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Iran May Be Bomb-Ready in a Year; Fight Over Financial Reform; Scary Times for Space Workers

Aired April 14, 2010 - 18:00   ET


WOLF BLITZER, CNN ANCHOR: Brian, $100,000 a speech, is that what we hear she's getting?

BRIAN TODD, CNN CORRESPONDENT: That's right. And Linda Roth says that's about average for someone of Palin's stature. She's -- some of the speeches can get up to about a quarter million dollars a pop. Palin, herself, may command that much in the future.

BLITZERL: Brian Todd, thanks very much.

And to our viewers, you're in the SITUATION ROOM. Happening now --

Chilling developments in a dangerous part of the world, U.S. generals say Iran may be very close to having what it needs to make a nuclear weapon. And Israeli officials say all of their country is now threatened by long-range missiles in the hands of Hezbollah in Lebanon.

President Obama hosts a bipartisan meeting on how to regulate Wall Street and protect taxpayers, but the lawmakers get into a fight over financial reform.

And the first lady sets strict rules for her kids when it comes to the internet, television, and phone use. We'll go one-on-one with Michelle Obama, that interview, here in SITUATION ROOM.

I'm Wolf Blitzer. We want to welcome our viewers in the United States and around the world. You're in the SITUATION ROOM.

But first, chilling new developments on Iran's nuclear program today as Iran boasts about its uranium enrichment efforts. Top U.S. military officials tell Congress, Iran could soon have what it takes to build a nuclear bomb. And there are urgent new efforts underway to do something about that. Our Pentagon correspondent, Barbara Starr, is here. She's working the story, and she has the latest -- Barbara.

BARBARA STARR, CNN PENTAGON CORRESPONDENT: You know, Wolf, Iran, certainly of course, was not invited to President Obama's nuclear summit this week, but still, today, the regimes nuclear efforts right now, front and center, in Washington's concerns.


STARR (voice-over): In Iran, President Mahmoud Ahmadinejad touting the latest advances in his country's nuclear development program. In Washington, a fresh round of assessments by senior U.S. officials on how soon Iran could have a nuclear weapon.

UNIDENTIFIED MALE: How long would it take approximately to produce enough highly enriched uranium for one nuclear weapon?

LT. GEN. RONALD BURGESS, DIR., DEFENSE INTELLIGENCE AGENCY: Sir, the general consensus, not knowing, again, the exact number of centrifuges that we actually have visibility into, is we're talking one year.

STARR: The U.S. isn't certain how much progress Iran really has made on enrichment, a key step in getting weapons-grade material. Even so, the next step, assembling a weapon, may not take very long.

UNIDENTIFIED MALE: Based on everything you know, about how long would it take?

GEN. JAMES CARTWRIGHT, JOINT CHIEFS VICE CHAIRMAN: Senator, again, you're asking me to know things I can't know, but three to five years is what I would tell you.

STARR: It's these calculations that are at the center of the U.S. case to press key United Nations members for tough new sanctions against Iran. The Obama administration now hopes, with support from China, a new security council resolution could be approved within weeks. The plan is to hit Iran in its pocketbook.

WILLIAM BURNS, UNDER SECRETARY OF STATE: We want to build on the existing sanctions, but look at ways in which we can increase pressure, particularly with regard to the financial sources that Iran draws upon.

STARR: The goal? Ratchet up the financial stranglehold on Iran's increasingly economically powerful revolutionary guard corps, which is believed to be behind a previously secret enrichment facility near the holy city of Qom.


STARR (on-camera): Now, administration officials raise an additional concern, what if Iran went all the way to the edge doing everything possible to develop a nuclear weapon but not necessarily assemble one? So, that raises the question, Wolf, how do you ultimately figure out what Iran is really up to?

BLITZER: Because based on everything we know, the U.S. intelligence on what is really going on in Iran, is not necessarily perfect.

STARR: It is not perfect. And Iran is trying to hide an awful lot from the international community. It's a big concern obviously.

BLITZER: All right. There's another big concern right now, Israeli officials, including the president of Israel, Shimon Peres, is saying that Syria has transferred scud missiles to Hezbollah in Lebanon, and that these missiles potentially can reach all of Israel, not only Haifa, the Tel Aviv, Jerusalem, and Dimona, where they have their nuclear facilities. What are the U.S. officials saying? STARR: You know, this was pretty stunning that Shimon Peres said this and we asked, around and I was surprised to find out that U.S. officials say, yes, there's every reason to believe that what Shimon Peres said is obviously true. That Syria, recently, we don't know how recently, transferred scud missiles to Israel. Now, some officials say it's not clear the transfer went through, some say it has gone through, not clear if it's just missiles or missiles and those scud launchers which would be the big concern, of course, because that means they can launch them, they can deliver them, and if you look at the map, you begin to see just how serious this is.

You see the scope, Wolf, of the countries and the range behind me on the map of the missiles -- the scud range and where they can hit, all the way across the Mediterranean throughout the Middle East is a big concern.

BLITZER: It's a huge concern right now. If that is, in fact -- if they've done that, Hezbollah, as you remember, in 2006, during the border war between Israel and Hezbollah, in Lebanon, they launched thousands of very short-range rockets and missiles into Israel that caused enormous problems.

STARR: There is no named terrorist group as far as anybody knows other than this that has this type of military capability to launch ballistic missiles potentially putting other countries, other populations at risk. This is the ultimate game changer.

BLITZER: All right. We'll watch the story closely with you. Thanks you very much, Barbara Starr.

Wall Street is on a winning streak right now. Stocks climb for a 5th day. Today, the Dow rising 104 points closing at 11,123. Standard and Poor's 500 Index topped at 1200 mark for the first time in a year and a half. Analysts attribute the surge to new reports showing the economy here in the United States is strengthening, and positive profit forecasts for JPMorgan Chase and the computer chip maker, Intel, among other things.

President Obama hosted congressional leaders from both parties today to discuss proposals to regulate Wall Street institutions and protect taxpayers. But lawmakers quickly got into a fight over financial reform. Listen to this --


SEN. MITCH MCCONNELL, (R) MINORITY LEADER: It's a bill that actually guarantees future bailouts of Wall Street banks. In fact, if you look at it carefully, it will lead to endless taxpayer bailouts of Wall Street banks.

SEN. CHRIS DODD, (D) CONNECTICUT: By suggesting somehow that there's a bailout provision in this bill, nothing could be further from the truth. The bill as drafted ends bailouts. Nothing could be more clear in the legislation. And let me tell you how we do it. First, for the very first time, Mr. President, our nation will have someone with a job of monitoring the risks to the financial system. (END VIDEO CLIP)

BLITZER: Our national political correspondent, Jessica Yellin here, she's been covering this story now for some time. So, what's going on? Because it's -- it's unclear to me that this is going to pass.

JESSICA YELLIN, CNN NATIONAL POLITICAL CORRESPONDENT: Well, administration sources, and I've been talking to them all day, Wolf, feel quite confident that they will get this through the Senate in the next few weeks, despite the fight that's broken out. They feel that this meeting today built some momentum, but also that a new policy that came out from the Senate today is helping them a bit. Bottom line, they're focusing on Senator Judd Gregg from New Hampshire And Senator Bob Corker from Tennessee who seem, they think, ready to compromise.

And, in fact, Secretary Geithner met with Judd Gregg today to talk about this very issue, even though their own Republican leaders are trying to pull them back.

BLITZER: Do the Republican senators have an alternative plan?

YELLIN: It's a tricky question, because the leaders do not. Senator Mitch McConnell, who is --the one who is leading the fight against this right now, is not putting out an alternative proposal. He is saying that he wants to negotiate with what Democrats are giving them and Democrats are being intransigent, but they are not proposing any specific alternatives. Now, these others I mentioned, Judd Gregg and Corker are, but their leaders are not.

BLITZER: The whole point about the word "bailout" which is such an explosive word as we all know, Senator McConnell, the Republican leader in the Senate is using it, does he have a point when he says, this democratic proposal of Chris Dodd that the White House liked is in effect a bailout for Wall Street?

YELLIN: You know what, it's not fair. The language in it, this bill does not in essence bailout firms. What it does is it creates a way to unwind failing firms like AIG. What he's talking about is some language in there that would give a little bit -- that would give money to some healthy firms during a credit crisis, so that our economy could keep chugging along.

Now, they're calling that piece a bailout. And even a Republican member on the floor today said, five minutes of negotiating, we could get that out of the bill. But overall, the bill, no, it's not a bailout. This is about a philosophical difference should government regulate these banks at all or should we let the markets do their own thing, and it's about politics -- Wolf.

BLITZER: That's what a lot of Washington is about, politics. Jessica, thank you.

One-on-one, with the first lady, Michelle Obama. She's in Mexico right now. She's speaking with CNN about immigration, the war on drugs, the impact on young people. The interview with the first lady coming up, this hour, here in the SITUATION ROOM.

And with the space Shuttle program coming to an end, these are scary times, very scary times, for lots of space workers. CNN's John Zarella will have an exclusive report.


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

JACK CAFFERTY, CNN CORRESPONDENT: Wolf, event though the economy is showing signs of recovery, Congress is on track to extend unemployment benefits for the fourth time since the recession began two years ago. The measure now making its way through the Senate would allow the jobless to get benefits for 99 weeks of unemployment. That's almost two years. Democrats insist times remain tough. They say Republicans who are opposed to this measure are inhumane and lack compassion. But republicans say they're worried about the price tag, costs about $7 billion a month, which will only add to our skyrocketing national debt.

They want to pay for the measure by spending cuts in some other part of the budget. Fed chairman, Ben Bernanke, predicted this morning that our national debt will double to $20 trillion or 100 percent of our gross domestic product in nine years by 2020. We're killing ourselves. There's also another component to this. The longer unemployment benefits are extended, the longer the jobless have an incentive not to work. Studies show that a lot of unemployed workers don't start seriously looking for a job until those benefits are about to run out.

In fact, some say the scope of the Obama administration's entitlement programs is leading to a two-class society, the haves, who are bankrolling the have-nots. Conservative activist, Phyllis Schlafly, writes that the president is transforming the nation by quote, "converting the earnings of American workers into hand-outs for those who voted for him."

As we told you in "The Cafferty File" earlier this week, 47 percent of American households pay no federal income taxes this year. In other words, the U.S. has become a country where only half of us are paying for the services that are used by all of us. Here's the question, can America survive without the disappearing middle-class? Go to and post a comment on my blog -- Wolf.

BLITZER: You know, it's a tough, tough, good question, Jack, and I'm sure a lot of people are going to weigh in. I'm anxious to hear what they have to say.

CAFFERTY: I do. We're getting a lot of mail, so we'll go through some of it.

BLITZER: By the way, coming up pretty soon, our interview, our CNN interview, with the first lady, Michelle Obama. She's in Mexico City. I think a lot of her viewers are going to be interested in this interview as well. CAFFERTY: I'm interested. Please give her my regards.

BLITZER: She knows that you are a big fan of hers.


BLITZER: You've made that pretty clear.


BLITZER: All right. You have a lot of supporters out there who agree with you.


BLITZER: All right, Jack, thank you.

Lisa Sylvester is monitoring some of the other top stories in the SITUATION ROOM right now. Lisa, what else is going on?

LISA SYLVESTER, CNN CORRESPONDENT: Hi, Wolf. It's absolute chaos in the streets of Jakarta, Indonesia today. Protesters attacked city officials and police fearing they were going to excavate an Arab cleric's tomb. Officials insist they were trying to remove illegal squatters, not the tomb, but demonstrators, they weren't buying that, and they attacked police with machetes, sticks, and gas bombs. Security forces fought back with baton, tear gas, and rubber bullets. Authorities say 130 people were injured, but they deny reports two people were killed.

And it's a photo-op for North Korea's reclusive leader. Today, North Korean television aired what it says are pictures of Kim Jong-Il, watching a military exercise, marking the birthday of his late father. The North Korean news agency reports Kim expressed satisfaction that his troops are ready to defend the country against any surprise attacks. It did not say where or when the military exercise took place.

And the country dubbed the land of fire and ice is definitely living up to that name, a volcano erupted beneath a major glacier in Iceland, forcing about 800 people to evacuate. Authorities aren't concerned about the lava, but they are worried about flooding. Officials say rivers are rising from the melting glacier and spilling over. About 70 tourists trapped near the volcano have been taken to a safe holding facility.

Flood damage in Brazil is forcing officials to close Rio de Janeiro's iconic Christ the Redeemer statue and definitely see it there. Authorities say trees and other debris, the problem is that they are blocking access roads to the site after days of heavy rain and mud slides. They say recovery work could take six months, but they do expect that visitors will be allowed to return a little sooner than that. The statue was named one of the world's seven new wonders in 2007.

So, pop quiz, Wolf, you know the other ones? Do you know the other Seven Wonders of the World?

BLITZER: I knew you were going to ask me that. Tell me who some of these other --

SYLVESTER: I have a cheat sheet here.

BLITZER: Tell our viewers.

SYLVESTER: So, that helps. You know, some of them you might expect. There's the Colosseum in Rome. There's the Great Wall of China. There's the Taj Mahal. You know, those three we're able to figure out pretty quickly, but there's some other ones, the pyramid at Chichen Itza in Mexico, Petra in Jordan, which is a temple, and let's see, which one am I forgetting? I think that's it. So, we for Machu Picchu and also Machu Picchu.

BLITZER: I don't think -- but those are considered longtime wonders of the world, not necessarily new wonders of the world.

SYLVESTER: You know what they do, though, is they update this list. So, it's going to be interesting to see, you know, who makes the cut and who doesn't. So, those are your some of the wonders of the world. I forgot Machu Picchu but somebody told me in my ear, so --

BLITZER: I've been to Petra and been to the Colosseum, and they are wonders of the world. There's no doubt that.

SYLVESTER: Yes, they are.

BLITZER: All right. Thanks very much, Lisa. Don't go too far away.

The first lady of the United States speaking out about immigration reform, Mexico's war on drugs, and the dangers of social networking sites. The interview with Michelle Obama, that's coming up, right here in the SITUATION ROOM.


BLITZER: Hundreds are dead after a series of strong earthquakes that rock a mountainous area of Western China. At least 10,000 people are reported injured. Our senior international correspondent, John Vause, is making the very long drive to the epicenter and is on the phone.


VOICE OF JOHN VAUSE, SENIOR INTERNATIONAL CORRESPONDENT: It's been very slow going because the roads have been fairly bad. Wolf, it's, you know, it's very dark here, and, you know, the roads are narrow and winding as we head up into the mountains. Also, you know, we haven't really seen many military convoys as we've headed by. We haven't actually seen a lot of anything. It's black for most of the journey. Breathing is difficult. The air is very thin.

You tend to feel very dizzy and disorientated at times so, you know, you start basically feeling the effects of altitude when you're about 2,500 meters above, you know, above sea level. We've been traveling at about 4,000 meters above sea level, so, yes, it's kicked in. You can certainly feel it. So, you know, they may be used to this kind of -- this kind of conditions.


BLITZER: That's John Vause, reporting. He's making his way to the epicenter. By the way, he's tweeting as well as he travels to the epicenter of the earthquake. You can follow his tweets at

Strict internet rules for the first daughters, Michelle Obama tells CNN how she limits the use of computers, television, and phones during the school week.

And a CNN exclusive, what happens to thousands of space industry workers now that the Shuttle program is coming to an end?


BLITZER: Remember, we're standing by for CNN's interview with the first lady, Michelle Obama. She's in Mexico City right now. That interview is coming up.

But some other important news we're following first. Just a couple of months after his budget pulled the plug on a project to send astronauts back to the moon, President Obama is set to unveil a new vision for the space program, which would pump billions of dollars into NASA. But with the Shuttle program already due to end this year, a lot of aerospace workers here in the United States are facing a very uncertain future. CNN's John Zarella is joining us from the Kennedy Space Center in Florida. John, tell our viewers what's going on.

JOHN ZARELLA, CNN CORRESPONDENT: Yes, Wolf, you know, it's still very uncertain as to how the president's new vision is going to affect the workers here at the Kennedy Space Center and workers elsewhere in the aerospace industry, within NASA, the contractors. A lot of folks I've talked with right up until today are saying they don't know. They're going to be watching the president to see if 2,500 new jobs are added, if there's additional jobs, retraining programs for workers here that the president is talking about adding.

But I can tell you, Wolf, that I was out in Utah within the last couple of months, and, you know, it's not just the people here who are being affected by this Shuttle program ending.


ZARELLA (voice-over); Gail Godfrey (ph), he's been here 39 years. Phil Jepson (ph), 33 years.

UNIDENTIFIED MALE: This has been my life since I was 21.

ZARELLA: Charlie Pierce, he started here in 1975.

UNIDENTIFIED MALE: Nozzle's that way and that's the working into the -- the motor. ZARELLA: These men build motors, one of a kind motors called solid rocket boosters, the ones that have propelled the 130 shuttles into space, but it is almost over. As it drives through the falling snow, the transporter looks like something out of "Star Wars." It is carrying one of the last massive booster segments to a rail yard 20 miles away.

From there, it's shipped to the Kennedy Space Center. This is Promontory, Utah, north to Salt Lake City, home to ATK aerospace systems, pretty much the middle of nowhere. For 30 years, they've been building and testing shuttle boosters here. With the Shuttle program coming to an end, production is, too, these people, and their jobs, no longer needed. ATK has already laid off 1,300 workers. Jeff Kent started working here in 1976. His son, following in dad's footsteps, came on board a dozen years back. These are scary times.

RYAN KENT, OPERATIONS ANALYST: Whether I have to go to another industry or if I've got to go move out of state, those type of things, that's what goes through my mind as we finish this off, is the anxiety for the future.

ZARELLA: So, this is the forward segment we're looking at?

UNIDENTIFIED MALE: Forward segment, yes.

ZARELLA: And it's ready to be shipped?

UNIDENTIFIED MALE: It's ready to be shipped.

ZARELLA: Even with the Shuttle going away, there had been hope, optimism here, at least for a while. The Aries rocket, the next- generation launch vehicle, was built here, but NASA is canceling that program, too, meaning another 2,000 jobs will be lost.

JEFF KENT, SENIOR MANAGER, FINAL ASSEMBLY ONE: At least in my mind, you would think that we would want to employ our people rather than give Russia or other people the opportunity to take our astronauts in space. We need jobs.

ZARELLA: On a mild February morning, thousands gathered at a viewing area. They came with their children. They came armed with cameras. It was the final test firing of a solid rocket booster. A moment that's crystallizing the reality here, a reality finally sinking in. The Shuttle program is almost done, and 30 years of building rockets is over.


ZARELLA (on-camera): Now, the president is promising that by 2015, they will settle on a design for a new heavy-lift rocket that will potentially take astronauts to a near-earth asteroid, perhaps to Mars, but that's still a long way away, and a five-year gap for a lot of aerospace workers who will need jobs as soon as the shuttle ends -- Wolf.

BLITZER: Yes, it's a critical issue. What's the possibility? What are you hearing, John, that the president might add another shuttle flight?

ZARELLA: You know, that's been speculated for awhile now, Wolf, and there was some thinking that when he came down here, that would be one of the announcements he made, but it has not been publicized anywhere that it's in the cards. Although, he certainly could come up with that tomorrow and say that they do have the solid rocket boosters to -- to accommodate one additional flight. They've got an extra external tank. So, yes, NASA says they could pull it off if the president and the administration and NASA decides that they want to go that way, but nothing in stone on that yet -- Wolf.

BLITZER: Excellent reporting from John Zarrella, at the Kennedy Space Center for us, John, thanks very much.

Let's put NASA spending in some sort of perspective and compare it to the year U.S. astronauts first walked on the moon. That was back in 1969. NASA's budget then, adjusted for inflation, was more than $25 billion. That's compared to this year's estimated spending of more than $19 billion. But look at this. Look at it as a percentage of federal spending. In 1969, NASA's spending was 2.3 percent of federal spending as opposed to 0.5 percent right now. That's a significant difference.

The first lady, Michelle Obama, is making her first solo foreign trip as first lady of the United States, in Mexico City right now. She sat down just a short while ago with Juan Carlos Lopez of CNN Espanol. He started off by asking her why she chose Mexico for her first solo trip abroad. Listen to this.


MICHELLE OBAMA, FIRST LADY OF THE UNITED STATES: It just made all the sense in the world. I mean, the relationships between Mexico and the United States are deep and -- and broad and meaningful.

We have the largest number of U.S. citizens living here in Mexico. Tens of millions of U.S. citizens connect their roots here. In my hometown, Chicago, we have one of the most vibrant Mexican- American communities in -- in the country. And there's so much in terms of the values between our countries, you know, valuing family and faith and, you know, ensuring that we're working hard. There's a work ethic that we share and a belief that you sacrifice for the next generation.

So this seemed like a natural outgrowth. And we've developed what I think is a very -- you know, it's a very pleasant and meaningful relationship with the president and the first lady, Mrs. Zavala, who I admire. She is smart. She is passionate. And I just really enjoy spending time with her. So from a personal perspective, it's easy for me to -- to be here.

JUAN CARLOS LOPEZ, CNN CORRESPONDENT: Nearly 23,000 peopled have died in the last three years. And many are questioning the -- the validity or the necessity of that war.

What can you tell them to -- to make them believe that it is necessary to fight that war?

OBAMA: Well, I think that the -- the response is that we have to fight the war but keep looking at other ways to address the problem. Mrs. Zavala is working on curtailing the demand on this side of the border with her New Life Centers that have been created to train and educate families, to help with prevention on the front end, so fewer of our people become addicted and involved in the drug trade.

On our end, we need to do the same. We need to do more of the same. But education is -- is also key to this issue because what we do know in both countries is if young people have opportunities, if they know that they -- they're going to get a solid education, perhaps go to college or at least get a job that's going to pay a wage that's going to allow them to live a decent life and care for their families and their grandchildren, they're going to make the better choice.

But so often in our countries, those opportunities don't exist. And I know that both of our presidents are working to revive our economies and to ensure that education is available to all. That's a part of the problem. That's part of the solution, as well.

So I agree that one approach isn't going to eliminate the problem. This is a problem that is big, it's deep and it's going to require multiple approaches from both of our countries.

LOPEZ: You're a first lady, but you're a mom. You have Sasha and Malia. And now there's this offer (ph) technology, the Internet, social networking.

How do you deal with that...


LOPEZ: -- and what advice do you give parents --


LOPEZ: -- on -- on how to deal with it?

OBAMA: I mean it's confusing in so many ways, I have to admit, because my generation -- this is a generational issue. We didn't have Facebook and Internet and -- you know, you picked up the phone and called your friends on the phone.

But in my household, you know, we try to establish a set of guidelines and rules that make sense -- no computers, phones, television during the week. We ask a lot of questions about what our kids are doing when they're on the computer. We talk a lot with them about the dangers of Facebook and sort of getting into that social networking kind of gossip mill or, you know, that -- that comes from those activities.

So we spend a lot of time talking to our kids. And fortunately, more schools are understanding the challenges and they're doing more to educate families, as well as parents and children, about the pros and cons of excessive use of the Internet and all these new networking technologies.

LOPEZ: One of the issues you discussed with the first lady of Mexico, Margarita Zavala, is immigration, the children of -- of immigrants in the United States.


LOPEZ: What is your position on immigration reform?

Arizona is passing very tough laws against -- illegal immigrants.

Where do you think they should go and where --

OBAMA: Well...

LOPEZ: -- should immigration reform happen soon?

OBAMA: I believe in -- in -- in what my -- my husband has said. Immigration reform is necessary, just like health care was necessary. He said that in his campaign. He said it -- he said it all throughout his first year as president. He said it in the State of the Union Address.

Immigration reform is necessary because of all these things we're seeing. We're seeing young children who are trying to cross the border just to reconnect with their parents. And their lives are in danger. They're put in precarious situations. And a strong immigration reform policy would help alleviate some of those challenges.

But the truth is, is that in the United States, it takes both parties in Congress to also be on that same page, as well. It's not enough that the president wants it. We need Republicans and Democrats to support it, as well. But I know that he will push -- be pushing for reform, as he said.


BLITZER: The First Lady speaking with Juan Carlos Lopez of CNN Espanol in Mexico today. We want to thank Juan Carlos for that interview.

Here's some more facts about the first lady -- first ladies' trips over the years. Barbara Bush and Rosalynn Carter also traveled to Latin America for their first overseas solo overseas trips, whereas Laura Bush and Nancy Reagan took their first solo trip to Europe. Neither first lady -- First Lady Lady Bird Johnson nor Betty Ford took any solo trips abroad as first ladies of the United States.

The first president's wife to travel alone abroad was Eleanor Roosevelt who went to Ireland and England back in 1942. And the most traveled first lady in history was Hillary Clinton, who spent nearly a year of her husband's administration overseas. She traveled often as first lady of the United States during those eight years.

Coming up, the attorney general, Eric Holder, he vows to close Guantanamo Bay. What's going on? He won't say when. CNN's John King will join us to find out why the Obama administration won't set a new timetable. Stay with us. You're in "The Situation Room."


BLITZER: The attorney general, Eric Holder, says the Obama administration still intends to close the U.S. prison at Guantanamo Bay in Cuba, but he isn't giving an exact date to talk about that. I'm joined by our John King, he's the host of "John King USA," which comes up right at the top of the hour. There was an exact date when they wanted to close that U.S. prison, January 21st of this year, but it didn't happen.

JOHN KING, CNN HOST: It didn't happen. Three months since that deadline has passed, and the administration still does not have a plan. As you said, the attorney general said we still want to do it. We think it's the right thing to do. We think that Gitmo is a recruiting tool for al Qaeda and other terrorist groups. Why can't they close it, Wolf? Because Congress won't give them the money. And it's Democrats and Republicans who have got concerned about bringing U.S. terrorists to that proposed site in Illinois. They're trying to cut a deal now. They're trying to work out a deal with Lindsey Graham and other Republicans. Lindsey Graham is the senator in the front of this saying that if we agree not to try Khalid Sheikh Mohammed and the other alleged 9/11 terrorists in New York City, if we put them in military tribunals and we back off on that one, change the plan on that one, will you then agree to help us get the money to bring this facility in Illinois, Thompson, Illinois, online.

They're trying to work that out, they're not there yet. And so because of that, the administration's position is we want to close it, but we can't say when and they can't even give a definitive answer on when, where, and how the trials will take place.

BLITZER: Khalid Sheikh Mohammed, even Senator Chuck Schumer, who is a strong supporter of this administration, he basically said in a statement that he released, do you know what, Eric Holder and the Obama administration? You know the trial's not going to happen in New York. Just say so.

KING: And they haven't said so definitively. And on this one, the president, it's a tough term, but essentially pulled the rug out from under his attorney general a little bit.

The attorney general announced in November we're going to try Khalid Sheikh Mohammed and a handful of other alleged 9/11 co-conspirators in New York, in federal court. The administration was ready to go forward with that and then a couple of months later, the president said give me some other options, again because of Mayor Bloomberg, because of Senator Schumer, not just Republicans saying don't do it, but Democrats saying don't do it.

So now they're looking for another plan and in those negotiations over how to do it, they're trying to deal with the Gitmo closing as well, essentially trying to get a package deal. Still a sensitive political issue and Wolf, every day is closer to Election Day. Republicans think they can use this president is weaker on terrorism argument against him. Some Democrats while they disagree and are fighting back, they're sensitive to it. So it's very delicate.

BLITZER: It might be a good issue for Scott Brown in his election in Massachusetts.

KING: Absolutely did.

BLITZER: I think a lot of Republicans learned that lesson. Thanks very much, John. You'll have a lot more on this at the top of the hour on "John King USA."

We're going to have a complete check of some of the other top stories in "The Situation Room." That's coming up in a minute, including researchers, they've identified a gene -- get this -- that could lead to a treatment for baldness.

And the shocking police beating of a college student, all caught on tape. You saw it here in "The Situation Room" yesterday. Now, more officers are identified and punished.


BLITZER: Lisa Sylvester is monitoring some of the other top stories in "The Situation Room" right now. Lisa, what do you have? >

LISA SYLVESTER, CNN CORRESPONDENT: Wolf, we have an update to a story that we brought you yesterday. A second police officer has been suspended following an incident in which a University of Maryland student was beaten repeatedly by officers wielding nightsticks. The incident, which happened last month, was captured on videotape, which you see there. Police say they have now identified all of the officers on that tape, and more suspensions are expected.

New details today about the allegations facing disgraced former Illinois Governor Rod Blagojevich. Among the accusations in a just- released court documents, engaging in near constant conspiracy and extortion after his 2002 election. The former governor resigned last year after being accused of trying to sell the U.S. Senate seat held by President Obama. Blagojevich says the paperwork contains all lies and that he is innocent.

Researchers believe they are one step closer to determining what caused hair loss in men. A team of investigators say that they have identified a gene which causes hair thinning. They say the discovery doesn't explain the complex process of male balding, but it can help develop therapies to treat the condition. The findings are detailed in tomorrow's edition of "Nature."

And the creators of the now-defunct reality show "Jon and Kate Plus Eight" have dodged a legal bullet. Pennsylvania regulators they had TLC should have obtained child labor permits for the eight children of Jon and Kate Gosselin. But they say the state won't pursue legal action provided at least 15 percent of the show's gross proceeds go into trust funds for the children. TLC said those funds were established in November.

And I've got to tell you, Wolf, that story about the balding, I know a lot of guys out there are going to be interested and want to know a little bit more on that one.

BLITZER: I know a lot of guys.

SYLVESTER: Not you, of course. Look at that full head of hair. Gorgeous hair.

BLITZER: A little thinner than it used to be, but it's still there. All right, thanks Lisa, thanks very much.

Can America survive without the disappearing middle-class? That's Jack's question. He has your e-mail. That's coming up.

And an Australian retiree making millions -- millions of Internet users really happy by imitating an angry dog.


BLITZER: Check back with Jack for "The Cafferty File." Jack?

CAFFERTY: The question this hour Wolf, is can America survive without the disappearing middle class? George writes "I'm a pretty liberal person. I vote Democrat. I still like Obama. That being said, I think extending unemployment for a two year stretch is ridiculous. I don't think people in this country should go hungry or homeless, but just giving people a two year paid vacation is unethical and it's unfair for the people who are paying for it."

Ted in San Diego writes, "Throughout history, weakness in the middle class has been associated with the eventual development of political instability. That may not apply to the U.S. just yet, but at the very least, stubbornly high unemployment and a large debt will lead to serious stagnation on many levels. There's no question that unless we act soon to substantially reduce our debt, the nation faces permanent significant damage."

Seth writes, "First we sent most of our manufacturing jobs overseas, then many of the service jobs. It's called outsourcing. These jobs were once the gateway to the middle class. There's an instant solution to the jobs crisis, outlaw all outsourcing. It's strange, no politician has even to my knowledge mentioned this possibility. I wonder why."

Dana writes, "I'm fairly liberal minded but I've been having some of these same thoughts. At what point do perpetual unemployment checks become welfare?"

David writes, "You know the answer or you wouldn't be asking the question. This spending is unsustainable, yet it shows no sign of stopping. This administration is now just buying votes using taxpayer money."

And Arthur writes, "Mr. Cafferty, it's tough enough out here for those of us looking for employment without you inferring that some of us are happy living on our unemployment benefits. I've averaged $100,000 or more per year over the last 10 years and I assure you that I for one am not sitting around waiting for my benefits to expire. Are there any openings at CNN?"

This job might be open soon. Keep that in mind, you never know. If you want to read more on this, you can go to my blog at CNN/CaffertyFile.

BLITZER: All right Jack, see you tomorrow, thanks very much for that. That job is not opening up, certainly not any time soon.

An Australian man is really roughing it. He's imitating a vicious dog and becoming an instant Internet hit. You'll see it right here in "The Situation Room."


BLITZER: Here's a look at some of today's "Hot Shots." In India, a villager walks on fire in a festival celebrating the new year. In Mexico City, an activist holds a sign that reads "let's stop obesity" during a protest in favor of vegetarian food. In Bangkok, Thailand, children play in a water pipe during an annual water festival. And in Germany, a young Orangutan peers through her bars over at the zoo. "Hot Shots," pictures worth a thousand words.

He's come to be known as the psycho dog man and his bark is most unusual. Here's our Jeanne Moos.


JEANNE MOOS, CNN CORRESPONDENT (voice-over): Multiple choice, please select the scariest bark. Is it A, B or C? Quiet Ray who answers to the name -- is this the psycho dog man?

RAY GRAHAM, PSYCHO DOG MAN: It's me, it's me, you've got him.

MOOS: This Australian retiree became an Internet sensation after the show "A Current Affair" came to his suburb outside Sydney and it interviewed him about two dangerous dogs living in the neighborhood.

GRAHAM: And as soon as they saw me, they came bounding over.

MOOS: It was the bark heard around the world. Plastered on blogs, psycho dog man has his own Facebook page. Ray Graham's ferocious imitation was turned into remix after remix.


MOOS: Even his wife's face was much remarked on, barely a flinch. Ray says he's never before done a dog imitation.

GRAHAM: Absolute spur of the moment.

MOOS: And yet his bark is scarier than even a snarl of the late champ of the ugliest dog contest. Ray's is far more terrifying than the bark of an 86-year-old man who encountered a bear in his house.

UNIDENTIFIED MALE: By impulse I went -- MOOS: The bear ran for the woods. Online admirers have compared Ray to Cujo. A recording of the psycho dog man's voice has New York canines like Pudding and Lola backing off. Although Rockie just wagged his tail.

Ray says he has no plans to try to make any money from his dog imitation, though an advertising agency has tried to get in touch with him.

GRAHAM: I think it's hilarious, absolutely hilarious.

MOOS: And Ray's imitation has sparked imitators with bonus underpants.

UNIDENTIFIED MALE: They came bounding over and --

MOOS: Now Ray is doing it on command.

GRAHAM: Go on, hit us.

MOOS: Posted one person, that guy needs to be put down. Speak, Ray. Ray, what's your wife doing right now?

GRAHAM: Well, she was asleep.

MOOS: Jeanne Moos, CNN, New York.


BLITZER: I'm Wolf Blitzer in "The Situation Room." "John King USA" starts right now.