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Illegal Immigration Crackdown; Vets Honored on WWII Anniversary; How Much Money Does Government Waste?

Aired April 15, 2010 - 17:00   ET


WOLF BLITZER, HOST: Rick, thank you.

Happening now, President Obama on a tough sales trip to the Kennedy Space Center, trying to sell NASA and all Americans on his vision for the future of U.S. space exploration.

Also, the Tea Party movement voices its outrage on this Tax Day, turning out to denounce the state of the country right now.

But what exactly do they want it to look like?

And a massive year long federal operation cracks a human smuggling ring wide open.

I'm Wolf Blitzer.


President Obama is promising more money and his full commitment to the U.S. space program. But under his administration, NASA will head on a very different trajectory than what it had planned.

Mr. Obama traveled to Florida's Kennedy Space Center today to explain his vision to a skeptical audience.


BARACK OBAMA, PRESIDENT OF THE UNITED STATES: The bottom line is nobody is more committed to manned space flight, to human exploration of space than I am. But we've got to do it in smart way.


OBAMA: And we -- and we can't just keep on doing the same old things that we've been doing and thinking that somehow is going to get us to where we want to go.


BLITZER: CNN White House correspondent, Suzanne Malveaux, is traveling with the president in Florida -- Suzanne, what else did the president have to say?

SUZANNE MALVEAUX, CNN WHITE HOUSE CORRESPONDENT: Wolf, it was almost kind of like a been there/done that when he explained the moon mission that had happened before and why he was scrapping it. But the president said that he would like to see humans on Mars by mid-2030s or so, that he intends to be around for that.

It was all a part of trying to show that he's got a goal for NASA -- for the human space exploration program. But, also, another thing, Wolf, he had to do was try to convince people here at the Kennedy Space Center and around the country that those tens of thousand of jobs potentially lost because of the closing -- the retirement of the shuttle, as well as the moon mission, is somehow going to help them out in some way and that he's got a plan. We talked to technicians, mechanics, even folks who sweep the floors, to get a sense of the anxiety that they're feeling.


UNIDENTIFIED MALE: It's one small step for man, one giant leap for mankind.

MALVEAUX: The moon mission under President Obama is scrapped, at least for now -- a devastating blow to Kennedy Space Center employees.

JEFF LAKASZCYCK, UNITED SPACE ALLIANCE: I should have a Plan B, but I don't have a good Plan B yet. I want to stay here as long as I can. But after that, we may have to relocate and try to find another job in aerospace. I could go back to being an aircraft mechanic or maybe I'll stick around here and drive a truck.

ROBERT WRIGHT, UNITED SPACE ALLIANCE: There is just kind of a cliff out there and we're not sure what's on the other side of that cliff.

MALVEAUX: The anxiety began with the announcement under President George W. Bush that NASA's aging Space Shuttles would retire in 2010, eliminating nearly 7,000 jobs at Kennedy Space Center and tens of thousands elsewhere.

Families at least took comfort in President Bush's plan to return U.S. astronauts to the moon by 2020. But in February of this year, the Obama administration announced it was killing the moon mission, called Constellation, after having spent $9 billion on the program.

(on camera): This $500 million steel tower stands at 355 feet. It's brand new -- never been used before. It was built to launch rockets into space. But under President Obama's new space program, it will now sit dormant. (END VIDEO TAPE)

MALVEAUX: And President Obama said that President Bush's mission to the moon, that it was over budgeted, that was it was way out there beyond the schedule -- late in the schedule and so -- but it was clear, Wolf, that he was concerned that he was losing the public relations battle, if you will. That's why we heard from President Obama today, saying that there were some components of the moon mission that he would bring back, that they would be investing more money in NASA's budget -- $6 billion over five years -- and that they would be investing in long-term projects, as well -- Wolf.

BLITZER: Did the president, Suzanne, change any minds over there?

MALVEAUX: Well, before this speech, the Congressional delegation of Florida, Republicans and Democrats alike, all against his new space policy. I had a chance to talk to Senator Bill Nelson, a Democrat here from Florida, very, very powerful; actually had some NASA training, was in a shuttle before. He reports that the president made a mistake when it came to the space policy. I had a chance to talk to him and he says he has since changed his mind, that the president made a convincing case, that he's got clear goals and it did not hurt, as well, that he committed $40 million to the State of Florida -- folks involved in the space program, to help them retrain and find some jobs -- Wolf.

BLITZER: All right, Suzanne, thank you.

Suzanne Malveaux traveling with the president.

On this Tax Day deadline, the White House is releasing President Obama's tax returns. It shows he and the first lady made $5.5 million last year, most of it from sales of his books. And they paid almost $1.8 million in taxes. The first couple donated $329,000 to charities, including CARE and the United Negro College Fund. The president also divided his $1.4 million Nobel Peace Prize money among 10 different charities.

It's -- on this, also, tax deadline day, the Tea Party protesters gathered here in Washington over at the Freedom Plaza. Republican Representative Michelle Bachmann of Minnesota drew roars of approval when she charged that the White House and Congressional Democrats were trying to take over large chunks of the economy. Bachmann telling the crowd -- and I'm quoting her now -- "we're onto this gangster government."

Similar rallies took place nationwide, as Americans aired their discontent over government spending and what they see as a Washington tax grab.

For decades, one of the questions pollsters have been asking Americans is, do you trust government?

Let's discuss this question and new poll numbers with our senior political analyst, Gloria Borger.

The mood among Americans right now when it comes to this question?

GLORIA BORGER, CNN SENIOR POLITICAL ANALYST: Well, most Americans don't trust government, Wolf. But it's worse when you ask Tea Party folk.

Let's take a look at how this kind of has evolved over the years. Back in 1958, which, of course you don't remember, right?

When Eisenhower was president, 73 percent of the people had trust in government. It continued to go down. After Watergate, 36 percent. Pretty low for Bill Clinton. The lowest -- 17 percent. After 9/11, after first responders, it went up, 60 percent. Now Barack Obama has 20 percent. But that arrow is going to continue to go down for these Tea Partiers because only 6 percent of them trust government to do what's right for the country.

BLITZER: Right. The Tea Partier -- but these numbers here are numbers of the American public as a whole.

BORGER: These numbers are numbers of the American public overall. But when you ask Tea Partiers right now, it's down.

BLITZER: Well, so these members of the Tea Party that have come here to protest...

BORGER: Right.

BLITZER: -- not only here, but all over the country, what do they want?

What do they want the government to look like?

BORGER: Well, they're very anti-establishment, as we know. They want a government that is smaller -- 92 percent in a "New York Times"/CBS News poll say small government. A large majority of them say they're willing to accept the cuts in domestic programs like Social Security and Medicare that that would require. Ninety-six percent of them don't like Congress. And a large majority of them say they are angry at -- at government. So they're unhappy right now with anything that says government's going to have a larger part of your life.

BLITZER: Who do they want as a leader?

BORGER: Well, this is what's so interesting right now, Wolf, because it is wide open. When "The New York Times" asked names -- take a look at this. Barack Obama, only 2 percent; Sarah Palin, by the way, we give her a lot of press, 9 percent. Newt Gingrich beats her out by 1 point; Mike Huckabee, 3; Ron Paul, the libertarian, only 3; Mitt Romney, only 5.

But here's what's so interesting. When you combine other, no one or don't know, you get 49 percent.

So paging Ross Perot, anyone?

This is a real opportunity, Wolf, for someone to take charge of this nascent political movement, like Ross Perot did.

BLITZER: Because according to this...

BORGER: You remember Ross Perot in the '90s?

BLITZER: Yes, of course I remember it. We all do.


BLITZER: Who can forget? But the -- the notion that Sarah Palin is the darling of the Tea Party movement...

BORGER: Right. Not so much.

BLITZER: That doesn't seem to bear out in this poll.

BORGER: Well, right. Insomuch as anyone is the darling. But she's still in single digits, 9 percent. So it's not as if the movement has said, we anoint you as a leader.

Some of these people say, you know, Sarah Palin, she ran with John McCain, don't like John McCain so much, maybe she's just another politician. They're looking for somebody outside of the establishment realm. And, again, I go back to Ross Perot, in much the same way that voters were looking to Ross Perot in the early '90s.

BLITZER: Maybe he should make a comeback.

BORGER: Who knows?

Or maybe there's a new one lurking out there.

BLITZER: There's a new Ross Perot out there (INAUDIBLE).

BORGER: Yes. Don't know.

BLITZER: Thank you.

Travel chaos right now -- some of the busiest airports in the world are shutting down, as air space is closed because of volcanic ash.

Can you believe this?

Thousands of flights are canceled. Tens of thousands of passengers are stranded.

Also, raids target a huge human smuggling operation. We ride along with law enforcement as they crack this ring wide open.

And heartbreak for thousands of families -- one Russian official says all, repeat, all U.S. adoptions with his country are now on hold.


BLITZER: Jack Cafferty is here.

He's got The Cafferty File -- Jack.

CAFFERTY: It -- it just could be the greatest rematch of all time. Hillary Clinton and President Obama almost tore the Democratic Party apart two years ago.

But what if they went at it again in 2012? A new CNN/Opinion Research Corporation poll shows Secretary of State Hillary Clinton with a favorable rating of 61 percent and an unfavorable rating of 35 percent. Clinton's numbers have improved since the 2008 primaries and she fares better now than President Obama, who gets just a 57 percent favorable rating. Plus, Obama's job approval rating is below 50 percent in most of the daily tracking polls. Mr. Obama's unfavorable rating of 41 percent has more than doubled since early last year.

We have more. Clinton's numbers top all other Democrats and Republicans in this poll, including the potential GOP frontrunners -- guys like Mitt Romney and Mike Huckabee. Clinton insists that she absolutely is not interested -- those are her words -- in running again for president, although she has suggested that she doesn't envision serving as secretary of State during a second Obama term. Of course, a lot can happen between now and 2012, including whatever President Obama does or doesn't accomplish in the remainder of his term.

If the economy recovers and jobs come back, he's going to be tough to beat. But as of right now, one survey shows the majority of Americans don't think the president deserves a second term. And when it comes to politics, we all know that it's never wise to count out a Clinton.

Anyway, here's the question -- should Hillary Clinton challenge President Obama in 2012?

Go to and post a comment on my blog.

It's not unprecedented. Ted Kennedy challenged Jimmy Carter at the end of his first term, Wolf. He didn't win the nomination, Carter did. And then Carter was defeated.

But it would be -- it would be a hell of a tussle, wouldn't it?

BLITZER: It certainly would. Remember, though, Ted Kennedy did not serve in the Carter administration. He was a senator -- a powerful senator, a big Democrat. But I guess it would be a little bit different for a secretary of State to challenge the sitting president.

CAFFERTY: Well, unless she quit a year or so before the election.

BLITZER: Unless she quit, yes. That would be (INAUDIBLE).

CAFFERTY: You know, like Sarah Palin quit when she was governor of Alaska.


BLITZER: I knew you were going to comment.

Why am I not surprised?

All right, Jack, stand by.

Thank you.

The Tea Party movement is focusing much of its anger today on taxes, this being the deadline to file with the IRS. But so far, taxes have not -- repeat, have not gone up under President Obama.

Let's talk about it with our senior political analyst, David Gergen.

There was a modest -- a relatively modest tax cut for middle class Americans. A lot of rich Americans are bracing for -- for bigger tax -- tax rates. But so far, it hasn't happened.

DAVID GERGEN, CNN SENIOR POLITICAL ANALYST, FORMER PRESIDENTIAL ADVISER: It hasn't happened, Wolf. But a lot of Republicans point out that they're -- the Congress has passed a number of tax increases. They are coming. They haven't hit yet, but they are coming.

But I think the -- the entry point today, Wolf, on Tax Day, is that everyone agrees that the deficits are too big and must be brought down. But there's a real disconnect now between the conversation one hears in Washington about how to do that and what one hears out around the country.

In Washington, you hear a lot of talk about higher taxes as a solution to the deficit problem and especially you're hearing from Nancy Pelosi and others about the idea of a new national sales tax -- a so-called VAT tax, a value-added tax.

And I've heard talk in the -- inside the administration at high levels of a possibility of a VAT tax that might be as much as 6 percent. And that would be on top of, not as a replacement for, but on top of, current income taxes, that are going up.

Now, that's the talk in Washington. Around the country, you hear, wait a minute. Two-thirds of the people say in a poll they're -- they -- they already feel overtaxed. You know, the CNN -- the new CNN poll finds that three quarters of people say the government is wasting far too much money.

And so there's a strong preference out in the country for solving the deficit problem by cutting spending first and only then, if you have to, as a last resort, raising some taxes. So I find on this Tax Day, there's a very -- there's a growing disconnect between the Washington conversation and what -- what you hear around the country.

BLITZER: Well, on this whole issue of a value-added tax which, in effect, is a national sales tax, it would be a total, total violation of President Obama's commitment, often made during the campaign, that if your household makes less than $250,000 a year or if you're a single individual making less than $150,000 a year, there won't be a dime increase in your taxes.

This would go across the board, a value-added tax -- a national sales tax. It would affect poor people, middle class people and rich people alike.

GERGEN: Well, again, Wolf, there are Republicans like Karl Rove arguing in the newspapers today that there are already small taxes that have been put on people below $200,000.

But on the value-added tax, in fairness to the administration and in others around the president and the Democratic Party, when they talk about a VAT tax, they are talking about taking a portion of the revenue and returning it to people at the lower end to sort of make up the difference, in effect, so that there -- they would pay very little of the tax impact.

Now how much would actually get to them, who knows?

But they are talking about a rebate for lower income Americans. And so we don't know quite where this is going to wind up. They're also talking about a rebate for small business. This is going to be very complicated.

But, Wolf, I think you and I know in the next six to 12 months, we're going to hear a lot more talk about what are the solutions to the deficits, how much of this, where is it going to come from on the spending side, what are we going to cut, after all?

Are you going to cut Medicare again or are you going to raise taxes?

So something clearly has to be done.

BLITZER: Because if you're concerned about the debt or the deficit, there's only three ways you could deal with it. You can cut tax -- you can increase taxes; you can cut spending; or, if the economy gets great and more revenue is flowing into the tax coffers, the IRS or whatever, then you can cut some of that deficit.


BLITZER: But the most painful, of course, is to cut spending for a lot of these programs.

GERGEN: Well, Wolf, as you know, the short-term painless way to do it is just to print more money. But that creates inflation and in the long run...


GERGEN: -- it costs you one heck of a lot (INAUDIBLE).

BLITZER: There's a fourth way, too.


BLITZER: If you're saying that.

All right. Thanks very much, David.


BLITZER: We're going to have more on this whole debate over a national sales tax, a value-added tax. That's coming up later here in THE SITUATION ROOM.

President Obama calling for a safety crackdown in the wake of that West Virginia mine disaster.

Why the mine's owner says the president is misinformed.

Plus, emotional stories of the final days of World War II.

We're going to hear from American veterans who helped liberate survivors of the Holocaust.


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


Well, air traffic chaos to the extreme in Europe today. Countries one by one are closing their air space, as a gargantuan cloud of volcanic gas blows toward the European mainland. You see it there. Thousands of flights into and out of some of Europe's busiest airports are grounded, including flights from the United States. The ash cloud is from a volcano in Iceland that is erupting. Volcanic ash can cause jet engines to shut down. And geophysicists say it's hard to predict exactly when it will be safe to resume air travel. And we will have much more on this story at the top of the hour, with a live report from Heathrow Airport.

Well, Poland is among the most recent countries to close air space to incoming and outgoing flights. The White House says for now, President Obama still plans to fly to Poland Saturday for the funeral of President Lech Kaczynski. That Polish leader was killed with 95 others, including his wife, in last week's plane crash in Western Russia.

Local officials say at least 16 people were injured in yet another suicide bombing in Kandahar. The blast was the second today in Afghanistan's second largest city. It happened near the Afghan National Army headquarters. The U.S. and NATO allies have announced plans for a new offensive to drive the Taliban from Kandahar. The city is considered the spiritual home of the anti-government Taliban militia.

And the Pentagon is implementing the first round of recommendations aimed at preventing more events like the deadly Fort Hood shooting last fall. Among the 26 recommendations being implemented immediately, a revamp of base emergency training programs, use of an FBI system to report suspicious activity and a larger role in the government's joint terrorism task force. Army psychiatrist Major Nidal Hasan is accused of opening fire on Fort Hood in November, killing 13 and wounding 30 others -- Wolf? BLITZER: Thanks, Lisa.

Stand by. We're going to get back to you for more top stories.

A crackdown today in Arizona -- after months of preparation and an investigation, the Feds close in on a massive human smuggling operation.

Also ahead, decades have passed, but the memories are fresh and they're filled with emotion -- a salute today to the veterans who liberated victims of the Holocaust.



Happening now, it was one of the worst terrorist attacks on U.S. soil. In a story I covered extensively, now, almost 15 years since the Oklahoma City bombing, a look back at the lessons learned with a man who was president of the United States at the time, Bill Clinton. My one-on-one interview with President Clinton tomorrow, here in THE SITUATION ROOM.

And you might just be recovering from mailing in your taxes on this Tax Day, but could another tax be coming your way?

We have new information for you.

I'm Wolf Blitzer.


But first, a major human smuggling operation is being cracked wide open today, with law enforcement officers making dozens of arrests across Arizona.

CNN's Casey Wian is tracking it all for us from Tucson -- Casey, what's going on over there?

CASEY WIAN, CNN CORRESPONDENT: Well, Wolf, until this morning, this business you see behind me was offering $25 shuttle bus rides between the border town of Douglas, Arizona and here in Tucson and also between Tucson and Phoenix. But federal law enforcement authorities shut it down this morning. They say it's connected to a massive illegal immigrant smuggling ring.


WIAN (voice-over): They appear to be mom and pop businesses operating shuttle vans between border towns and major cities in Arizona. But they're allegedly part of a confederation of illegal immigrant smuggling rings, according to Immigration and Customs Enforcement.

JOHN MORTON, IMMIGRATION & CUSTOMS ENFORCEMENT: This is the largest human smuggling operation ICE has ever conducted. And I'm quite confident, at the end of the day, we will have dealt a very strong and severe below to the human smuggling industry here in Arizona and along the Southwest border.

WIAN: Hundreds of agents from nine federal and local law enforcement agencies fanned out across the state Thursday, arresting more than 40 criminal suspects and shutting down several businesses.

Here's how investigators say the human trafficking rings operated. Smugglers would help illegal immigrants enter the United States near a border city, such as Nogales. They would then be transported to Tucson, where one of these shuttle vans would take them to Phoenix. Once there, they would rendezvous with another vehicle and be taken to a drop house. They would then be moved to cities all over the United States.

ICE says its yearlong investigation, dubbed Operation Plain Sight, found the businesses were operated by U.S. citizens and legal residents. Illegal immigrants were allegedly issued phony tickets for shuttle trips. That way, investigators said, drivers could claim they were operating legitimate businesses if they were stopped by law enforcement. Immigrants rights groups criticized the timing of the raids.

JENNIFER ALLEN, BORDER ACTION: I think we're getting absolutely mixed messages. I saw that just yesterday that First Lady Michelle Obama said she wants to see immigration reform happen. And then we wake up this morning and we have ICE raids intensively throughout the State of Arizona.

WIAN: ICE officials say politics played no role in the operation, which they say represents a shift in enforcement strategy. For years, they've concentrated on busting illegal immigrant drop houses. Now they're after the transportation networks that supply the smugglers' human cargo.


WIAN: Now, I.C.E. says it has received unprecedented cooperation from the Mexican government which actually apprehended some suspects on the other side of the border. Agents could not tell us how many illegal immigrants were actually -- helped move throughout the state by these alleged smuggling organizations that were posing as shuttle bus operator. But they say that number, Wolf, was significant.

BLITZER: Significant, indeed. Casey Wian on the scene for us in Tucson. Casey, good report.

Against the backdrop of today's raids, Arizona lawmakers are right now on the verge of passing the toughest law in the United States against illegal immigration. It would make it a crime under state law to be in the United States illegally and require police to question suspected immigrants about their status. Those unable to produce documents could be arrested, jailed and fined. The bill just needs state Senate approval before going to the governor. She has not said whether she will sign it into law. They are some of this country's greatest, greatest heroes. Today in a ceremony marking the 65th anniversary of the end of World War II in Europe on this Holocaust memorial day, the head of the U.S. military central command, General David Petraeus honored those men and women who liberated the survivors. Today as we said is holocaust memorial day in the United States. Our pentagon correspondent, Barbara Starr, had a chance to hear some very emotional stories.


BARBARA STARR, CNN PENTAGON CORRESPONDENT: Sixty-five years ago, Tech Sergeant Leon Bass was mad he could only serve in an all black segregated unit in World War II.

LEON BASS, HOLOCAUST LIBERATOR: I was questioning my wisdom of joining the army telling me I wasn't good enough to serve with white soldiers.

STARR: But one day, everything changed.

BASS: This day in April, 1945, I had the shock of my life. I walked through the gates of a concentration camp.

STARR: In Germany, the living were barely alive. Bass and other veterans have gathered to renew an extraordinary bond, perhaps for the last time. These men helped liberate Nazi concentration camps.

BASS: They were skin and bone. Skeletal faces. Deep set eyes. Many of them were dressed in pajama type clothing. Some were naked. I could see the sores on their body.

STARR: Bass returned home still to face discrimination. He says he knew he had already seen the worst.

STARR: It was that day I realized I wasn't the same anymore. Something had happened to me.

STARR: Susumu Ito was in an all Japanese American unit. Now 90, he's here with Nelson Akagi, 87, friends since they served together. Tell me about the day you came across the camp.

SUSUMU ITO, HOLOCAUST LIBERATOR: I saw then quite a few still milling around inside. Others that were strong enough, they were starting to scream out. And they were still in their striped garb. Just skin and bone and barely moving around.

STARR: They show me photos of Larry, a Lithuanian Jew they rescued. Nelson recalls finding him years after the war.

NELSON AKAGI, HOLOCAUST LIBERATOR: I think we did more crying than talking when we first talked to each other.

STARR: Remarkably, they express no bitterness their own relatives were in relocation camps back home.

AKAGI: Kind of made us think, wow, one group in the United States that were in the camp liberating another group in Germany who were in camp.

STARR: Sergeant Arthur Mainzer was one of the first to document what happened in the hours after liberation.

ARTHUR MAINZER, HOLOCAUST LIBERATOR: These are German civilians in the town right next to the camp.

STARR: Why were they marched through?

MAINZER: To show what had happened there. Some of them said, oh, I didn't know that was going on.

STARR: A terrible time. Now memories shared by elderly men, wanting the world to know what happened when they were young.

Barbara Starr, CNN, Washington.


BLITZER: Fresh fallout from an international adoption scandal. Heartbreaking news for thousands of American family. We're getting new information.

Plus, a controversial alternative to the income tax. Details of how it would work and why some experts say it could help defeat, at least scale back, the deficit.


BLITZER: Something you'd see in a futuristic movie. It's being used now on America's streets. A high-tech device that records everything an officer sees and hears. We have amazing video you won't see anywhere else. Don't miss what happens when Brian Todd goes on the beat with officers and their new head cams. That's tomorrow, Friday, right here in THE SITUATION ROOM. I think you're going to want to see this report.

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 there, Wolf. President Obama is ordering an extensive review of coal mine safety in the wake of that deadly blast in West Virginia. He's directing labor secretary Hilda Solis to work with Congress to strengthen existing laws. He also says the government is sending inspectors into mines with troubling safety records. Mr. Obama calls last week's mine explosion a failure of management. Massey Energy which owns the mine calls his remarks misinformed and regrettable.

A Russian foreign ministry spokesman says all adoptions between his country and the United States are on hold. Other Russian and U.S. officials say they're not aware of a freeze. The dispute comes after an American family sparked outrage by returning their adopted Russian child back to the country. A U.S. delegation will travel to Russia in the next few days to try to resolve this conflict. And one of the hottest new technological sensations is banned in Israel. The country is prohibiting the use of the Apple iPad because of concerns that its wireless frequencies don't adhere to national standards and that they could disrupt other devices. The ban prevents everyone, including tourists, from using the computers until officials can certify that they do, in fact, comply. Confiscated iPads will be held by customs until their owners leave the country.

An update on plans to close the only remaining sardine cannery in the country. Maine's governor says a deal is close to saving it. An unnamed seafood processing company is potentially interested in purchasing the cannery who's last day of production is today. The plant probably won't be used to process sardines. The buyer is expected to give hiring preferences to current plant employees. That would be very good news for the employees there. There's something like 100-plus employees working there so let's see what happens there.

BLITZER: Good news for sardine lovers, too. You like sardines?

SYLVESTER: Not a huge fan. Although I've had them in my time.

BLITZER: I've had them, too. Not a huge fan. I like them a little bit. Not much. Thanks.

BLITZER: As you know, it's tax deadline day here in the United States. While Americans dot their I's, cross their T's, mail their tax return in or e-mail them in, it's a good time for a good old- fashioned debate as tea party Americans rally to air their discontent. We'll ask, is Congress ripe for a return to Republican leadership? Two key members of Congress, Steny Hoyer and Eric Cantor. They are here in THE SITUATION ROOM. that debate is coming up.

And how much of their tax dollars do Americans believe Congress is wasting? The results of our new poll, they are pretty stunning.


BLITZER: On this April 15th tax day, a new CNN poll finds that Americans think the government is wasting your money, big time. Joining us now to talk about that and more, I'm joined by the House majority leader, Congressman Steny Hoyer, and the House minority whip, Representative Eric Cantor. Both the number two leaders of their respective parties in the House of Representatives. Congressmen, thanks very much for coming in.



BLITZER: Steny Hoyer, let me show you the results of the CNN opinion research corporation poll today. We asked the question, how much of your taxes does government waste? 74 percent said a lot. 23 percent said some. Only three percent of the American people, only three percent, say not much. That's not a vote of confidence in what you guys are doing up on Capitol Hill. HOYER: Well, you know, I think the 3 percent are correct. Not much. Do we waste some, yes. Any enterprise this large, private sector, public sector, obviously had trouble keeping track of every nickel. But very frankly, it depends upon what you mean by waste. Social security, Medicare, Medicaid take a huge sum of money that we pay for health care and senior retirements. And poor people who can't get health care. So is that a waste? Do we waste some money within that? We do. Do we need to be very careful about it? We do. In the health care bill that we just passed, of course one of the major investments is to eliminate waste, fraud and abuse in the health care programs. But they're right. It's an important consideration for us. We need to go after waste, fraud and abuse.

BLITZER: That's a lot easier as both of you know, said than done. If we asked you that question, Congressman Cantor, how much of your taxes does government waste, would you say a lot, some or not much?

CANTOR: I think you're going to predict right, Wolf. I'm going to say a lot. And, you know, today is tax day as you said before. Steny and I work together on a lot of things. As you may expect, we disagree on some. I think today, tax day, though, would be a great time for us to start and maybe join together, and I would challenge Steny to say, hey, come on. Let's just say right now we're not going to allow for tax hikes to occur this year because we don't need anymore money coming out of people's pockets into Washington. That would probably be the best response to the poll that you speak about.

BLITZER: You ready --

HOYER: Not only will I accept the challenge, we accepted the challenge. Taxes for Americans, 95 percent of Americans, were reduced substantially last year. Over $300 billion in tax cuts last year. And the average refund is 10 percent greater this year than it was last year under the last year of the Bush administration. Very frankly, taxes have gone down. Eric, of course, doesn't mention that. But a third of the recovery and reinvestment act were tax cuts.

BLITZER: Go ahead Eric Cantor.

CANTOR: Well listen. What I'm saying is this. Certainly with can argue about the stimulus bill. What I can say is this. Every American knows their taxes are going up in December. Let's say right now we're not going to allow taxes to increase. Especially when we've got the unemployment that we have and the need for us to grow in this economy and to produce jobs. Let's say right now no tax hikes this year.

HOYER: Wolf, clearly, if what Mr. Cantor is talking about, I suspect he is, is the tax program that was adopted in '01 and '03, then had a 2010 ending date, so automatically taxes would go up, the answer to his question, the president has said, we've said, we're certainly going to make sure that middle class taxes don't go up.

BLITZER: But they will go up for people making -- households making more than $250,000 a year, individuals making more than $150,000 a year. Steny Hoyer, is that right?

HOYER: Well, that may be the case.

CANTOR: And all capital gains taxes.

BLITZER: Go ahead. What was the point, Eric Cantor?

CANTOR: And, Wolf, I would say to Steny, and Steny knows, too, that all capital gains taxes will go up. Will have marginal rates increase. This is a huge tax increase on the American people that is set to happen in a time in which we've got really high unemployment and the need for job growth.

BLITZER: Steny Hoyer, first to you. There's a lot of buzz out there about a new tax, a value added tax, a so-called national sales tax. Yes or no? Good or bad idea?

HOYER: Well, I don't think we're going to do a value added tax. The Senate is going to pass a resolution today or essentially the Senate that no value added tax -- I don't know whether they'll pass it or not. I understand it's coming over to us. There's no discussion right now about a value added tax. What I have said in the commission that the president has formed with respect to how do we get a handle on this debt and deficit that confronts us, one of the most serious problems that confronts this country, everything's got to be on the table. We got to pay for what we buy if we want to buy it. The Republican is the Republican leadership during the last decade bought a lot of things, tax cuts, wars, drug prescription programs, not bad programs -- but they didn't pay for it.

BLITZER: They just, by the way, Eric Cantor passed through the Senate a nonbinding resolution saying this idea of a value added tax or a national sales tax, not a good idea.

CANTOR: Listen, that is certainly good news. Nobody in this country wants to become like some of the big government nations in Europe where taxes really are effectively even just at the marginal rates over 50 percent. Then you put a value added tax on, they're over 60 percent taxed. Like your poll said, Wolf, you know, Americans think Washington wastes a lot of money, and we do. We don't have a revenue problem here, which is why I say we ought to join together and say no tax hikes this year. We've got a spending problem. And Steny talks about the commission the president has put in place. You know what? The intent and the goal is laudable. The problem is they didn't put tax hikes off the table. And we can't afford tax hike right now when we have to grow jobs in this country and get investors back into the game of putting their capital to work so that we can grow again.

HOYER: Wolf, let me make a comment. Since Ronald Reagan they've been talking about waste, fraud and abuse. We ought to get rid of it. I agree with that. Eric just said there's a lot of waste in the government. They were in charge for eight year. Just a few months ago they were in charge. They should have gotten rid of that waste, fraud and abuse they think exists. We'd be for that.

BLITZER: Let me move on. HOYER: What they didn't do, Wolf, was pay for what they bought. That's created a great big deficit problem for us that have got to be solved.

BLITZER: I want to move on. We have a limited amount of time. There is one issue both of you agree on. That is U.S./Israeli relations. Steny Hoyer, you weren't very happy with the way president Obama treated the Israeli prime minister on his recent visit here, were you?

HOYER: I think that we need to treat Israel for what it is. Our closest ally in the Middle East, one of our closest friends in the world. And when we have those differences need to be discussed, in my opinion, in private. I think the administration has made it very clear that our relationship with Israel is very, very strong, as strong as it's ever been. There is no way to dissolve the bonds between us and Israel. But obviously, I have indicated that I think that whatever differences we have ought to be discussed in private.

BLITZER: Eric Cantor, you and Steny Hoyer co-sponsored a letter, 333 members of the House signed it, Democrats and Republicans. Basically, correct me if I'm wrong, because I've read it carefully, rebuke the White House for the way the president treated Benjamin Netanyahu.

CANTOR: That is correct. I stand side by side with and salute the leadership of Steny Hoyer on the precedent of U.S. Israel relationship. I think it is very clear to most Americans that Israel's security is synonymous with our own. We have a lot of struggle out there in this world, and we are in an ideological fight with the spread of radical Islam. And it's something that we've got to take seriously, because we know the impact of what that can have on free-loving people like those of us in the United States. And Steny and I also are working hand in hand together on a resolution that I'm hopeful Congress will produce very shortly which will impose real sanctions on any nations doing business with the state -- the nation of Iran. Because it is Iran that poses an existential threat to us here in this country as well as Israel.

BLITZER: On that note of cooperation, very quickly ten seconds.

HOYER: Wolf, all I wanted to say is, the president has said, the Congress has said, a nuclear-armed Iran is not an acceptable alternative and we need to be very strong and clear on that proposition.

BLITZER: Steny Hoyer and Eric Cantor, they agree on that issue. Let's see if they agree on other issues down the road. Gentlemen, thanks very much.

HOYER: Thank you, Wolf.

CANTOR: Thank you, Wolf.

BLITZER: Jack Cafferty is coming up with your e-mail. And a volcano, get this, a volcano in Iceland, brings air travel to a virtual halt. Thousands of flights have been canceled. Not since 9/11 have we seen this.


BLITZER: Get right back to Jack for "the Cafferty file." Jack?

JACK CAFFERTY, CNN CORRESPONDENT: The question this hour is -- should Hillary Clinton challenge President Obama in 2012? There's some new poll information out that indicates that currently she's more popular than he is.

Dave writes: "I don't think Hillary Clinton should run against Barack Obama in 2012. If things look bad for our president, I anticipate he may decide not to run again. Mrs. Clinton would be just the person to step up in that situation."

David writes: "Terrible idea. It would just create a huge divide among Democrats and invalidate Obama's term in office."

Adam writes: "I supported Hillary during the '08 primaries. I voted for Obama in the general election, however, given the opportunity, I would not hesitate to support Hillary Clinton again. Only time will tell if I get that chance."

C. writes: "Absolutely. She is much more capable of leading the country in these tough times. Although Obama seems to be trying, he hasn't been able to accomplish very much at all. Most likely due to his lack of experience. I say if it takes a primary challenge in the party to straighten out the mess we're in, do it."

Jonique writes: "No, I don't believe Hillary would challenge President Obama, since you asked. My question to you is, why would you ask such a question in the first place? Do you wish for an Obama failure? You are mighty hard on a person who has been in office for such a short time. What is your agenda?"

Lene writes: "I don't think America has to go through that again. People have short memories. Clinton had her issues like the campaign donations, the sniper fire lie, and now she's put up on a pedestal. This makes as much sense as Sarah Palin running for president."

And Jerry writes from Ashfork, Arizona: "Both are hell-bent on turning the country into a socialist nation. I'd have to find some wacky right-wing yo-yo that believes in America first."

If you want to read more on this, you can go to my blog at Wacky, right-wing yo-yo.

BLITZER: Thank you, Jack. Don't go away.

CAFFERTY: Ashfork, Arizona.

BLITZER: London, Paris, Amsterdam, some of the world's busiest airports are all closed right now along with airports across Europe as volcanic ash gets airports to cancel, get this, 6,000 flights. We'll check it out coming up.