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Elizabeth Edwards 1949-2010; Dems Angry About Tax Cut Deal; What Tax Deal Will Cost Everyone; President Obama Vs. President Bush; WikiLeaks Founder Jailed; Huckabee Seeks Palin-Like Buzz

Aired December 7, 2010 - 17:00   ET


WOLF BLITZER, HOST: And we want to continue the breaking news here in THE SITUATION ROOM -- the sad news that we have to report.

According to a family spokesman, Elizabeth Edwards has passed away. Only yesterday, we learned she was very, very sick in -- in the sense that there was no more treatment, that the family had gathered around her, including her estranged husband, the former senator, John Edwards. But now, we have just learned in the last few minutes that Elizabeth Edwards, 61 years old, has passed away.

Jessica Yellin is here in THE SITUATION ROOM with us.

We've all covered her. I spent a lot of time with her when he -- when her husband was running for president of the United States, when he was a vice presidential candidate. She was an outstanding woman in her own right. And she -- she really fought this cancer very, very hard.

JESSICA YELLIN, CNN NATIONAL POLITICAL CORRESPONDENT: And that is, Wolf, what she was best known for, in some ways, was her strength and her courage, fighting this and facing so many of the tragedies that cropped up in her life, not just this, but, of course, the death of her teenaged son, Wade, in the mid-'90s.

I spoke with a family friend earlier today who said that Mrs. Edwards was comfortable during the day. She was surrounded by her children with her husband, from whom she had separated, John Edwards, at least earlier today. And that this was significant in that she had -- this was a -- a cancer she attacked aggressively. She said she always wanted the most aggressive treatment at every step of the way.

So the fact that she had acknowledged that this couldn't be addressed any further was a momentous change in her sort of acceptance of this cancer and the end for her, and that she had come to a place of peace, both with the cancer and with her relationship with her husband, too, in some ways -- Wolf.

BLITZER: And his infidelity, which has been such a painful part of the last year, year-and-a-half of her life, when she came to terms with what had occurred.

YELLIN: That's right, because not only was it a personal marriage, but it was a public marriage. So often when you were on the campaign trail covering them, both in 2004, when he was on the vice president -- on the ticket as the vice president, and again in 2008, their bond was a key part of his appeal.

He would often come on stage and say she is the love of my life and her love proves that I am a -- one -- a good person, in a way. She was his key validator. And she was by his side, a key companion during that 2008 campaign. And an important adviser on the campaign, sometimes a controversial figure with staffers. And so that's one of the reasons it was all the more shocking when it came out that he had had this affair, that he had lied to her about it, that he had fathered a child with someone else. And she, of course, wrote about that in this book, "Resilience," where she expressed her rage.

And as I say, family and friends say that she has sort of come to peace with it, having her there for both herself and for her children.

BLITZER: It was November 2004 when she first alerted all of us that she had been diagnosed with breast cancer. And then it was in March of 2007 when she alerted all of us that it had recurred despite the treatment, the aggressive treatment, that she -- she got right after the initial diagnosis. So we've all sort of gone through her breast cancer, her treatment, her life with her. And as you point out, so much of the past year, year-and-a-half, two years has been in the tabloids, which must have been so painful for her and for her family.

YELLIN: That's right. I mean the recent news and the drama, the saga, has been exceptionally painful, no doubt, for them. But, you know, when you talk to the people who are close to the Edwardses, they say that they want everybody to remember, as she is passing, that she was also an advocate for health care reform, that when she learned that she had cancer, instead of going private, she went public, trying to educate people and push for an expansion of our health care program. And that she was more than a candidate's wife. She was a trained lawyer. She was an accomplished professional in her own right. She had clerked. She had served in a law firm, and them, of course a key adviser. And she had, after suffering the loss of her son -- she had a daughter, Kate -- she went in to have two more children very late in life. She's a woman who didn't give up easily.


And John King is joining us right now -- John, I understand you have the statement that has just been released by the family?

JOHN KING, HOST, "JOHN KING USA": I do, Wolf. The statement just released from Jennifer Palmieri, who you all know was the spokeswoman for the Edwards campaign. She is a long time friend of Elizabeth Edwards and she is at the family residence in Chapel Hill.

She told me on the telephone that Mrs. (ph) Edwards passed at 10:15 this morning, surrounded by her family.

I want to read, Wolf, this statement just released by the Edwards family: " Today we have lost the comfort of Elizabeth's presence, but she remains the heart of this family. We love her and will never know anyone more inspiring or full of life. On behalf of Elizabeth, we want to express our gratitude to the thousands of kindred spirits who moved and inspired her along the way. Your support and prayers touched our entire family."

And the statement goes on to say, Wolf, in lieu of flowers, donations may be made to the Wade Edwards Foundation, which benefits the Wade Edwards Learning Lab. That foundation, of course, set up, as Jessica Yellin was just talking about it moments ago, when the Edwards' lost their son some time ago -- Wolf.

BLITZER: You know, it -- it's hard to believe, John, it -- it moved so quickly, because we knew, obviously, for the last several years that she suffered from breast cancer, she had aggressive treatment and that -- but only yesterday did they tell us -- did they alert us through Facebook that they were stopping any of the treatment, that it was -- it was no longer necessary. I just assumed it would be a matter of weeks. But then 24 hours later, to have to report that she's passed away, makes it so very, very sad. At least she had her loved ones along her side.

KING: It does make it sad, the suddenness to us. I was told by a family friend just yesterday the expectation was that she might last a matter of weeks. Her doctors told her last week, Wolf, that they believed it was just futile, not productive anymore to try to treat the cancer. They believed that it had spread to the point where treatments were counter-productive and what they were doing is giving her treatment for some of the symptoms and the side effects, but no longer treatment for the cancer.

And I should note, when I spoke to the family friend just yesterday, she said that Elizabeth was in remarkably good spirits, of course; that she had taken a lot of time in react years to prepare for this sad moment and that she was taking comfort in that her entire family, her brother, her sister, her nephews and nieces, in addition to her own children and Senator Edwards were there, as well, along with some other family friends.

And the -- the conversation last night was the expectations that we would be, you know, watching this for several days, if not a few weeks. But at 10:15 a.m. this morning, I am told, she passed away.

BLITZER: Yes. And it moved very, very quickly at the very end.

Gloria Borger is here. Those of us who knew Elizabeth Edwards, interviewed her on many occasions, she was a -- a very distinguished woman in her own right...


BLITZER: -- a professor, an attorney, an author. She had a lot of accomplishments.

BORGER: You know, as Jessica was just saying, and became quite an advocate for health care reform in the later years. I remember her, really, as kind of redefining the role of political wife, spouse. You know, we had Hillary Clinton, who was very strong; and Elizabeth Edwards, who was very strong.

And when the senator ran for the presidency the first time, there was really a sense that she was as much a part of that team as -- as he was. There were folks at that time talking about, you know, Elizabeth Edwards ought to be the candidate, she ought to be the one.

And that's why it was so stunning to the American public, I think, and to those of us who covered her, when the whole Edwards affair came out, because she had been such an integral part of his political life and that unfolded so publicly. And then she became another kind of public figure after that occurred, speaking about it quite openly, speaking about her family, writing about it.

So she's somebody who went from being sort of a political spouse and -- and a political advocate to being somebody who spoke for women.

YELLIN: Women.

BORGER: Yes, really.

YELLIN: That's right. She often had a message that sort of said don't be a victim.

BORGER: Right.

YELLIN: You know, this happened to me, but it doesn't make me a victim and it's not my fault. And if it's happened to you, it's not your fault. And it's one of the reasons she's connected so well with the public, is because she was sort of -- I hate using a fake word like relatable, but she was relatable. She would talk about how hard it is to diet on the campaign trail and always struggled with her weight.

BORGER: Right.

YELLIN: Or the fact that her husband always looked so young and she was aging and she was a little older than him.

And so she was sort of honest and up front about these very real things that so many people relate to but you rarely hear political figures talk about. It's part of what made her so well liked.

BLITZER: Yes. I mean I got to know her after her husband, John Edwards, became a young senator from North Carolina. They came to Washington. And I interviewed her on many occasions, especially when he was running as a vice presidential candidate.

But this interview I remember, back in 2007.

I want to play a little clip, because we can remember Elizabeth Edwards with these words.


BLITZER: This is a really emotional article that -- that is in the "People" magazine. And -- and in it, one of the most emotional parts which I read deals with the letter you're writing to your kids.

Tell us a little bit about this.

ELIZABETH EDWARDS: This is actually something I was write -- I've been writing probably nearly 20 years now. I started writing it after the movie, "Terms of Endearment," where the mother knew she was dying and wrote a letter to her children. And I thought, that's a really great idea. You don't know, you know, when your time is going to come and whether you're going to have any warning. And it would be a great idea to pass on the things you thought were important to them.

So I started writing it then, long before I knew, of course, of any -- any cancer.

And it just tells them the things I hope that they'll know about grow -- about growing up. I know they'd have their father as a great moral guide, but, of course, there's no mother who doesn't want to get her two cents in.

BLITZER: And you're giving advice about people they should marry, what kind of church they should go to...


BLITZER: -- simple things and -- and really, really serious things.

EDWARDS: Exactly.

BLITZER: And -- and your little kids are, what, nine and seven.

EDWARDS: Nine and seven.

BLITZER: The little ones. You have an older daughter who's 25.

EDWARDS: Right. And these were actually written for our older children. They were a little bit older than this, I think, maybe, but -- when I started writing it. But I -- or maybe not. But I -- but they -- I wrote it for children, you know, Kate now 25. So it may come in handy for the younger ones and -- and maybe she'll read it, too.

BLITZER: And I was really happy to read in this "People" magazine article that the new treatment you're going through is not as terribly debilitating as the other treatment, when you were first diagnosed with breast cancer.

EDWARDS: No, I still have my hair, so that's a good -- that's a good sign. And I'm not -- it doesn't exhaust me in any way. So that's always great. It means I can campaign.

BLITZER: And the pills are really, really little.

EDWARDS: Yes, they are. They're very, very tiny, I was saying. And they're yellow, actually. And so I was kind of thinking I needed a serious color of pill if I was going to have a serious disease. So I have little tiny yellow pills to take.

BLITZER: Because when people think of chemotherapy, they think of IVs and sitting in a chair for a long period of time and going through this really painful, arduous process. But it's -- it's a lot different now.

EDWARDS: Well, my doctors have said, you know, that you don't have to have terrible side effects to have good effects. You know, we always think no pain, no gain. And that is -- it doesn't actually apply in this case.

BLITZER: And -- but -- but you're doing well. And...


BLITZER: And you can combine your -- your family life, obviously, and also campaigning.

EDWARDS: Absolutely. I spent the previous two days at a wedding with the children here for a couple of days, back home for the last days of their school. And then, when they're through with school, they'll be on the road with John and with me.

BLITZER: The little ones, Emma Claire, 9, and Jack, 7...


BLITZER: You're going to home school them during this coming year.


BLITZER: Tell us a little bit about that.

EDWARDS: Well, actually, I thought about home schooling my children in some subjects before -- my older set of children. But this time, we have an opportunity to let them travel, to see the country, to go to historical sites, as we -- as we travel and to be with us and -- and just too short -- to home school them for a short period of time.

We're going to get someone to travel with us, too, because, honestly, I'm not capable of teaching science and math. I -- I know how to do fourth grade science and math. I just don't know how to teach it in an effective way. So we're going to get someone to help us with those things.


BLITZER: That was my last interview with Elizabeth Edwards, back in 2007, as her husband was on the campaign trail and running for the Democratic presidential nomination, which, obviously, he did not get -- John, I know you spent some time with John Edwards and with Elizabeth Edwards.

We could see her coming through there. And, you know, after the original cancer diagnosis in 2004, the recurrence in 2007, the treatment she got, I simply assumed that things were moving in the right direction and maybe she -- she had beat it. But now we know she didn't.

KING: We know now that, Wolf. But you saw the tenacity of her, the courage of her, the determination of Elizabeth Edwards to keep on with her campaigning at that stage and later on, her public life, her fighting for health care reform, even, you know, much later, after the presidential campaign was long over -- a steely determination, a very gentle Southern friendly in parts of that interview. But if you followed her on the campaign trail some, she could also be feisty and she was a very, very competitive person. And the staff of the campaign enjoyed her, although they also would have told you, Wolf, she was demanding and challenging and she expected tenacity and great energy of them, just as she had of herself.

BLITZER: Yes. She was a remarkable woman -- Gloria, you know, and you knew her quite well.

BORGER: Yes. She was engaging and charming and kind of, I think, the best surrogate that any presidential candidate could ever have, because she kind of humanized John Edwards, to a certain degree. He was sort of the picture perfect politician you saw on the campaign trail. And she would -- she would -- she would make fun of him and she would kind of just talk about family life and how difficult it was as -- as Jess was saying before, to live with this gorgeous guy and she wasn't quite so gorgeous.

And, also, the thing that I remember the most about her is how she made it very clear that she was treating her cancer as a chronic disease, that someday, yes, it might kill her, but we all die of something. And when I spoke with her about it, she'd she say, look, this is a chronic illness. Lots of people in this country have chronic illnesses. I'm going to learn to live with this, just as -- just like everyone else at my age has to learn to live with something.

BLITZER: Yes. She was a very, very brave woman.

Elizabeth Edwards passes away today at the age of 61.

Our deepest, deepest condolences to her children and to her entire family.

We'll have more on this story coming up, plus all the other important news here in THE SITUATION ROOM.

We'll take a quick break.


BLITZER: Elizabeth Edwards has passed away. The 61-year-old wife of the former, the former U.S. Senator from North Carolina John Edwards was diagnosed in 2004 with breast cancer. She underwent treatment, then more treatment in 2007 when it recurred. Unfortunately, we have learned that earlier this morning she died. Dr. Sanjay Gupta, our chief medical correspondent, is with us. Yesterday, we assumed she had a few weeks left based on a statement that the Edwards family had released. But all of a sudden, 24 hours later, Sanjay, she died. Is that unusual?

DR. SANJAY GUPTA, CNN CHIEF MEDICAL CORRESPONDENT: Well, you know, it's the same thing you're saying, Wolf, it's hard to know exactly at -- what the time course was of all this.

You know, the statement was released. At that point, the sources close to the family said it was going to happen quickly, within weeks, but there's no way to absolutely predict how some of these diseases are going to behave.

Ultimately, when someone is in the end stage of this sort of disease, whether or not the lungs are affected, the heart is affected, that's ultimately what causes someone to pass on, so it's just very hard to say.

What we know is that treatment to try and control the cancer had been stopped, stopped at some point, thought to be unproductive and the type of treatment that was being given was mainly to control symptoms, things like pain, nausea and vomiting and to keep, in this case, Elizabeth Edwards comfortable, Wolf.

BLITZER: Sanjay, I'm looking at the history of some of her medical treatment. In 2004, November, she announces she's been diagnosed with breast cancer, she's treated with chemotherapy, radiation and surgery.

Then, three years later in 2007, March, she and her husband announced the cancer has returned to her ribs and hips. Her doctors say the cancer diagnosis is incurable, but manageable by treatment.

And yesterday, say they stopped all treatment because there was no more point, the treatment was becoming counterproductive.

Is that a normal way that breast cancer spreads and eventually kills someone?

GUPTA: Yes. You know, and it's tough to think of it that way.

And it's important to point out, I think, Wolf, that if you look across the board, while every cancer is going to be behave differently, it's a disease that's different in every patient. The five-year survival rates for people with breast cancer are 88 percent, Wolf. Ten year survival rate, 80 percent.

So if it does spread, the thinking in the medical community does change to some extent. When the cancer is confined to one particular area, you think, can we cure this, can we remove the cancer. In her case, she got chemotherapy first to shrink the tumor and then had the remaining tumor removed and then that area undergo radiation therapy.

If it spreads, as it did to her bones, then the thought is more can we control it, so it doesn't spread to more places around the body.

And then as you alluded to, Wolf, once it had also spread to the liver, now there are two organs, two sites involved outside the initial area. Then it's more about, you know, how we try and treat the symptoms that would otherwise be bothersome.

In the statement that you read, Wolf I know they talked about the fact that her pain was in good control and a lot of the other symptoms could be treated as well.

BLITZER: Yes, a very, very sad story.

Sanjay, stand by for a moment. Chris Chafe is a family friend who's been in touch with the family, he's joining us on the phone.

Chris, our condolences. Tell us how you know the Edwards.

CHRIS CHAFE, CLOSE FRIEND OF EDWARDS FAMILY (via telephone): Well, I worked for many years in the labor movement and was very close with the senator through both his first run first one for the Senate in North Carolina, where I am from and they are from. In '98, we worked closely together and in the 2004 presidential and very closely in the '08 cycle. So we have been in touch for quite a long time.

BLITZER: Have you spoke on the her recently?

CHAFE: No, we generally communicated of late by text message and e-mails. It had been quite a bit since we had spoken directly to one another. But she had remained in remarkably good spirits, great humor, a real warmth and a continued passion about the issues that really drove her public and private life.

BLITZER: Tell us something about Elizabeth Edwards that we might not know that you might feel comfortable sharing.

CHAFE: Well, I would say that she was probably one of the most forceful human beings I have ever met. She had an incredible commitment to the issues she cared about, and to travel with her and campaign with her was one of the most exhilarating and exhausting experiences a person could have.

I remember well Labor Day of 2007, we had an event in Pittsburgh where two unions had endorsed her husband, John, and we spent an hour after the event working the rope line with Elizabeth. And the numbers, the hundreds of people who would come to events to see her husband, but also very much to see her, and the amount of time people would spend waiting in order to get two or three minutes with her, a quick hug, a word of encouragement, a word of appreciation to her, every single one of those kinds of moments was more powerful and emotional than almost anything you would experience in normal life at any time.

And yet, she went through that day after day after day, both giving people enormous strength and taking in their stories and it was just exhilarating, but also just incredible, her capacity to give to others in moments like that. BLITZER: Chris Chafe, well said. Our condolences to you and her entire family.

Once again, Elizabeth Edwards, 61 years old, has died.

We'll take another quick break. When we come back, all the other important news of the day, including dramatic developments over at the White House on the deal that has been worked out with the Republican leadership, a deal which a lot of Democrats are not very happy about.


BLITZER: President Obama today at once angry, defensive, passionate about the tax cut deal he struck with the Republican leadership and why he felt forced to make concessions.

At a last minute news conference, he accused GOP lawmakers of holding Bush-era tax cuts hostage unless they got what he calls, "their holy grail," a temporary extension for wealthier Americans as well.

The president acknowledged concerns among from fellow Democrats that he caved in on a core issue, but he insisted he still has plenty of fight left in him as the Republicans take control of the House of Representatives and as the 2012 election gets closer.


BARACK OBAMA, PRESIDENT OF THE UNITED STATES: My job is to make sure that we have a north star out there. What is helping the American people live out their lives? What is giving them more opportunity? What is growing the economy? What is making us more competitive? And at any given juncture, there are going to be times where my preferred option, what I'm absolutely positive is right, I can't get done.

And so then my question is does it make sense for me to tack a little bit this way or tack a little bit that way because I'm keeping my eye on the long term and the long fight. Not my day to day news cycle, but where am I going over the long term.

And I don't think there's a single Democrat out there who if they looked at where we started when I came into office and look at where we are now would say that somehow we have not moved in the direction that I promised.

Take a tally. Look at what I promised during the campaign. There's not a single thing that I have said that I would do that I have not either done or tried to do. And if I haven't gotten it done yet, I'm still trying to do it.


BLITZER: But as far as many Democrats in Congress are concerned, there's still no deal to extend the Bush-era tax cuts because they have not yet agreed to it. The White House struggling to gain support from members of the president's own party.

Let's go to Capitol Hill, our senior congressional correspondent, Dana Bash, is following this story.

The vice president, Joe Biden, he went up to speak to some fellow Democrats. What are you hearing? How did he do?

DANA BASH, CNN SENIOR CONGRESSIONAL CORRESPONDENT: Well, he tried. While the president was making a public pitch, that was when the vice president was pushing it hard to a group of very disappointed and frustrated Senate Democrats.

I can tell you that the Senate will take this up before the House, that's why the focus in there. The Senate Democratic leader, Wolf, came out of that meeting and said that even he personally is, quote, "not a big fan of this compromise," and said they're going to have to be probably some changes before Senate Democrat will even take this up to vote.

Now the Democratic frustration -- and I can tell you, even in some cases, outrage was palpable in the hallways today, Wolf, both from liberals and even in some moderates who think this is just spending too much and blowing even more of a whole in the deficit.

I want to give you a taste of some of our conversations starting with Frank Lautenberg of New Jersey who actually used the hostage analogy before the president did.


SEN. FRANK LAUTENBERG (D), NEW JERSEY: I don't like it because in some way it's -- it releases hostages.

BASH: Who are the hostages?

LAUTENBERG: The hostages are the poor people who need unemployment benefits, and they're -- this --

BASH: You think the tax cuts are ransom for the unemployment?

LAUTENBERG: Much like it. I think that there was an attempt at consensus that almost turned into a capitulation.

BASH: The president capitulated?

LAUTENBERG: That we capitulated.

SEN. MARY LANDRIEU (D), LOUISIANA: I'm familiar on what compromise is about. I have voted on many compromises. Half of the package I love, half of the package I hate. I have to weigh it for my constituents and I will do the same here.

But if I end up voting for this package, it will not be silently. It will be being sort of dragged to that position having firmly established that I disagree strongly with some provisions and can't imagine this president leading the country in that direction. (END VIDEO CLIP)

BASH: Now I should tell you that Senator Mary Landrieu actually voted for the original Bush tax cuts almost a decade ago, but she said that was a time of surplus, this is different and the wealthy simply should not get a tax cut.

I want to read you one quote that speaks to not necessarily the substance, but the process here and the feeling among many Democrats that the president caved too early. This is from Tom Harkin of Iowa, here's what he told us in the hallway, "I have always had this saying, 'a good lawyer compromises on the courthouse steps, not in the conference room.' We never got to the courthouse steps. We never got to the point where they had to sit down and make a deal. I just think it was bargained away too soon."

So that's in the Senate, and I can just tell you briefly, even the House Speaker Nancy Pelosi, wolf, who always puts a good face on things, especially when it comes to division among Democrats, even she just came out of a House Democratic leadership meeting and admitted there is unease over the deal and that there is not a good response among House Democrats on what's going to happen.

So it's across the board, across the Capitol, very, very divided and pretty upset Democratic caucus at their president.

BLITZER: We'll see, though, in the end if they have the votes to defeat it or if it will be passed. That's all critical in the House and the Senate. Dana, thank you.

President Obama says the tax cut compromise will help strengthen the economic recovery, but it will add billions and billions and billions of dollars to the federal deficit, more red ink at a time we have been hearing a lot of political promises about cutting national spending and cutting the national debt.

Let's go to CNN's Mary Snow. She's joining us from New York to help break down these numbers for us. And these numbers are huge, Mary.

MARY SNOW, CNN CORRESPONDENT: Yes, hefty price tag, Wolf.

The projected cost of this tax deal is between $700 billion and $800 billion, which means, if approved, could be added to the deficit. Now that factors into extending the Bush-era tax cuts for two years, extending unemployment benefits for 13 months and includes tax breaks and credits in the deal.

And of those, prolonging the Bush-era tax cuts carry the biggest costs amount to about $458 billion. So how does it compare to other programs? It's roughly the same size of the 2009 stimulus package, estimated at $814 billion. And that, as you remember, was an expenditure that generated a lot of anger around the country, it helped spark the Tea Party movement.

Another program with a similar price tag, TARP, shorthand bank bailouts, which committed $700 billion. That, though, has largely been repaid.

So if this costs roughly the same amount as the stimulus, is it considered stimulus? The largest chunk of it, the Bush-era tax cuts aren't considered stimulus because these tax cuts aren't new, they are already in place. There are some measures, though, that would be considered stimulus like the payroll tax holiday, but that measure and others will cost the government, which just contributes to the deficit -- Wolf.

BLITZER: So there's a lot of numbers to digest there. A lot of the expenditure over the next two years is to continue the tax rates for the middle class, 98 percent of the taxpayers, those earning under $250,000 a year, that's the bulk of the expenditure over the next two years?

SNOW: Exactly.

BLITZER: But it does keep that money in those taxpayers' hands.

All right, we're going to have conflicting assessments of what's going on in the next hour, but I want to bring in out chief business correspondent, Ali Velshi, for a little bit more on this.

Is it good for the stimulus, for the economic recovery, Ali, that people will have more in their pockets, in other words they'll have to shell out to the federal government in taxes less?

ALI VELSHI, CNN CHIEF BUSINESS CORRESPONDENT: Well, separate this. The $458 billion that Mary was just talking about is money that nobody is actually getting more of, it's going to be exactly the same as what you've been getting. In other words, you won't see that tax increase in January.

It's hard, Wolf, to argue that that has any stimulative affect whatsoever, because it's just money you're not paying. So there's no likelihood that people are going to say, instead of that 39.5 percent interest -- tax rate, I'm going to take the money I would have spent in taxes and apply it to investing in the economy. So I think that that was really a very misleading argument that a number of conservatives have made.

That said, Wolf, there are other things in there that are very stimulative, including the extension of unemployment benefits that the president really, really wanted. Economists say that for every dollar you spend on unemployment benefits you get $1.50 to $1.90 back in the economy because people who are living off of unemployment benefits have to spend every last dollar of what they get.

But there is a lot of stuff in here that will contribute to the debt, that will contribute to the deficit, unclear whether it will stimulate growth. Wolf, we only have to hope that it does, because if it doesn't, we have just deepened the hole we're in.

BLITZER: The bottom line, though, is right now that for two years the tax rates continue, assuming this gets passed by the House and the Senate, that's a big assumption right now, given the opposition.

VELSHI: Right.

BLITZER: But assuming it does pass, everybody's tax rates, at least for the next two years, the rich, the middle class, the poor, everybody stays the same.

VELSHI: Yes, with the exception of the estate tax or what conservatives call the death tax, that was going to go up. The exemptions were eliminated, that was going to go up to the point that if you had a lot of money you would, upon passing, pay a tax of about half of it. Now it's going to be about 35 percent, over $5 million.

So in most cases, yes, you're correct, people will be paying less. There's also this very key Social Security tax, if you will, that we pay on our wages, 6.2 percent of our wages, it's going to be reduced for a year to 4.2 percent. So people will see that extra money in their paychecks as well.

BLITZER: And the first $5 million dollars of any estate will be tax free, the 35 percent will kick in over $5 million.

VELSHI: That's correct, after $5 million. That's correct, yes.

BLITZER: Ali, thank very, very much.

More of the president's spirited defense of his tax cut deal with the Republicans, that's coming up.

Other stories we're following as well, including Mike Huckabee. He's complaining that is Sarah Palin has been getting all of the media attention. Now the White House hopeful is doing his part to try to grab a little bit of the spotlight.



OBAMA: I have said before that I felt that the middle-class tax cuts were being held hostage to the high-end tax cuts. I think it's tempting not to negotiate with hostage takers, unless the hostage gets harmed.


BLITZER: Strong words by the president of the United States at his White House news conference earlier today. Let's discuss it in our "Strategy Session." Joining us, our CNN political contributors Roland Martin and Mary Matalin.

Guys, thanks very much for coming in.

Eric Cantor was pretty upset about the president's use of that phrase "hostage takers" referring to the GOP.

MARY MATALIN, CNN POLITICAL CONTRIBUTOR: It was not an auspicious beginning to a new bipartisan love fest. I hope -- he was obviously not in his zone. He called his own people sanctimonious and purists and he should have just stayed on the track.

He is -- I never quote Keith Olbermann, as you well know -- but he said, and he represents a big part of the Democratic party, this is a ratification of the singular, signature domestic piece of W.'s presidency, George W. Bush's presidency.

And he gave the reasons why, it's good for the economy, it's good for families, raising taxes bad for families, bad for the economy. So he not only made the policy, he gave the conservative arguments. And his people are mad and he was registering all of it in his articulation.

BLITZER: In his defense, though, Roland, it's only a temporary extension of the Bush tax cuts for the wealthy for two years and in exchange he did get an extension of unemployment benefits and other tax breaks for the middle class, small businesses.

ROLAND MARTIN, CNN POLITICAL CONTRIBUTOR: Also, it's not quite what he said. He did not say that these tax cuts are just so wonderful and great, what he said was that in this climate, in this economy, it is not the right thing for us to do right now. And so it's not like he was so happy and excited about it.

Look, clearly, the left is upset. One thing that's interesting is I think back to when the right was critical of President George W. Bush, you didn't see the president pretty much tell the right, shut up, deal with it, get over it. He said OK fine, I understand your principal positions, that's fine. The president, he seemed to take personally the criticism from his own party.

And so, at the end of that news conference today, in terms of how he was speaking to his own party, you can disagree with the left, but I think when you have such an attitude that somehow they should not be upset, when they're taking a principal position, to me that makes no sense, because you still need them.

BLITZER: In our next hour, we're going to replay that chunk of that news conference from the end of that news conference because he does get very emotional and he gets very specific in expressing his dissatisfaction with his own party.

But I want to move on, Mary, talk about your former boss, President George W. Bush. Take a look at this, two years after he leaves office, his job approval rating right now in this new Gallup poll, 47 percent approve of him in this retrospective approval rating, we should say, compared to 46 percent right now for President Obama. When he left office, his approval was at 34 percent.

So in hindsight, people are liking him a little bit more now than they did when he was in office.

MATALIN: You know, 52 months of consecutive growth, 5 percent unemployment, a deficit and debt that were a quarter of what they are today and a great book tour. So yes, I think when he -- this book tour made everyone go back and say, if it wasn't for all these things we have been complaining and blaming on him for the last two years, the economic chaos is not a result of his fiscal policies, it was a result of misregulated, overleveraged, financial weapons of mass destruction which Democrats and Republicans share in the blame of letting get that out of control. But when they look back at --


MATALIN: -- there was jobs, there was a deficit under control. You can laugh, it's not a comedy show, but you can look at the --

BLITZER: But hold on, hold on. Mary, when you say a deficit under control, the national debt doubled during his eight years as president.

MATALIN: As a president GDP, it was an historic --

BLITZER: But it went from, what, $5 trillion to $10 trillion.

MATALIN: With the recession, corporate malfeasance and two wars. It's not quadrupled over that.

MARTIN: OK, let me take cell phone and explain to Mary.

MATALIN: Numbers, numbers.

MARTIN: This is called a spin of the cell phone. Mary, that was a spin. He's gone, they're happy he's gone.

MATALIN: Really?

MATALIN: Look at President Bill Clinton. This is a man who was impeached and you look at the numbers now, people say oh, it's nice and wonderful. They're happy this he's away from the interns and they're happy President Bush is out of the White House. It's simple as that.

When the president leaves, we love him.

BLITZER: All right, it's a little nostalgia, but --

MARTIN: I mean, come on.

BLITZER: -- but it happens all the time.

MARTIN: All the time.

BLITZER: All right, guys, we'll leave it there. Thanks very much.

Potential Republican presidential hopeful Mike Huckabee is hoping to generate the same political buzz as Sarah Palin. Can he do it?

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BLITZER: The WikiLeaks founder Julian Assange is behind bars at this hour on charges unrelated to the massive diplomatic document dump.

Brian Todd has been monitoring all the details for us. He's joining us here in THE SITUATION ROOM.

What's the latest?

BRIAN TODD, CNN CORRESPONDENT: Wolf, what the legal handicapping begin, in this case, the legal wrangling over Julian Assange, may be as ugly as that media scrum we saw in London today.


TODD (voice-over): After Julian Assange turned himself in at a British court and was denied bail, his lawyer said this about the sex crime allegations he might face in Sweden.

MARK STEPHENS, JULIAN ASSANGE ATTORNEY: Many people think that the prosecution is politically motivated.

TODD: Swedish authorities say that's not true. They say this case is about Assange's personal conduct with the women in question, not his work in posting leaked U.S. documents on WikiLeaks.

(on camera): The lead prosecutor in Sweden says she's got no inquiries so far from U.S. legal authorities about Assange. That's according to Swedish media. She added she didn't request the European arrest warrant in order for him to be handed over to the U.S.

(voice-over): But if Assange is extradited to Sweden, there could be considerable pressure from U.S. officials on Sweden to hand him to them. They say there is a serious criminal investigation against him in the United States. And some politicians in the U.S. have called for him to be tried for espionage.

If he's extradited to Sweden, there are two things that would have to happen to get Assange into American courts, according to international law professor Stephen Vladeck.

STEPHEN VLADECK, AMERICAN UNIV. LAW SCHOOL: The first up is the U.S. government would actually have to indict him on some charge. There is as yet no indictment pending against Assange in the United States. The second is, we would -- the United States would then have to extradite them or at least move to have him extradited from Sweden. And at that point, Assange would have the opportunity to contest that extradition in a Swedish court.

TODD: Then there's that massive secret file of information Assange has threatened to release if, quote, "something happened to him."

Cyber security expert Ira Winkler says that may be a problem for Army Private Bradley Manning, accused of giving classified information to WikiLeaks.

(on camera): You still think Manning is vulnerable to something worse here?

IRA WINKLER, AUTHOR, "SPIES AMONG US": If it is shown that he has put, you know, soldiers' lives in danger or anybody related to this at a time of war, again, his lawyer has a lot to worry about depending on how much they want to come after him. And clearly, Assange is no friend of his. Assange has s basically thrown him under the bus, in this case, for his own protection.

You know, Assange's own protection. Because what Assange is basically saying, whoever gave me this data, I don't give a damn about you, I'm just going to release the data as I see fit, just for the purpose of protecting me.


TODD: I spoke with Bradley Manning's attorney a short time ago. He would not comment when I asked if he was not concerned about the possible release of that huge cache of secret documents now that Assange is in custody. Manning hasn't yet entered a plea in his case. His lawyer told me he expects the charges against Manning to change eventually -- meaning more charges could be filed against Manning or charges could be dropped.

BLITZER: I know you're checking with a lot of sources. But if he is extradited from Britain to Sweden, what are the real prospects eventually of his being extradited back to the United States?

TODD: Assange's lawyer is hinting he thinks that's a done deal. He's implying the Swedes are going to cave to any U.S. pressure. But others, including Stephen Vladeck, say, you know, it could be that U.S. authorities may just let this play out in the Swedish courts, if he's convicted in Sweden on those sexual assault charges. They might just be content to let go with that, just to get off him the streets and stop him from posting things on WikiLeaks.

But other people say, look, Eric Holder is not going to talk about a criminal investigation unless he plans on bringing a charge.

BLITZER: All right, Brian, thanks very much.

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BLITZER: Right now, Republican Mike Huckabee is looking to gin up the kind of media buzz that Sarah Palin generates practically every single day. Like Palin, Huckabee is considered a top presidential prospect in 2012. And like Palin, he's also selling a brand new book.

Jim Acosta is covering the former Arkansas governor's tour in Florida right now.

How's he's doing down there, Jim?

JIM ACOSTA, CNN CORRESPONDENT: Well, Wolf, we are covering a Republican, a potential Republican presidential candidate on a book tour, but it is not Sarah Palin. It is Mike Huckabee, the former governor of Arkansas -- as you said, sounding and looking very much like a contender this evening at this bookstore in Sarasota, Florida, where he had 100 to 200 well-wishers coming in to look for autographs, also urging him to get into the race.

But one thing that he told made a little bit of news, I think. He said that he's probably going to wait until the second half of next year before he throws his hat into the ring. If he even makes that decision, and part of the reason of that, some are speculating, could be the former governor of Alaska, Sarah Palin. There are other potential contenders who have said they may wait to see what she does.

Here's what we -- here's what Governor Huckabee had to say about Sarah Palin when we asked him about the possibility of running against her. Well, what do you think of running for president with Sarah Palin potentially running against you in the primaries?


ACOSTA: What do you think about running for president with Sarah Palin potentially running against you in the primaries?

MIKE HUCKABEE (R), FORMER PRESIDENTIAL CANDIDATE: Well, one thing I learned in almost 20 years of politics and then I really learned it a lot through running four marathons, the worst thing that you can do is look around and get distracted by the competition.


ACOSTA: And another thing that we heard from Mike Huckabee this evening, he took the president to task a little bit this evening, questioning why the president was being so hard on his fellow Democrats than he was on Republicans when it came to the tax cut deal that was worked out in this lame duck session.

We also asked him about why there are so many potential Republican contenders for president who worked for FOX News. We couldn't get our own interview with Governor Huckabee, because he is an employee of FOX News. He was able to give us, you know, sometime answered our questions, along with reporters, and he said about he and some of the other paid contributors for that network, "Hey, we all need employment" -- Wolf.

BLITZER: Yes, he's got a show on FOX News that airs on the weekends. He's an employee there. I understand that if he were to formally announce that he's running for the Republican presidential nomination, he would have to -- FOX News would have to sever all of their relations with Mike Huckabee, just as they would with some of the other contributors if they announce they're running for president, like Sarah Palin or Newt Gingrich. So, I guess my explanation why he wants to stay undeclared for as long as possible so he doesn't have to give up the TV show on FOX News s. Is that the sense you are getting?

ACOSTA: That's right. That's right. He feels like he gets a lot of exposure. We asked him about this. He defended the gig over at FOX News, and said, basically, that's where the Republicans are. He feels that's the best way to reach out the Republicans right now.

And, you know, there is this aspect of the campaign that's really undetermined at this point, because Sarah Palin has not said whether or not she wants to run for president. Rick Santorum, just the other day, said that she's sucking up a lot of the oxygen right now.

And I do want to add one other thing. We did ask Mike Huckabee about the passing of Elizabeth Edwards and he offered his thoughts on Elizabeth Edwards, saying that she showed a lot of courage in the battle against cancer -- Wolf.

BLITZER: She certainly did. All right. Thanks very much.

We're going to have more on Elizabeth Edwards' passing today as well. Jim Acosta on the scene for us from Florida.

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