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Obama Administration Sues Arizona Governor; President Says Bond with Israel is "Unbreakable;" Skimmers Getting Enough Oil?; If Relief Wells Don't Work; Awaiting the Queen at Ground Zero

Aired July 6, 2010 - 17:00   ET

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.


WOLF BLITZER, CNN ANCHOR: Thanks very much, Rick.

Happening now, breaking news -- the Obama administration sues the governor of Arizona. The challenge to the state's controversial immigration law was filed just a short while ago and the legal and the legal and political fallout from this landmark lawsuit only just beginning. We're going to bring you new, live reaction. Stand by.

President Obama declares a U.S. bond with Israel "unbreakable." This hour, the public show of support for Prime Minister Benjamin Netanyahu and went really went on behind the scenes.

And Britain's Queen Elizabeth as you rarely see her, taking the international stage right here in the United States. We're standing by here for her visit to the site of the 9/11 terror attacks.

I'm Wolf Blitzer.

You're in THE SITUATION ROOM.

But breaking news right now -- President Obama using the full legal force of the United States government to try to stop one state's crackdown on illegal immigration. The Justice Department filing that highly anticipated lawsuit against Arizona and against the Arizona governor, Jan Brewer, just a short while ago.

This law prompted widespread protests since Governor Brewer signed it back in April. It requires police to question people suspected of being in the United States illegally. Critics warned it might encourage racial profiling.

But the suit doesn't challenge the particulars of the law, it challenges Arizona's authority to pass it.

Let's bring in our senior legal analyst, Jeffrey Toobin.

He's been studying what's going on.

And the Justice Department makes the case this is unconstitutional because it violates what's called the Supremacy Clause of the Constitution -- Jeff, explain the thinking.

JEFFREY TOOBIN, CNN SENIOR LEGAL ANALYST: Well, you know, Wolf, it's a very interesting legal document, this 25-page lawsuit that was filed today, because so much of the discussion about this law has been whether it violates the rights of -- of Hispanics, of legal immigrants, of illegal immigrants. And that's not how the lawsuit is pitched at all. Basically, what the -- the lawsuit says is that immigration is one of those areas of the law that is uniquely reserved to the federal government and when there is a conflict between the federal and state government, federal law is supreme. That's what The Supremacy Clause refers to.

Another theory also referred to in the -- in -- in this lawsuit is that the federal government has preempted -- has taken over the area of immigration law and so states have very limited abilities to regulate immigration and Arizona exceeded the power of a state bypassing this law. That's the theory of the Department of Justice's lawsuit.

BLITZER: And here how -- here's how they put it. Here's the -- the thrust of the main argument. A state may not establish its own immigration policy or enforce state laws in a manner that interferes with the federal immigration laws. The constitution and the federal immigration laws do not permit the development of a patchwork of state and local immigration policies throughout -- throughout the country.

That's the basic argument that they made.

TOOBIN: That's the argument. The -- the difficulty with the -- the federal government's argument is that there has always been some joint responsibility for immigration between the states and federal government. Yes, it's true that most federal -- most immigration law is handled by the United States government, but there is usually some cooperation with the state. So it's not one of those areas like, for example, the right to declare war, which I think everyone understands is something only the federal government can do. Immigration has been an area where there has traditionally been some cooperation and certainly that's what Arizona is going to respond when it files its -- its response to this lawsuit.

BLITZER: The two Republican senators from Arizona, John Kyl and John McCain, issued a statement, among other things, saying this: "It is far too premature for the Obama administration to challenge the legality of there is new law, since it has not yet been enforced. Most legal experts believe such a facial challenge to the statute will be very difficult to win."

Do they make a good point?

TOOBIN: They -- they do make a good point, because the difference between a facial challenge and an as applied challenge is that a facial challenge says this law is simply in -- illegal, that even if low -- police officers in good faith try to separate, you know, legitimate arrests from illegitimate arrests, it's simply unconstitutional. Most courts prefer as applied challenges. They prefer to say, look, let's see how this works. Let's see if it's being used in -- in an illegal manner.

What the federal government is doing is they're saying because it infringes on federal rights, in and of itself, it can been challenged as a facial matter on a facial basis before it even comes into effect.

But the two senators do make a good point, that most judges prefer as applied challenges to facial challenges.

BLITZER: And the other point that McCain and Kyl make is this: "Moreover, the American people must wonder whether the Obama administration is really committed to securing the border when it sues a state that is simply trying to protect its people by enforcing immigration law."

The -- those who support the immigration law in Arizona say they're simply trying to enforce the -- the federal laws involving illegal immigration.

TOOBIN: Well, that -- that's a much more political point than a legal point, because, you know, even if Arizona is trying in good faith to help with the immigration problem, it is certainly true that it's the federal government that is in charge of immigration policy in the United States. And it is true that we can't have 50 states with 50 different laws. So that point, I think, is a little harder to make.

BLITZER: All right. We're going to continue to watch this. We're getting more reaction coming in.

Jeff, thanks very much.

But let's move to another important story we're following right now, President Obama's attempt today to mend fences with Israel. He gave the prime minister, Benjamin Netanyahu, the full Oval Office treatment, complete with a friendly photo opportunity and words of praise.

Let's bring in our White House correspondent, Dan Lothian.

He's working the story for us.

What a difference a few months makes. When he was here back in -- in March, he couldn't even get a photo at the White House and today he got a lot of smiles, a lot of love, if you will.

DAN LOTHIAN, CNN WHITE HOUSE CORRESPONDENT: That's right. It does appear that that tension has been eased, although both the president and the prime minister tried to make the case that there had been no tension at all, that there are challenges, that, yes, there are differences, but that both of their teams have been meeting, sometimes behind-the-scenes -- something that the public does not see.

Mr. Netanyahu summed it up this way: "You can have differences in the best of families."

(BEGIN VIDEOTAPE)

LOTHIAN (voice-over): This was the picture the White House wanted the world to see -- strong handshakes, smiles and a lot of talk about unity. BARACK OBAMA, PRESIDENT OF THE UNITED STATES: The bond between the United States and Israel is unbreakable.

BENJAMIN NETANYAHU, ISRAELI PRIME MINISTER: Here I'll have to paraphri -- paraphrase Mark Twain. The reports about the demise of the special US-Israel relations -- relationship -- aren't just premature, they're just flat wrong.

LOTHIAN: The White House even changed Mr. Obama's schedule so that cameras could get this rare friendly departure shot.

ROBERT SATLOFF, THE WASHINGTON INSTITUTE FOR NEAR EAST POLICY: They are bending over backwards to try to give off the perception that all is well in the US-Israeli relationship.

LOTHIAN: As a handful of pro-Israeli and Palestinian protesters shouted outside the White House, the two leaders, meeting for the fifth time, discussed the hurdles to peace talks.

OBAMA: It's going to be difficult. It's going to be hard work. We expect those proximity talks to lead to direct talks. And I believe that the government of Israel is prepared to engage in such direct talks.

LOTHIAN: The Palestinians are unwilling to engage in those direct talks until Israel stops all settlement construction in the West Bank and East Jerusalem.

SATLOFF: The outcome of which is likely, I think, to be a compromise which does get us into direct talks and a continuation of -- of the existing moratorium on settlement construction.

LOTHIAN: President Obama and Prime Minister Netanyahu also discussed the Gaza flotilla incident and progress made in easing the blockade, but acknowledged it's a work in progress.

OBAMA: Obviously, there's still tensions and issues there that have to be resolved.

LOTHIAN: Few new details about the next steps forward emerged. But Prime Minister Netanyahu struck an optimistic tone.

NETANYAHU: The president and I have discussed concrete steps that could be done now, in the coming days and the coming weeks, to move the peace process further along in -- in a very robust way.

(END VIDEOTAPE)

LOTHIAN: Now they also talked about Iran and trying to block their nuclear ambitions. This is something of particular concern to Israelis.

Now, finally, President Obama says that there need to be confidence building measures so that people see or hear -- see actions, not just hear words -- Wolf.

BLITZER: Thanks very much.

Later here in THE SITUATION ROOM, we'll speak with the Israeli ambassador to the United States, Michael Oren, and get his take on how these meetings today at the White House went.

Also coming up, bad weather -- it's putting a crimp on the oil skimming in the Gulf.

But does BP have the ability to capture a lot more crude?

We're taking a closer look at that.

Also, the pomp and the importance of Queen Elizabeth's visit to New York. She's visiting Ground Zero this hour. We'll have coverage.

An Iranian official sentenced her to death by stoning for having an affair. Now, her son is making a last ditch attempt to save her life.

(COMMERCIAL BREAK)

BLITZER: Jack Cafferty is here with The Cafferty File -- welcome back, Jack.

JACK CAFFERTY, CNN ANCHOR: Thanks, Wolf.

You, too.

Finger-pointing is an age old past time in Washington, but at some point when you get the job, you also get the own the problems that come with the job.

When President Obama took office almost 18 months ago, he had a lot to blame on his predecessor, George W. Bush. The economy was on life support, we were fighting two wars half a world away and the country was spiraling ever more deeply into debt. The general mood of the country at the time wasn't so cheery.

Flash forward a year and a half and not a lot has changed. The economy is not a whole lot better, the wars continue and the debt has gotten a lot worse.

President Obama is still reminding Americans, though, that he inherited a lot of his problems. Last week, he told attendees at a Wisconsin town hall meeting that the economic woes many are facing are simply not his fault.

Now, granted, there's a lot of animosity when it comes to the Bush presidency and perhaps rightfully so. But at some point, he becomes history and the country has to confront the here and now.

Our friends at CNN.com point out that 41 percent of Americans say Republicans are responsible for our current economic problems. Twenty-eight percent point the finger at the Democrats. And 26 percent say both parties are to blame, even though, in the last two years of the Bush administration, it was the Democrats who controlled Congress, remember?

The debate over whose fault everything is could take on some added importance when it comes to the mid-term elections in November.

Are the voters going to continue to give the Democrats a pass on some of this stuff?

Here's the question -- at what point does ownership of problems blamed on George Bush transfer to President Obama?

Go to CNN.com/caffertyfile and post a comment on my blog -- Wolf.

BLITZER: That's a great question Jack.

Thanks very much.

Oil from the massive Gulf spill traveling farther than ever before. Right now, tar balls on the shores of Louisiana's Lake Pontchartrain are the size of marbles or even bigger. And officials confirm tar balls are discovered in Galveston County in Texas are connected to the spill.

Rough seas spreading the oil and keep slowing down clean up and containment. A blimp scheduled to arrive in the Gulf today to help with the disaster response has been delayed until Friday. And testing of the giant "A Way" -- Whale skimmer -- "A Whale" skimmer -- has been extended until Thursday because of the weather.

But we just learned another vessel, the Helix Producer, is in the process of being connected to the leaking well. It could collect up to 53,000 barrels of oil a day when it's operational.

Questions are being raised, as well, about the amount of oil being skimmed from the Gulf and whether BP is capturing as much crude as possible.

Our Brian Todd is here.

He's been looking into this part of the story for us.

It's a complicated story.

What are you learning?

BRIAN TODD, CNN CORRESPONDENT: Well, Wolf, the questions have to do with BP's own projections about how much oil it could skim in the event of a major spill. Now, according to this document we found, a BP report to the government in June of last year, BP projected it could recover nearly 500,000 barrels of oil a day in a event of a major spill.

But BP now says in the 78 days since the spill began, it's recovered a total of 673,497 barrels of oily liquid. That's total. That's not per day. And when you factor in that oily liquid includes oil and water and that when they're separated, the oil only amounts to a fraction of the total recovered, the actual oil recovered is a lot less than that 500,000 a day projection. It could be as low as about 900 barrels of oil a day.

Now, when we contacted BP about this, they sent us a statement saying, quote: "We continue to adjust our operations and resources to respond to the unique characteristics of the spill. We are committed to being here until all the oil is collected. There will, no doubt, be a review of the planning and response that went into this historic effort when this is all over. And we will participate in that dialogue."

Now, part of the problem here could be weather. Incident Commander Thad Allen said today that not much skimming was going on today because of the condition of the seas.

He says when you have three to five foot waves, unless you have a huge skimmer with a large boom system, it becomes problematic.

Now, that huge skimmer they brought in for this, as Wolf just mentioned, the "A Whale," could be that vessel. But tests of the "A Whale" have been inconclusive. They're going to have to continue those tests through Thursday, Wolf.

So skimming and burning -- you know, those efforts that they have undertaken since almost day one of this, it's been kind of inconsistent. And this is just an example of how inconsistent it can be.

BLITZER: They -- they've got another vessel that they've brought into this area, as well.

TODD: That's right, that Helix Producer. That's going to -- that's the third vessel they've brought in to contain the oil that they're sending up to the surface. They're going to bring in a fourth. They're in the process of hooking up the Helix Producer right now.

So they're going to have a total of four vessels there. Two of them will be the primary vessels, including the Helix Producer, that will be able to take the majority of the oil. They think that they can capture the majority of it and -- and get it to shore and get it, you know, sent out of there.

But again, you know, it all takes time. The Helix Producer and that other vessel, the Toisa Pisces, have been on the way for quite some time now.

BLITZER: And we're going to have more on this story, including whether or not those relief wells -- those two relief wells, supposed to be ready by early to mid-August...

TODD: Right.

BLITZER: -- whether, in fact, they will get the job done.

TODD: Right.

BLITZER: Brian, thanks very much. The national incident commander in the Gulf, Thad Allen, says he believes BP still is on track to complete those relief wells in August. Those wells are seen as the best hope of permanently -- prominently plugging the leak. BP chief operating officer Doug Suttles says he believes the relief wells will, in fact, work. He told CNN's Amber Lyon the company has some other options.

(BEGIN VIDEOTAPE)

AMBER LYON, CNN CORRESPONDENT: Let's talk a little bit about contingencies.

Let's say the first relief well, the second relief well, none of them work.

What's the contingency plan here?

DOUG SUTTLES, BP CHIEF OPERATING OFFICER: Well, the -- there's -- there's two pieces to that. One is this containment system we're building. And the second is tying that containment system back to other production facilities that wouldn't actually have the issues associated with a severe storm. So the backstop to the relief wells is, is hooking this well and the containment system up through a pipeline, through an existing well or platform, so that we -- we can actually continue to collect in the event of a storm.

(END VIDEOTAPE)

BLITZER: As the oil keeps gushing and gushing and gushing, we're going to get an update on how animals are being effected right now and what rescuers are doing to try to save them. Stand by for that.

New details are emerging about who could have leaked disturbing video of a U.S. military attack in Iraq. We'll have the latest for you on that story.

And is France one step closer to banning women from wearing burkas?

(COMMERCIAL BREAK)

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

What do you have -- Lisa?

LISA SYLVESTER, CNN CORRESPONDENT: Hi there, Wolf.

Well, at least one person has died because of a major heat wave gripping the Northeast right now. The body of a 92-year-old woman was discovered in her Philadelphia home last night. Cities up and down the Eastern Seaboard are expecting triple digit temperatures today. The heat has triggered hundreds of power outages in Philadelphia and more than 1,000 in New York City.

The verdict in a racially charged California murder trial will not come today. Deliberations in the case of former transit police officer, Johannes Mehserle, are canceled for the day because one juror is sick. Mehserle is charged with shooting Oscar Grant, an unarmed black man, on an Oakland train platform last year. Police are bracing for riots as a verdict nears in the widely publicized case.

The French parliament is debating a bill that would ban women from wearing burkas and other Islamic veils. The French Council of Ministers approved the measure back in May, saying the veils cannot be tolerated in public places. If passed, violators could face up to a year in prison. The bill is expected to be voted on next week and then the senate would have to approve it.

And the son of a woman sentenced to death by stoning in Iran is making a desperate plea to spare her life. He says the only way the court will reverse her sentence, which was imposed for an alleged affair, would be if a member of the Iranian government issues a letter of pardon. Now, he's asking the international community to help him get that letter. She's already faced a sentence of 99 lashes -- Wolf.

BLITZER: It's hard to believe, but stuff like that happens, I guess.

SYLVESTER: Yes.

BLITZER: All right. Thanks very much, Lisa, for that.

The breaking news this hour -- the federal government now suing the state of Arizona over its controversial immigration law. I'll talk to a local sheriff in Arizona who's been an outspoken supporter of the crackdown.

And Americans are getting an up-close look at the queen of England. We're following Elizabeth II to her next stop in New York City.

And wildlife rescuers want you to see what's happening to those oiled birds along the Gulf Coast right now.

(COMMERCIAL BREAK)

BLITZER: You're in THE SITUATION ROOM.

Happening now, salacious new photos and details about the sex life of the accused Russian spy, Anna Chapman, allegedly revealed by her former husband. You're going to hear how she's responding to that. Stand by.

And the breaking news we're following right now -- the Obama administration taking Arizona to court over its controversial new immigration law. We'll get reaction from a key supporter of the state's legislation.

I'm Wolf Blitzer.

You're in THE SITUATION ROOM. This hour, Britain's Queen Elizabeth is due to lay a wreath at ground zero in New York City. She just wrapped up her first speech to the United Nations General Assembly in more than 50 years. We may all love the royal pomp and gossip, but the queen has a serious job representing 30 percent of the world's population.

She spoke to the United Nations about challenges facing the world in her role as the head of state of 16 nations and the leader of the Commonwealth of Nations representing 54 countries.

(BEGIN VIDEO CLIP)

QUEEN ELIZABETH II, QUEEN OF ENGLAND: This September, leaders will meet to agree how to achieve the Millennium Development Goals. New challenges have also emerged which have tested this organization as much as its member states. One such is the struggle against terrorism. Another challenge is climate change, where careful account must be taken of the risks faced by smaller, more vulnerable nations, many of them from the Commonwealth.

(END VIDEO CLIP)

BLITZER: Let's bring in our two correspondents covering the queen's historic trip to New York, CNN's Richard Quest and our senior U.N. correspondent, Richard Roth -- Richard Roth, first to you.

How did she do at the General Assembly?

RICHARD ROTH, CNN SENIOR UNITED NATIONS CORRESPONDENT: I think she did well, a refreshing voice, maybe from the past. But she said let's not just reminisce. The queen making a very forceful, yet polite address to the world. It was a packed room. One diplomat saying there was an air of electricity in the air. And she made simple but very firm points that you don't often hear among the 192 countries when they talk to each other.

BLITZER: How did she impress you, Richard Quest?

RICHARD QUEST, HOST, "QUEST MEANS BUSINESS": The sheer sense of history, that this is a woman who has been at the top for 60 years sitting there, waiting to speak.

Just -- I was wondering, what was she thinking?

Was she remembering what it was like all those years ago, five decades ago, when she sat in that very same spot?

And as Richard Roth said, the simplicity of the message -- not here to reminisce, but ultimately, if we are going to solve these problems, then having to come here and solve them together.

And, Wolf, you know, one thing, they are cynical. They are skeptical. They've seen it before at the United Nations. But even so, they had a twinkle in their eye for the queen.

BLITZER: Is there -- was there anything, Richard Roth, that could be seen as controversial in her statements?

ROTH: Well, she's talking about the Commonwealth countries being concerned about global climate change and she's urging more attention there. There are a few nations that may not be on the ball regarding the environmental issue or not wanting to spend the money there.

I didn't hear anything unbelievably controversial, but I think it was very impressive, the fact that here was Her Majesty since 1957. It was like a voice out of the past -- like a time traveler, almost, coming here.

Secretary-General Ban Ki-moon noted that she's seen it all, from The Beatles to Beckham, from television to Twitter.

BLITZER: Richard Quest, this is a pretty short visit to the United States for Queen Elizabeth.

Why such a -- a quick trip, especially given the fact she spent a lot of time in Canada?

QUEST: Because she was in this part of the world. This is -- this should not be seen as a visit to the United States. This is a visit of a few hours and with a few specific purposes, to the United Nations, to Ground Zero, where she now is laying a wreath in memory of those who died. To dedicate a British garden of remembrance for the 50,000 British citizens who died. Although she has meet Mayor Bloomberg and Governor Paterson, she's really just come here, come through and gone away again. This is not a visit U.S. in that sense. One other thing Wolf, when we think about what the queen has done today, she has given a clarion call that basically says while it may sound old fashioned, but what starts now will be the future.

BLITZER: She's got a lot of history there. Richard Roth, what's it like to be in New York City on a day when the queen of England visits Manhattan? I know that when the president comes things get a little crazy over there. What about when the queen of England comes to New York?

ROTH: Well, I wish I had a more dramatic answer. We were sort of pinned down here especially with security inside the U.N. grounds. We just watched her motorcade make a turn the opposite way than traffic normally travels on First Avenue, which is sort of behind me in the window behind me and then traffic reappeared. Normally, there's heavy rush hour at this point in time and how she got in from J.F.K. airport in Queens, I'm not sure but they know. This is very experienced practice, Secret Service, New York City police. In September, Wolf as you know, they have to handle 192 dignitaries. We haven't heard of any problems. The queen made it to the World Trade Center 9/11 grounds, her next stop, right on time.

QUEST: I just want to add one thing to what Richard Roth said. The motorcade, when it left there, Wolf, it was longer with more vehicles and ambulances and police cars and noise than I've ever seen back in London and the reason is simple. The queen and Prince Phillip have always said the day the Brits get stuck in traffic because of their motorcade, that's the end of the monarchy. BLITZER: And very quickly, Richard Quest you've spent a lot of time watching this queen. Tell us about the hat, the gloves, the dress she was wearing today. I thought she looked lovely.

QUEST: And it was chosen with care and dedication. The gloves serve a purpose. They're to protect her hands from all the handshaking. The dress has to be suitable. She's here at the U.N. but she's also laying a wreath. Nothing, nothing, nothing is left to chance when it comes to what the queen wears and how she behaves and we've seen a classic example of that right here in New York. And also remember, it's 102 degrees and she hasn't even broken into perspiration.

BLITZER: No she looked great today and we wish her only the best. All right guys. Thanks very much.

Britain's Queen Elizabeth is said to be the most traveled monarch in history. Her last state visits to the United States were back in 1991 and 2007, both times meeting with a president named Bush. In between then and since then, she's made many private U.S. visits, sometimes including the Kentucky Derby on her trips. In all she's made 325 visits to foreign countries since her reign began back in 1952. She doesn't even have a passport. It's deemed unnecessary because the U.K. issues them in her name.

The state of Arizona is fighting back against the federal government. I'll talk to a local sheriff who says the Feds are out of line for challenging the state's immigration law.

And a colorful former Congressman who went to jail is stumbling right now on the comeback trial. We'll explain.

And a soldier now faces charges in connected with that leaked video of a deadly attack in Iraq. We have new information.

(COMMERCIAL BREAK)

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

SYLVESTER: Hi there Wolf. Well, former U.S. representative and convicted felon James Traficant's chances of returning to Congress are dwindling. The County Board of Elections says the Ohio Democrat who served seven years on bribery and racketeering charges doesn't have enough signatures to appear on the ballot as an independent. Traficant submitted 4,000 names before the May deadline, but not all of them were found to be valid. He could appeal the decisions.

Family and friends are saying a final good-bye to the longest serving member of Congress. A funeral service was held in Arlington, Virginia today for the late Senator Robert Byrd. Byrd is being laid to rest alongside his late wife. He died last week at the age of 92.

And a member of the infamous Charles Manson family is up for parole. Leslie Van Houten will face the California state parole board today for the 19th time since she began serving a life sentence for first degree murder. Van Houten was convicted back in 1978 for the 1969 slaying of Rosemary LaBianca.

And take a look at this fisherman in Massachusetts. Managed to reel in this 350-pound thrasher shark yesterday. The catch comes just days after the coast guard warned boaters about an increased presence of great whites off the coast. Thrashers aren't typically considered aggressive towards human. One fisherman says beachgoers shouldn't worry because this shark was caught 30 miles from shore. I don't know about you though. Thirty miles from shore is still close enough.

BLITZER: Pretty close. Way too close.

SYLVESTER: Especially when talking about a great white.

BLITZER: Big shark. All right. Thanks very much Lisa for that.

The breaking news we're following right now, the Obama administration suing the state of Arizona over its controversial new immigration law. Could it end up spelling trouble for Democrats this fall? We'll assess. And is President Obama in danger of losing support of major Wall Street CEOs if he signs financial reform into law? We'll talk about that and more in our strategy session.

(COMMERCIAL BREAK)

BLITZER: All right. Let's get right to our strategy session. Joining us, our CNN political contributor, the Democratic strategist Donna Brazile and the Republican strategist Rich Galen. Guys, thanks very much for coming in. Rich quickly, Michael Steele, the chairman of the Republican Party, should he step down?

RICH GALEN, REPUBLICAN STRATEGIST: No. He won't step down. He shouldn't step down. Let him serve his time. I think they ought to put in a keeper that sit with him, that talks with him, that reports not to him but to some senior member of the committee.

BLITZER: But is he going to be capable of leading the party?

GALEN: No, but in a mid tem it's not nearly as important as it is in the presidential year and frankly, nobody looks to the chairman of the Republican or Democratic National Committee for political strategy. For policy strategy. They look for political strategy.

BLITZER: What would happen to the Democrats, you're involved in the DNC, if the chairman of the DNC were to make some quote, outrageous statement which was at totally odds with the mainstream of the Democratic Party, what would happen to that chairman?

DONNA BRAZILE, DEMOCRATIC STRATEGIST: In our case, we have a really effective chairman in Tim Kane and fortunately, he knows his job which is to go out there and get Democrats elected.

BLITZER: What if he made some crazy statement? What would happen to him?

BRAZILE: Wolf in this city if we start throwing out politicians who make mistakes, there will not be anybody to turn the lights off here in Washington. But Michael Steele's term ends next year. I don't think he'll be re-elected.

BLITZER: If he runs.

BRAZILE: If he decides to run but four months from now, we'll see.

GALEN: The national committees are just transfer agencies. They transfer money, they transfer people, they transfer research. That's really all you need to have them do. When chairmen and all of us have had this kind of trouble where they want to put themselves into the mix, it never works out.

BRAZILE: He's the gift that keeps on giving. Let him stay there.

BLITZER: All right. Let me read to you what Fareed Zakaria, our colleague, wrote in Monday's "Washington Post" and in "Newsweek." "Most of the business leaders I spoke to had voted for Barack Obama. They still admired him. Those who had met him thought he was unusually smart. But they all thought he was at his core anti- business." They think he's anti-business right now because what he's trying to push through the House and the Senate, these new regulations involving Wall Street. This is a problem. If the Democrats lose the support of these wealthy business leaders who supported the Democrats and Barack Obama last time around, if they abandon him now, that's a big problem for the Democrats.

BRAZILE: There's a new sheriff in town and President Obama said, you know, the era of too big to fail is over. We know the business community has been unreliable, but we welcome all the support we can get for big business because we want to heal Wall Street. We want to make sure that Wall Street is helping Main Street. I don't see any contradiction in what the president's trying to do. We still have a lot of support in the Democratic Party from big business. We welcome their support.

GALEN: The sheriff backed up his buck board to Wall Street in the first quarter of the first quarter of 2007, he raised almost half a million dollars from Wall Street and just recently CNN, I'm not sure if it was Dana Bash or somebody bearded Harry Reid in the capitol asking about a fundraiser that he had just dealt. This is recently as April this year and in fact, his press secretary finally had to admit that Harry Reid had been in New York at a restaurant mostly attended by bankers or executives from Goldman Sachs. The two gold mines for political fund raising are Manhattan and California and everybody needs to be able to mind those.

BLITZER: There's the impression as Fareed described it in Politico, others describing the president of the United States as being quote, anti-business. Is he anti-business?

GALEN: Oh, I don't think there's any question about that. Of course he is.

BRAZILE: No he's not.

GALEN: Sure he is. It's us against them. This goes back to his --

BRAZILE: Too big to fail, we just bailed out Wall Street taxpayers.

GALEN: And we just bailed out the UAW.

BRAZILE: No we bailed out General Motors. Last I checked, that's General Motors.

GALEN: Last I checked --

BRAZILE: What's wrong with helping --

GALEN: It is -- it is us against them. He's been brought up that way. That's what his early life was. That's what his legislative history has been and the us is never business. The them is business.

BRAZILE: The era of self-regulating yourself is over. There's a new sheriff in town and President Obama intends to ensure that we never go back to that old era.

BLITZER: There's another accusation today that's been leveled appropriately today because there was this love fest with him and the Prime Minister of Israel Benjamin Netanyahu at the white house. A lot of Israel's supporters think he's quote, anti-Israel. Do you think he is?

GALEN: I think it took a while for them to get their arms around -- it's so difficult. If Israel and the Middle East could have been solved, it would have been solved by Harry Truman. Nobody's been able to get their arms around that so this is not an Obama problem. I think it took a little while for them to calibrate where they thought America needed to be. Obviously they've gotten to that point and I say let's move forward.

BRAZILE: The bond is strong. As President Obama said today, it's not just words, it's actions. It's also working with Israel as they try to begin the peace talks once again. This is a friendship that goes back a long time and as the president and the prime minister said today, with all those photographers, they said the bond is unbreakable.

BLITZER: I think a few months before the election in November, that's good political news for the Democrats and for the president, if in fact he's managed to repair that relationship with Netanyahu.

BRAZILE: This was his fifth visit. The two have met five times.

GALEN: All but making him sit on the curb and wait. The last visit was anything but a friendly visit.

BLITZER: We'll leave it on that note. We'll see what happens. We're going to speak next hour with the Israeli ambassador to the United States. And the prime minister will be on "LARRY KING LIVE" tomorrow night. Thanks very much. Jack Cafferty is going through your e-mail. Stand by. He'll be right back with "The Cafferty File."

And the ex-husband of an alleged Russian spy revealing some sexy photos of her and equally racy details about her life.

(COMMERCIAL BREAK)

BLITZER: Here is a look at some "Hot Shots." At a jail in India, female inmates make incense sticks to keep themselves occupied.

Outside of the U.N. offices in Sri Lanka traditionally dressed dancers perform a dance to exorcise evil spirits.

And in Spain, look at this, a man leaps from a fountain into a crowd on the first day of the running of the bulls.

In Shanghai, China, a group of nine pandas celebrate their second birthday at the zoo. "Hot Shots," a picture worth 1,000 words.

Let's go back to Jack for "The Cafferty File" -- Jack?

CAFFERTY: It's the running of the bulls and the idiots. They shortened the title.

The question this hour: At what point does ownership of problems blamed on George Bush transfer to President Obama?

Theresa in Mississippi writes: "Jack, we should give him another six years. As talented as Bush and the Republican Congress were at wrecking the country, it took us a few years to get into the hole we are in, but they expect President Obama to fix it in less than two years? I think they have been listening to Rush Limbaugh too much. He is not a magician, the president."

Brian in Illinois writes: "I live a few miles outside of Chicago, Obama's home state. I was excited when he was first elected and had high hopes much would change, but I believe that the honeymoon is long over and the vast drop in the approval rating is testimony to that. I do pin some of the blame on Congress though, who has put up appreciable roadblocks to much of what Obama wanted to accomplish."

Tom in Philadelphia wrote: "When he took the oath. I'm tired of the blame game."

And Jane in North Carolina: "What really kills me is that you in the media allow him to continue to blame Bush and make no effort to hold him responsible for what he says. At some point, I'd think that the media should remind Obama that the Democrats and the American public, that the Democrats have controlled the House since 2006. So, how exactly is Bush to blame for all of this if the Democrats have been controlling the purse strings of the nation for the last two years of the Bush presidency?"

Mike writes: "It took Roosevelt four to six years to get out of the depression, and since this is the worst economic times since the great depression, that time line works out about right."

Brian writes: "Bush and Obama are the same people, same agenda, same bosses, same lust for big government, small people, and nation building. The only thing separating Obama and Bush is that Bush's wife is not a gardener."

And Russ in St. Paul writes: "They transferred the moment he was sworn in. If he didn't want to deal with the problems, he should have taken his name off of the ballot and I'm fairly certain that Hillary would not have minded."

If you want to read more on this you'll find it on my blog at CNN.com/Caffertyfile -- Wolf?

BLITZER: Excellent blog indeed. All right. Thank you.

We are getting more reaction to the breaking news we're following right now, the federal government formally suing the state of Arizona over its immigration law. We will talk about the legal and political fallout from the landmark case.

And a heartbreaking new look at the wildlife threatened by the gulf oil spill. Can these creatures be saved?

(COMMERCIAL BREAK)

BLITZER: The growing oil spill along the gulf coast is taking a devastating toll on much of the wildlife in the region. Our John Zarrella is over at a wildlife center in Pensacola, Florida, where some of the animals are being rehabilitated. It is a heartbreaking story all in all, but tell us what you have discovered, John.

JOHN ZARRELLA, CNN CORRESPONDENT: Well, Wolf, we did visit a wildlife rehabilitation center here in Pensacola today, and at this facility, it is one of four along the gulf coast, they treat only birds and since the facility opened up in May, they have treated 100 birds here is particular facility. Today, one of the birds they were working on is called a northern gannet which is known as the pelagic bird and they spend most of their time at sea, they feed at sea and they rest at sea and what they were doing with the bird today was cleaning its feathers. This facility is literally like an emergency room. The birds are brought in. They are triaged. Their pictures are taken. They are given intravenous I.V.s, and then they are stabilized before they are cleaned and they are only cleaned one time, the feathers on the bird, just one time is all it takes to get them completely cleaned in many of the cases. Once that is done, and they begin to move along the process of rehabilitation, they are taken outside of the facility in the back of the facility where there are these swimming pools, several swimming pools out there, and in these particular pools, there were loons in there today along with northern gannets and they are closer to the process of being released. It takes about 14 days in the facility before they are ready to be released. Now, the last couple of days they have not gotten any new birds in, and they say that they are hoping that is a good sign.

(BEGIN VIDEO CLIP) HEIDI STOUT, DIR. TRI STATE BIRD RESCUE & RESEARCH: It is wonderful for wildlife.

ZARRELLA: But does not necessarily mean the worst is over, does it? Or does it?

STOUT: Well, you know, the geographic magnitude of this spill makes it difficult to really predict what is going to happen a week from now.

(END VIDEO CLIP)

ZARRELLA: Now they've had 52 birds in that facility today and you know Wolf, I found it fascinating that they say it's so meticulous the cleaning of the birds, because they have to get every single feather de-oiled, or the bird will not be waterproof any longer and that won't do any good. In the four-state area, there have been 1,000 birds that are being treated, and about 400 of those birds have been released, but the sad part is that there are 13, more than 1,300 nearly 1,400 birds, Wolf, found dead during this process. Wolf?

BLITZER: What about the other animals impacted by this disaster? What is happening to them?

ZARRELLA: Yes, the numbers are not very good, specifically for sea turtles. More than 440 sea turtles found dead, 150 rescued. Mammals including dolphins and whales, and 53 of the 58 that they have found have been found dead. Wolf.

BLITZER: That is heartbreaking, indeed. If you can, ask your photographer to pan aside, because I see the folks beside you at the beach in Pensacola, and what is the situation like on this day?

ZARRELLA: You know I just took a walk down there and we have been this beach on and off several days, and there were a lot of tar balls on there all over the place. You dig down six inches, and you can find the tar balls, but today, we were out there, and there just isn't any. You can see that the weather here, Wolf, it is lousy here and it has been that way, but the wind direction for the last couple of days has actually been moving a lot of the tar and a lot of the sheen back to the west and away from the Pensacola area. Wolf?

BLITZER: John Zarrella on the scene for us in Pensacola. Thanks.

You are in THE SITUATION ROOM.

Happening now, breaking news that the justice department files a lawsuit against Arizona over its controversial new immigration law, pitting the federal government against the state and the governor and which side are Americans backing right now?

Also, a show of unity. President Obama and the Israeli Prime Minister Benjamin Netanyahu going out of the way to affirm the ties between the two countries and calling for direct peace talks with the Palestinians. The Israeli ambassador to the United States, Mike Lauren, will join us this hour.