Return to Transcripts main page


Growing Oil Leak Concerns; Wall Street Reform Passes Senate

Aired May 21, 2010 - 18:00   ET



Happening now: As oil pollutes the Gulf of Mexico and the Louisiana coast, there are now growing concerns about the chemical dispersants used to try to break up the crude from the leaking well.

Wall Street reform is finally in the works after Senate passage of a massive overhaul bill. But when it comes to assigning responsibility for the financial meltdown, why are lawmakers blaming everyone except themselves?

And is it time to legalize marijuana? How about getting tough on alcohol? The current drug czar and the very first drug czar, they are here together for a rare frank conversation.

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

It's now more than a month since the oil rig explosion in the Gulf of Mexico. At the bottom of your screen, you can see exactly how long it's been. With oil beginning to pollute delicate coastal wetlands, the next best hope for stopping the leak now won't be tried until at least early next week.

It's called top kill. It involves pumping thick fluid into the leak site to stop the flow so it can then be sealed with cement. You're seeing, by the way, a live picture of the leaking oil right now. We still don't know, though, how much is actually gushing out of that broken riser.

Our congressional correspondent, Brianna Keilar, has been looking in to this for us.

How can they stop this leak, Brianna, if they don't even know how much oil and natural gas is exploding from there?

BRIANNA KEILAR, CNN CONGRESSIONAL CORRESPONDENT: And that's such a good question, and, Wolf, the Obama administration has established a task force that is designed to answer that very question.

This announcement coming at the same time that BP, under pressure from lawmakers, made these live underwater images available to the public. Now, I spoke with one of the experts who is working on this task force. He is Dr. Steve Wereley from Purdue University. He was one of the first to say that BP's estimates of how much oil is gushing into the Gulf are way off the mark.

And I asked him, wouldn't it have helped to see all of this new video weeks ago, instead of just in the last couple days?


STEVEN WERELEY, ASSOCIATE PROFESSOR OF MECHANICAL ENGINEERING, PURDUE UNIVERSITY: The better information and better videos would lead to a more accurate calculation, and that may have led to different outcomes in previous efforts to -- to cap the well.

KEILAR: So, your initial estimate, which was 70,000 barrels, what are we talking about, just as a layperson, in gallons here?

WERELEY: Seventy thousand barrels is roughly three million gallons.

KEILAR: Are -- and that's per day.

Now, are you thinking...

WERELEY: That's correct.

KEILAR: ... that, once you take into consideration the fact that some of the volume here is gas, and that you just have better data on which to base your estimation, are you expecting that that will come down?

WERELEY: I would expect it might decrease somewhat, but I wouldn't expect it to be substantially different.

KEILAR: Substantially different from...

WERELEY: I don't want to get...

KEILAR: Substantially different from your estimation you mean or from the official estimation that we have seen?

WERELEY: The BP estimate of the release rate is certainly wrong. And a number of scientists have already said that, myself included. And we have all come up with rates that overlap. So, the range is 20,000 barrels per day to 100,000 barrels per day.


KEILAR: Now, Dr. Wereley is expecting to have his own new estimate of the flow rate tonight. But he's not going to release it. He's first going to meet with other experts tomorrow. They are going to try to come up with one number between them.

And I spoke with a spokesman for the national incident command, who could tell me exactly what was going on with this task force, and I said, how quickly are you going to have this new flow rate number? He said, soon, very soon, but he couldn't tell me necessarily that we would maybe get it tomorrow or maybe on Sunday. So, we still don't know. BLITZER: Explain to our viewers, Brianna, why it's so important to know this actual flow rate.

KEILAR: It has to do with that top kill method that they're planning on doing early next week that you mentioned at the top of the story. And basically the way Dr. Wereley explained it to me, in order to know how much fluid you have to put into this well to kill it, it's important to know how much is coming out and at what pressure, and that is something that could really help them perhaps be successful in attempting to kill this well.

BLITZER: Because they're hoping to do this top kill by Tuesday or so, push this fluid in and then follow up with a lot of cement. And if they don't know how much is gushing out, they won't have the right mixture, and it could fail.

KEILAR: Exactly. It's sort of the idea, if you were going into war, wouldn't you want to know the size of the army that you're dealing with? And that's sort of one way to look at this.

BLITZER: Good point. Brianna, thank you.

While oil continues to foul the Gulf of Mexico and the Louisiana coast, there are now deep concerns about the chemical dispersants used to break up the crude from the leaking well. Federal authorities have ordered BP to use a less toxic chemical.

CNN's Ed Lavandera has been looking into that.


ED LAVANDERA, CNN CORRESPONDENT: Wolf, BP now says they are looking at four alternatives of chemical dispersants. The EPA is forcing them to change the chemical they are using in the Gulf of Mexico, but one of those alternatives we know that BP has known about for quite some time.

All of this that you are looking at is a less toxic dispersant. BP has known about it, but why is it sitting here outside of Houston, Texas?

(voice-over): Hundreds of containers are just sitting here in the Houston sun. To some, it's just another example of the mismanagement of the oil spill. The containers are full of a chemical dispersant calls Sea Brat 4. Why is it sitting here, and not in the ocean instead? No one really knows, especially since BP's on record as saying it would use the stuff.

DOUG SUTTLES, COO, GLOBAL EXPLORATION, BP: We also have a second product now identified to use called Sea Brat 4, which we will begin introducing into the -- the process as well.

LAVANDERA (on camera): That's what BP said almost a week ago. But we found the Sea Brat 4 just sitting here in an industrial park outside of Houston, Texas. You're looking at it, almost 100,000 gallons of the less toxic dispersant. Guess who ordered it? BP did, on May 4, almost three weeks ago.

JOHN SHEFFIELD, PRESIDENT, ALABASTER CORPORATION: This is Sea Brat. It's in totes ready for delivery.

LAVANDERA (voice-over): John Sheffield is president of the company that makes Sea Brat 4.

(on camera): Do you think it's weird that stuff's just sitting here in the Houston area?

SHEFFIELD: It's ridiculous. It's ridiculous. You know, I think something's intentionally trying to stop us from getting our product in the water.

LAVANDERA (voice-over): EPA and Coast Guard officials say there's nothing stopping BP from using Sea Brat 4. Sheffield says that, by now, he could be making 50,000 to 100,000 gallons of dispersant a day.

But a BP spokesman will only say the company had to use what was readily available and stockpiled, and it has been asked to find alternatives to the current dispersant, Corexit, and that's what they're in the process of doing.

Getting a direct answer is even hard for Congress to get, as they grilled Lamar McKay this week about the issue.

REP. JERROLD NADLER (D), NEW YORK: Who decided which dispersant to use? BP?


NADLER: You don't know?

MCKAY: I don't know the individual who decided which...

NADLER: I didn't ask the individual.

MCKAY: I don't...

NADLER: Was it the -- BP who decided, or was it the national -- the government who decided, or the national incident command?


MCKAY: I don't know. I don't know.

NADLER: You don't know. Could you find out for us, please?


LAVANDERA: Easier said than done. There's still no word on who's making that call, while 100,000 gallons of potential help sits hundreds of miles away. (on camera): A BP spokesman told me they are waiting on final approval from the EPA. But the EPA and the Coast Guard says that's not the case, that they have always had the go-ahead to move forward with this Sea Brat chemical. Interestingly enough, the company that makes Corexit has announced this week that they plan on making $40 million in profit by the end of this week -- Wolf.


BLITZER: Ed Lavandera, good report. Thanks very much.

The mothers of three American hikers jailed in Iran had a second meeting with their children today, but then left the country without them. The three young Americans were picked up along the Iraqi border 10 months ago. They are accused of spying. The mothers had requested meetings with Iran's top leaders. A lawyer for the hikers says no such meetings took place.

But another development today may -- may -- end up having some bearing on the case. Two Iranians who had been held for years by U.S. troops in Iraq were in fact freed today. Iranian officials say the release is not tied to the hikers, but, in a recent newspaper interview, the Iranian president, Mahmoud Ahmadinejad, publicly called for a prisoner swap.

Last week, a French woman arrested in Iran on espionage -- espionage charges was released, and an Iranian who had been in a French prison for 19 years was freed.

Jack Cafferty's coming up next with "The Cafferty File."

Also, the push to legalize marijuana, we will talk about it with America's current drug czar, Gil Kerlikowske, and the country's first drug czar, our own political contributor Bill Bennett.

Also, his controversial views are stealing the spotlight. Is Republican Senate candidate Rand Paul giving fodder to Democrats?

And working moms right now, they're fighting back, and winning -- details of a major discrimination case.


BLITZER: Jack Cafferty's here with "The Cafferty File" -- Jack.

JACK CAFFERTY, CNN ANCHOR: Wolf, some days, it really does feel like the end of the world as we know it.

There is pretty grim news everywhere you look these days, from the economy to international threats to natural disasters. People are taking notice, too. A new Gallup poll shows only 23 percent of Americans are satisfied with the way things are going in this country, and that's far below the historical average of 40 percent.

When it comes to the economy, the stock market is taking a beating. The Dow Jones industrial average had its biggest one-day drop in more than a year yesterday, nearly 400 points. And it's fallen 1,000 points in a matter of just a few weeks.

One top economist, Nouriel Roubini, says the stock market will drop another 20 percent before this correction over. Investors are nervous about Europe's debt crisis, among other things. And it's not just Europe. Many worry that America's skyrocketing deficits could soon put us on the brink of the kind of stuff that Greece is going through.

Overseas, North Korea threatening all-out war if the South retaliates for the North sinking one of its ships. Iran continues to march toward nuclear weapons, claims it could destroy Israel within a week if Israel attacks them first.

In the Gulf, we have that massive oil spill threatening wildlife, entire industries up and down the Gulf Coast. Mother Nature's unhappy as well these days, earthquakes in Haiti, Chile, Taiwan, floods in Tennessee, and a volcano in Iceland that continues to spew ash and disrupt European air travel.

It's a lot to think about on a Friday night, huh? Here's the question: How confident do you feel about the future?

Go to Post a comment on my blog -- Wolf.

BLITZER: Pretty depressing stuff, Jack.

CAFFERTY: Yes, it is. We got a lot of problems.


BLITZER: Yes. I'm confident, though. I'm an optimist by nature. That's just me.



BLITZER: Thank you.


BLITZER: President Obama soon will pick a new director of national intelligence, following yesterday's resignation of the retired director, Admiral Dennis Blair.

The job requires coordinating 16 separate intelligence agencies. Is that too much for any one individual to take on?


BLITZER: And joining us now, the author, the bestselling author, I should say, and the columnist for "The Washington Post," David Ignatius.

David, thanks for coming in.


BLITZER: You have spent a long time studying the world of intelligence. You know this subject. What happened to Dennis Blair?

IGNATIUS: Dennis Blair basically made too many political mistakes. He made trouble for the Obama White House. He picked a fight with Leon Panetta, the CIA director, a man who is very powerful politically, has a lot of friends. He was sure to lose that fight.

He also really was the person who was blamed for the Christmas Day bombing mistakes, for the failure to connect the dots.

BLITZER: That Senate Intelligence Committee report was blistering.

IGNATIUS: It was very damning. And that really was Admiral Blair's job. As director of national intelligence, he was the guy who was supposed to finally connect the dots.

And I think the White House decided after the December 25 bombing attempt he wasn't getting that job done. So I began hearing rumors shortly after that that he was on the way out.

There's a larger problem, Wolf, which is that this may be an impossible job. It's so vaguely defined. You're nominally the head of 16 different intelligence agencies, but you don't really have authority over any of them. Blair tried to assert authority over the CIA and Panetta. He got rebuffed on that.

So, I think, before the next guy takes the job, the White House needs to give clear definition of what this is.

BLITZER: Because he -- he's supposed to be a coordinator, but he saw himself as the big boss of all of these 16 agencies. And you're not going to be the boss of the NSA, for example, which reports to the defense secretary, or the CIA, which is the CIA.

IGNATIUS: Exactly. He was -- he was trying to be an intelligence czar and run everything. Admiral Blair's a former four- star admiral. He's used to command in the Navy, which means, you know, really full-speed ahead.

And he found that this bureaucracy just wasn't manageable. And I think I think -- I think some -- some changes need to be made. We have an intelligence reform that created the Office of the Director of National Intelligence. The reform needs to be...

BLITZER: Was that a blunder?


BLITZER: Should they just get rid of that?

IGNATIUS: The reform needs to be reformed. I think -- I think you need to scale this down. We need a strong CIA director. That person is always going to clash with the director of national intelligence, unless you scale that down.

I likened it this morning in something I wrote to -- what we need is somebody like the director of the Office and Management and Budget, somebody who will use budgets, use personnel decisions to get orderly management, but who won't pretend to be a line manager, running different agencies.

BLITZER: Not going to pretend to be secretary of the Treasury or the secretary of health and human services.

IGNATIUS: The director of OMB is an essential person in our government, but he's not a high-visibility person. That's the kind of director of national intelligence we need.

BLITZER: Is it -- but you're not ready to say this was a mistake, this whole creation of the Office of the National Intelligence Director?

IGNATIUS: I think that it was a mistake. I wrote that at the time. I was very strongly against it. I was afraid that it would create more layers of bureaucracy in an intelligence community that has much too much bureaucracy as it is.

We're now five years into it. And I think the way to do it is to reduce the size of it, reduce its budget, have it -- we do need coordination. That's a function that is needed. So, if you can get a lower key function of coordinator, facilitator, again, like the OMB director, I think that would do the country some good.

BLITZER: You see, what surprised me in all of this was the failure of this the new Center for Counterterrorism that they created. That was supposed to be connecting the dots, as you say, but it really failed.


You know, a part of the solution here is going to be technology. We're going to get systems -- they are just over the horizon -- that will merge all the data that comes in from the many, many intelligence agencies into one pile, where you can sift it, and sort it, and everybody will see the same data.

Once that happens, it will be a lot easier to see the dots and connect them.

BLITZER: So, your understanding is the president and the White House basically told Blair, it's over?

IGNATIUS: Blair was fired. The White House came to a judgment in the last few weeks that this just couldn't continue.

As I say, Admiral Blair, nice guy, but he had made a lot of political problems for them, and they decided it was time to cut their losses and move on.

BLITZER: And he's out. All right, David Ignatius, thanks very much.

IGNATIUS: Thank you, Wolf.


BLITZER: A monumental face job. We have details of the laser work being done right now on Mount Rushmore.

And drug czars past and present weighing in on a new push to legalize marijuana.


BILL BENNETT, CNN CONTRIBUTOR: I think, if you really examine the arguments, you might want to think about more restrictions on alcohol than opening up marijuana.



BLITZER: Getting word on who the president wants to lead a presidential commission investigating the Gulf of Mexico oil spill.

Our senior White House correspondent, Ed Henry, has got the information for us.

Ed, what have you learned?

ED HENRY, CNN SENIOR WHITE HOUSE CORRESPONDENT: Well, Wolf, sources familiar with the process confirming the president is going to name former Senator Bob Graham, a Democrat who you know served in the Senate, but also as governor of Florida, to help co-chair this commission investigating the oil spill and figuring out how to prevent future spills.

The other co-chair is going to be Bill Reilly, a Republican who served in the first Bush administration as the EPA chief. Obviously, enormous environmental impact here with this spill, Bob Graham from a state in Florida that could be impacted in a major way as well, that whole Gulf region, interesting because we had heard several days ago the president was going to be naming this commission. We're told it's likely that he's going to officially announce it on Saturday.

But we didn't know the players. These are two big-time power players. This is something not just about this spill, but trying to prevent future ones and figuring out government regulation, making sure it doesn't happen again, Wolf.

BLITZER: Let's make sure it doesn't happen again.

Ed, thank you.

(NEWS BREAK) BLITZER: Marijuana vs. alcohol -- should the federal government ease up on one and get tougher on the other? I will speak about that, and more, with the current drug czar and the very first drug czar.

Also, is it un-American of President Obama to criticize oil giant BP for its actions in the Gulf of Mexico? Rand Paul says so. We will assess.

And employers might want to look at an important discrimination case won by a group of working mothers.


UNIDENTIFIED FEMALE: Were you given the same opportunities as men at the company?






BLITZER: America has a huge drug problem, but the Obama administration now wants to end what's been called the war on drugs, and start treating this as a public health matter.

I sat down with the current drug czar, Gil Kerlikowske -- he's director of the Office of National Drug Policy -- and with CNN contributor Bill Bennett. He was the first drug czar back in the George H.W. Bush administration.

Does the change in focus suggest the government is open to legalizing marijuana?


GIL KERLIKOWSKE, U.S. DRUG POLICY DIRECTOR: No. Legalization is an absolute nonstarter in the Obama administration. And it just makes no sense.

But what we do know is that there are a lot of people frustrated about the war on drugs. They don't see success. They know friends. They know relatives. They know what's happened in their own neighborhoods. We're going to bring some other people into this issue at the same level that we have law enforcement. That's where we're headed.

BLITZER: Because the argument in favor of legalizing marijuana is sort of this: We legalized alcohol. We regulate it. People deal with it. Why not do the same thing with marijuana and, as a result, open up efforts to deal with much more serious drug-related issues, like heroin, for example? KERLIKOWSKE: You know, as a police chief for a long time, I never saw officers in Seattle running around spending an inordinate amount of time chasing people for a small amount of marijuana.

We know that the health costs of alcohol, the health costs of nicotine vs. the taxes collected doesn't even begin to pay for those social and criminal justice costs. Why have another mood-altering drug made legal, and then more widely available because of its legality? It makes no sense.

BLITZER: Well, would you want to criminalize alcoholic use?

KERLIKOWSKE: No. I'm not going back down -- down that path.

But I don't think that we need another thing that causes so much hurt to families and people.

BLITZER: Is this a waste of resources, though, to spend...


BLITZER: ... so much law enforcement, judicial effort criminalizing people who want to go out and smoke pot?

BENNETT: No, we had 40,000 people die last year because of drug use. We can make that 80,000 or 120,000 or 360,000 by making it legal. You make it legal, you make it more accessible, you give permission for it.

Alcohol is legal. We have plenty of alcoholics. We have plenty of people whose lives are wrecked, plenty of families whose lives are wrecked because of alcohol.

BLITZER: Because there's one argument that alcohol -- potentially a lot more dangerous than marijuana.

BENNETT: It may be. I think if you really examine the arguments, you might want to think about more restrictions on alcohol than opening up marijuana. When see the effect of marijuana on the brain particularly --

BLITZER: You don't want to go back to prohibition.

BENNETT: I don't want to go back to prohibition but I certainly think the rules on drinking, if they were enforced, for example, on college campuses, where we know what this leads to from time to time -- it leads to a lot of things every weekend, but someone weekends it leads to some of the horrible violence of we've seen.

But let me just say a word about the war on drugs, properly understood. Not to get into a war with Gil Kerlikowske about the phrase, but if you energize people, motivate people, to talk about this issue, as Gil Kerlikowske has at will, I don't think the president has enough at all, and I think he should.

You can have success. Remember 1979 there were about 24 million drug users in this country. This country decided to do something about it. There was a drug czar appointed. The country mobilized. The number in 1992 was 11 million. That's not victory, but from 24 million to 11 million is a big decline.

It's now back up to 20 million. Now I think if you press right on this thing, don't call -- fall for the siren song of legalization, and I applaud the drug czar on that, and going out to California and fighting this issue, you can get those numbers back down. And that's what you want. You want the numbers down, not up.

BLITZER: Let me pick up one point that Bill just made. In your mind -- and you're an authority on this -- is alcohol potentially more dangerous than pot?

GIL KERLIKOWSKE, DRUG CZAR: Two points. One, alcohol does cause more problems than marijuana. But alcohol is legal. If you make marijuana legal, it will therefore become much more widely available, and therefore the damages and detriment to society and to individuals would continue to increase.

But let me mention also, President Obama is actively engaged in this. When I met with him and he gave me some directions to get the voice of the American people into this strategy, that's what's in there. When I briefed him a week ago about this strategy, he could not be more supportive.

BLITZER: How do we reduce the demand for illegal drugs in the United States?

KERLIKOWSKE: Smart education through a variety of trusted givers.

BLITZER: Nancy Reagan used to say just say no.

KERLIKOWSKE: She did, and, you know, it's a little more complex than that. If parents, teachers, faith, community, and neighborhood groups all give young people the same consistent message and they repeat it about making healthy choices -- underage drinking is mentioned in the strategy, the drug problems, and, of course, if they get healthy choice advice about exercise, nutrition -- they will actually be prevented in the future.

BLITZER: But we've been hearing this for decades now.

KERLIKOWSKE: Well, we've only kept it to four hours in a health care class about drugs, and maybe four hours about nicotine. It has to be across the whole continuum --

BLITZER: I remember --


BLITZER: I was a little boy growing up in Buffalo, New York, I heard all those stories, the horrors of drugs and we were taught that, and I assume since then all the kids are taught about that. KERLIKOWSKE: One, we don't want to use scare tactics, and number two, we want to use the evidence-based systems. And that's what the most recent analysis tells us. Across the board quality advisers giving kids the right piece of information.

BLITZER: Is this going to make a dent?

BENNETT: It does if you do it -- again, across the board. And Nancy Reagan's statements were underrated. A lot of the kids liked those statements They like it because it was clear. Just say no. It's a heck of a lot better statement than if it feels good, do it. It's a lot clearer.

You want that statement, but you also want sound education programs and sound policies in the schools. The problem is, the kids get a message of ambiguity from adults and when you have this legalization stupidity out there you're going to have more young people confused.

BLITZER: Other than you're not -- you don't like that you're not hearing enough directly from the president on this issue --


BLITZER: -- is there any basic problem you have with the Obama administration's efforts to deal with this issue?

BENNETT: Not really. Again, I'd like more attention, more publicity. There are a lot of things going on. We understand it competes for attention. But this strategy if people read it, I think would be impressive.

It's a clear moral message and it talks about working on a variety of fronts. I think it's quite good. But what you had back in the '80s was an entire society mobilized and this is what leadership does.

You did have all those ads, the guy jumping off the diving board into an empty swimming pool. This is your brain on drugs, this is the two-fried eggs. Because the society decided it wanted to push back --

BLITZER: Those public service --


BENNETT: It pushed back. It went down and we can do it again.

BLITZER: They're coming back.

KERLIKOWSKE: Yes. The president asked for $66 million in those advertisements and those advertisements are directed towards specific groups. In fact, just last week we released the strategies for meth on reservations in tribal nations those kids. Those are targeted directly to that youth group and we're going to continue to do those things.

BLITZER: Gil Kerlikowske, thanks very much for coming in. Bill Bennett, thanks for this discussion.

BENNETT: You bet.

BLITZER: Let's hope you make a dent. We're counting on you.

KERLIKOWSKE: Yes. Thank you.

BLITZER: Controversial new remarks about President Obama by the Republican Senate candidate Rand Paul. We're going to hear what he said, talk about it with John King and Gloria Borger.


BLITZER: Republican Senate candidate Rand Paul is questioning the Obama administration's tone toward BP and the gulf oil spill. Listen to this.


RAND PAUL (R), KENTUCKY SENATE CANDIDATE: What I don't like from the president's administration is this sort of, you know, I'll put my boot heel on the throat of BP.

I think that sounds really un-American in his criticism of business. I've heard nothing from BP about not paying for the spill. And I think it's part of this sort of blame-game society in the sense that it's always got to be someone's fault, instead of the fact that maybe sometimes accidents happen.


BLITZER: Let's talk about this with our senior political analyst Gloria Borger and CNN's John King. He's the host of "JOHN KING, USA" which starts right at the top of the hour.

Do these latest views by Rand Paul provide another opening for the Democrats?

GLORIA BORGER, CNN SENIOR POLITICAL ANALYST: Sure. I've been talking to Democrats all day about this, and one of them said to me the Republican Party would be wise to put Rand Paul in a candidate protection program.

And they're just sitting back and letting him continue to talk because what they hope is that the public will look at Rand Paul at large, nationally, not necessarily in Kentucky, but nationally, and say he defines the Tea Party Movement.

He said, remember, I am the Tea Party. Well, that's just fine with the Democrats. Let Rand Paul define the Tea Party.

BLITZER: I -- we just got a Tweet from Betsy Fisher, the executive producer of "Meet the Press" saying he's been scheduled to come on this Sunday. He's now canceled.

BORGER: Shock. BLITZER: So maybe they are trying to put a muzzle on him.

JOHN KING, HOST, "JOHN KING, USA": I've been in conversations with senior Republicans here in Washington and in Kentucky throughout the day, and they said look for Mr. Paul -- Dr. Paul -- to not be doing much national press for a little bit a while.

There's a thing -- consultants like to use the term message discipline.


KING: I don't think he has it. And they're going to spend a little time with him on that. And so -- there are some refreshing aspects of this candidate. He's unconventional. He's candid. He speaks his mind and it's helped him a great deal. In this last week those very attributes that helped him so much in the primary campaign have hurt him. And the questioning --

BLITZER: Even in Kentucky also?

KING: Well, that's the question.

BORGER: Absolutely.

KING: We watch some polling down there. Democrats insist yes, let's watch for some new polling. A lot of Republicans say, you know what, criticizing the Obama administration, criticizing big government, getting into a fight with the media, might not hurt him as much in Kentucky as we think.

He's trying to reenergize a conservative base that has been dormant for a couple of years. We'll see.

BORGER: But -- but nationally, you know, Republicans are concerned because they don't have any control over him. I mean this is not somebody that Senator Mitch McConnell supported, the leader of the Republican Party in the Senate.

And he's out there on his own, and if they try and muzzle him, then it could really backfire for these so-called establishment Republicans. They don't want to do that.

I mean do you remember a candidate who's had a worst introduction since -- to the public since Dan Quayle? I mean --

KING: That's probably -- that's probably the best comparison.


KING: In the sense that national Republicans, Wolf, I think they have the wind at their back. You know, 25 percent of the American people think the country is heading in the right direction. The unemployment rate is up around 10 percent.

Those are dynamics that work politically in the Republicans' favor. They want to talk about President Obama. They want to talk about big spending. They want to talk about deficit red ink in Washington.

They do not want to talk about, you know, is one part of the Civil Rights law of 1964 --

BORGER: Right.

KING: -- not right, should the Fair Housing Law be repealed, should the Americans with Disabilities Act be repealed.

That is not a conversation the Republican Party wants to have. Not inside the borders of Kentucky and anywhere else in America.

BORGER: And you know, the Tea Party has been nationally very popular right now. Independent voters look at the Tea Party, if you look at polls and they say, OK, I'm going to give it a chance.

And what Democrats hope now is that this will -- Rand Paul will make independents look at the Tea Party and go, gee. If this is what the Tea Party is all about, I think I need to give it another look. And then the Democrats can start talking about government issues, like Social Security as a government plan. Medicare as government plan. What about those things? You want those things taken away?

BLITZER: Remember, he's new to politics. He's an eye surgeon.

BORGER: He is.

BLITZER: He's an ophthalmologist. So this is all new turf for him, and you know --

BORGER: It's very hard.

BLITZER: -- he's obviously doing the best he can.

KING: He -- five months is a long time. But every week in a competitive election year when you need to get just about everything right to take back the House or take back the Senate, every week counts. This was not a good week for the Republicans.

BLITZER: And his opponent, Jack Conway, who's here in THE SITUATION ROOM, today, is the attorney general. He's an experienced politician in Kentucky. So this will be a close race, no doubt about that. We'll watch it.

KING: Interesting.


BLITZER: We'll see you at the top of the hour, John.

KING: I'll be there.

BLITZER: Working moms fighting back against the way they were treated on the job and they are winning a major discrimination case. Stand by for details.

And blaming everyone except themselves. Should lawmakers take responsibility for the nation's financial meltdown?

Stay with us, you're in THE SITUATION ROOM.


BLITZER: It's 1600 pages long and represents sweeping overhaul of financial regulations. The Senate passed a bill aimed at reforming Wall Street and the banks. It must now be reconciled with the House version.

But when it comes to assigning responsibility for the financial meltdown, the lawmakers cast blame at almost everyone except themselves.

Our national political correspondent Jessica Yellin is looking in to this, and is here to explain.

JESSICA YELLIN, CNN NATIONAL POLITICAL CORRESPONDENT: You know, Wolf, for months we heard plenty of outrage on Capitol Hill over the economic meltdown and who caused it, and now plenty of U.S. senators are patting themselves on the back for passing Wall Street reform.

So it's a good time to reflect on the folks who haven't taken much responsibility for their part in the meltdown. Our own elected officials. The folks who just passed the financial overhaul actually helped cause the mess, too.


UNIDENTIFIED MALE: And nothing but the truth so help you God.

YELLIN (voice-over): On Capitol Hill, they aren't shy about pointing fingers.

SEN. CLAIRE MCCASKILL (D), MISSOURI: All of you were loving life. You were chasing each other.

SEN. CARL LEVIN (D), MICHIGAN: How much of that (EXPLETIVE DELETED) deal did you sell to your clients?

SEN. JOHN ENSIGN (R), NEVADA: On Wall Street, they manipulate the odds while you're playing the game.

YELLIN: But you know who hasn't been called on the carpet for their part in the economic meltdown? The nation's leaders.

REP. SPENCER BACHUS (R), ALABAMA: The subprime lending market has been very successful in providing housing.

SEN. CHRIS DODD (D), CONNECTICUT: Good solid, subprime lending has made a huge difference for people in this country.

YELLIN: First, not only did they fail to see a housing crisis coming, but Washington actually encouraged the housing boom with policies that helped more low-income Americans get first-time mortgages. It was a bipartisan effort.

BILL CLINTON, FORMER U.S. PRESIDENT: Home ownership is one of the most empowering things we can ever do for anyone.

GEORGE W. BUSH, FORMER U.S. PRESIDENT: We'll help more people realize the great joy of owning their own home.

YELLIN: Second, someone changed the rules. Allowing Wall Street firms that were gambling in bad mortgages to take control of your small-town bank.

LARRY SUMMERS, TREASURY SECRETARY: With this bill, the American financial system takes a major step forward.

YELLIN: That's Larry Summers. Today one of president Obama's top economic advisers. But in 1999, these guys passed a law that tore down the financial walls that once protected Main Street from Wall Street's risks.

That helped fuel a long economic boom, but then came the bust. Finally, there was the early warning. It came more than a decade ago from Brooksley Born, a top regulator.

BROOKSLEY BORN, FORMER CFTC HEAD: We're trying to protect the money of the American public, which is at risk in these markets.

YELLIN: As this PBS "Front Line" documentary explains, she pushed for the government to oversee the multitrillion dollar derivatives business those big banks were gambling in, but the White House and Congress decided more regulation would be bad for business.

So Born was ignored. And for years, the anti-regulation philosophy won. Until now.


YELLIN: Over the years, some senators did raise concerns about subprime lending and said that maybe regulators weren't watching the markets closely enough. But Washington simply didn't act.

There was just too much concern that any new rules, Wolf, might hurt the boom in business. And they were very excited about that booming business for so many years.

BLITZER: Thanks for reminding us about all of this, Jessica. Good work. Thank you.

Jack Cafferty is next.

Also, details of the lawsuit giving a boost to working moms.


BLITZER: Check back with Jack for "The Cafferty File." Jack. JACK CAFFERTY, CNN ANCHOR: Happy little question to end the week on, how confident do you feel about the future?

Judy rights from El Lago, Texas, "Sadly, I don't have much confidence in the future. There are so many unresolved issues in the country I simply don't see them being addressed. Many speak of the American dream. There are countless stories of those who've experienced it but no more. We've sold out this great country and its citizens."

N writes, "I'm very confident. America always ends up OK. The Democrats will lose power in November. Obama will be one and done. The future's bright. Besides, look at the past. Look at what we've lived through. We're pretty tough. No worries here."

Rita in Illinois says, "Even if it sometimes gets worse before it gets better I feel confident about the future. Might be a slow process, but we'll inch slowly forward. AP reported today in April, the jobless rate dropped in 34 states and D.C. held steady and 10 others. Inflation is down so were interest rates. It's news like that we have to give more attention to. Two steps forward, one back but we're still gaining ground."

Rod writes, "I'm extremely confident about the future. It's the present that worries me." John writes, "I have zero confidence in the future of my country, so much so that I'm currently researching other countries to determine a better place to live the rest of my years. I am done."

Beverly writes from Iowa, "I'm not much of a gambler, so I don't get involved in the stock market, too risky. I only bet on sure things. As a native Chicagoan I only wager the Cub won't win."

And Buster in New York writes, "Hey, Uncle Jack, remember a year ago you and I and Wolf were downing shots of Obama Kool-Aid at the Capitol lounge, hooting and hollering that utopia was right around the corner? Oh well, it's nice to dream. But after reading this bleary post of yours, I'm wondering if you guys wouldn't be interested in doing a few shots of the Reverend Jim Jones Kool-Aid after work. If not, have a nice weekend, Mr. Happy."

If you want to read more on this, go to my blog, Wolf.

BLITZER: No shots for us, Jack.

CAFFERTY: No. I quit years ago.

BLITZER: Thanks.

Is the Tea Party splitting the GOP? Former Republican congressman Bob Bahr joins John King at top of the hour.

Also they fought back against the giant drugmaker and they won.

(BEGIN VIDEO CLIP) UNIDENTIFIED FEMALE: When I was fired I just -- I couldn't believe it. I mean that was -- that was just a slap in the face. And I just couldn't believe -- you know being the number one rep I was making my manager --



BLITZER: Employers across the United States should be taking note of an important discrimination case won by a group of women who knew they've been treated unfairly and decided to do something about it.

CNN's Deborah Feyerick has details -- Deb.

DEBORAH FEYERICK, CNN CORRESPONDENT: Wolf, being a working mom can be challenging, but what happens when you're in an environment you feel is downright hostile? Well, a group of women sued drug giant Novartis, claiming they had been treated unfairly compared to their male counterparts, and they won big.



FEYERICK (voice-over): Don't let the baby talk fool you. Amy Velez and Holly Waters were both top sales representatives working for the international drug giant Novartis.


FEYERICK: Until, that is, they decided to have families.

WATERS: When I was fired I just -- I couldn't believe it. I mean that was -- that was just a slap in the face. And I just couldn't believe -- you know being the number one rep I was making my manager the most money.

FEYERICK: Waters was 7 and 1/2 months pregnant at that time, and like Amy Velez, had believed she had a future at the company.

AMY VELEZ, FORMER NOVARTIS EMPLOYEE: Prior to pregnancy, my reviews were great.

FEYERICK: A federal jury this week found the company guilty of gender discrimination. A judge ordering Novartis to pay $250 million in punitive damages to some 5600 female employees.

(On camera): Were you given the same opportunities as men at the company?


WATERS: No. VELEZ: absolutely not.

FEYERICK (voice-over): Velez and several other women testified they've been repeatedly passed over for promotion which effectively capped their salaries.

Novartis says it has a zero tolerance policy when it comes to sex bias and at trial a number of female employees testified they were treated well by the company.

Still, lawyers in the class-action suit showed male managers there systemically discriminated against female sales reps, routinely passing women over for promotion or derailing careers when they became pregnant.

KATHERINE KIMPEL, ATTORNEY: The ladder the women that they were pushing out of the company were in fact top performers.

FEYERICK (on camera): What were some of the reasons that the men were giving? What were the reasons the managers were giving?

DAVID STANFORD, ATTORNEY: The problem with the company is that there are simply too much discretion in the hands of a predominantly male managerial force. When you're given that kind of discretion and pay and promotion, with respect to pregnancy leave, then there's -- anything goes.

FEYERICK (voice-over): The company says women who feel they're being treated unfairly can call an alert line or go to the legal department or human resources. Both women say they tried.

VELEZ: Most people are desperate for a job, especially in this economy. But if you cross your manager and they so desired they would get rid of you, one way or the another.


FEYERICK: Novartis released a brief statement saying it plans to appeal but otherwise they wouldn't comment on the case. At trial their lawyers disputed the women's stories.

As for the women, both have had new jobs in sales and both say they're happy and being treated well by their new managers -- Wolf.

BLITZER: Deborah Feyerick, thanks very much. Feyerick in New York.

Remember you can always follow what's going on THE SITUATION ROOM. I'm on Twitter, WolfBlitzerCNN, that is all one word.

Thanks very much for watching. I'm Wolf Blitzer in THE SITUATION ROOM. "JOHN KING, USA" starts right now.