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Good Reports But Where are the Jobs?; Financial Fix or Wall Street Bailout; Palin Blasts Dems on Spending; $16.5 Billion of Pork

Aired April 14, 2010 - 17:00   ET


WOLF BLITZER, CNN ANCHOR: Rick, thank you. Happening now, positive signs for the U.S. economy. Closely watched numbers all moving in the right direction except for one as Americans find themselves in the midst of a jobless recovery.

Also, the Tea Party Express stops in Boston near the site of the original tea party with one of the movement's favorite figures on hand to fire up the crowd. We're talking about Sarah Palin.

Plus Michelle Obama on her first solo trip abroad as first lady. She's in Mexico City right now where she sits down for a one-on-one interview with CNN. You'll see the entire interview right here.

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

With Democrats getting ready for tough battles in this fall's midterm election, the White House is welcoming new numbers showing a sustained economic recovery, although a modest one.

President Obama's praise of the data was also modest. He says the improvement is not enough.


BARACK OBAMA, PRESIDENT OF THE UNITED STATES: What we're seeing, I think, is some significant improvement in the economy and stabilization. But obviously everybody here, Republican and Democrat, recognizes we've still got work to do.

That there are too many people who are still unemployed. The housing market is still very soft. Too many small businesses who aren't getting credit. And so we're going to spend some time exploring how can we build on the progress that has been made to make sure that ordinary Americans are seeing improvements in their own lives.


BLITZER: Here is what the president was talking about. We learned today that people are spending more. Retail sales jumped 1.6 percent in March. That's better than expected. At the same time, inflation remains low. Consumer prices rose a mere .1 of 1 percent last month.

That's impressive.

And the Federal Reserve's latest beige book, as it's called, which looks at economies in 12 U.S. regions, showed signs of growth in 11 of those regions. Despite that, the Federal Reserve chairman Ben Bernanke tells Congress the job market will take more time to improve.

Let's bring in our chief business correspondent Ali Velshi who's been digesting and appreciating all of these numbers.

The good, the bad and the ugly, Ali. What do you see?

ALI VELSHI, CNN CHIEF BUSINESS CORRESPONDENT: Wolf, how long have you and I worked together? I'm not just digesting. This is like a lovely feast at which I am overeating.

The reality is most of these indicators are good. Of the things you just showed us, the one that interests me the most is the beige book. It's this report that one of the regional Federal Reserve boards comes out with every several weeks. And it's anecdotal.

That's what makes people feel better. The anecdotes. There are three things really that make our viewers -- most Americans feel better. One is the value of their investments increasing. And we have seen the Dow up about 69 percent from last March when it hit its low.

The other one is the value of their property increasing. We haven't seen that across the board. But we have seen an increase nationally in the median price of a single-family home. And that's because interest rates remain so low.

The third thing, though, Wolf, the most important thing is employment. And we have not seen big improvements in unemployment. We've seen the unemployment number come down a little bit. We've started seeing job creation.

But the bottom line is there is some job creation. So those people who are employed feel like it's OK after being frugal for so long to go out and spend. And we saw this number that showed that consumer spending is up for the fourth month in a row.

Why is that important, Wolf? We don't like to use one month as a trend. Generally after three months, you're starting to look at a trend. And after four months, you're seeing folks are starting to spend a little more. That's because they've got a little more money, they're feeling a little more secure about their jobs, and the future is looking a little brighter.

So this isn't just a little meal that I'm digesting. This is a fairly satisfying one.

BLITZER: And JPMorgan, $3.3 billion profit for the first three months of this year alone. Wow.

VELSHI: Well, yes. Yes. And one thing we haven't entirely fixed, Wolf, is the credit situation. Right? So people are still having a tough time getting credit and getting mortgages. So that one, if you want to continue the meal analogy, is a little hard to swallow for Americans. The other thing is on Capitol Hill right now there is a debate going on. The president hosted leaders from both parties to talk about financial reform. And you've got some people, particularly Republicans, saying not so fast. It's going to stymie the bank's ability to do their jobs and make money.

That is still a very hard sell to Americans. They don't understand why the banks have simply not felt the pain that the average American has felt considering that the banks were at the center of the economic collapse, Wolf.

BLITZER: Hold on one moment, Ali. Stand by. President Obama met with congressional leaders from both parties today to talk about plans for a financial industry reform bill that would prevent another Wall Street meltdown. But there's no sign of bipartisanship, none at all.

Republicans are portraying the bill as yet another bailout for the big banks on Wall Street. Democrats say that's simply wrong.


SEN. MITCH MCCONNELL (R), MINORITY LEADER: The bill that they've reported out of committee is an endless taxpayer bailout of Wall Street banks. That is not a political winner. And it's also the wrong thing to do for the country.

SEN. CHRIS DODD (D), BANKING CHAIRMAN: The American people deserve better from us in this chamber. And that's why I've been so dismayed over these last 24 hours.

There are members of this body repeat the utter falsehoods concocted by special interests whose jobs and pensions are plenty secure, thank you very much, that this bill would lead to more bailouts.


BLITZER: The president himself was asked about this. Here is his response.


OBAMA: Thank you. Well, the -- I am absolutely confident that the bill that emerges is going to be a bill that prevents bailouts. That's the bill. All right?


BLITZER: All right, let's bring in our senior political analyst Gloria Borger.

Gloria, this whole notion of bailouts right now in this --


BLITZER: -- financial regulation bill. What's going on? BORGER: Well, Wolf, honestly it's a political argument. Period. It's an open secret that there was a Republican memo that was circulated which said that essentially if you -- one way to kill a bill is to remind voters of things they don't like.

And what they don't like, and the president himself said he doesn't like, Wolf, were the bank bailouts. And so what you have here are the parties competing for the populace mantle.

So bailouts -- the word bailout comes in handy. Here's the real crux of the substantive question which is how do you handle sick banks? Banks that are going to fail. The Democrats say the government has to help them die. That costs a little bit of money which the banks themselves would pay.

But they say look, the government has to help them die, because if you don't, you're going to create a panic. You're going to create a crisis. So you have to help them get rid of their assets, et cetera.

The Republicans are saying any help from the government would give these banks a crutch to hang on to. And they say you should just let them die on their own, period.

BLITZER: It's a little risky for the Republicans right now.

BORGER: It is very risky for the Republicans because of course the banks are not popular right now. And so what they're trying to do is walk a fine line between saying, OK, we want to regulate Wall Street, but we don't want to bail them out.

The Democrats are saying, you have to really regulate Wall Street. And so, you know, I think this is very difficult for the Republicans but it was the only way for them in the afterglow of their success in opposing the Democrats in health care to oppose them on financial regulation.

And I -- you know, we don't know whether it's going to succeed. The Democrats say honestly that you have to have regulation or you're going to have what happened with Lehman Brothers and that wasn't very pretty to look at.

BLITZER: Let me bring Ali back in.

Ali, as good and as positive as these numbers are -- all these numbers with the exception of jobs and unemployment, there are some economists who still worry, given the enormous debt, the enormous deficits every year, the potential for inflation, some of the countries like China or Saudi Arabia rethinking how much they want to lend the United States.


BLITZER: That we could be in for another fall.

VELSHI: Yes. We are not out of the woods. I would say we're out of the crisis. We're out of that thing where we're talking every day and we're not sure about what's going on. The interesting thing about this discussion about financial reform is that we typically regulate for the last crisis. So we regulate about the things that happened last time. We're still not sure what's coming up in the future.

But most economists share the view that we're not in crisis mode, we're probably in growth mode. But this debt situation that you referred to, Wolf, is the very, very serious situation.

Our interest payments are going to be too high. And the reality is despite what some political parties, some activists, will tell you, there is no way out of this situation that we are in in the United States without taxes increasing, not only on the middle class, but pretty much on everyone.

That is going to be a very difficult pill to swallow as we get closer to midterm elections.

BLITZER: Either you got to raise taxes or cut spending. And the federal government is reluctant --

VELSHI: You can't cut spending enough.


VELSHI: The problem is you can't cut spending enough to actually deal with this deficit. You've got to cut spending and you have to raise taxes. And there's nobody in the country who likes that combination.

BLITZER: All right, Ali, stand by because we're going to continue this. And, Gloria, thanks to you as well.


BLITZER: Pigs run wild on Capitol Hill drawing attention to annual list of pork barrel spending. Those pet projects that lawmakers lavish billions of tax dollars on. We're going to show you who's spending most of your money.

Also, Sarah Palin at a modern day Boston Tea Party. We'll hear her message and look at the movement's possible impact this November with our senior political analyst David Gergen.

Plus new details coming in on a deadly earthquake in China.


BLITZER: Let's check in with Jack, he's got the "Cafferty File." Jack?

JACK CAFFERTY, CNN ANCHOR: Wolf, transparency. What was once a great rallying cry for President Obama seems to have fallen by the wayside in the tradition of so many campaign promises.

Pardon me. The latest example comes from the recently concluded nuclear security summit that took place in Washington this week. Dana Milbank writing in "The Washington Post" says world leaders arriving in the U.S. capital might have felt more like they were transported to Soviet-era Moscow with President Obama, quote, "putting on a clinic for some of the world's greatest dictators on how to circumvent a free press," unquote.

Milbank details how foreign reporters were shut out of press availabilities after only minutes. One journalist who was here reporting for an Arabic language TV station said they were only present with President Obama's meeting with Jordan's king for about 30 seconds. Not even long enough to notice the colors of the ties the two men were wearing.

Also multiple events on the president's official schedule were marked "closed press," leading reporters who come to the White House for decades to say these were the most restrictive meetings they have ever seen.

Where is the transparency we were promised? The disregard for the media is becoming somewhat of a theme for President Obama from closed events like the recent meeting with Israeli Prime Minister Benjamin Netanyahu to the president's signing of an executive order on abortion.

No media coverage allowed for any of that, not to mention another broken campaign promise of televising those health care debates live on C-SPAN.

Here is the question. When it comes to transparency, is President Obama keeping his word?

Go to and post a comment on my blog. The comment is no. Wolf?

BLITZER: You know, what's worrying to me, Jack, as a former White House correspondent -- I spent seven years covering the Clinton presidency -- last Saturday morning he left to go see his daughter play soccer which is fine, every father should do that because his daughter plays soccer.

But they didn't take the traveling press pool along. They didn't notify the press that he was leaving the White House going someplace else. They always take a pool of reporters along.

God forbid, if three's something terrible that happens. It's been like that ever since John F. Kennedy's assassination. And they didn't do it that time. They only notified the press about two hours later that he had gone to see his daughter play soccer.

CAFFERTY: Well, two things come to mind. Where else has he gone that we don't know about? And God forbid, what if something would have happened?

BLITZER: Yes. Well, that's -- you know, it's -- a lot of people think we in the press, we whine about that. But we are --


BLITZER: -- the representatives of the American public. We want to make sure that we cover the president of the United States. And that's why this is so important.

CAFFERTY: It is important. But I whine for a living. That's what I get paid to do here, is whine.


CAFFERTY: And I do it well.

BLITZER: After the show we'll have a little white.

CAFFERTY: Not anymore. Not for this cowboy.


BLITZER: Jack, thank you.

Sarah Palin energized those members of the tea party today in Boston, and the Republican heavyweight is blasting Democrats over spending.


SARAH PALIN (R), FORMER ALASKA GOVERNOR: So the people in Boston and all across the U.S. were sending a message to Washington that come November, that big government, big debt, Obama-Pelosi-Reid spending spree, that they're their little children and we're here to take care of you.

That agenda is over. We're voting them out. We're going to tell them, you're fired.


BLITZER: Joining us now to talk about that is our senior political analyst David Gergen.

You had a chance to go out there and sort of sample the opinion of what was going on. What did you discover, David?

DAVID GERGEN, CNN SENIOR POLITICAL ANALYST: Well, a couple of things, Wolf. It was very interesting to be there. She got a big crowd. The Tea Party Express rolled in there with several buses. And they drew at least 5,000 according to the Associated Press. I'll just put the number higher.

They really crowded around Boston Common. What I found very striking and we hear a lot in the press about how angry the tea party folks are. This actually was a very festive air.

People were -- it was a beautiful spring day. It encouraged a lot of warmth. But there was people -- it was almost like going to a state fair or something. People were milling around but they were talking in jovial ways. What I also found, Wolf, was that the -- at these tea party events, there's not only the strong supporters, and they're very intense, they carry a lot of signs. But no racism, by the way. No hints of it. But there were also a lot of people who came out because they're curious.

It's clear that a lot of Americans don't quite understand what this phenomenon is about. And they want to come out and just know more about it. And then there was a third group, there were the protesters. They're protesting the protesters, in fact.

And they had their own little demonstrations. And they -- I think some tea party folks are worried that they're going to start putting on pranks in the name of tea partiers that will bring a bad name to the effort.

But the buses rolled out of here, they're on to Washington on Thursday. And I must tell you that here in one of the most liberal states in the country, to have a crowd of 5,000 plus is a -- you have to take this into account as something that's a serious part of our politics.

BLITZER: Well, Sarah Palin is a huge draw as we all know. How much influence do you suspect they will have when the dust settles in November?

GERGEN: I think in selective states they're going to have a lot of positive influence for conservative Republican candidates. There are some areas where they're going to fail, obviously. But they bring energy to it. They turn out.

And you know CNN has a new survey out that says one of every one out of every 10 Americans has either donated money, shown up at a rally or sent Internet messages. Some have -- considered themselves very active in the Tea Party Movement.

That's a pretty wig number. And they feel intensely about government spending, about the growth of government and the Obama years, and they will turn out at the polls in large numbers. And they will make a difference in some of these races.

BLITZER: David Gergen, excellent reporting for us on this day. David, thanks very much.


GERGEN: It was fine, Wolf.

BLITZER: Good work.


BLITZER: A check of the top stories is next. Also, a missing girl found alive after four days. We have that 911 call from the man who says God led him to her. Plus 76 U.S. senators scolding the Obama administration over the way it's dealing with Israel. We'll talk about that and more in our strategy session.


BLITZER: Lisa Sylvester is monitoring some of the other stories in THE SITUATION ROOM right now.

What else is going on, Lisa?


Well, the death toll from a series of strong earthquakes in China is climbing high. According to the country's state-run media, at least 589 people were killed when the quakes hit a poor mountainous area near the border with Tibet. That number, though, could soar as rescuers search for trapped victims. More than 10,000 people were injured.

A solemn homecoming in Pennsylvania today massive steel remnants of the World Trade Center towers returned to the town of Coatesville where they were made more than 40 years ago.

A mile-long procession of 28 flatbed trucks carried 10 of the structural supports weighing 50 tons each. Local leaders hope to feature the so called steel trees at a proposed Iron and Steel Heritage Museum.

And this is an unbelievable story. A Pennsylvania third grader is suspected of handing out as many as 60 bags of heroin to other kids at his school. Police have confiscated the bags which were stamped with the words "trust me."

They're conducting tests on the substance to confirm that it is heroin. School officials in the town of Wilkinsburg have warned parents that some of the students may have touched the suspected drugs.

An investigation is under way. So far, Wolf, no charges have been filed. Unbelievable story. You know we're talking an 8-year-old here, Wolf, so a lot of questions remain. And we'll have to see, well, where did the kid get the stuff -- Wolf.

BLITZER: We'll stay on top of that, too. Thanks very much, Lisa.

Government spending. Some lawmakers do it a whole lot more than others. A watchdog group is out and it's naming names in its so- called pig book. So will we.

And Israeli is accusing Syria of delivering scud missiles to Hezbollah and Lebanon. We're going to tell you how Syria is responding and how a weapons transfer like that could dramatically impact the balance of power in the region.


Happening now, Michelle Obama is in Mexico in the midst of a deadly drug war. Now the first lady is going one on one with us. She's sharing what she says are the keys to solving this crisis. Her interview with CNN. You'll see it here in THE SITUATION ROOM. Stand by.

And as the shuttle program nears its end, could President Obama's new vision for space mean the loss of thousands of jobs? This is a CNN exclusive we have for you.

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

More than $16 billion. That's how much a watchdog group says members of Congress lavished this year on their pet projects known as earmarks, commonly called, though, pork barrel spending.

All that pork is served up in the group's annual pig book, as it's called.

Our congressional correspondent Brianna Keilar has gone through the pig book. She's here to tell us what you found.

BRIANNA KEILAR, CNN CONGRESSIONAL CORRESPONDENT: Well, this is the pig book right here. We found a lot in here.

BLITZER: Cute little pig in there.

KEILAR: Very cute, kind of a silly atmosphere around the revealing of the pig book. But there's beef improvement research. There is wool research. There is, of course, swine research.

Members of Congress securing billions in earmarks. $16.5 billion in 2010 for the industries that really keep their states going.

Keep in mind, though, this is down about 10 percent over the last year. Critics say, though, it's still a very serious problem, although they use some pretty silly antics to highlight this issue.


KEILAR (voice-over): When these oinkers come to Capitol Hill, they bring the pig book with them. It's an annual list of congressional earmarks. What one watchdog group calls pork.

THOMAS SCHATZ, CITIZENS AGAINST GOVT. WASTE: More and more members of the public know about earmarking. They know that it's corrupting, they know that it's symbolic of overspending. And if someone is running for office and they say no to earmarks, they will probably get more taxpayer support as a result.

KEILAR: Making the list this year, about $5 million for tree and wood research in 11 timber states and almost $3 million for shrimp farming research. (On camera): Critics say Congress is doling out pork even more freely than they are here at the Senate cafeteria. So we wanted to talk to Congress biggest earmarker, Senator Thad Cochran. He's a Republican from Mississippi.

He declined our request for a formal interview. So we went to catch up with him just a couple of floors above here as he went into an appropriations subcommittee hearing.

Critics say that you're a prolific porker (INAUDIBLE).


KEILAR: How do you respond to that?

COCHRAN: My goodness. I don't know what that is.

KEILAR: But I mean $490 million in earmarks. You obviously feel they're important. Why do you think they're important?

COCHRAN: Well, the Congress has an obligation to direct the spending of appropriations under the Constitution. We're exercising our constitutional responsibilities by doing that.

KEILAR: Do you understand why people are critical of that? How do you answer for that?

COCHRAN: I haven't heard much criticism from the people of my state about it.

KEILAR (voice-over): Cochran secured $500,000 for marijuana eradication. As well as $300,000 for music education in his home state. No coincidence he's the top Republican on the Senate committee in charge of spending.

The Democratic chairman of that committee, Hawaii Senator Daniel Inouye, came in second with almost $390 million in earmarks, including 300 grand to help Girl Scouts become more financially savvy and more than $2 million for coral research in his home state.


KEILAR: We asked the senators' offices to respond to these earmarks that we highlighted. Senator Cochran's response was he disagreed with President Obama's budget and without enough Republican votes in the Senate, putting these earmarks in is his way of changing where he thinks the money should go. We talked to Senator Inway's office. He said these are very valuable projects for Hawaii. For instance, the coral project, they say coral is essential to prevent erosion. This is very important in storms. They say it provides really big money when it comes to tourism and it comes to fisheries. They're definitely defending these earmarks. No surprise.

WOLF BLITZER, CNN ANCHOR: I suppose you were once a girl scout, too?

KEILAR: I was. BLITZER: Was it important that you learned about financial planning as a girl scout?

KEILAR: There's an argument for it and there's an argument for all of these.

BLITZER: The moratorium on earmarks, I suppose the numbers will go down in the house. Is that right?

KEILAR: It's possible. Certainly in the house. Republicans are calling for a total moratorium on earmarks. There are a few of them who are still going to go forward with earmarks. Democrats are calling for a moratorium on all earmarks that are for-profit entities. In the Senate, Democrats and Republicans, both of them have not committed to this. We could still see a lot of this so-called park next year.

BLITZER: So-called. Thank you.

KEILAR: This for you. This was at the press conference.

BLITZER: A little pig?

KEILAR: A little pig nose.

BLITZER: Charlie Rangel battling ethics problems may be vulnerable in the midterm election. The son of another New York political icon is trying to capitalize on that. Mary Snow has been looking into this. She's joining us in Harlem.

MARY SNOW, CNN CORRESPONDENT: This is a house race that might not have gotten much attention were it not for two legendary names in Harlem and their personal history.


ADAM CLAYTON POWELL: I'm running for Congress.

UNIDENTIFIED MALE: Go ahead, like your father.

SNOW: In Harlem, one thing Adam Clayton Powell the 4th has in his corner, name recognition.

SNOW: When you look across the street you see a building bearing your dad's name, you see a street named after him. How hardest to live up to that legacy?

POWELL: It's easy because I'm not trying.

SNOW: Powell is a 47-year-old New York state assemblyman, son of the late civil rights leader and former Congressman Adam Clayton Powell, Junior. The elder Powell lost his Congressional seat in 1970 under an ethics cloud to a young Turk named Charlie Rangel. 40 years later Powell's son is challenging Rangel in the Democratic primary. This time it's Rangel who is under an ethical cloud. Powell first ran against Rangel in 1994 and admits back then it got personal. POWELL: Last time I ran, I had a little revenge in me and anger in me. This time it's not about that at all.

SNOW: In announcing his candidacy, Powell see's Rangel's ethics problem as an opening.

POWELL: He's no longer chairman of ways and means. That is significant.

SNOW: Rangel who will soon turn 80, stepped down temporarily as the chairman of the house panel in charge of taxes as an investigation continues into his failure to pay taxes on a home in the Dominican Republic and other issues. Through his office, Rangel declined requests for an interview. His campaign spokesman doesn't see Rangel as vulnerable.

KEVIN WARDALLY, RANGEL CAMPAIGN SPOKESMAN: Nothing is ever a lock. You still have to make your case to the voters, tell them about what you've done. You've got to remind them of all the things you've accomplished.

SNOW: Powell has his own baggage and was originally acquitted of driving while intoxicated but convicted of a lesser charge. There's Rangel's popularity in New York Daily News columnist Errol Louis says runs deep.

ERROL LOUIS, NEW YORK DAILY NEWS: I think for a lot of people looking from the outside, this may look like an incumbent who is on the ropes. From inside New York, it doesn't look that way at all.


SNOW: Another thing that stands out, Rangel has never had a major challenge. Besides Powell, a former aide is also challenging him in the Democratic primary.

BLITZER: Mary Snow, thank you. A check of the top stories up next. Also, the one-on-one interview with the first lady Michelle Obama in Mexico City. She speaks candidly to CNN about that country's deadly drug wars, immigration and a whole lot more. The interview we'll air right here in THE SITUATION ROOM.

Plus a missing girl found in a Florida swamp by a man who says god let him to her. We'll hear their dramatic 911 call. And bogus claims lead to new rules about which products can be called energy efficient.


BLITZER: Lisa Sylvester is monitoring some of the other top stories in THE SITUATION ROOM right now. What do you have?

LISA SYLVESTER, CNN CORRESPONDENT: Hi again Wolf. A girl who was lost in a Florida swamp for four days is said to be doing remarkably well. 11-year-old Nadia Bloom was rescued yesterday by James King who tells CNN that god led him directly to her. King put Nadia on the phone with authorities moments after finding her. UNIDENTIFIED MALE: Sir, can I talk to Nadia?

JAMES KING, RESCUER: Yes. Nadia, would you like to talk to the policeman who has been trying to find you?

I'll put you on speaker phone. Hold on. Let me see if I can get this working. Okay.

NADIA: This is Nadia. I'm the girl who got lost.

UNIDENTIFIED MALE: Nadia, are you okay? You're not hurt in any way?

NADIA: Hi, what's your name?

UNIDENTIFIED MALE: Okay. I'm one of the dispatchers for the police department. If you stay with that man right where you are, we'll have somebody come to you right now.

SYLVESTER: Nadia is mildly autistic.

We have an update to a story we brought you in THE SITUATION ROOM. Consumer products with the energy star logo are supposed to be government certified as the most energy efficient on the market. As we reported, companies didn't have to prove those claims. As part of a test the government accountability office submitted 19 bogus products given the coveted seal. Now the environmental protection agency and energy department have announced changes to the program. Companies will have to submit complete lab reports that will be subject to a review and an automated approval process will no longer be used.

It is the end of an era for those small silverfish we call sardines. The only remaining sardine cannery in the United States is closing its doors. The Stinson Seafood Plant owned by Bumble Bee Foods will shut down this week as a result of declining demand. The company has been in business since 1927, some 130 workers who will be out of their jobs. Sad situation there, Wolf.

BLITZER: You know, it is a sad situation. Thanks, Lisa. We'll cover the story and continue to cover it.

The Obama administration gets a tongue lashing from three-quarters of the U.S. Senate. The lawmakers say they're angry about the recent tiff between the U.S. and Israel. They're spelling out their complaints in a letter to the secretary of state Hillary Clinton.

Later, the first lady sits down with CNN spelling out solutions to major global challenges as she makes her first official solo trip outside the United States.


BLITZER: Right to our strategy session. Joining us our CNN political contributors, Democratic strategist Paul Begala and Republican strategist Alex Castellanos. You saw this story. 76 U.S. senators out of 100 sign an open later to the Obama administration and they clearly are concerned about the way the prime minister of Israel, Benjamin Netanyahu was treated when he came to Washington recently. In the letter to Secretary Clinton they write, "We recognize our government and the government of Israel will not always agree on particular issues in the peace process, but such differences are best resolved amicably and a manner that befits longstanding strategic allies." That sounds like a little swipe there.

PAUL BEGALA, DEMOCRATIC STRATEGIST: The only question is why wasn't it 100. It's one of the few things Republicans and Democrats agree on in our politics, is America is pro Israel. Strong position among Democrats and Republicans. If Hillary Clinton and Joe Biden were still in the Senate, I dare say, they would have signed that letter.

BLITZER: And Barack Obama, too.

BEGALA: I bet he would have, too. Biden, Hillary and Obama all had I think nearly 100 percent pro Israel records in the Senate. It's Israel's 62nd birthday today. Have you been?

BLITZER: I've been there, yes.

BEGALA: I've been there myself. It's one of the great countries on earth. Thank god Republicans and Democrats agree on this. On the house side, 330 Congressmen and women signed a similar letter supporting Israel. I think it's wonderful.

ALEX CASTELLANOS, REPUBLICAN STRATEGIST: There is a lot of concern about the Obama administration's moral equivalence here, that it's treating the cop and the criminal the same way. Israel, a Democratic nation that allows Arab citizens to vote as opposed to other countries that every time Israel reaches out its hands, it gets a missile to blow it off. Right now, anger against Israel in that part of the world is surrogate anger against us, and that by weakening our support for Israel as this administration is doing, we're destabilizing the region.

BLITZER: Does a letter like this really have an impact inside -- you worked on the Clinton administration? There were sometimes tensions between President Clinton and the Israeli government. Does it have an impact?

BEGALA: I think it's a good thing. The letter, I think it does have an impact. Secretary Clinton -- I don't speak for her, she is a strong supporter of Israel. So is President Obama. I think that's a good thing. Like the letter says, sometimes you'll disagree. President Clinton, Israel had no stronger friend than Bill Clinton. When Netanyahu was the prime minister last time there were disagreements but it was a discussion like a family. What you said was not fair.

CASTELLANOS: Entirely fair.

BEGALA: The Obama administration has been killing al Qaeda and our enemies with great effect. They're working with and supporting our allies. CASTELLANOS: But treats Netanyahu rudely, refuses to have a photo op with him over here, bows before other foreign dictators but pulls the rug out from under our longstanding allies I think to the detriment of our own security. Ultimately if we pull back our defense of Israel, it brings problems closer to us. By the way, Israel doesn't have a problem having good relationships with Jordan and Egypt, nations that don't want to destroy it. Other Arab nations that want to destroy it, yes, we should stand behind them 100 percent.

BEGALA: There is no country on earth more committed to peace than Israel and no country more threatened than Israel. I love that country. I've been there and strongly support it. It's not fair to say the Obama administration has pulled back support. That's not true. We support them politically, militarily. We support them diplomatically. Why? Because it's good for American. It's not a charity case.

BLITZER: This is one issue where there is bipartisanship in the house and the senate when it comes to support for Israel.

CASTELLANOS: Unfortunately there's bipartisanship in the white house. But it's for the Palestinians and Israel treating them as if they're morally equivalent. That's a mistake.

BLITZER: Let's move on to John McCain. I don't know if you saw the latest story in politico where headline is "Agitated McCain: Don't Call Me a Maverick." He used to be proud of that maverick status. I'll let the Republican strategist explain what he's saying.

CASTELLANOS: Senator McCain I think is trying to embrace the entire Republican Party there. He's in a tough primary, even though internal polling that the McCain campaign has shows him up among core Republicans over ten points. He's going to be just fine in that situation. McCain always has been a maverick. We know that. He was a maverick, for example, against spending and what he called pork. The drunken sailor spending in Washington. Now everybody is for it. Now everybody is a maverick. It's not just John McCain by himself.

BLITZER: He was certainly a maverick when he supported comprehensive education reform, when he voted against the Bush tax cuts back in 2001 and 2003, he was a maverick. Campaign finance reform teaming up with Russ Feingold. Those are from a Republican standpoint pretty maverick ideas.

BEGALA: From time to time, precisely 9 percent to 10 percent of the time. He voted with George W. Bush 90 percent of the time. When he was calling himself a maverick of the campaign, the Maverick family objected. The mavericks are a family. Maury Maverick was a Congressman from San Antonio, great new dealer. The original mavericks were mavericks because they wouldn't brand their cattle when he called himself that, he said you're a following of George W. Bush. I'm glad he's not calling himself a maverick anymore.

CASTELLANOS: I've been critical of McCain at times. I'll tell you this, here he is in his own tough race, the leading Republican going around the nation trying to elect other Republicans to take back Congress and cut this ridiculous that's going on? John McCain, the first guy to support Scott Brown in Massachusetts, a generous and noble political guy.

BLITZER: He's got a fight in Arizona.

CASTELLANOS: He'll be okay there.

BEGALA: I want to see them debate. You should -- we should have a CNN debate there. I'd pay money to see Wolf Blitzer preside over a debate.

BLITZER: We'll make a formal request.

CASTELLANOS: Do it in fighter jets.

BLITZER: Guys, thanks very much.

Jack Cafferty has your e-mail just ahead. Sarah Palin's perks for her speeches. We'll take a closer look at what she's getting after stepping down as governor Alaska. Fire and ice converge in Iceland, a violent volcanic eruption. You'll find out how the force of nature is affecting hundreds of people.


BLITZER: Let's get right back to Jack for "the Cafferty file." Jack?

JACK CAFFERTY, CNN CORRESPONDENT: The question this hour is when it comes to transparency is President Obama keeping his word?

Jack in Virginia, "Wake up, Jack, Obama never cared what the media think. They're useful idiots when the spin is positive like during the campaign and annoying pests who deserve to be ignored when times are not so good like now. You and your media pals have been had."

Matt in Santa Barbara, California, "A certain amount of closed-door activity's necessary in diplomacy and in reaching consensus. This allows leaders to search for the best answers without being hounded by news agencies looking for a sound bite that will later be used against the speaker usually out of context."

James in South Carolina, "He certainly is more transparent than past presidents. They'll never be transparent enough to suit the press and that's not necessarily a bad thing. By the way, you're dead right when you said you're very good at whining."

Charlene writes, "When candidates run for office, I don't think they're exactly privy to all of the inside info that the president has access to. Could it be that once a candidate actually gets into office they find that things are a little different than they thought, therefore, not everything should be leaked to the press and the general public?"

Don writes, "I would say the president's not keeping his word. I supported his campaign. I voted for him. I'm very disappointed. He said he'd open things up, and I see his administration being just as closed and secretive as past administrations. I voted for change. I got the same old thing."

And June says, "I love it. The media, who have been fawning over the president since he announced he was running, are now feeling shut out. Boohoo, is your leg tingling, Jack?"

If you want to read more on this, you can go to my blog at Wolf?

BLITZER: I know, a lot of people love it when they think we're whining about access and stuff like that.

CAFFERTY: Well, you know, we're not exactly beloved in all sections of society.

BLITZER: I suspect you're correct.

CAFFERTY: And with good reason.

BLITZER: Correct. Correct. I agree. Jack, thank you.

Iran, potentially -- potentially -- much closer to a nuclear bomb than thought. There's talk now that Iranian researchers could have enough uranium to make a weapon within a year.


BLITZER: A growing controversy right now over a speech deal in California's revealing some of the perks Sarah Palin gets as one of the most sought-after speakers in the country right now. CNN's Brian Todd is working the story for us. All right, Brian, what's going on?

BRIAN TODD, CNN CORRESPONDENT: Wolf, you know the phrase Sarah Palin, Inc., she is now a huge draw. Her representatives won't disclose how much she's made since resigning as Alaska's governor, but one media report says she's pulled in over $10 million from her book deals and network contracts and speaking engagements. Various reports say she gets $100,000 a pop for those, but one upcoming event is drawing fire.


SARAH PALIN: This is about the people! This is the people's movement.

TODD: She's clearly a speaker in high demand, but one engagement on Sarah Palin's docket has become very controversial. Palin's slated to appear at a fund raiser at Cal State University, Stanislaus in June, California attorney general, Jerry Brown, a Democrat who is running for governor, has launched an investigation of whether that's the best use of the public university's money at a time when the state's school system is in financial meltdown. He's also looking in to whether school officials tried to hide or destroy documents on the event.

ALICIA LEWIS, CALIF. STATE UNIV.-STANISLAUS STUDENT: We just took the documents as they were stacked out of the dumpster and inside of it was just pages 4 through 9 of the Sarah Palin contract.

TODD: That's Alicia Lewis, one of two students who claimed to have found documents on the Palin event in a school dumpster. The school president denies ordering anyone to destroy or throw out the Palin documents.

HAMID SHIRVANI, PRES., CALIF. STATE UNIV.-STANISLAUS: This has nothing to do with transparency. It has everything to do with political ideology.

TODD: We were given a copy of the document by office of the state Democratic Senator Leyland Yee, the aid to Yee tells CNN it's part of a contract for Palin's engagement issued by the Washington speaker's bureau. The school president said it's not the final contract. It doesn't mention Palin's name, but says the client will be responsible for first-class commercial air travel for two between Anchorage, Alaska, and event city. And if private flight is need, the private aircraft must be a leer 60 or larger. Another part says, unopened bottled still water, two bottles, and bendable straws are to be placed near the lectern. Contacted by CNN, Palin's aides referred us to the Washington's speaker's bureau which did not return our calls or e- mails. Linda Roth, a public relations executive in Washington, has handled several high profile events including one hosted by CNN's Larry King. I asked her about the perks in Palin's contract. A leer 60 or larger, is that something unusual to you?

LINDA ROTH, LINDA ROTH ASSOCIATES: A lot of it has to do with how many people are traveling in the party. She may have a group of people in the party where she knows she needs to have at least that size.


TODD: We asked a spokeswoman for Cal State University Stanislaus why a public university in a system that is suffering financially would pay for the Palin speech, she said that money's all being raised by a private foundation connected to the school, and she reiterated that Palin's event is a fund-raiser design to make money for the school, Wolf.