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THE SITUATION ROOM

New Message From Osama bin Laden?; New York Gubernatorial Campaign Turns Ugly

Aired October 1, 2010 - 18:00   ET

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


WOLF BLITZER, CNN ANCHOR: You're in the SITUATION ROOM. Happening now, a NATO fuel convoy under attack and up in flames in Pakistan. As tensions with the U.S. grow, the Pakistani ambassador to the United States is standing by. He's here in the SITUATION ROOM this hour. We will talk about what is going on. The stakes are enormous right now.

Also, terrorists armed with small weapons lay siege to a major city for almost three days. It happened in Mumbai, India, back in 2008. Now some U.S. cities are working to ensure it does not happen to them, while others are not prepared at all. We have new information coming in this hour.

And the campaign for New York governor suddenly getting very, very ugly and very personal, with allegations of affairs, heated confrontations with reporters, and more.

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

Fiery images underscoring the volatile situation confronting the United States and Pakistan, as American forces lead a war next door in Afghanistan. Militants in Pakistan, a critical U.S. ally, attacked a convoy carrying fuel to U.S. and NATO forces, setting two dozen trucks on fire. No one was hurt in this attack, but two people were killed in a separate attack on another NATO truck in Pakistan.

On the same day, a new message purportedly from Osama bin Laden believed to be hiding in Pakistan urging Muslims to focus on relief and development. The tape has not been authenticated, all this coming in the same week that explosive video emerged showing what appears to be Pakistani soldiers lining up and shooting a group of unarmed men.

Pakistan's military says it does not know whether the video is real or a forgery, but has launched an investigation. We are going to talk about all of this and much more this hour with the Pakistani ambassador to the United States, Husain Haqqani.

But, first, our Pentagon correspondent Chris Lawrence, he is standing by.

Chris, Pakistan's government shut down the supply line which is so critical for U.S. and NATO forces in Pakistan.

CHRIS LAWRENCE, CNN PENTAGON CORRESPONDENT: You said it, Wolf. Half of the cargo that flows into Afghanistan for the troops comes through Pakistan. So, it is vitally important. Now, take a look. This red line is the border between Afghanistan and Pakistan. Now, the food and other perishable items is still coming down to the troops from the north, and sensitive stuff like weapons and ammunition is still being airlifted in.

But this major road, this major supply line, the Khyber Pass, as of now is shut down.

(BEGIN VIDEOTAPE)

LAWRENCE (voice-over): U.S. troops are swooping in to help Pakistan's flood victims, backed up by $300 million in American aid. But the cash didn't buy much goodwill.

On Friday, militants ambushed a NATO convoy on its way to Afghanistan. They torched oil tankers and killed two drivers. And Pakistan closed the Khyber Pass border crossing. The U.S. has other routes to get supplies into Afghanistan.

P.J. CROWLEY, U.S. ASSISTANT SECRETARY OF STATE FOR PUBLIC AFFAIRS: The land supply routes through Pakistan are vitally important.

LAWRENCE: Why it was closed is where it gets interesting. Pakistani officials said punishment for U.S. forces frequently crossing its border, including Thursday, when a U.S. aircraft entered Pakistani airspace and may have mistakenly shot several of Pakistan's troops.

Pakistani officials publicly condemned the U.S., questioning whether the two countries were allies or enemies. But Pentagon officials said, Pakistan's military told us that they only closed the supply route because of security concerns over possible militant attacks.

RICHARD HOLBROOKE, SPECIAL U.S. REPRESENTATIVE FOR AFGHANISTAN AND PAKISTAN: The overall relationship with Pakistan is complicated, more complicated than any strategic relationship I have ever been involved in.

LAWRENCE: It is one built on mixed messages, where Pakistan's government condemns American's actions to show its own people it can stand up to the U.S., but that tactic may be wearing thin.

SEN. CARL LEVIN (D-MI), ARMED SERVICES COMMITTEE CHAIRMAN: And I have real problems with the Pakistan government publicly attacking us when we accurately hit a target, when it is clear that they don't object privately.

LAWRENCE: Senator Carl Levin admits the U.S. may have made a mistake in Thursday's shooting, but he strongly criticized Pakistan for only going after militants that threaten its own government, and not insurgents who plot attacks in Afghanistan and overseas.

LEVIN: They have got some responsibility to go after them, and they have not carried out that responsibility.

LAWRENCE: The tensions are rising, but analysts say it is not near the breaking point.

MARK QUARTERMAN, CENTER FOR STRATEGIC AND INTERNATIONAL STUDIES: I think the relationship is important enough to both countries for them to work very hard to make it survive.

(END VIDEOTAPE)

LAWRENCE: And one thing that could help both sides mend fences is the fact that U.S. officials say their unmanned drones are getting more accurate. Those unmanned drone strikes are used by the U.S. to strike at militants on the Pakistani side of the border and they are still extremely unpopular with the people there.

But, whereas a few years ago those drone strikes may have been killing civilians at 30, even 40 percent of the time, now U.S. officials say that rate has dropped to 7 or even 8 percent -- Wolf.

BLITZER: Chris Lawrence, thanks very much.

And we're going to have a lot more on this coming up in just a few minutes. This hour, the Pakistani ambassador to the United States, Husain Haqqani, he is here. We will talk about this very, very dangerous situation. Remember, Pakistan has a nuclear arsenal.

U.S. officials tell CNN that intelligence suggests al Qaeda leader Osama bin Laden has been urging affiliates of his terrorist network to take action, but one source cautions against linking bin Laden to recent reports that he ordered Mumbai-style attacks on several European cities.

Mumbai, India's financial hub, came under a series of small, coordinated attacks two years ago that left 160 people dead. Could such a multipronged assault happen here in the United States? Would the U.S. be ready to take them on?

Here is CNN's homeland security correspondent, Jeanne Meserve -- Jeanne.

(BEGIN VIDEOTAPE)

JEANNE MESERVE, CNN HOMELAND SECURITY CORRESPONDENT: Wolf, this is a Colt M4 semi- and fully automatic weapon, and now every New York City police recruit is shown how to use one. Why? Mumbai.

(voice-over): Mumbai was a low-tech, high-impact attack. Terrorists armed with only semiautomatic weapons, grenades and bombs hit multiple civilian targets in quick secession. Back in 2008, as they watched the carnage, the chaos, the 60-hour siege, some U.S. police officials had this thought.

PATRICK BURKE, WASHINGTON, D.C., ASSISTANT POLICE CHIEF: We are not ready for that specific type of attack, especially on soft targets. MESERVE: Los Angeles and New York immediately dispatched personnel to India to learn all they could. There was one big takeaway.

MICHAEL DOWNING, LOS ANGELES DEPUTY POLICE CHIEF: You have to put the threat down immediately, and you have to run toward the fire, not away from it.

MESERVE: Now every police recruit in New York is given some heavy weapons instructional, and 250 officers have been trained and equipped to reinforce the department's emergency team.

The NYPD, knowing the Mumbai attackers moved by boat, has identified 100 sensitive locations in the harbor. New technologies help identify suspicious people and vessels, and schematics have been reviewed in case a boat is taken over.

DAVID DRISCOLL, NEW YORK POLICE DEPUTY INSPECTOR: We know how to take control of certain ships and where fuel turnoffs are.

MESERVE: In New York and in Washington, the layouts of hotels, transit hubs and other potential targets have been mapped in case police have to get in or hostages have to get out. Police are also learning how to harness technologies like surveillance cameras and cell phones, so they can use them, and attackers cannot.

BURKE: And making sure that these persons, these terrorists potentially, don't have access to each other and making sure that they are not getting information from public sources that they can use to our detriment.

MESERVE: Some police now exercise how to counter the tactics used in Mumbai, even as they watch for new innovations in the terrorist playbook.

RAYMOND KELLY, NEW YORK CITY POLICE COMMISSIONER: You have to be careful not to fight yesterday's war. You have to look over the horizon.

MESERVE: But if Mumbai is the template for an attack here, at least New York, Washington, and Los Angeles feel better contained.

DOWNING: Well, I hope it would not last more than 30 minutes before we contain it and neutralize it.

MESERVE (on camera): Making these sorts of preparations is expensive. Not every city can afford to do it. Not every city is prepared for an attack like Mumbai -- Wolf, back to you.

(END VIDEOTAPE)

JUDY WOODRUFF: All right, Jeanne, thanks very much -- Jeanne Meserve reporting.

Let's go to the White House right now, President Obama calling it the least suspenseful announcement of all time. After 21 months, Rahm Emanuel stepped down today as the White House chief of staff. The deputy chief of staff, Pete Rouse, will take over while the president searches for a permanent replacement.

Over at the White House, Rahm Emanuel paid homage to his now former boss.

(BEGIN VIDEO CLIP)

RAHM EMANUEL, WHITE HOUSE CHIEF OF STAFF: Mr. President, I thought I was tough. But as someone who saw firsthand how close our nation came to the brink and what you had to do to put America back on track, I want to thank you for being the toughest leader any country could ask for in the toughest times any president has ever faced.

My father and my grandfather came to this country for opportunity. They came here for a better life for their children.

My mother marched with Martin Luther King because she believed that none of us is truly free until all of us are.

Both my parents raised me to give something back to the country and the community that has given us so much. And I want to thank you for the opportunity to repay, in a small portion, of the blessings this country has given my family. I give you my word that even as I leave the White House, I will never leave that spirit of service behind.

(END VIDEO CLIP)

BLITZER: Rahm Emanuel expected to run for mayor of Chicago now, sources telling CNN it is unlikely he will announce his intentions this weekend. But stand by.

Growing concern that terror attacks against the United States are being plotted in Pakistan right now. So what is Washington's nuclear- armed ally doing to stop them? I will ask the Pakistani ambassador to the United States, Husain Haqqani. He is here in THE SITUATION ROOM.

And the spotlight shifts to the candidates' personal lives, as the race for governor of New York takes a very ugly turn.

(COMMERCIAL BREAK)

BLITZER: Get to politics. The New York governor's race between Democrat Andrew Cuomo and Republican Carl Paladino has suddenly taken on an extremely nasty tone. It has been going on badly for two weeks, but now it is getting worse.

Cuomo has responded to personal attacks from his opponent, and the hot-headed Paladino is backing down, only a bit, though.

Let's go the Mary Snow. She is working the story for us from New York.

Are things cooling off or heating up? MARY SNOW, CNN CORRESPONDENT: Wolf, right now, cooling off just a bit, but the fallout continues, especially after a confrontation involving Republican Carl Paladino was videotaped. He is explaining his action, and his Democratic opponent is answering back.

(BEGIN VIDEOTAPE)

SNOW (voice-over): Andrew Cuomo, the Democrat in New York's governor's race, speaking publicly for the first time since his Republican opponent leveled an unsubstantiated claim that he had an affair while married to wife Kerry Kennedy before they divorced five years ago.

ANDREW CUOMO (D), NEW YORK GUBERNATORIAL CANDIDATE: Was is negative? It is destructive? Did my kids have to read it? Yes. And is all of -- was it hurtful to my kids, who, you know, are in school? Of course it was.

SNOW: Republican Carl Paladino has since backtracked on claims he made to a reporter that he has evidence, saying he was not accusing Cuomo of having an affair. Here is how he dialed it back during an interview with New York 1.

CARL PALADINO (R), NEW YORK GUBERNATORIAL CANDIDATE: My conversation was that I have been confronted time and time again with people asking me what extramarital affairs I had, and I'm asking back, well, why don't you go and ask Mr. Cuomo that question?

SNOW: It has gotten so much attention because of a heated exchange Wednesday touched off when a veteran political reporter from "The New York Post" asked Paladino what evidence he had.

PALADINO: I will take you out, buddy.

SNOW: Paladino says he was angry the paper had a photographer at the window of his daughter's home. She's a daughter he had out of wedlock. "The Post" denies it was their photographer.

All of it is bringing attention to a governor's race that had largely gone unnoticed until a few weeks ago, when Paladino, a multibillionaire businessman, scored an upset and won the Republican nomination with the backing of Tea Party activists.

PALADINO: Sadly, all Andrew offers us is status Cuomo.

(CHEERING AND APPLAUSE)

PALADINO: Cuomo is the state's attorney general and the son of former Governor Mario Cuomo and was seen as having a clear path to victory, but the race got ugly fast, with Paladino questioning Cuomo's manliness and suggesting he was a dirty politician.

CUOMO: I said at the beginning of the campaign, I will not engage in the name-calling. I will be not be brought into the gutter.

SNOW: Cuomo made his comments while touting an endorsement from a conservative New York politician. Democrats are hoping Paladino's brash behavior will push Republicans their way. But some state Republicans say it has given Paladino attention he would not have otherwise gotten.

(END VIDEOTAPE)

SNOW: Wolf, I talked to a few Republicans in the state. The chairman of the state's Republican Party is standing by Paladino, but another New York Republican, Congressman Peter King, says the fact Paladino went personal with Cuomo is raising some questions about him. But he says he believes with all the attention now on Paladino, he has an opportunity there to turn it into a positive -- Wolf.

BLITZER: We will see if that happens.

But let's talk about it, Mary.

Thanks very much.

Joining us now, CNN's John King. He is the host of "JOHN KING, USA," which starts at the top of the hour. And our chief political correspondent, Candy Crowley, she is the host of the "STATE OF THE UNION," which airs Sunday mornings at 9:00 a.m. Eastern.

He is making the point, John, that he is narrowing this gap in the polls with Andrew Cuomo, Carl Paladino. Does he really have -- in a state, a Democratic state like New York, does he have a realistic shot of actually winning the governor's race?

JOHN KING, HOST, "JOHN KING, USA": In this volatile, unpredictable year, don't make any predictions or don't pour them into cement.

However, the public polls show Mr. Cuomo with a double-digit lead. I made some calls and some e-mails about this to people who know New York State pretty well. Number one, it is not all on Mr. Paladino. There's no Republican infrastructure in the state right now.

The Republican Party, once a strong Republican Party in New York, is in shambles right now in New York. Number two, Mr. Cuomo does have a lot of baggage, because he is a familiar name in a year when people don't like politicians.

But can he win? I talked to six people today on the phone and in e-mail. All six said they don't think so.

BLITZER: What do you think, Candy? Because you've been checking into this as well. He is unscripted, he's volatile, he's unusual, but, as John says, this is an extraordinary moment in U.S. political history.

CANDY CROWLEY, CNN SENIOR POLITICAL CORRESPONDENT: It is.

And, listen, I think, if you were going to play the odds, you would play the odds against his winning. If you are going to play the odds, you would -- I mean, it is interesting to me the Republicans are saying, oh, he can turn this to his benefit.

I think that is probably a little doubtful, but the fact of the matter is you don't want to bet on anything. People do like their politicians to be outspoken. They don't always like the truth. Walter Mondale did not win because he promised the raise taxes.

But there is a fine line -- and I'm not saying he is crossing it -- but voters will decide. There's this fine line between personal and aggressive, sort of the Chris Christie style from New Jersey, and going like off the cliff.

BLITZER: Does he fall into that Tea Party camp, like Christine O'Donnell in Delaware, Rand Paul in Kentucky, Sharron Angle in Nevada? Is Carl Paladino like that?

KING: Well, yes and no in the sense that everybody in Albany knows him. He is a big real estate developer. He has played the Albany game in terms of working for tax credits and breaks for his projects and everything.

Yes in the sense that he was not the endorsed establishment Republican candidate. And so those who are looking for somebody different, somebody who does not fit the establishment mold, came and rallied, including Tea Party people, around Carl Paladino.

One of the big questions on November 2 is, is that anti- Washington, stir things up, send in some people with some pretty outlandish or provocative views, we know that exists when it comes to Washington. People are so mad at this town, they think it's broken. Does it exist in a big way when it comes to electing your governor, a much closer, more personal decision. We will see.

BLITZER: You have got to give him credit. He crushed Rick Lazio, the establishment Republican candidate, in that Republican primary.

CROWLEY: And a key here, Republican primary, though, because that is where the Tea Party activism was happening, was in the Republican Party.

And we should have probably seen that coming, because Rick Lazio also has been around a long time, also had some baggage, so all the passion in the Republican Party came from the Tea Party. But now you are talking about New York. And John is right. There's no real Republican infrastructure there.

And so you have not only that against him, but it is just -- it's a Democratic state. It's a very, very tough hill to climb.

BLITZER: My home state, New York.

CROWLEY: I know, Buffalo, huh?

BLITZER: All right, guys. Thanks very much, guys.

Candy will be back Sunday morning 9:00 on "STATE OF THE UNION." CROWLEY: That's right.

BLITZER: John is coming up right at the top of the hour. Going to have a lot more on this.

A reminder: You can see that Delaware Senate debate between Christine O'Donnell and the Democrat, Chris Coons, right here on CNN. I will co-moderate that 90-minute debate at the University of Delaware on October 13.

A check of the day's top stories coming up next: deadly flooding from North Carolina to New England, calls for dozens of dicey rescues.

And Iraq's top coalition makes a key political choice, but the main opposition party says it may not be able to live with that choice.

Stay with us. You're in THE SITUATION ROOM.

(COMMERCIAL BREAK)

(NEWS BREAK)

BLITZER: Embattled Democrats? Don't tell that to the House speaker, Nancy Pelosi. She spoke candidly and defiantly to journalists today, including to our own senior political analyst, Gloria Borger. She is standing by with details.

And the Pakistani ambassador to the United States is here in THE SITUATION ROOM. I'm going to ask Husain Haqqani about tensions between the countries, the fiery attack on a NATO convoy, and much more. Ambassador Haqqani is walking in. We will talk in just a moment.

(COMMERCIAL BREAK)

BLITZER: Pakistan has closed a vital route used by the United States and NATO troops to bring supplies to forces in Afghanistan. The move came after three Pakistani soldiers were killed in fighting between NATO troops and militants in Pakistan.

Let's talk about that and more with Husain Haqqani. He is the Pakistani ambassador to the United States.

Mr. Ambassador, welcome.

HUSAIN HAQQANI, PAKISTANI AMBASSADOR TO THE UNITED STATES: Always a pleasure being here, Wolf.

BLITZER: Let's talk about this, supply route. So much of the supplies going to the U.S. and NATO forces in Afghanistan, they come through Pakistani. They go up from Karachi, the port, go through Pakistan, come to Afghanistan.

But, all of a sudden, you have shut down this route. Why?

HAQQANI: Well, actually, what happened was that there was a NATO airstrike, and, as a result, public opinion became infuriated again.

You must remember that Pakistan and the United States are allies, but we have a lot of difficulties managing opinion in both countries about the other. So, in a situation like that, if the supplies were continuing, there would have been a possibility that there may have been a security situation that we had to deal with.

We are working through our disagreement. NATO and ISAF have agreed to conduct an inquiry about the incident. And I think, as soon as we can ensure the security of the convoys moving through the Khyber Pass, we will have them moving again.

BLITZER: So, so far, it is still blocked? There's no supplies coming in to the U.S. troops?

HAQQANI: No, no, no, there are several routes which U.S. troops get their supplies...

BLITZER: From Pakistan.

HAQQANI: Seventy percent of supplies. This is the main one.

BLITZER: And that main one is the still blocked?

HAQQANI: We will ensure the security, and we will have it moving. It's not yet even been 24 hours since it is blocked.

BLITZER: Because a lot of Americans have a hard time understanding this. What's wrong if the U.S. occasionally goes in and kills militants on the Pakistani side of the border? They're trying to kill Pakistanis, as well as Americans.

HAQQANI: Well, Wolf, the issue here is that Pakistan is a sovereign nation; very cognizant of her sovereignty, and we are a proud people. And you must remember that approval for the United States' policies in Pakistan is at an all-time low. It's at 11 percent.

In a situation like this, when the government is an ally of the United States, it has to be very mindful of how people respond to the United States. And when there is an air strike, which kills Pakistani troops, not insurgents, then there is obviously some public payback that has to happen.

BLITZER: As you have acknowledged, that was probably a mistake. It happens in war. Sometimes the U.S. kills American troops.

HAQQANI: Which is why we are conducting an inquiry. But at the same time, I don't think anybody should overreact. Pakistan and the United States remain allies, and we are allies with some disagreements.

BLITZER: Here's what I don't understand. You say that U.S., the U.S. image, support for the United States and Pakistan is at an all- time low. This after, over the past eight, nine, ten years the United States has provided Pakistan with $10 billion in assistance and billions more on the way and huge sums for the flood victims. Why do Pakistanis not like the United States?

HAQQANI: Wolf, that's an important question, and I think the answer to that can be found in a number of ways. One is that the U.S. has not always been able to argue its case well with the people of Pakistan. The propaganda against the United States is much stronger than the American response.

Secondly, I think there are actions where the Americans are seen as acting in a way in which Pakistanis do not feel comfortable.

BLITZER: Like what?

HAQQANI: Policy issues, Pakistanis are not comfortable with the United States policy in Afghanistan in the sense of it being overbearing and too militaristic. There are opinions, and by the way, similar opinions exist in the United States. We are now a democracy after a dictatorship of almost a decade, and we have a fractious political situation. It's a question of differing opinions. Our president, by the way, who doesn't have very high approval ratings also, is holding on and trying to change opinion about him.

BLITZER: I want to get to that in a moment, but let's get through some specific issues. There's this videotape of Pakistani soldiers supposedly assassinating unarmed men who are tied up and just killing them. You've seen this video. First of all, have you confirmed that it is authentic, that these are Pakistani troops deliberately killing these unarmed -- these unarmed Pakistanis?

HAQQANI: First of all, we haven't been able to authenticate the video, but that said, if it is ever authenticated, it would be Pakistani policy to bring to justice anybody who's engaged in something like that. The Pakistani military is a crippling force. The Pakistani military is the frontline army fighting against terrorism. I do not think that the Pakistani army would ever do something like this, and the Pakistani army makes sure that it never does something like this.

BLITZER: So if these soldiers did this, they will be punished?

HAQQANI: Well, first of all we will have to determine if they did it, and if they did, it will be dealt with in accordance with the law. We will do it, but we must understand it is not our policy to do it and our military is a very brave force that in the last 2 1/2 years has laid down the lives even of a general and more than one general officer in fighting the terrorists.

BLITZER: I interviewed Bob Woodward, the "Washington Post" reporter, who's got a new book entitled "Obama's Wars" yesterday. He was here in THE SITUATION ROOM sitting right where you are. He told me this. Listen to this.

(BEGIN VIDEO CLIP)

BOB WOODWARD, AUTHOR, "OBAMA'S WARS": Terrorist attacks being planned now against our country that are being hatched in Pakistan by all kinds of groups, not just al Qaeda. And the people who know, including the president, are alarmed is about as alarmed as you can be.

(END VIDEO CLIP)

BLITZER: President Obama, he says, is about as alarmed as you can be about terrorist attacks being planned in Pakistan right now against the United States.

HAQQANI: Well, you must understand that when somebody says they are being planned in Pakistan, it's not like they're being planned in our major cities with -- in any official comfortable building where people are conducting this business. This is happening in remote parts of Pakistan. Intelligence is being shared.

And we understand that our intelligence service, and your intelligence service, and the intelligence services of several European nations are working together to foil any plots that are hatched.

Afghanistan has been in war since 1978 when the Soviets occupied it, and we have had a lot of blowback of it on the Pakistani side of the border, and this is part of the blowback. But we are allies in dealing with it, and we will deal with it together.

BLITZER: You say the democracy of Pakistan is fragile. I want to read to you from Richard Cohen, a columnist in "The Washington Post." The Pakistani military is making those low growling noises that precede a coup or an attempt to place yet another civilian at the head of the government. Are you worried about a coup, a military coup in Pakistan right now?

HAQQANI: Not at all, Wolf. There have been four coups in Pakistan in 60 years, and everybody has learned the lesson. In fact, today the last person who took part in a coup, General Musharraf, has announced the formation of a political party and announced that he will come back and contest elections shows that now there is consensus in Pakistan, including within the Pakistani military to make democracy work.

Look, the United States worked through many issues, issues between the judiciary and the executive, et cetera, through your history, just as John Marshall didn't like the face of President Jefferson. You have these issues, but the only way forward is to work them through within the constitution, and through the democratic process, and our military supports that.

BLITZER: We are counting on you, Mr. Ambassador. Pakistan has a nuclear arsenal. We're very concerned. We want to make sure it's secure and safe and that this democracy thrives and that this cooperation between the United States and Pakistan thrives, as well.

HAQQANI: Be concerned, Wolf, but stop worrying. Trust that the Pakistani leadership understands the challenges. Help Pakistan go through the challenges instead of worrying so much about the challenges that you stop helping us.

BLITZER: Mr. Ambassador, thanks for coming in. HAQQANI: Thank you for having me there.

BLITZER: Democrats in danger of losing the House of Representatives. Don't tell that to the Speaker Nancy Pelosi. Details of why she says Democrats right now have the upper hand.

(COMMERCIAL BREAK)

BLITZER: The House speaker, Nancy Pelosi, spoke with a group of journalists today here in Washington, and while Democratic prospects in next month's election appear dim to so many folks, she insists she'll be back as speaker of the House. Our senior political analyst, Gloria Borger, was there at that session. She had her notebook. She had her pen. How did it go?

GLORIA BORGER, CNN POLITICAL ANALYST: Sure did. Well, you know how we've been talking about the Republican wave that's coming at the Democrats? This was sort of like being at an alternate universe with the House speaker. She is defiant about it, and she said, and let me quote her here. She said, "I would rather be where we are," meaning the Democrats, "than where they are," meaning the Republicans.

And we said, "Wait a minute. Look at the polls."

And she said, "Look, we are going after this race by race. We have better candidates. We have more experienced candidates."

And what about the dispirited base that we've been talking about? She said, "I am the base of the Democratic Party, and I know in the end, they're going to show up and vote for better candidates."

BLITZER: But she doesn't just have a problem with the Republicans. She has a problem with a whole bunch of Democrats.

BORGER: She does.

BLITZER: Many of whom the Democrats who don't like her are running ads saying, "I'm not with Nancy Pelosi. I'm not with the president of the United States."

BORGER: She's down with that, Wolf. She's perfectly fine with that. I asked her about Congressman Minnick of Idaho, who told CNN that he wasn't sure, even if the Democrats won the House back, that he would even vote for her as speaker.

And I asked her, "Well, how do you feel about that, your Democrats leaving you?"

And she said, "I tell them, go for it. Just win your race. This is not about me. This is about getting Democrats re-elected and do what you have to do."

You know Nancy Pelosi. She is a very pragmatic politician.

BLITZER: Very tough woman.

BORGER: She is.

BLITZER: Did she acknowledge that the Democrats have any problem right now?

BORGER: ... alternate world. Well, yes, she did.

First of all, she gives the spiel about this being a choice election about going back to Bush and going ahead to the future with Barack Obama. So you get all the talking points.

But the towards the end of the discussion, we talked about why people are so angry at government. She said, by the way, that's nothing new. They're always angry at government.

But then she said something that's very telling, because there's an elephant in the middle of the table, and that's the unemployment rate. And she acknowledged, and she said, any political party that can't exploit 9.5 percent unemployment ought to hang up their gloves.

So, she understands that the Republicans are out there, trying to do what they can do, because the jobs issue is still very much front and center, and that is one thing, despite their long list of what they consider to be legislative successes, that's the one thing that this administration has not been able to touch.

Gloria, thanks very much.

Gloria Borger, coming from that meeting with the speaker.

We've heard plenty about the Tea Party movement, but in Florida, the Milk Party movement is growing. I'll give you a hint: it's for kids.

And Jessica Yellin introduces us to a vegetable butcher. Stick around. You're in THE SITUATION ROOM.

(COMMERCIAL BREAK)

BLITZER: There's a growing political movement in Florida right now that's bringing together liberals, conservatives and many people in between, all drawn to the singular focus of the Milk Party.

CNN's John Zarrella shows us what it is all about -- John.

(BEGIN VIDEOTAPE)

JOHN ZARRELLA, CNN CORRESPONDENT: Wolf, this is the Milk Party's Milk Wagon. No, it's not the Tea Party; the Milk Party. This grassroots movement to focus the attention of politicians and state leaders on children's issues in Florida is turning a lot of heads.

(voice-over) The marching band kicked it off. The crowd energized. It had the feel of a classic only-in-America political rally, but -- get this -- without politicians. That's how it turned out. Five hundred people, parents mostly, at the Key West High School auditorium. Now, let's back up a few hours, as the big blue bus headed south down U.S. 1 to the Keys, the leaders of the children's movement of Florida had no idea what to expect: another city, another rally.

UNIDENTIFIED MALE: They fade together.

ZARRELLA: Known better as the Milk Party, this new grassroots bipartisan effort has struck a chord in Florida.

DAVID LAWRENCE, FORMER PUBLISHER, "MIAMI HERALD": We Amazing to me, because we didn't know quite what to expect. Could we get several hundred people to come out? We got 15,000 people to come out.

ZARRELLA: one issue, children, uniting Democrats and Republicans. David Lawrence, former publisher of the "Miami Herald," is one of the movement's founders.

LAWRENCE: We need to change the priorities in Florida and, frankly, in this country. Start investing in children, and you're going to have an extraordinary return on investment.

ZARRELLA: The Milk Party plan: get lawmakers and civic leaders to put children's issues like health insurance, education, special needs, mentoring at the top of the list. Not more money; just a bigger slice of the money there is.

In city after city, 17 in all, at rally after rally, the milk and cookies flowed, and the message resonated.

UNIDENTIFIED MALE: Education and safety have got to be the two priorities for our kids, period.

ZARRELLA: What do you think, mom?

UNIDENTIFIED FEMALE: Well, the future. They're the future.

UNIDENTIFIED FEMALE: I have one that has learning disabilities, and we need help.

ZARRELLA: There is reason for the outcry: 18.5 percent of kids under 19 in Florida are uninsured. The state is fourth in enrollment, fourth in the number of teachers, but 36th in money spent per student.

PROF. SUSAN MACMANUS, UNIVERSITY OF SOUTH FLORIDA: Having large crowds that are cohesive on an issue is much more likely to grab the attention of people who might be elected to key positions in the state.

ZARRELLA: Like governor. Alex Sink, the Democratic candidate, showed up at one rally. Probably a good idea. Politicians here may find out it's a bad idea if the Milk Party is sour on you.

(on camera) Now that they've made a big splash with the milk and cookies, the party's leadership knows that, to be relevant and influential, they have to not only sustain the party, but grow it -- Wolf. (END VIDEOTAPE)

BLITZER: All right. John, thank you.

John Zarrella in Key West, Florida.

NASA's shuttle program is winding down, and as the shuttle goes, so goes its team. Fallout beginning for the space agency employees tied to the long-running program.

And as NASA pares down, now China's space program revs up. A second Chinese probe heads for the moon.

Stay with us. You're in THE SITUATION ROOM.

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

Fred, what's going on?

FREDRICKA WHITFIELD, CNN ANCHOR: Hello again, Wolf.

Good news for those trapped Chilean miners. Officials now say that they may be rescued as soon as mid-October. It was previously said the rescue wouldn't happen until November. The miners have been spending their time watching news and movies and exercising. The 33 men have been trapped since the mine collapsed august 5th.

And a special ceremony in the U.S. Supreme Court today to welcome its newest member, Justice Elena Kagan. President Obama, Attorney General Eric Holder and members of Congress were among those attending. There are now three women on the bench for the first time in the high court's history.

The official start of the new term is next week, when the court will hear arguments in two cases.

And a Texas man is believed to be dead in Mexico after being attacked while jet skiing on Falcon Lake. CNN affiliate KRGV reports authorities say the 30-year-old man and his wife crossed into Mexican waters to sight-see. They saw boats with armed men coming at them, and the man was shot. The wife made it back to shore to alert authorities.

Earlier this year officials said pirates believed to be drug traffickers were holding up boats.

And more than 1,200 NASA workers were laid off today. And there are more lay-offs to come. Almost 9,000 NASA employees in total will lose their jobs as the shuttle program comes to an end. It's expected to be a difficult transition for many of them, since they have such specialized skills.

Meanwhile, as NASA makes cutbacks, the Chinese are ramping up their space program. China launched its second lunar probe today. Chinese media reports the probe will orbit within nine miles of the moon. And it will test key landing technology and take high resolution pictures of the landing area. In 2003 China became the third country after the U.S. and Russia to put a person in orbit.

And royal jewels on the auction block in London. Sotheby's will sell 20 pieces from Britain's King Edward VII and his wife, Wallace Simpson. The collection includes 11 pieces by Cartier. Some are estimated at more than $1.5 million each.

The king abdicated his thrown in 1936 to marry Simpson, an American divorcee.

Some beautiful jewels there, to say the very least.

BLITZER: A lot of history three, as well. All right, Fred. Thanks very much. See you over -- over the weekend. Appreciate it.

"JOHN KING USA" starts right at the top of the hour. But first, here in THE SITUATION ROOM, we have the joy of the vegetable. We find new ways to celebrate it with the woman who may be the world's first vegetable butcher. Stick around. You're in THE SITUATION ROOM.

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BLITZER: All right. So what would it take to get you to eat more vegetables? CNN's Jessica Yellin introduces us to someone who wants to teach us how much fun cooking and eating our veggies can be -- Jessica.

(BEGIN VIDEOTAPE)

JESSICA YELLIN, CNN CORRESPONDENT: Wolf, what if every time you sent to the supermarket, someone would cut up all the fresh vegetables you pick out and then tell you how to cook them in under five minutes? Meet Jennifer Rubell, possibly the nation's first vegetable butcher.

UNIDENTIFIED FEMALE: If she cuts off her finger, she has insurance, right?

UNIDENTIFIED FEMALE: I'll hold this.

UNIDENTIFIED FEMALE: Oh, really?

UNIDENTIFIED FEMALE: And you just go really quickly, watch your fingers. There, you got it.

UNIDENTIFIED FEMALE: No.

UNIDENTIFIED FEMALE: You're doing it, Jen.

UNIDENTIFIED FEMALE: It's not working.

UNIDENTIFIED FEMALE: You're making a celery root salad.

YELLIN (voice-over): Meet Jennifer Rubell, vegetable butcher. JENNIFER RUBELL, VEGETABLE BUTCHER: You grab your vegetables, bring them to me and I cut them however you want. And you take them home, and instead of it taking you a half hour to cook, it takes you five minutes to throw together a homemade meal.

That's celery root salad with parmesan and olive oil.

YELLIN: OK, true confession: I went to college with Jennifer. Now she's a performance artist who works in food. She developed the veggie butcher idea with celebrity chef Mario Batali, and she slices and dices at his New York City food emporium, Eatily.

(on camera) Do you think we're a little intimidated by vegetables because we don't know how to cook them?

MARIO BATALI, CHEF: Exactly. And having a vegetable butcher here, the whole stand is more or less to give you the information, to disarm the vegetable, to make it easier to cook. Like anything can be sauteed or even, in that matter, eaten raw. What we want to do is really in support of people cooking at home, which is where Italians know the best meals happen.

YELLIN (voice-over): The food industry spends millions marketing things like cereal and meat. Rubell wants to speak for the vegetables.

(on camera) Americans are famously -- hate vegetables. Right?

RUBELL: Yes. I mean, I'd hate vegetables, too, if I ate frozen vegetables. I'd hate vegetables if I ate vegetables that were out of season.

You feel where it starts to get tender.

YELLIN (voice-over): Her advice: eat only fresh vegetables.

RUBELL: Just buy what's cheapest, most abundant and most seasonal.

YELLIN: And encourage your market to follow her lead. Call it vegetable stimulus.

RUBELL: I have a fantasy that people will go into their supermarkets all over America and say, "Let me be a vegetable butcher for a week and see if you sell more vegetables."

YELLIN: Rubell is convinced the vegetables' moment has arrived.

RUBELL: And when Michelle Obama planted a vegetable garden at the White House, that was the official beginning of the vegetable moment.

YELLIN (on camera): And we're all going to get on board soon.

RUBELL: We're all on board. You made a celery root salad today. YELLIN: Her advice? She says buy the cheapest vegetables, because they're probably the most seasonal. Then when you get home, slice them thin, cook them with lemon, olive oil and salt. Even I can do that, Wolf. I bet you can, too.

BLITZER: I'm not so sure I can, but I know you can, Jessica. Thanks very, very much. Good advice. Vegetables, delicious stuff.

Remember, you can always follow what's going on here in THE SITUATION ROOM. I'm on Twitter. You can get my tweets at Twitter.com/@WolfBlitzerCNN, @WolfBlitzerCNN, all one word.

You go also follow THE SITUATION ROOM on Facebook. Go to Facebook.com/CNNSituationRoom to become a fan. Remember, I'll see you tomorrow, 6 p.m. Eastern in THE SITUATION ROOM. Until then, thanks very much for watching.

I'm Wolf Blitzer in THE SITUATION ROOM. "JOHN KING USA" starts right now.