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Health Repeal Bid Starting Now; Former Pentagon Official Dead in Landfill; Falling Birds Likely Died of Trauma; Health Repeal Bid Starting Now; New Governors Awash in Red Ink; Republicans Moment of Crisis; The GOP's Real Power Center

Aired January 3, 2011 - 17:00   ET


WOLF BLITZER, CNN ANCHOR: Brooke, thanks very much.

Happening now, what could be the worst thing about being a new governor. Even for someone like Jerry Brown who's been there before. This hour state leaders desperate to plug huge budget gaps. They're look for courage and they are asking for sacrifice.

Also the body of a former Pentagon official found dumped in a landfill. This is a real-life crime mystery involving a veteran of three Republican administrations.

And the actor George Clooney wants to turn the camera on a global hot spot in hopes of preventing election violence and genocide. I'll ask him about his new project far away from Hollywood.

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

But first, this just coming in to THE SITUATION ROOM. We're learning that Republicans about to take control of the House of Representatives are moving forward right now, right now with their attempt to try to repeal health care reform.

The stage is being set for a confrontation with President Obama even before the new session of Congress actually begins.

Our senior congressional correspondent Dana Bash is getting new information just coming in right now.

What are you learning, Dana?

DANA BASH, CNN SENIOR CONGRESSIONAL CORRESPONDENT: Well, I'm told, Wolf, by House Republican sources that they do plan to make moves to repeal the health care law almost immediately after taking the majority in the House.

What I'm told is that there will be a critical procedural vote this Friday and Republicans plan to have a final vote to repeal this health care law on Wednesday, next Wednesday. Now not only that, I am told that tonight -- tonight, two days before Republicans officially take control of the House, they're actually going to post this legislation for repeal online.

Now the reason they're doing that is because of the Republicans' self- imposed new rules that they put in place to have any legislation posted in public for three days before there's any vote on it.

Now, of course, it goes without saying that repealing the president's health care bill law now was a top priority for Republicans across the board during the campaign. Still, there may be some Republicans who say that they're not sure that doing this right away is the right thing to do because joblessness is such a huge issue still in this country.

Well, Republicans I talk to, Wolf, say that they think that they're one in the same. I want to put up a quote from Brad Dayspring. He is a spokesman for the incoming House majority leader Eric Cantor. Here's what he told me.

He said, "Obamacare is a job killer for businesses, small and large, and the top priority for the House Republicans is going to be to cut spending and grow the economy and jobs." He said that is why Republicans have decided to go ahead and have this vote -- final vote again next Wednesday, one week after they take the majority, to try to repeal this health care law.

BLITZER: Well, there's no doubt, Dana, they got the votes in the new House of Representatives to repeal the health care reform law. But it's got to be also repeal in the United States Senate, which is unlikely, I think, at this point. And even if it were, the president could veto that legislation, requiring a huge override which probably would be difficult to sustain as well.

So what are the chances that what the House of Representatives is doing right now is simply for show as opposed to real substance?

BASH: You make absolutely critical points. The -- you're right about the votes. I've not talked to any Republicans who tell me that they believe that they can get this repeal all ultimately at least through the Senate. Because of course Democrats still maintain control of the Senate and they would need 13 -- Republicans would need 13 Democrats to go along with that to make that happen.

Is this for show? Republicans argue that this is something that they promised they would try to do during the campaign and they're going to go ahead and do it. Ultimately, kind of a long-term strategy is, they're going to try to take away this law bit-by-bit, death by 1,000 cuts, as the way Republicans have described it to me, to try to choke funding for implementation for the health care law.

That's the -- that's the plan down the road through the appropriations process. But in terms of the initial plan -- the fact that they're going to do this so soon -- is clearly is a nod to the Republican base, but Republicans say it's a nod to the people who they say put them here who they insist do not like this health care law.

BLITZER: They said they would do it, and they're doing it in the House of Representatives.

Dana, good work. Thank you.

Right now, eight new governors are in power across the United States. Five of them were sworn in within the last few hours alone. And they're already facing some very painful spending choices that will affect millions and millions of Americans.

Here's why. All but one of those new governors has to grapple with a hefty short fall in the upcoming budget. All together -- get this -- these states need to find $37 billion to cover expenses at the current levels, money they simply don't have.

In terms of a dollar amount, California's Jerry Brown is swimming in more red ink than any other new governor. The Democrat was sworn in today to the same job he held three decades ago. Listen to this.


GOV. JERRY BROWN (D), CALIFORNIA: Speak the truth. No more smoke and mirrors on the budget, no empty promises. Second -- second, no new taxes unless the people vote for them. And third, return as much as possible decisions that authorizes the cities and counties and schools closer to the people.


BLITZER: The new governor of New York, Democrat Andrew Cuomo, is going after a very visible target in his first stab at trimming the budget, that target being himself and his top aides.

Let's bring in CNN's Mary Snow. She's in New York working this part of the story -- Mary.

MARY SNOW, CNN CORRESPONDENT: Wolf, this sets the tone for what's to come. States are struggling with piles of debt. And while the overall economy is expected to improve somewhat, states are facing deep cuts and governors facing tough choices.


GOV. ANDREW CUOMO (D), NEW YORK: I, Andrew M. Cuomo --

SNOW (voice-over): Faced with a looming financial crisis, New York's new governor, Andrew Cuomo, is taking a 5 percent pay cut and his top aides will do the same. It comes as "The New York Times" reports he'll order a one-year pay freeze for state workers on Wednesday as part of an emergency financial plan.

CUOMO: The state government has grown too large. We can't afford it. The number of local governments have grown too large. And now we're going to have to reduce and consolidate.

SNOW: In California --

BROWN: The year ahead will demand courage and sacrifice.

SNOW: California's new governor Jerry Brown faces a $28 million deficit and the state with the worst credit rating.

And Illinois is being closely watched to see how it handles the biggest budget shortfall in the state's history.

PETER MORICI, ECONOMIST, UNIVERSITY OF MARYLAND: What's going on in Europe is a precursor of what's going to happen in Illinois, New York, California.

SNOW: Economist Peter Morici says, like European countries strapped with debt, U.S. governors must rein in spending and renegotiate pensions.

MORICI: The governments at the state municipal levels employ too many people to do too few things ineffectively. And that simply has to change.

SNOW: It's estimated that budget shortfalls for all states combined amounts to roughly $140 billion this year. Compounding the problem, federal stimulus money that helps states create jobs expires this spring.

SCOTT PATTISON, NATL. ASSN. OF STATE BUDGET OFFICERS: I think the best analogy is the person who was unemployed, got a job back, but they actually make less than they did before the recession. And that's -- that's really what states look like.

SNOW: Scott Pattison is executive director of the National Association of State Budget Officers. He says municipal bankruptcies are rare and doesn't expect them. But --

PATTISON: There's only so much money to go around. So the interest will be paid on the debt. The bondholders will be paid. But there'll be budget cuts and perhaps tax increases in other areas that will cause pain that frankly citizens are going to notice.


SNOW: Plus, several of the new governors have pledged not to raise taxes, which leaves them with the unpopular choice of cutting programs -- Wolf.

BLITZER: Unemployment across the country right now, 9.8 percent. Very high. Some of these states it's even higher. And that's having a huge toll on these states as well.

SNOW: Yes, because that's contributing to the weakened tax base for states and that's only furthering the strain on them.

BLITZER: Mary Snow in New York for us watching the story. Thank you, Mary.

It's a new year and a new "Cafferty File." Jack is back with "The Cafferty File."

Happy new year, Jack.

JACK CAFFERTY, CNN CONTRIBUTOR: You too, Wolf. Good to see you. As the new Congress gets down to business this week, no shortage of things for them to devote themselves to. Guess what's at the top? House Republicans said they're going fulfill a campaign promise and vote to repeal Obama's health care law before he delivers the State of the Union address.

It's a futile exercise. Even if they repeal it in the House, it won't get through the Senate. And even if it got through the Senate, President Obama would probably veto it. And it's also focusing on health care is running the same risk of making the same mistake that the Democrats made back a couple of years ago after President Obama was elected when they chose to plow ahead with health care at the expense of ending the war in Iraq and the economy and other things.

The GOP has its eye on some other things as well. Legislation passed by the Democratic Congress. Things like new limits on green house gas emissions. The reach of entitlement programs. Some are calling for investigations in to the Obama administration.

There's what we need. Let's tie up Capitol Hill with investigations at a time when there are other issues out there -- like the wars, like the economy, like immigration, the skyrocketing deficit and national debt.

Republicans have vowed to tackle government spending, they'll soon have to decide whether to vote to raise the debt ceiling again from its current $14.3 trillion because we're going to hit the ceiling soon.

Meanwhile, a majority of Americans are optimistic about the new year. A new Gallup poll shows 58 percent say 2011 will be better than 2010, 20 percent say it will be worse, 21 percent say it'll be the same.

The poll suggests Democrats and young Americans are more optimistic than the independents, Republicans, and old Americans like me about the coming year.

Here's the question. What's the most important issue that's facing this country in 2011? Go to and pick one.

BLITZER: Let me give you a clue, Jack. And I know you'll agree with me. Jobs, jobs, jobs.

CAFFERTY: That's it. Why are the Republicans going to monkey around with trying to repeal health care? The Democrats made a huge mistake when they made that priority one after President Obama was inaugurated. And the Republicans are threatening to do the same thing. Explain that to me.

BLITZER: I can't.


BLITZER: Good to have you back. Batteries are recharged.


BLITZER: But I think it's -- look, national security is always a number one, but jobs, jobs, jobs. People have to have food on the table. They've got to get back to work. And that's critical right now. Everybody I think agrees.

CAFFERTY: You're absolutely right.

BLITZER: All right, Jack. Thank you.

The battle began in earnest today to replace the Republican National Committee chairman Michael Steele. We'll get a special taste of the debate over the party's future and why it matters so much.

Plus, we'll have the latest on why thousands and thousands of birds simply fell from the sky and dropped dead on New Year's Eve.


BLITZER: A spirited debate today over the future of the leadership of the Republican Party heading into the next presidential election. The Republican National Committee chairman Michael Steele held his first debate today against the four rivals who want his job.

His opponents have a similar message that Steele brings too much drama to the cash-strapped party and not enough skill at management and fundraising.


SAUL ANUZIS, REPUBLICAN PARTY CHAIRMAN CANDIDATE: I think the Republican National Committee is at a moment of crisis.


ANN WAGNER, REPUBLICAN PARTY CHAIRMAN CANDIDATE: It is time for some tough love at the Republican National Committee.

MICHAEL STEELE, REPUBLICAN NATIONAL COMMITTEE CHAIRMAN: We won. I was asked to win elections. I was asked to raise money, $192 million over the last two years. We won. And the fact that we're here right now celebrating that win.


BLITZER: Our senior Mark Preston was at the debate here in Washington. He's here in THE SITUATION ROOM right now.

Let's remind our viewers, Mark, why it's important who chairs the RNC.

MARK PRESTON, CNN SENIOR POLITICAL EDITOR: It is. It certainly is as we're heading into this presidential election year, Wolf.

Two points. First of all, the new chairman is going to have to raise upwards of $425 million -- just at the RNC -- to try to defeat President Barack Obama in 2012. Secondly, the new RNC chairman has to be the chief critic for the Republican Party. The reason being is you cannot have congressional Republicans -- those who just got voted into office -- on the idea of change and legislating out there partisanly attacking the Obama White House.

In addition to that, all those presidential candidates that are thinking about running for the Republican presidential nomination, they're going to be running against each other, not against President Obama.

BLITZER: Now you heard the critics of Michael Steele saying he's got the penchant for drama, controversy, he's not good at fundraising. You had a chance to speak with Michael Steele earlier today. What did he say?

PRESTON: Well, you know, he defended himself. Not only did he defend himself during this 90-minute debate that was held here in Washington, D.C., but I did talk to him about it afterwards. And he was very resolute in his idea that he was elected for one thing and one thing alone, and that's winning elections.

In fact, let's hear what he had to say.


STEELE: My focus is on what we've done over the last two years. We've tried to engage our grassroots, raise the money, and win elections. And that's the -- that's the main charge that I have as a national chairman. So a lot of the stuff that was talked about today really boils down to winning elections and raising those dollars that are necessary to do that.

And we've done that. And under some very difficult circumstances. We were able to pull together the resources to win.


PRESTON: And there you have it, Wolf. There's Michael Steele just a few hours ago defending his stewardship at the RNC. Now he has been under a lot of criticism for the stewardship of the committee. In the end, he did have some big wins. He was at the head of the RNC when Republicans did very well in 2010. In 2009, winning back Ted Kennedy's seat in Massachusetts.

But the fact of the matter is, he hasn't been a very good fundraiser. And that really is one of the chief responsibilities of the RNC chair.

BLITZER: Because the Republicans did great in the special elections, in the midterm elections. They won an enormous amount of seats, governor seats, House Senate seats. And so he's going to be kicked out presumably if he doesn't get the votes.

The Democrats who suffer badly, their chairman, Tim Kaine, he's going to stay on. Now what's wrong with this picture?

PRESTON: Well, because what we're seeing over at the DNC is that the DNC chairman serves at the behest of the president of the United States, the person who's in power. Of course, that's President Obama.

We've seen Tim Kaine become a loyal soldier over at the DNC. What we're going to see with the RNC next week is that the 168 members who make up the committee, they're going to make their own decision.

BLITZER: Mark Preston, I'm sure you'll be watching that very, very closely. Thank you.

Republicans can fight all they want over the party leadership. Their real power, though, lies elsewhere on Capitol Hill where GOP leaders are just a couple of days away from taking the reins of power in the House.

Let's bring in our senior political analyst Gloria Borger.

Gloria, are GOP leaders all on the same page now as far as the agenda is concerned?

GLORIA BORGER, CNN SENIOR POLITICAL ANALYST: Well, they are. I mean there is one big mandate coming out of this election. And the mandate is to cut the budget. And as you saw Dana Bash reporting earlier, they're all on the same page about that.

What they want to do is repeal health care reform. They think that will help the deficit. And they're also proposing, by the way, something that's kind of interesting which is they're going to cut their own budgets by about $25 million. Now, again, you know that's just sort of symbolic. But they're going to do that.

One more thing, Wolf, they say they're going to do when they come in is they want to bring spending back to the levels that it was before Barack Obama became president. So on all of these sort of general cut big government, cut the spending, cut the deficit, Republicans kind of -- are on the same page there.

BLITZER: Can the new speaker, John Boehner, keep, let's say, the Tea Party caucus --

BORGER: Well --

BLITZER: -- members, the more moderate Republicans, can he keep them all on the same page?

BORGER: You know that's a really, really interesting question and a very difficult problem for him. If you look back to 1994, and you and I remember that Newt Gingrich-led revolution, the House speaker, Gingrich, actually led the revolution.

John Boehner, the new House speaker, is the beneficiary of this revolution. He did not lead it. So he is beholden to his Tea Party members. And what they want him to do is cut spending. Half of them have never been in government before. They don't know the realities of what divided government is like.

But he also has about 30 new members. We don't talk about this a lot, Wolf. He's got about 30 new members who won in districts that Barack Obama won in. So those are more moderate Republicans. So he's going to have to figure out a way to navigate those waters between his real conservatives and his more moderate Republicans. And keep the public happy and keep independent voters happy so they think Republicans are actually getting something done in Washington. It is a very, very, very difficult job he's got.

BLITZER: You know, maybe he can go to Nancy Pelosi and ask for some advice on how she kept the blue dog Democrats and the more liberal Democrats together during her reign as speaker.

BORGER: Why do I think that's not happen?

BLITZER: I don't think it will happen either. He probably could get some advice from her on that.

Thanks so much, Gloria.

The airline wars are heating up right now. dumping American Airlines from its popular travel Web site in a battle over fees. What does this mean for you and me?

Also, under fire, the New York Sanitation supervisors are facing accusations they made a beer run when they should have been cleaning up after that monster blizzard instead.


BLITZER: You won't find American Airlines if you're looking for flights on

Lisa Sylvester is back. She's monitoring that, some of the other top stories here in THE SITUATION ROOM.

Lisa, good to have you back.

LISA SYLVESTER, CNN CORRESPONDENT: And it is very nice to be back. Thanks, Wolf. And thanks to everyone else.

Well, Expedia has dropped American Airlines fares from its online travel Web site. It does it responding to American's new pricing strategy which it calls, quote, "anti-consumer and anti-choice."

This is the latest move in an escalating war between airlines and the travel sites over fees. American removed its fares from It says travelers can still find American fares and schedules on other places like on Expedia's corporate travel Web site and on and

And there's new fallout over New York's allegedly slow response to last week's monster blizzard. Investigators are looking into a report that four sanitation supervisors bought beer and sat in their car for hours last Monday night. Instead of helping clean up the snowy mess. They allegedly told their bosses they ran out of gas.

The head of the New York Sanitation Workers' Union says it was not aware of any slowdown.

And many New Yorkers have been fuming over the huge piles of trash littering the city streets following the blizzard. But the uncollected trash may have actually saved the man's life.

Police say the man jumped from the ninth floor of a midtown Manhattan building yesterday. Garbage bags apparently broke his fall. He's hospitalized in critical condition. Workers had suspended garbage pickup until today to plow snow instead.

And pharmaceutical giant Johnson & Johnson and Massachusetts General Hospital are teaming up to develop a blood test to find cancerous tumors. What makes this test different, though, is that it could potentially spot a single cancer cell in a person's bloodstream.

That could help doctors determine as early as possible if cancer has spread and it could lead to new treatments -- Wolf?

BLITZER: Amazing some of the new treatments. But let's speak about something really, really important. We've got the pictures. A lot of our alert viewers, they were always asking, where's Lisa? Take a look at that. I believe that's Amelia.

SYLVESTER: That is Amelia.

BLITZER: Is that little Amelia?

SYLVESTER: That's my --

BLITZER: How's she doing?

SYLVESTER: That's my little heart. That's my little baby girl. She's now four, almost five months. And she is just an adorable girl. She is -- all the moms and dads can appreciate this. She's 95th percentile for weight and 85th percentile for height. So she's doing fabulous.

BLITZER: Sweet little boy over there. Theo, the older proud brother.

SYLVESTER: Yes. He's such a good brother. He is 3 years old. He loves being a big brother. There's Theo. Oh, this just warms my heart. I'm going to like start tearing up. My little babies. But it is good to be back. And you know those pictures actually -- a friend of ours, photographer, Joe Foley, he shot those wonderful photos for us.

Fabulous and, you know, it's great, great, great being a parent.

BLITZER: And you've got sweet adorable little kids like that. You don't have to have a great photographer, the pictures just come automatically.

SYLVESTER: I know. It's the personality that comes out.

BLITZER: It is. Like the mom.

SYLVESTER: Wolf, thank you.

BLITZER: Great to have you back here in THE SITUATION ROOM. Enjoy those kids. SYLVESTER: Thank you very much.

BLITZER: They grow real quickly.

A House Republican about to get some new investigative powers is lashing out at the attorney general, suggesting it's time for him to go. Stand by.

And it's a grim way to have your death discovered. How did a former Pentagon official's body wind up in a landfill? We're looking into that.



Happening now, the commander of the USS Enterprise under investigation right now. The Navy wants to know why raunchy videos depicting simulated sex acts and anti-gay slurs were shown to crew members shipping out to Iraq and Afghanistan. We're taking a closer look at this growing controversy.

And George Clooney is live here in THE SITUATION ROOM today. He's telling us about his personal mission to keep watch on war-ravaged Sudan.

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

All that coming up. And let's get to our "Strategy Session" right now. Joining us, our CNN political contributor Roland Martin and our CNN political contributor and national radio talk show host, Bill Bennett.

Guys, thanks very much for coming in.


BLITZER: Happy new year to both of you.

Bill, why is the house -- and you heard Dana Bash at the top of the hour. The Republican leadership, the incoming leadership saying issue number one, repealing health care reform, the new law, when you know it's not going to be repealed in the Senate. And even if it were, the president would veto it and the Republicans don't have the votes to overcome a presidential veto.

BILL BENNETT, CNN POLITICAL CONTRIBUTOR: Well, I think you can do a couple of things at once. I think you're going to see very serious moves with budget reduction deficit --

BLITZER: That's one thing, but to actually repeal a law now?

BENNETT: Well -- well, because the main reason they're doing it is they promised they would do it and a lot of them ran on this. So it's very important to them to take this stand, this principle position. We'll see what happens. I've been very interested to see what the Democrat House does with a Democrat House members -- passed by seven votes last time.

This is an extremely --

BLITZER: The Republicans don't even need Democrats to repeal it in the House.

BENNETT: Of course they don't. But it will be interesting nevertheless to what --

BLITZER: To see how many Democrats --

BENNETT: That's right. It's very unpopular.

BLITZER: There will be a bunch of Democrats, as you know, who will join with the Republicans and say repeal this law.

MARTIN: Of course. And as you said, it's no shock that if it is indeed passed in the House, passed in the Senate, it will get nowhere when it comes to President Obama.

It's no shock to anybody Republicans are making this issue number one because they made this the point all of last year. And so, no doubt, folks will be looking at those moderate and conservative Democrats, especially those senators who are up for re-election in 2012.

BLITZER: Because you heard Jack Cafferty, and a lot of others are saying the Republicans may be falling into the same trap that President Obama fell in by, instead of dealing with jobs, dealing with health care. And now it looks like the Republicans are falling into the trap as well.

BENNETT: This won't take long. This will be a lay-up for the majority. They know what they believe. They'll pass this.

We'll see what happens in the Senate. We'll see what the president does. But it's not the only thing they'll do about health care.

They'll also have hearings. I think this will be very important. They'll also look at the various regulations that are coming out. This is an unpopular vote, an unpopular law.

BLITZER: See, what they can do, Roland, is that -- they can chip away at the funding for various provisions of the new health care law. They can chip away at some of the regulations. That they can do .

MARTIN: They can do all of that. But again, there's no doubt in 2012, issue number one will be the economy.

And, so, they have to strike a significant balancing act, because if you go too far on that issue and you don't stay focused on the economy, I mean, we saw what happened in November. The public is saying, look, 9.8 percent unemployment, the need for jobs. If you don't focus on that and make that issue number one, it could come back to bite you.

BLITZER: Let's talk about Darrell Issa, the congressman from California. He's going to be the chairman of the Government Oversight and Government Reform Committee in the House of Representatives.

He's got subpoena power. He can make the White House and the administration lawyer up as much as they want.

You remember what happened in '95, '96, when the Republicans did this to the Clinton administration. Who was re-elected in '96?

BENNETT: Let's see if I can remember. It escapes me. Was it Clinton?

BLITZER: I believe it was, yes.

BENNETT: Yes, look, he needs to be careful here. And I wouldn't draw the conclusions before the investigation.

MARTIN: Right.

BENNETT: He's not a prosecuting attorney. He's the chairman of the committee. He shouldn't say things -- people are corrupt, the administration is corrupt, until he's launched his investigation. If he then finds evidence of corruption, he can show it to the whole country and we'll all draw conclusions.


BLITZER: He said yesterday, "I'm saying that this is one of the most corrupt administrations." He did say the president. Earlier, he said the president. Yesterday, saying, "This is one of the most corrupt administrations."

MARTIN: OK. First of all, it's semantics when you say, oh, not the president, but the administration. It's the president's administration.

Look, at the end of the day, you cannot talk about holding people accountable. You cannot talk about being transparent if you say from the outset, oh, they're corrupt, now let's have investigations.

And so what you really want to say is, look, I don't care what side of the aisle you're on. If we do not have accountability when it comes to spending, when it comes to a stimulus bill, when it comes to TARP, then we need to have the answers.

But he is hurting himself by coming out of the box and actually doing this. And so he should step back and say, wait a minute, I want to invite Congressman Elijah Cummings, the ranking member on the Democratic side, to say we want the answers from anybody. That's what he really should be saying, not calling folks corrupt out of the gate.

BLITZER: And he's also suggesting -- at least -- I guess suggesting pretty broadly that Eric Holder, the attorney general of the United States, should go. He said this -- he said, "He's hurtling this administration. If you're hurting the administration, either stop hurting the administration or leave."

BENNETT: I know Eric Holder pretty well. We get along pretty well. I don't think he's done a great job as attorney general. But the things that he's done of which I am most critical are the things that he's done at the behest of Barack Obama.

I don't think Barack Obama should fire Eric Holder for doing things that he wanted him to do. I think the whole business with Khalid Sheikh Mohammed and this notion of a trial in New York has been a mess.

The whole idea of these civil trials, I think, has been a mess. That's been, I think, the major problem.

If you take his testimony on the Fort Hood massacre, that was a problem. But, again, this was administration policy. It's not as if he's off on his own, Eric Holder. He's doing what Barack Obama wants him to do.

BLITZER: And now that the deputy attorney general who was a recess appointment sworn in, today, James Cole, who Republicans don't like because of comments he made, an article he wrote after 9/11, suggesting the terrorists should be tried as criminals, as opposed to war crimes or terrorists --

MARTIN: Of course. And I remind those same Republicans when President Bush nominated John Bolton to be the ambassador to the U.N., you're going to have people in the administration you don't particularly like. The president has the right to appoint who he wants to appoint.

But also, when it comes to Attorney General Eric Holder, when you look at his focus when it comes to civil rights division, when you look at his focus when it comes to a variety of issues, there are things that are in the (ph) positive that you frankly disagree with. But also, Holder has had issue with people inside the administration.

When you look at the back and forth with chief of staff Rahm Emanuel, it's not like he hasn't been fighting some of his own people inside the administration. And so, fine.

If you want to say he should go, at the end of the day the president controls who serves him. And that's at the end of the day.


BLITZER: Roland and Bill, we'll continue this conversation down the road.


BLITZER: Guys, thanks very much.

It was like something out of an Alfred Hitchcock movie, thousands of birds falling from the sky and landing dead in Arkansas. What happened? We'll go there.

And an eye-popping new estimate of what Facebook is really worth. It could drive the Web site's founder to do something new.


BLITZER: Is satellite technology tearing apart two European allies?

Lisa's back. She's monitoring that, some of the top stories in THE SITUATION ROOM right now.

What's going on, Lisa?

SYLVESTER: Oh. Well, Wolf, just when you thought that the WikiLeaks revelations were done, newly revealed U.S. diplomatic cables suggest a growing rift between France and Germany over satellite surveillance technology.

According to the cables, Berlin lobbied to partner with Washington on developing high-resolution observation satellites that could take infrared images at night and send them back to Earth much quicker. But France allegedly opposed that and tried to stop that project.

A Florida police lieutenant's son who was allegedly caught on video beating up a homeless man has turned himself into authorities. The tape shows one man punching another man in the head last month -- you see it there -- leaving him unconscious on the street. The victim's sister alleges 21-year-old suspect Justin Collison got preferential treatment because of his father's job. The Sanford Police Department denies that.

And talk about a status update. Facebook reported has received investments in a deal that puts its value at a whopping $50 billion. That is according to "The New York Times."

The paper says Goldman Sachs and an unnamed Russian have invested $500 million in the social network site, and that could pressure on Facebook's founder, Mark Zuckerberg, to take the company public. The reported investments would make Facebook worth more than Yahoo!, eBay, and even CNN's parent company, Time Warner.

And the first Monday of the new year, well, it got off to a late start for some Apple iPhone users. Their iPhones' alarm apparently failed to go off properly for the third day in a row.

Some users reported the glitches on Twitter and Facebook. And Apple had promised to fix the problem today. And the people who were experiencing this problem, well, they had set their alarms for one- time use. So Apple is now telling users to set their alarms as recurring ones to try to resolve this issue -- Wolf

BLITZER: That's so basic, you know, for an alarm to go off. They didn't have that right? That's hard to believe.

SYLVESTER: Yes. This is apparently dealing with the iPhone app, and that's the glitch.

And again, if it's for people who are setting a one-time use, those are the folks who are experiencing the problem. So they're saying, you know, you have the option of putting in for a recurring use. Use that one instead and hopefully that will fix it.

Of course they need a more permanent solution. But you're right, that's kind of a basic thing, setting an alarm on a phone. You'd think that they'd have that one set.

BLITZER: You know what a permanent solution is?


BLITZER: An alarm clock next to your bed. You just turn it on, and that works. It's been working very well for many, many years.

SYLVESTER: That's just too easy though, Wolf.

BLITZER: Thanks very much.

Some say it's like a Alfred Hitchcock thriller coming to life. We're talking about the birds. Thousands of them have fallen dead from the skies over an Arkansas town.

We're going there.

Plus, Christians targeted in Egypt. A deadly attack is sparking new concern right now at the Vatican.


BLITZER: Now the shocking fate of a former Pentagon official who devoted much of his life to getting the Vietnam Veterans Memorial built. The body of 66-year-old John Wheeler has now been discovered in a landfill, and police say it was a homicide.

Our senior correspondent, Allan Chernoff, is joining us now with more on what's going on.

A very, very bizarre and sad story. What do we know?

ALLAN CHERNOFF, CNN SR. CORRESPONDENT: Wolf, the case is really right out of a crime thriller.

The Delware medical examiner has determined that the death of John P. Wheeler was a homicide. An employee at a landfill in Wilmington spotted Wheeler's body in a garbage truck as the vehicle was dumping its contents on the morning of New Year's Eve.

John Wheeler was the first chairman of the Vietnam Veterans Memorial Fund, as well as a former Pentagon official. Newark, Delaware, police are now asking for the public's assistance.

The police believe that the body was placed in a dumpster along the garbage trucks route in Newark. Trucks began pickups along that route at 4:20 in the morning last Friday in downtown. Based on the body's position in the truck, police believe that Wheeler's corpse was dropped at one of the first stops along the route. At nearly 10:00 a.m., the police were called to the landfill to investigate.

Now, the medical examiner, thus far, is not revealing the likely cause of death.

We have a recent picture here from -- actually, it's from the early '80s. And this is a picture from -- on the right side you see Mr. Wheeler. It's from the book "To Heal a Nation," by Jan Scruggs, who is president of the Vietnam Veterans Memorial Fund. Scruggs said Wheeler "served his country honorably, then dedicated himself to ensuring that our nation's service members are always given the respect they deserve."

Wolf, a very tragic and sad story.

BLITZER: And a lot of mystery involved there as well.

Our deepest condolences to the family.

Thanks very much, Allan, for that.

Now to a different kind of deadly mystery. There is early word on what might have caused up to 5,000 birds to simply fall from the sky just before midnight on New Year's Eve.

CNN's Ed Lavandera is joining us now from Beebe, Arkansas, with more on this mystery.

What do we know, Ed?

ED LAVANDERA, CNN CORRESPONDENT: Well, Wolf, this is a story that has everyone here in Beebe, Arkansas, extremely confused as they try to figure out what happened to these blackbirds that just started falling out of the sky as midnight on New Year's Day approached.


LAVANDERA (voice-over): Kelly Mayo still can't imagine what caused this bird to fall out of the sky and nose-dive into his back yard.

KELLY MAYO, FOUND BIRD IN BACK YARD: We haven't touched him. That's the exact way that he's been since the 1st.

LAVANDERA (on camera): You can see what looks like maybe like a little blood stain on one of these brown leaves.

(voice-over): Arkansas livestock officials say some birds showed signs of massive trauma, but no evidence they were poisoned.

But what caused the trauma? Some officials suggest it was New Year's fireworks or lightning from a storm. Residents here aren't buying those theories.

MAYO: Fireworks? I can't imagine fireworks would strike 4,000 or 5,000 birds and drop them in a one-or-two-square-mile area. It just doesn't sound feasible to me.

LAVANDERA: Beebe, Arkansas, has developed a love-hate relationship with these blackbirds. Just ask Charles Moore, who lives right next to a wooded area where tens of thousands of the birds live. CHARLES MOORE, BEEBE, ARKANSAS, RESIDENT: To go out and do a simple thing like get a paper, sometime we'll take an umbrella with us. The sky is just black with them. Then there's going to be a lot of droppings.

LAVANDERA (on camera): And you just had a target on your head, right?

MOORE: Oh, yes. Exactly.

LAVANDERA (voice-over): We walked through the wooded area behind Moore's home. Dead birds are still everywhere. And Moore says the ones still alive are acting strange, some even struggling to fly.

(on camera): I think I see one over here.

MOORE: Is he alive?

LAVANDERA: It's a bird that probably should have flown away.

MOORE: Yes. I can't imagine a bird letting us get that close. That bird is sick as well.

LAVANDERA (voice-over): We tried to get a better vantage point of the wooded area where these birds flock to when we came face to face with one of the dying blackbirds.

(on camera): I feel terrible. All of a sudden, I'm driving and I see the bird just kind of flop up onto the hood of the car here, and it just started fluttering up this way, and it went over to the back, and now it's sitting over there on the side of the road.

(voice-over): The little bird couldn't get off the road.

UNIDENTIFIED MALE: Going to pull him off over here. It's terrible.


LAVANDERA: Wolf, and you do still see that, even throughout the day today, in that wooded area. You see a lot of these birds. They still seem to be kind of confused.

Now, as to what exactly happened here, you've heard the theory about the lightning or the fireworks. We've talked to some people who did say they heard some "booms" as midnight approached on New Year's Eve. But many people still say, even if that were the case, they don't understand why that would have confused these birds so intensely.

State officials are saying that these blackbirds can't see very well at night. So if something caused them to jump out of these trees and fly at night, they very plausibly could have all started flying into each other. But those are the kind of scenarios here, Wolf, that people are having a hard time buying. So, here in Beebe, Arkansas, the plot thickens -- Wolf.

BLITZER: Yes, what a mystery that is.

All right, Ed. Thank you.

Another mass death of wild life in Arkansas as well. An estimated 100,000 drum fish floated to the surface of the Arkansas River near Ozark. That's about 125 miles west of the town of Beebe, where all those birds fell from the sky.

Authorities say they do not believe the two events are connected. They suspect some sort of disease killed the fish, which were discovered Thursday night.

Jack Cafferty is asking, what's the most important issue facing the country in 2011?

And raunchy videos were shown to the crew of a U.S. aircraft carrier. We're investigating how this could have happened. How this could have happened.


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

CAFFERTY: The question this hour as we head into the new year: What is the most important issue facing our country in 2011?

Dave in Florida, "Three things: jobs, everything else, and jobs."

Langston writes, "Entitlements, entitlements, entitlements. The government is a massive entitlements vending machine which is deferring costs as far as possible into the future, burdening future generations. Unless policy changes are made, projected spending for Medicare, Medicaid, Social Security and federal employee retirement programs will consume all tax revenues collected by the year 2030."

Sam writes, "Reducing the deficit has to be a top priority. Although it's not a major short-term problem, the plans to reduce it have to be set in place now or it may not happen until it's too late."

Richard in Michigan says, "Cynicism is the greatest problem we face. We're not going to be able to solve anything if insults, disrespect and sarcasm replace legitimate political discussion. It may play well on the newscasts, but dueling sound bites and snarky pundit commentary aren't doing a thing for the rest of us."

Steve in Virginia writes, "The most important issue facing the country for 2011, the application of common sense for the common good of the American people. Let us not confuse the debate with fellow citizens within our borders with the enemies that lie outside our borders."

Kevin, in California, "A second financial meltdown. This time, the states defaulting on bonds, massive cuts by the states, and the possible collapse of the euro."

Stacy in Florida says, "Getting the unemployed to go to school and learn a trade or profession. I read where there are a lot of jobs that need to be filled but can't because of a lack of qualified people." And Helen writes, "Happy New Year, Jack. The top issue for 2011, the economy. I hope this year you'll ask more intelligent questions. No more stupid Palin questions."

That's redundant.

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

BLITZER: Jack is back for the new year.

Welcome back. Good work.


BLITZER: Jerry Brown is back as well. He was known decades ago as "Governor Moonbeam." He was sounding a little bit spacey today as he was sworn in as the California governor again.


BLITZER: Grief, anger and a search for answers. Right now, the pope saying deadly attacks on Christians in Nigeria and Egypt could fuel a Christian exodus from the Middle East and elsewhere. President Obama's condemning the attacks.

CNN Senior International Correspondent Ben Wedeman is in Alexandria, Egypt, where a suicide bombing killed worshippers as they welcomed in the new year.


BEN WEDEMAN, CNN SR. INTERNATIONAL CORRESPONDENT (voice-over): Distraught relatives search for victims of the New Year's bombing.

In the nearby Marmokos (ph) hospital, law student Peter Sami recalls he just left midnight mass when the bomb went off. "There were bodies all over the ground," he recalls. "I fell on top of them. I got up and had to walk on top of more bodies to get back into the church."

Still in shock, store owner Musab Shada (ph) suffered burns to his legs and face. He struggles to maintain his composure as the nurses attend to him.

In the intensive care unit, 4-year-old Karin Bulas' (ph) relatives are trying to distract her with snacks and sweets. In addition to second- degree burns to her face, shrapnel tore into her legs.

Christian/Muslim tensions have been rising here in recent years. Members of the Coptic Christian minority, which makes up around 10 percent of the population, have long complained of discrimination at the hands of the Muslim majority.

Sameh al-Khatib and his brothers were in their grocery store when they heard the blast. "Moments later," he recalls, "a mob seemed to appear out of nowhere, rushing down the street, attacking and ransacking Christian-owned stores and properties." He protected himself with an empty soft drink case.

Up the street, angry Christians chant, "We want our rights!" and then try to break through the police cordon to reach the church.

(on camera): The church is now surrounded by security. Hardly anybody is allowed near it. And that's the problem, many of the people in this neighborhood say, that when the church really need to be protected, there was no one there to do it.

(voice-over): Now the security forces have their hands full trying to keep the anger from turning into violence. Reinforcements have been trucked in from Cairo.

Christian storekeeper Rauf al-Disidin (ph) insists Muslims and Christians in Egypt can live together in peace, but says what's needed is an educational system that teaches love and tolerance.

After the new year's carnage, those are two commodities that seem to be in short supply here.

Ben Wedeman, CNN, Alexandria, Egypt.