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THE SITUATION ROOM

President Obama Stands by Biden; Interview with Condoleezza Rice; Miner Fist Fights Revealed; The Political Scorecard; Interview With Kentucky Democrat Senate Candidate Jack Conway; Slamming the Number One Senate Dem; GPS Device Sparks Debate; Should U.S. Pull Out of Afghanistan; Magazine Offers Tips for Terrorists

Aired October 15, 2010 - 17:00   ET

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


WOLF BLITZER, HOST: Don, thanks very much.

Happening now, President Obama may be trying to put rumors about Joe Biden's future to rest. This hour, their one-two punch to keep Biden's old Senate seat in the Democrats' hands.

Also, new rumors of minor fistfights and arguments during the first days they were trapped -- it's raising questions about the bond between miners and how long it will last now that they're free.

And the first African-American woman to become the secretary of State -- she is now opening up about the challenges of growing up in the segregated South. Stand by to hear from Condoleezza Rice. She'll share her moving story and say a word you may never expected her to say on national TV.

I'm Wolf Blitzer. You're in THE SITUATION ROOM.

But we begin with the president. He's standing shoulder to shoulder today with Joe Biden in the vice president's home state of Delaware. But he seems to be sending a strong message to any Democrats out there wishing for an Obama/Clinton ticket in 2012. Listen to this.

(BEGIN VIDEO CLIP)

BARACK OBAMA, PRESIDENT OF THE UNITED STATES: The single best decision that I have made was selecting Joe Biden as my running mate -- the single best decision I've made. I mean that.

(END VIDEO CLIP)

BLITZER: Let's bring in our Senate race White House correspondent, Ed Henry -- Ed, in a recent interview on CNN's "JOHNKING USA," the reporter, Bob Woodward, of "The Washington Post," suggested that replacing Hill -- Joe Biden with Hillary Clinton was, quote, "on the table." It seems the president now wants to put that rumor to rest.

ED HENRY, CNN SENIOR WHITE HOUSE CORRESPONDENT: Oh, it's off the table now. And -- and when you listen to senior people who are at the White House, it never really was on the table. And, in fact, Bob Woodward has since said that he was not talking about any specific inside information about a conversation going on inside the White House now. He's talking about a conversation he had a year or two ago with Mark Penn, one of Hillary Clinton's strategists, about this sort of hypothetical possibility of an Obama/Clinton ticket.

The bottom line for people inside this White House, they've never considered that a real possibility. And two big things happened this week.

Number one, the vice president, a couple days ago, told "The New York Times" that the president privately has already asked him to run again with him in 2012. Now you have the president -- this was not an accident. He did this by design, on Joe Biden's home turf, in Delaware, he said look, shut the door on all of this talk. The best decision I made was picking him.

So they're running. We hadn't even heard that before -- not just about running together, that officially, basically, the president is planning to run for reelection. He's planning to run, according to Joe Biden, and they're going to run together -- Wolf.

BLITZER: And at a time when several administration officials are leaving the government, you're getting new information about someone who's expected now to stay longer than we earlier thought?

HENRY: That's right, Pete Rouse. He was named the interim chief of staff. A lot of people thought maybe that was just through the election or the end of the year. But I'm picking up from senior Democrats from outside and inside this White House that they think he's going to stay a lot longer -- at least six, eight months or even maybe up to two years, through that 2012 reelection effort that I mentioned.

The bottom line is that I'm told by top Democrats there's an understanding between the president and Rouse that he can basically have the job almost as long as he wants. He had some reluctance to take this. He's now enjoying the job, number one; and, number two, a lot of people inside this White House feel that maybe the calm tempo that Rouse has brought to the table, compared to sort of the frenetic days of Rahm Emanuel, not such a bad thing for a White House that's in some transition now, bracing for these elections -- Wolf.

BLITZER: Ed Henry over at the White House for us. Thanks very much.

The president, by the way, he's now back here in Washington from Delaware. And just a little while ago, he met with the former secretary of State, Condoleezza Rice, in the Oval Office.

Before Secretary Rice sat down with the president, she was right here in THE SITUATION ROOM.

I asked her why she planned -- what she planned to say to the president and whether she might get a job offer from him.

(BEGIN VIDEOTAPE) CONDOLEEZZA RICE, FORMER SECRETARY OF STATE: The president nicely invited me. He knew I was here. And we'll talk about a whole range of foreign policy issues.

BLITZER: Is there something on your agenda?

RICE: Well, it's -- it's frequently done, you know, that former cabinet secretaries go -- and particularly on the foreign policy side -- and see the sitting president. So I'm very much looking forward to it and whatever is on his mind.

BLITZER: If there -- this is a period of transition of personnel in his administration, in his cabinet. If he offers you a job --

RICE: Oh, come now --

BLITZER: -- are you interested?

RICE: -- come now, Wolf. I've got a job and he's got really fine people around him. He -- he's picking the brain of an -- a former secretary of State and that's perfectly appropriate.

BLITZER: He's got a few Republicans, though, who are working for him, including the secretary of Defense.

RICE: Yes, Bob Gates. My good friend, Bob Gates, is doing a -- a really terrific job as secretary.

BLITZER: So if he said --

RICE: Well --

BLITZER: -- if the --

RICE: -- Wolf, you --

BLITZER: -- commander-in-chief says to the former secretary of State, I need you, I need your help --

RICE: Wolf, that's not the nature of this meeting and no one should even go there.

BLITZER: Well, you know about (INAUDIBLE).

RICE: I know. You have to go there.

BLITZER: (INAUDIBLE).

RICE: I know that.

BLITZER: But as --

RICE: I know.

BLITZER: As soon as you hear that the president is inviting you to the Oval Office, the first thing on my mind, I said well, that -- RICE: Well --

BLITZER: -- that could be a -- a bold move on his part.

RICE: I know. But -- but presidents do this. It's a nice feature, actually, of our democracy, that particularly on the foreign policy side, those foreign policy -- people who have been involved in foreign policy do this from time to time.

BLITZER: All right. You're a professor at Stanford University.

RICE: Yes.

BLITZER: Grade this administration on foreign policy.

RICE: Now, Wolf, you know I'm also not going to do that. I've said very many times that I may not agree with everything that the administration has done, but I also know that it's a lot harder in there than it is out here. I know that it's not really -- nobody needs to have people who've been there chirping at you about what you're not doing right, because you can't possibly know the whole range of considerations on any given day unless you're in.

When I have advice, I know the people in the administration quite well enough to pass it on and I do.

BLITZER: Do you -- do you speak with the secretary of State, Hillary Clinton?

RICE: I do from time to time. But again, when you're in those -- those positions, the opinions and the advice of people who aren't following the issue on a daily basis is somewhat limited.

But whenever Secretary Clinton is needed, she -- she will call me.

(END VIDEOTAPE)

BLITZER: All right. Much more of the interview coming up with Condoleezza Rice. She has a new book about her life growing up in the segregated South, the challenges that she and her family faced. Stand by to hear her tell us several stories, including one story where she has to use a bad -- a very bad word. I'll leave it at that -- an especially powerful bad word to make her point. You'll hear it here. That's coming up later.

At least 10 more rescued miners are going home from the hospital in Chile today. Three were released yesterday and welcomed with joyous -- joyous homecomings. Officials hope that all 33 men will be home by Sunday.

More stories, though, are emerging about their 69 days underground.

Brian Todd is here in THE SITUATION ROOM and he's been learning more about what's going on. What are you learning -- Brian?

BRIAN TODD, CNN CORRESPONDENT: Wolf, new details coming out now about the fears and tensions these men experienced while they were trapped. We're now learning the harmony they have displayed to the public may not have always been there during their time underground.

(BEGIN VIDEOTAPE)

TODD: (voice-over): Above and below ground, they've been the picture of unity. By many accounts, the 33 Chilean miners worked through their fears and disagreements with determination. In a just released portion of an interview, miner Richard Villarreal talks about that.

(BEGIN VIDEO CLIP)

RICHARD VILLARREAL, RESCUED MINER (through translator): We just had to communicate and talk things out. We had problems. We just talked them out.

(END VIDEO CLIP)

TODD: Or, depending on who you listen to, they duked it out. One miner who left the mine before the collapse later got a letter from a trapped miner. The miner who had left told the "Washington Post" there were fistfights, but he wouldn't say what they were about. Other miners and their relatives told "The Post" the men made a deal to keep their discord secret.

If there's friction from here on, it almost most certainly won't be secret. The miners say they agreed to equally divide all their earnings from interviews, movie and book deals and endorsements. But one miner has reportedly been offered money to publish a diary he kept. And because he was the sole author, he may not share the proceeds.

I spoke with Dan Baum, a PR and marketing specialist who handles major global brands.

(on camera): From the perspective of someone trying to manage them going forward and the various deals, you have 33 clients.

How hard is it going to be to keep them unified?

DAN BAUM, CBC PUBLIC RELATIONS: It's a juggling act. It's going to be extremely hard and I'd say it's going to be near impossible to keep the miners in line now that they're out of the mine.

TODD: Why?

BAUM: You have 33 people. There's going to be money, family, fortune coming at them from every angle. And if they don't watch it, it's likely to rip them apart.

(END VIDEO TAPE) TODD: Baum says if he represented the miners, he'd warn them whatever happens, you cannot buy your reputation back. He says while the public was very sympathetic during their 60 plus days underground, 60 days from now, if all they care about is money and fortune, their reputations could very well sour -- Wolf.

BLITZER: But there were also examples where they displayed extraordinary unity and discipline.

TODD: They did. And we heard this from Richard Villarreal, the miner who we had in our piece. He said that in the two weeks between the time that the mine caved in and the time they were discovered, food ran so low, that they had to agree to ration it.

Take a look at this bottle cap. He says that they actually each had about a half a spoonful of tuna fish to eat per day. That's about three quarters the amount that could fit in this bottle cap. Imagine that -- that much tuna fish per day for more than two weeks.

They agreed to it. They stuck to it. They had discipline. And it saved their lives.

BLITZER: Yes. And some of them lost 20 or 30 pounds --

TODD: They did.

BLITZER: -- in the process of those 69 days, as well.

TODD: But they made it through.

BLITZER: Thanks very much, Brian, for that.

TODD: Right.

BLITZER: Imagine finding a GPS secretly attached to your car. Ahead, one man's discovery -- surprising discovery that the FBI was tracking his every move.

And I'll ask the former president of Pakistan, General Pervez Musharraf, if his country's nuclear arsenal is really safe.

And we'll show you an al Qaeda magazine online, designed to recruit Americans to kill Americans.

(COMMERCIAL BREAK)

BLITZER: In Kentucky right now, some predict the U.S. Senate race could help unleash a Tea Party tidal wave. Eighteen days before the election, check out the stats on the race between Republican Rand Paul and Democrat Jack Conway.

Paul is a Tea Party favorite, with a libertarian streak, who beat the GOP establishment candidate back in the Republican primary. He's an eye doctor, the son of a congressman and former presidential candidate. That would be Ron Paul of Texas. Conway is the Kentucky attorney general. He narrowly lost his race for Congress back in 2002. He and his father, by the way, own a racehorse that came in eighth in the Kentucky Derby this year.

And joining us now, the Democratic candidate for Senate from the state of Kentucky, the attorney general of Kentucky, Jack Conway.

Mr. Conway, thanks very much for coming in.

JACK CONWAY (D), KENTUCKY SENATE CANDIDATE: Oh, it's my pleasure to be on again, Wolf.

BLITZER: This is a -- a really close race. The most recent poll I've seen in Kentucky has Rand Paul at 43 percent, you at 40 percent, a 3.5 percent margin of error. It could go either way right now.

CONWAY: Yes.

BLITZER: His biggest argument against you is that you would simply be a rubber stamp for President Obama and the Democratic leadership, Harry Reid and others.

Here's what he recently said.

Listen to this.

(BEGIN VIDEO CLIP FROM OCTOBER 11, 2010)

RAND PAUL (R), KENTUCKY SENATE CANDIDATE: He doesn't want to run and talk about President Obama. He doesn't want to talk about his support for President Obama and all of President Obama's initiatives. That's what this election is all about and he's trying to run away from it.

(END VIDEO CLIP)

BLITZER: All right.

Is that true?

CONWAY: No, sir, it's not true. I'm an independent-minded Kentucky Democrat.

I'm going to put the people of Kentucky first. And unlike Rand Paul, I -- you know, I get this state. And there's a real clear choice in this election between someone like me, who understands that drugs are a pressing issue in Kentucky, when Rand Paul said drugs aren't a pressing issue. He's called for a $2,000 deductible on Medicare. Our seniors here in Kentucky on fixed incomes can't -- can't afford that. He's called Social Security a Ponzi scheme that ought to be privatized. And he says we need no federal mine safety laws.

I mean, it's an issue of who gets Kentucky and who doesn't. And I'm someone that will stand up for Kentucky, even if it means standing up to my own party. BLITZER: All right, so tell us where you disagree with President Obama.

CONWAY: Well, I disagree with him for several key places.

I disagree with him on cap and trade, for example. I think cap and trade would really hurt the coal industry here in Kentucky. And so, I disagree with that particular agenda.

I've come out and said, you know what, in a time of recession like we're in right now, it's no time to be raising taxes. So we ought to extend the Bush tax cuts for some period in time.

I disagreed with President Obama --

BLITZER: For everyone, including those making more than $250,000.

CONWAY: For everyone. Now time to be raising taxes right now.

And then, for example, in Afghanistan, I questioned whether we should have surged because I didn't hear enough about Pakistan. Pakistan has the most deadly combination of nuclear material and terrorists in the world, and we haven't talked enough about the regional solution that's going to be put in place once the troops leave.

So I've broken with him in several key areas.

BLITZER: How do you feel about the health care law?

CONWAY: I would've supported it. I'm on record as saying that I supported the health care bill.

There's a big difference between Rand Paul and me on this issue as well. I want to improve the health care bill and he says he wants to repeal it. He's come out for a $2,000 deductible. He said we need a system of health care in this country like we had before World War II. I really couldn't believe that statement when I heard it.

He's come out and said we don't need federal funding for breast cancer research, an issue that got our first lady Jane Beshear so mad that she had a conference call last week on the issue.

And what I think we need to do is allow for Medicare bulk purchasing so that we can negotiate for prescription prices. That saves about $200 billion and that's a big improvement we can make right away.

BLITZER: What are some specific proposals you have for creating jobs, which is issue number one right now?

CONWAY: It is absolutely issue number one, Wolf. We've lost 100,000 manufacturing jobs in Kentucky in the last decade alone.

I'm calling for something called a hometown tax credit. A lot of people in Kentucky are concerned that the government is just growing and it's not creating any jobs. So what we have to do is give incentives, incentives to the private sector to create jobs.

So what I would do is propose a tax credit from small and medium- sized businesses. It's a 20 percent tax credit, I would cap it at $30 billion and pay for it by closing down offshore tax loopholes, and estimates are that it would create three-quarters of a million jobs nationwide. I think it's a commonsense plan

I also think that we need to make certain we get the small and community banks lending once again to the small and medium-sized businesses. There's a lot of uncertainty out there and the government bailed out a lot of big banks on Wall Street, but boy, the regulators have come down awfully, awfully hard on our small and community banks in places like Kentucky.

BLITZER: The budget deficit keeps growing and growing beyond a trillion dollars a year. The national debt now is over $13 trillion and counting.

Where would you cut federal spending?

CONWAY: We've outlined on my website at jackconway.org five specific plans. Rand Paul talks and says he's going to balance the entire federal budget next year, he's just not going to tell anyone how he's going to do it this year and that's a secret budget plan that no one here in Kentucky is buying.

What I'm going to do it, and I mentioned the Medicare bulk purchasing, that would save about $200 billion. I think there's about $100 billion in Medicare fraud. I understand that issue because I've taken on Medicaid fraud as an attorney general, and our Medicaid fraud collections here in Kentucky are up about 600 percent.

I think we need to close down the offshore tax loopholes and the laws that allow for tax havens and the tax treatment that incents companies to ship our jobs overseas to places like China. That's $130 billion in savings.

We need to get back to the pay as you go system that we had in the Clinton years when Clinton produced balanced budgets. And I would have supported the Senator Conrad-Senator Gregg Bipartisan Debt Commission to come back to Congress with some recommendations.

BLITZER: We've got to leave it there. Jack Conway, the attorney general of Kentucky, the Democratic candidate, thanks very much for coming in. Good luck.

CONWAY: Great to be with you, Wolf.

BLITZER: We've repeatedly by the way invited Jack Conway's opponent, Rand Paul, to join us here in THE SITUATION ROOM as well. Unfortunately, he's declined our invitations since his last interview with us back in May.

Will the millions of Americans on Social Security checks see an increase in their cost of living benefits next year? Standby, we have new information coming in from the federal government.

And a Tea Party favorite and GOP Senate candidate has a brutal message for her opponent. Why she's telling the Senate Majority Leader Harry Reid, to, quote, "Man up."

(COMMERCIAL BREAK)

BLITZER: Fredricka Whitfield is monitoring some of the other stories in THE SITUATION ROOM right now, including the latest from the Defense Department in "Don't Ask, Don't Tell."

Fred, what's going on?

FREDRICKA WHITFIELD, CNN CORRESPONDENT: That's right, Wolf, the U.S. military is telling troops to be careful when it comes to the "Don't Ask, Don't Tell" policy.

A recent court injunction has stopped the military policy of barring known gay troops from service. The Defense Department, rather, said it will follow the injunction but that it would continue "Don't Ask, Don't Tell" if an appeals court cancels the injunction. For that reason, it's telling service members that altering their personal conduct may not be a good idea.

For the second year in a row, there will be no cost of living increase in 2011 for millions of Americans on Social Security. Due to the recession, inflation has been low for the past two years, and the government says prices are up only slightly over last year. More than 58 million seniors and others receive Social Security checks.

And a federal judge is sending rapper T.I. back to prison for 11 months for violating his probation with the drug arrest. T.I., whose real name is Clifford Harris, said he, quote, "screwed up big time." He begged the judge for mercy saying he needs help for his drug addiction, not more time in prison. But the judge said T.I. had his limit of second chances. His sentence begins in two weeks.

And some possible activity in one of the nation's most famous cold cases, the 1996 Christmas murder of 6-year-old JonBenet Ramsey in her home. Police in Boulder, Colorado say they want to speak to the girl's older brother, Burke. But a family lawyer says Ramsey isn't talking, that he's already answered investigators' questions. Police have cleared the family in the murder, but no one has ever been arrested -- Wolf.

BLITZER: A great mystery. A lot of people would be interested to know who actually murdered JonBenet Ramsey.

Thanks very much, Fred.

WHITFIELD: OK.

BLITZER: All right, we're just getting this into THE SITUATION ROOM from sources down in Chile, specifically a doctor with knowledge of the treatment for those 33 miners. We have now been told that 31 of the 33 miners have been released from the hospital. Two others are still in the hospital, but will be moved to another facility shortly. But 31 of the 33 have been released and have been allowed to go back home. That's terrific, terrific news for those 31 miners. The two others we're told earlier had relatively minor ailments and problems. Hopefully, they'll be released soon as well. Excellent, excellent news for the miners.

It's a how-to guide for would-be terrorists. Standby to see how al Qaeda is now recruiting Americans to kill Americans with a new online magazine.

And there's something missing from NASA's plan to add one more shuttle flight before the program is scrapped. And it's something very important, namely money.

(COMMERCIAL BREAK)

BLITZER: Here in THE SITUATION ROOM, happening now, it's one man's surprising discovery -- a GPS device secretly attached to his car. Could the FBI be keeping tabs on you right now without your knowing it?

Plus, more of my interview with the former Secretary of State Condoleezza Rice. She's opening up about the painful, oftentimes wrenching journey from the segregated south all to way to the White House.

I'm Wolf Blitzer. You're in THE SITUATION ROOM.

The number one Democrat in the U.S. Senate gets told by his Republicans opponent to, quote, "man up." It's not the kind of thing Senator Harry Reid usually hears on Capitol Hill, but he got an earful from his rival, the Tea Party-favorite Sharron Angle in their one and only debate.

Listen to Sharron Angle slap at Reid in Nevada last night urging Reid to do something about the looming crisis in Social Security.

(BEGIN VIDEO CLIP)

SHARRON ANGLE (R), NEVADA SENATE CANDIDATE: Man up, Harry Reid. You need to understand that we have a problem with Social Security. That problem was created because of government taking that money out of the Social Security trust fund.

In 1990, you said it was stealing to use Social Security for anything but Social Security. And then you voted to take that Social Security money into the general fund where it would be generally used for generally anything.

When you did that, you left IOUs there, special Treasury bonds that are kept in a filing cabinet in Parkersburg, West Virginia.

(END VIDEO CLIP)

BLITZER: Hear a little bit about what Senator Reid had to say about the Social Security problem.

(BEGIN VIDEO CLIP)

SEN. HARRY REID (D-NV), MAJORITY LEADER: She talks about and has for years talked about getting rid of Social Security, for years. This isn't something just during the primary. Now she's trying to change her tune.

I heard her say, why don't we have a program like we had in Chile or England. Those two countries ruined their pensions. They went broke.

You can't put the moneys into the stock market. Look what would have happened if we put this money in the stock market as was suggested by President Bush. This is an extreme idea and it's not good. It will destroy Social Security.

(END VIDEO CLIP)

BLITZER: Let's bring in our senior political analyst, Gloria Borger and our national political correspondent, Jessica Yellin. You were in Las Vegas for the debate last night. Was this the Sharron Angle her campaign wanted to show?

JESSICA YELLIN, CNN NATIONAL POLITICAL CORRESPONDENT: Actually Wolf yes. It's true that she stumbled throughout the debate. She often seemed to get lost in her own arguments and forget facts. Her team thinks none of that really matters. They say voters understand in their own words she's not a professional politician and forgive her not polished debate performance. They wanted her to be likable, relatable, deeply held beliefs, and professional enough to get the job done. As national Republicans tell me, Wolf, they think all she needed to do was give people who hate Harry Reid an excuse to vote against him. And by that standard, they think she met it.

BLITZER: Gloria, in the past few days, we've seen two women, both Republicans, both tea party favorites in these kind of debates, Christine O'Donnell in Delaware the other night. We were there for that. Any similarities between what Christine O'Donnell did and Sharron Angle?

GLORIA BORGER, CNN SENIOR POLITICAL ANALYST: It's interesting. Because in both of these debates, the women were the aggressors. You heard Sharron Angle say man up to the Senate majority leader. And O'Donnell came out punching as well at Chris Coons.

What's interesting is that the men don't know how to react. They don't want to attack women. And Harry Reid missed some opportunities. I don't know if Jess would agree, I think he kind of held back. Chris Coons on the other hand had a lot of disdain for O'Donnell and that could backfire. He wasn't quite clear how to deal with her.

So I think in a way, he demeaned her. And that may work against him. These squabbles we see between men and women now, it's interesting, the women are doing the punching. BLITZER: Some of this -- some Democrats out there, Jessica, they think Harry Reid could have done a better job. That's what they've been murmuring over the past few hours.

YELLIN: He's Harry Reid, Wolf. What I mean by that is he's not a charismatic guy. He's not particularly articulate. He's just not a good public speaker. As Gloria points out, absolutely, he was in an awkward position where he didn't want to seem to be bullying her. I think he pulled punches. The bottom line for his team is he didn't have any major Harry Reid gaffes, so there's no game-changing bad moment, which means that they can now leave the rest of this campaign up to the part of the operation that works so well -- his ground game and just focus on getting out the vote.

BLITZER: You know, I was going to say the polls are so close right now, Gloria. A debate like this could make a difference for people who were undecided. Maybe it could move things.

BORGER: It probably wasn't a game changer because if you -- if you like Harry Reid, you probably still like Harry Reid. You may think he could have done a better job in the debate. And if you like her, you probably like her. Same thing in Delaware, of course. There's such a large difference in the polls that the Democrat, Chris Coons has really anticipated to win.

But, again, I think it's interesting, Wolf, when you see these kinds of face-offs, the men are a little unclear about how to react to the women. I know Coons got some advice from the vice president. The vice president who debated Sarah Palin said to him, look, you know, you have to be careful not to attack her. But the vice president said, I missed some opportunities with Sarah Palin that I might have been able to take. Chris Coons tried to do it. I'm not sure he succeeded.

BLITZER: The vice president got elected in that election.

BORGER: He did.

BLITZER: Chris Coons is way ahead of the polls right now. Harry Reid not so much. It's going to be a close race in Nevada. Thanks, guys, thanks very much. Jessica, don't go too far away, another report from you coming up.

This note to the viewers, we'll replay the Senate debate that I co-moderated this week. The replay will air tomorrow, Saturday, right here on CNN from 4:00 to 6:00 p.m. eastern. Set your DVR if you want to see it or if you want to see it again.

There's a new twist in the search for an American reportedly shot in Mexico. Are investigators being intimidated by drug lords?

And Californians prepare to vote on legalizing marijuana. Could they have a say in easing the drug war at the border?

(COMMERCIAL BREAK) BLITZER: Fredricka Whitfield is monitoring some of the top stories in THE SITUATION ROOM right now, including some eye-popping deficit numbers from the U.S. government.

Fred, what's going on?

WHITFIELD: That's right. Hello again Wolf. Hello, everyone.

The U.S. wrapped up an almost $1.3 trillion deficit for fiscal year 2010, that's the second year in a row that the deficit topped $1 trillion. But it's actually down from the record $1.4 trillion deficit last year. The slight decline is due to somewhat higher tax revenue and slightly less spending.

And Russia will help Venezuela build a nuclear power station. President Dimitri Medvedev and Hugo Chavez signed a formal agreement in Moscow today. And it's on the path to developing new solar and wind energy. It's the latest example of closer ties between the two countries when it comes to energy trade and defense.

In Hungary, residents evacuated because of that toxic sludge are now being allowed back home. Construction crews have finished work on an emergency dam in case there's another toxic spill. The sludge from an aluminum plant covered three towns. It killed nine people and injured 100.

And Mexican officials have temporarily suspended their search for a missing American they say they want to better assess their strategies. David Hartley was reportedly shot to death September 30 on Falcon Lake. Investigators believe the gunmen are linked to a Mexican drug gang. The lead Mexican investigator on this case was beheaded this week. Grisly stuff, Wolf.

BLITZER: What a grisly story indeed. All right. Thanks very much Fred.

Is the FBI secretly tracking you? We're going to tell you about a sophisticated device now being used to monitor potential suspects.

Plus, from the segregated south all the way to the white house, the former secretary of state Condoleezza Rice. She's now opening up about the tremendous pain she and her family endured along the way.

(COMMERCIAL BREAK)

BLITZER: The FBI is being criticized for using a controversial sophisticated device to monitor potential suspects. So what if the federal government is secretly tracking you? Let's bring back Brian Todd who's following the story for us, Brian.

TODD: Wolf, a controversial court ruling recently in the western U.S. gave law enforcement new leeway to track suspects but it's added to a long-running debate on how far public security can go before it becomes big brother. One man in California is complaining about FBI surveillance of him using GPS.

(BEGIN VIDEOTAPE)

TODD (voice-over): Some of them aren't much bigger than a soda can. In some states, law enforcement can stick a GPS on your car while it's on your driveway and track almost every move you make.

In Yasir Afifi's case, it's not clear where his car was when he says FBI agents recently placed a GPS on it. Afifi, a 20 year old computer salesman in Santa Clara, California removed the device when he found it. It wasn't long before he says FBI agents approached him asking pointed questions.

YASIR AFIIFI, GPS PLACED ON CAR: Have you ever been to Yemen for any type of training. No.

TODD: The agents asked for their GPS back. Afifi has been not accused of wrongdoing. Contacted by CNN, the FBI wouldn't comment on the case. But a spokesman said they don't need a warrant to track a vehicle with GPS when it's in a public space. How watchful an eye can this device keep on you?

Where's the best place of that.

MIKE O'CONNELL, O'CONNELL & ASSOCIATES, INC.: The frame of the car or the truck.

TODD: I recently tested a tracker on our CNN vehicle with veteran private investigator Mike O'Connell. He's been using them for years mostly to track spouses suspected of infidelity. His GPS may not even have the same capabilities as those used by law enforcement.

Mike is going to show me how sophisticated this device is. He's going to track me from his office right up there as I get in the car and drive away. I've got Mike on the phone here.

He follows me at every turn while I question him on speakerphone.

How far can you track me on this thing, Mike?

O'CONNELL I can track you throughout the country on this device. Also, if you were to get on some sort of a boat or yacht and went to an island, it would continue tracking you.

TODD: For how long can you track someone on this device?

O'CONNELL: This device has a battery for two weeks before I have to recharge it.

(END VIDEOTAPE)

TODD: Recently, one defendant objected to one being placed on his car in his driveway saying it was an invasion of privacy and unreasonable search. Officials didn't have a warrant. That's why he complained. But the ninth circuit court of appeals said an individual does not necessary have a reasonable expectation of privacy in the driveway.

BLITZER: Other courts have disagreed with that decision.

TODD: Federal courts in D.C. and state Supreme Courts in Massachusetts and New York have said that officers do have to have a warrant to place a GPS on your car while it's in your driveway. This could be taken up by the supreme court of the U.S.

BLITZER: A lot of people are watching this closely. Brian, good work. Thank you.

Bill Clinton is getting ready to team up with a former rival he's had nasty feuds with over the years. We'll explain.

And will the last shuttle flight get off of the ground? Stand by for questions about extending the mission and the cash needed to pay for it.

(COMMERCIAL BREAK)

BLITZER: American support for the war in Afghanistan has now reached a new low. But there are serious concerns in the region as well about U.S. plans to eventually begin withdrawing its forces, perhaps as early as next summer. The ramifications are enormous. I spoke about that and we -- and much more with the former president of Pakistan, General Pervez Musharraf.

(BEGIN VIDEOTAPE)

PERVEZ MUSHARRAF, FORMER PAKISTANI PRESIDENT: You take on the plan and the -- and the statements coming from the United States that you are going to quit American forces and coalition forces are going to quit in 2011. Then I imagine they ought to be some thinking in Afghanistan and in Pakistan on how Pakistan needs to handle the situation after your withdrawal. Especially in case politically the stability has not been shored up in Afghanistan before you quit. These are statements which cause a lot of turbulence in decision making on the Pakistan side or even in Afghanistan, maybe.

BLITZER: Why are these NATO convoys bringing supplies to U.S. and other NATO troops in Afghanistan being attacked and being held up along the border with Pakistan? Why are Pakistani authorities allowing this to happen?

MUSHARRAF: Well, they are not allowing that to happen, but they do happen. And this situation has been aggravated by U.S. attacks across the border. There were drone attacks which were very unpopular, and they were creating a lot of problems in the public, and the masses in Pakistan, but now it is aggravated by helicopter attacks across the border. These are incursions against the sovereignty of Pakistan are not acceptable to the people, and they cause a lot of anger in Pakistan. So, it is because of these probably that all such actions have been increased against the NATO forces.

BLITZER: Are you ready to announce that you are going the go become to Pakistan and run for the presidency?

MUSHARRAF: Well, no. I will go back to Pakistan and I have entered politics. I have announced my party on the first of October from London. But running for the presidency is that we don't have a presidential system, but a parliamentary system. First, we have to bring in the elections and then only one has to decide whether they are running for the prime ministership or the presidency.

BLITZER: But you have made no secret that you would like once again to be the president of Pakistan, is that right?

MUSHARRAF: Well, one has to take many considerations in mind. The government is not run by the president in Pakistan, it is the prime minister who is the chief executive and whether ones want to run the government oneself or a person who can run the government well, and you are in some position to advise and oversee the running of the government needs to be decided later. First off, first s to win in the election, and then only can we be thinking of greater ideals.

BLITZER: How worried should the world be about the safety and security of Pakistan's nuclear arsenal?

MUSHARRAF: Well, Pakistan's nuclear arsenal, I think are really safe, and I very proudly take the credit for that. The only possibility of their falling into wrong hands, terrorist hands at all are extremist religious organization wins in the election and runs Pakistan then Pakistan is theirs, but it is not likely at all, because now the religious setup has only got about 3% of the vote in Pakistan. And if it at all, a terrorist organization has to grab these from the army and fight the army, and the army strategic force command, so I really feel that they are very safe.

BLITZER: Finally, the situation involving the floods in Pakistan, and it has been a horrendous situation and millions of people have been uprooted from their homes and a lot of money has come in. Do you feel that money is actually getting to the right places and helping these people?

MUSHARRAF: Well, I think that unfortunately, the money is not getting to the government as much as is required. I am told that the requirement is very far greater than all tsunami and Katrina or the earthquake that we suffered. Yes, I can imagine so, because it affects 20 million people.

BLITZER: And we wish only the best for the people of Pakistan and this has been a horrible, horrible tragedy that has unfold and the pictures are devastating, we hope, we hope it improves soon. Mr. President, good luck to you and good luck to all of the people of Pakistan and thank you very much for joining us.

MUSHARRAF: Thank you very much, Wolf. It was a pleasure.

(END VIDEOTAPE)

BLITZER: It is a brazen move by al Qaeda terrorists to recruit and train Americans to kill other Americans. You will want to see what is available online right now.

We will show you how one angry man is dealing with the foreclosure issue, the foreclosure on his own home.

(COMMERCIAL BREAK)

BLITZER: Here is a look at some Hot Shots.

In Paris, high school students take to the streets to protest government pension reform.

And in Afghanistan, soldiers kneel in high grass to avoid buried bombs that have plagued troops near Kandahar.

And in India Hindu women dance by floral displays.

And in France, check it out, a dog dances on his hind legs while playing in a fountain.

Hot shots, pictures worth a thousand words.

This is a new issue out of an online magazine out like none other. It's called "Inspire" and it's full of articles and tips designed to inspire would be terrorists. We are quoting directly from the magazine to give the viewers a sense of the specific threat being made and at the same time we are not giving information that al Qaeda and its affiliates don't already know about it. CNN's Kate Bolduan is looking into the story for us. Kate?

KATE BOLDUAN, CNN CORRESPONDENT: Well, wonderful creative imagery promoting a deadly message, chilling terror tips on how to wage violent jihad. The 74 page 2nd edition of the al Qaeda online magazine called "Inspire" aims to recruit Americans to kill Americans. The ultimate mowing machine reads the title of one article suggesting how to carry out individual attacks. "The idea is to use a pickup truck as a mowing machine and not the mow grass but to mow down the enemies of Allah."

TOM KEAN, FORMER CHAIRMAN, 9/11 COMMISSION: What al Qaeda are looking for right now is not the traditional recruits that they used to do in places like Pakistan and other places in the middle east. That's a very dangerous theater for us, and particularly if they have an American passport.

BOLDUAN: Another article takes direct aim at the nation's capitol. "A random hit at a crowded restaurant in Washington, D.C. at lunch hour for example might end up knocking out a few government employees." Intelligence officials believe that Samir Khan, an American citizen now living in Yemen, is a driving force behind the publication and pens his new own essay in the new edition entitled "I am proud to be a traitor to America." And Fran Townsend who is a former homeland security adviser to President Bush says while the magazine's message is not new, the way they are getting it across is.

So what is different here with this magazine?

FRANCES FRAGOS TOWNSEND, CNN NATIONAL SECURITY CONTRIBUTOR: These are men who have either been born here or lived in the United States who speak colloquial English who can appeal to Americans to join their cause. They know how to persuade them and speak to them. And they know how to really inspire them to become a part of it.

BOLDUAN: And top U.S. officials like FBI director Robert Mueller says that the internet acts as an accelerant for terrorist activity.

ROBERT MUELLER, FBI DIRECTOR: Consider the impact of someone like the American born Yemeni based extremist, and ten years ago Awlaki would have operated in relative obscurity, but today on the internet, he has unlimited reach to individuals around the world, including those here at home.

BOLDUAN: A U.S. counterterrorism official tells CNN they are aware of the publication and saying that it aims at provoking the murder of innocents and hardly lives up to the name "Inspire."

Kate Bolduan, CNN, Washington.

(END VIDEOTAPE)