun.

BLITZER: All right. It airs -- it starts, premiers Monday night, 7 p.m. Eastern, "JOHN KING, USA". We'll be watching.

KING: Thank you much.

BLITZER: OK. Thanks very much.

In Philadelphia, fallout from a lawsuit over laptops. Why families are now trying to block the class action, accusing the school system of spying.

And a Chicago man accused of terrorism in connection with a deadly bombing cuts a deal with federal prosecutors. Is it enough though to spare his life?


BLITZER: Jessica Yellin is monitoring some of the other top stories in THE SITUATION ROOM right now. What else is going on, Jessica?

JESSICA YELLIN, CNN CORRESPONDENT: Hey, Wolf. A deal with federal prosecutors has spared the life of alleged terrorist David Coleman Headley. Headley is the Chicago man accused of scouting out the Indian city of Mumbai before a 2008 terrorist attack that killed 166 people and also for planning to attack a Danish newspaper for its cartoons depicting the Prophet Mohammed.

In court documents, Headley allegedly wanted attackers to behead newspaper executives and throw their heads out of windows to heighten a response by Danish police. Headley pleaded guilty to a dozen charges and, as long as he cooperates with investigators, is not eligible for the death penalty.

The actor best known for playing TV's Davy Crockett has died. A spokeswoman for Fess Parker's family says the 1950s idol died of natural causes at his California home today.

Following an acting career playing Crockett and later TV's Daniel Boone, Parker left Hollywood and found success in real estate development and wine making. He died with his wife of 15 years close by. Fess Parker was 85 years old.

Nice, long life.

Well, some families near Philadelphia are trying to block a class action lawsuit against their school district. The family of a 15- year-old boy filed the case, alleging invasion of privacy for using cameras on school-issued laptops. They are accusing the school of spying on the teen in his bedroom. Now the school says those cameras are only activated when they need to find missing laptops. Parents who oppose the lawsuit say if the school loses the case that would drain funds and hurt their schools.

Now this is a story where you have to watch the video. Down under, the sheep rescue was over the top. Helicopters airlifted hundreds of sheep to safety after flood waters stranded them.

Farmers said volunteers in the state of New South Wales have been corralling the wet and muddy animals into cages to be flown out.

The Australian flooding has triggered one of the biggest emergency operations in the outback in recent memory.

That seems odd to those of us in America but a big deal over there.

BLITZER: Huge deal over there.


BLITZER: Lovely, lovely sheep, too.

YELLIN: Fun pictures.

BLITZER: Do they like it, people in Australia, when we say down under?

YELLIN: I don't think they like it.


YELLIN: Do they say we're up over? I don't know.


BLITZER: Right. We're going to -- we're seen in Australia. Let's find out.


BLITZER: All right. Thanks, Jessica. Thanks very much.

Once they were food stamps, now they're debit cards. Some of those swipe and buy cards are being used to bilk U.S. taxpayers out of millions of dollars and maybe hundreds of millions, maybe a billion.

Up next, the CNN exclusive. We're going to take you inside an undercover investigation.


BLITZER: Beer, cigarettes, even lottery tickets. A new investigation in Florida reveals that millions of your taxpayer dollars is helping some people pay for those items and it's becoming a scam involving the modern-day version of food stamps.

We're talking about those debit cards. Details now from CNN's John Zarrella.


UNIDENTIFIED MALE: Female is getting out. Walking towards the front door.

JOHN ZARRELLA, CNN CORRESPONDENT (voice-over): An undercover agent walks into a small convenient store in Tampa. Wearing a recording device, she approaches the cashier with a debit card.

UNIDENTIFIED FEMALE AGENT: Can I get a $100 back off of this?

ZARRELLA: She picks up about $12 worth of chips, soda and cigarettes then presses the clerk.



ZARRELLA: The clerk runs the debit card allegedly keeps $100 for the store and gives the agent $100 plus the good.

UNIDENTIFIED MALE: You see she's out. Small bag in her hand.

ZARRELLA: What the store clerk just did, Florida Department of Law Enforcement officials say is illegal. And they say you should be outraged.

BOB URA, FDLE SPECIAL AGENT: It's directly staking from the taxpayers of the United States.

ZARRELLA: The debit card the undercover agent used is called an Electronic Benefit Transfer card, or EBT, which can only be used to purchase food. It's more commonly known by its old name, food stamps.

URA: See, what they do is they charge the U.S. government $212.02. EBT food benefit, food balance, all that. And they give us $100 in cash. Cigarettes and chips for $212.

ZARRELLA: Bottom line, there's no requirement to itemize the receipts so the convenience store allegedly got a $100 kickback of your taxpayer money. The recipient, the undercover agent, got cash back. Also illegal.

(On camera): Authorities targeted 30 stores in the state of Florida. At 16 they were allowed to use the EBT cards. At multiple stores the cash from those EBT cards were used to purchase lottery tickets. And at one store agents used the EBT card to buy the prescription drug oxycodone.

(Voice-over): If you think that's outrageous, listen to this transaction at a drive-through store called Big Daddy's.

URA: It looks like Wayne's the clerk. Looks like he may have shaven his beard.

ZARRELLA: If was one of the stores targeted because in just the month of December it did $34,000 in EBT transactions. Compare that to $1,000 at comparable stores.

Here the agents didn't get money back, but they illegally got nonfood items, beer, cigarettes, and this.

UNIDENTIFIED MALE: Do you have any Trojans in there?




UNIDENTIFIED MALE: Yes. Do you have a three-pack or --


UNIDENTIFIED MALE: Yes. Give me two of those.

ZARRELLA: Wednesday, following a three-month investigation, state agents hit the 16 targeted stores across Florida. At Big Daddy's, three people were taken into custody -- the owner and two employees. None of them would comment for CNN at the scene.

Authorities believe during the past year the 16 stores alone defrauded taxpayers of $3.5 million.

KEN TUCKER, FDLE ASST. COMMISSIONER: If you multiply it nationwide, it's -- you know, I can't give you an accurate number, but it has to be in the billions of dollars.

ZARRELLA: The USDA which administers the program says nationwide 38 million people benefit from the supplemental nutrition program. It estimates 1 percent of the $50 billion in EBT funds were lost to fraud in 2009.

Authorities in Florida say the next phase of their operation will target people using the cards illegally rather than for what they were intended -- food to put on the table.


ZARRELLA: Now, in an unfortunate development today, the man you saw in that piece at the end there, that -- the Big Daddy, who owns that store, he was bailed out last night from jail and at his store they found him dead this morning, Wolf.

They are not sure, police in Tampa, whether it was a natural death or whether the man known as Big Daddy committed suicide.

And, Wolf, again, just you this card, just swiping it, and that's all it took for these people to scam you and me and every taxpayer in the country. BLITZER: John Zarrella, thanks for that report. And that most recent count by the way of more than 38 million people who receive federal food assistance is a 22 percent increase from 2008.

On average, each month, an individual receives around $134.55 in benefits and households receive nearly $300. That money can only be used to buy food you eat at home like bread and cereal, fruit, vegetables, meat, dairy products.

You can't use the money to buy any other kind of hot food or something you'd eat in a store. You also can't use the money to buy anything that isn't food like alcohol or tobacco, paper products, pet food, household supplies.

Good investigation by John Zarrella and CNN.

Let's check in with Campbell to see what's coming up right at the top of the hour.

Campbell, what are you working on?

CAMPBELL BROWN, CNN ANCHOR: Hey there, Wolf. Well, coming up, as you certainly know, Democrats pulling out all the stops tonight to get the 216 votes they need to pass health care. We're going to talk to Congressman Bart Stupak, asked him if he is still planning to vote no, whether there is anything at this point that could change his mind.

Plus, a special investigation, our special investigation team looks at an American terrorist. A fascinating story on that front as well. Wolf?

BLITZER: Right in a few moments, Campbell. Thanks very much.

He's a popular rap star, but wait until you hear what Snoop Dogg is now telling David Letterman about me.


BLITZER: Let's kick things with Jessica Yellin once again.

Jessica, we got a cute little story here.

YELLIN: We do, Wolf, because most of us, you know, we think it doesn't get much cooler than listening to your wisdom, but we've got to say comedian David Letterman, he had quite a show last night.

He prefers to hear what Snoop Dogg has to say and we think, Wolf, you'll like it, too. Let's listen.


DAVID LETTERMAN, HOST, "LATE SHOW WITH DAVID LETTERMAN": Here we go. Top 10 things that sound cool when said by Snoop Dogg. Here we go. Number 10.


LETTERMAN: Yes, it does. Number nine.

DOGG: I'm following Wolf Blitzer on Twitter.



BLITZER: Very cute, Snoop Dogg. And Snoop Wolf on Twitter. Can you believe that?

YELLIN: Did he call you that? Snoop Wolf?

BLITZER: Snoop Wolf. Snoop Dogg.

YELLIN: You know what he says? He says go shizzle. That's my favorite Snoop saying.

BLITZER: What does that mean? What does --

YELLIN: It means for sure. Definitely.

BLITZER: Jessica is obviously totally -- now you do Twitter, too, right?

YELLIN: I do. I tweet. But Wolf?


YELLIN: Do people follow you?


YELLIN: For shizzle.


YELLIN: For shizzle.

BLITZER: We're going to talk about this later, Jessica --

YELLIN: OK, good.

BLITZER: -- Yellin. Thanks very much. By the way, you can get my tweets at, all one word.

I'm Wolf Blitzer in THE SITUATION ROOM. Up next, Campbell Brown.