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Moammar Gadhafi Remains Defiant; Humanitarian Crisis in Libya

Aired February 28, 2011 - 19:00   ET


JOHN KING, HOST: Thanks Wolf and good evening everyone. Tonight anti-regime protesters in Libya say much of the country is now under their control including areas with major oil reserves. The United States and its allies are telling Moammar Gadhafi time is up.


HILLARY CLINTON, SECRETARY OF STATE: It is time for Gadhafi to go now without further violence or delay. The international community is speaking with one voice and our message is unmistakable.


KING: But Colonel Gadhafi not only vows to fight on in an interview with the BBC and ABC News today, he denies the capital of Tripoli is under siege or that he has lost his legitimacy as leader.


MOAMMAR GADHAFI, LIBYAN LEADER: They love me, all my people, they love me all.

UNIDENTIFIED FEMALE: But if they do love --

GADHAFI: They will die to protect me, my people.


KING: To that, the Obama White House says this.


SUSAN RICE, U.S. AMBASSADOR TO THE U.N.: It sounds just, frankly, delusional. And when he can laugh in talking to American and international journalists, while he is slaughtering his own people, it only underscores how unfit he is to lead and how disconnected he is from reality.


KING: What's next in this stalemate is the big question tonight. Just how much help should the international community give anti- Gadhafi rebels. And should direct military options now be on the table? We are told tonight there are some U.S. military assets already in the Mediterranean, and two more powerful Navy ships not too far away down here in the Red Sea.

The military debate, in just a moment. But first, let's begin with a firsthand assessment of Gadhafi's grip on power, if not reality. Our senior international correspondent, Nic Robertson, is in Tripoli. And Nic, let's just start right there, in a stalemate with Gadhafi in charge of Tripoli, I'm going to show our viewers here a bit of this control. You see the difference. The green area controlled by opposition forces, the red area definitely controlled by Gadhafi. The question becomes, Nic, resolve. How deep is the opposition? How deep is its resolve to keep fighting?

NIC ROBERTSON, CNN SR. INTERNATIONAL CORRESPONDENT: Well, the government says its resolve to keep on going is strong. They say that they actually control three quarters of the country and they say, on top of that, if there are any (INAUDIBLE) inside that three quarters that the opposition has, it's tiny, tiny pockets, not the reverse. Of course, that's not the reality, but their view of the reality is that they can talk to the opposition, that they can negotiate with them, along tribal lines.

They still believe that Gadhafi can hold out. They are saying, well, we might have to have some constitutional changes, but when you look around this area, 40 minutes drive from here, we were in a town, an important oil refining town, Zawiya yesterday, the center of the city controlled by the opposition and the army on the outskirts that we saw didn't really seem strong enough to go in and crack down and take control of the area.

Even the army, the government's army here looked pretty rag tag. Tripoli, a different feeling, the government here has sort of encouraged people to come back out on the streets, secured it better, because they've tightened it up. You get soldiers and policemen, armed soldiers and policemen on traffic intersections in the city, just not the normal here. There are more -- there's more traffic about, but resistance, the opposition here say the government's grip is so strong they're afraid to come out, but they're still here so it's a very strange reality that's going on here, John. It looks like the government has control in the city, but really it's a tenuous, but nevertheless, a sort of firm grip, John.

KING: And as you described that tenuous but firm grip, Nic, what is the regime if anything saying about the sanctions? The United States says it has frozen at least $30 billion in assets. We hear from international governments around the world, similar sanctions, financial sanctions, more diplomatic pressure, what is the government saying?

ROBERTSON: Oh, they're angry about it. And that's why they've invited journalists in here. They're saying, look how can you slip sanctions on this country when you haven't even been here to take a look at this situation. There's been no mass murders, no aerial bombardments of civilian cities. They're saying that the international community has just got it plain wrong and they should come here and take a look.

So they're clearly feeling the heat. I don't think there's too much surprise that they're feeling that they're getting this sort of pressure right now. I talked to Moammar Gadhafi's son, Seif Gadhafi, the night before last, and he actually asked me, well, what's going to happen with the sanctions. And when I said to him, look, it should come as no surprise to you, your father is not liked by the international community, he didn't seem in the least bit surprised.

They know that the international community is gunning for them. I think they're very surprised, though, at how quickly it's all come. And frankly, they find themselves essentially defenseless to stop it happening, John.

KING: And Nic, what is the government saying about the bloodshed? We just heard Gadhafi saying that his people love him. And some of these statements would frankly be laughable if the stakes were not so serious and the bloodshed not so significant. The former ambassador -- I call him the former ambassador, but the U.S. ambassador from Libya who has broken with the regime and now supports the anti-government forces, he just told Wolf Blitzer he believes 2,000 people have been killed over the last couple of weeks. Does the government give any death toll?

ROBERTSON: They're saying it's in the hundreds. They're saying there's no doubt a lot of people have died. They say people have died on both sides, both the army, police, and the civilians. They say the reason for that is they've had to crack down. They're saying, look, if you had armed supporters of the opposition out on the streets in Washington, they say, what would your government do about it?

And they point to these protesters that we saw in Zawiya yesterday, who had weapons, anti-aircraft guns, heavy machine guns, RPGs, they say, what would your government do? They would have to go in with weapons to deal with them, and that's why they say there were civilian casualties. But it belies what everyone else here in the city has told us that government militias have been running around the city in ambulances, shooting on innocent protesters. That people have been denied treatment in government hospitals, that they've had to seek treatment in people's houses.

What's happened in the past couple of days here is that the government's got better control in Tripoli. So we're not seeing that kind of violence. They've got that control through fear and repression, because we're talking to the people who have that fear and are telling us they're repressed and can't come out and demonstrate. These people are telling us that they fear they're losing their momentum.

So the government's gaining it here, but their defenses of what they've done don't wash at all with the opposition. So how they can believe that they're in real negotiations with the opposition, it's hard to imagine. It is a very strange situation; this city is almost a bubble of reality to itself -- John.

KING: Nic Robertson for us, and as Nic noted, he is here in the capital of Tripoli, part of our fascinating team not only in Libya but across the region. We'll keep in touch with Nic in the hours and days ahead -- Nic, thanks. Let's check in now with CNN's Ben Wedeman who is in eastern Libya and Ben, perhaps not surprising, but we keep hearing conflicting reports, conflicting information, some confusion, including on this day whether or not Libyan jets were in the air and conducting bombing runs. What can you tell us?

BEN WEDEMAN, CNN SENIOR INTERNATIONAL CORRESPONDENT: Well I can tell you that we were in the area (INAUDIBLE), which is about an hour and a half's drive from here when we were driving around in the desert and we heard a plane overhead. And it's very unusual to hear any planes in this area. And shortly afterwards, we heard a large explosion. We drove to the place where the explosion took place, and it was inside sort of an army camp/ammunition dump.

According to the gates -- the guards at the front gate, a Sukhoi, that's a Soviet-made jet dropped four to five bombs within the compound, and in fact, while we were outside, we heard what sounded like secondary explosions. And afterwards, of course, the soldiers in the area, who, of course, are part of the anti-Gadhafi coalition, started to fire anti-aircraft, sort of wildly, in the air, even though the planes had already left. Now, afterwards, Libyan state TV denied that any Libyan Air Force planes were involved in action in eastern Libya, but what we saw and what we heard, it couldn't have been much of anything else, I think -- John.

KING: Ben, that's fascinating reporting there. What's your sense of the state of the balance of power, if you will, where you are largely in control of the anti-Gadhafi forces? Gadhafi himself is in Tripoli and he says he is defiant and he's going to fight to the end. When you talk to the anti-government forces, are they requesting anything specific from the international community, outside help?

WEDEMAN: Well, they have suggested that the no-fly zone would be helpful to prevent the sort of air raid that took place today, but beyond that, they're very hesitant to ask for any sort of direct foreign intervention or help. In fact, we were driving around this area to the west of here, and it does appear that they do have a certain amount of hardware. We were in another army camp where we saw 13 T-54 Soviet tanks.

Now, those tanks do date back to the 1950s, but all of them seem to be in working order, at least, that's what we were told. In the port of Benghazi, there are some Libyan warships that look like they're in fairly good shape. Out at the airport nearby, there are some functioning helicopters. And there certainly is no shortage of volunteers, should they decide to muster some sort of force to march on Tripoli.

Of course, the problem is there's a large area in between the eastern section and the western part, where Tripoli is, that is very difficult to get across. It's hundreds and hundreds of miles. And in the middle is the town of Sirte or rather the city of Sirte, which is Moammar Gadhafi's homeland. So sort of tactically, it's hard to imagine how the forces in the east are going to even engage the forces in the west, unless there's some sort of decisive foreign intervention to cripple Gadhafi's Air Force and Navy and Army. At this point, it's almost -- it almost seems as if we've reached a stalemate.

In the west Gadhafi seems to be getting a handle on the situation. We're hearing that his forces are approaching Misurata, a town outside of Tripoli where initially the rebels or the opposition had gained control, but their control seems to be slipping again, so it's sort of an east/west stalemate, with neither being able to really make a decisive move against the other -- John.

KING: Ben Wedeman for us in eastern Libya, and as Ben notes, a stalemate. We'll wait to see what the international community does next -- Ben, thanks.

In addition to the violence and the political uncertainty, there is now talk of a humanitarian crisis as thousands of Libyans flee as well as thousands of foreign workers who had jobs in Libya, but are now rushing across the border to escape the violence. Ivan Watson is along the Tunisian/Libyan border. And Ivan, tell us what you're hearing from people who are coming out and are they still coming out in large numbers?

IVAN WATSON, CNN CORRESPONDENT: Absolutely, they're streaming out more every day, we're told between 10 and 13,000 a day, close to 60,000 just over the course of the last week. And most of these people are not Libyans; they're some of the foreign nationals, the armies of foreigners who have worked in Libya, which is an oil and gas-producing country, much richer than many of its neighbors.

They're estimated more than a million Egyptians. And the problem is, they get here to Tunisia, they're being well-cared for by the Tunisia military, by Tunisian civil society, who are feeding them, but they have simply overwhelmed the network of camps and temporary shelters that have been set up, and they're stranded here. The Egyptians simply do not have the capacity to airlift or sea lift all these people back to Egypt, because as you well know, Egypt is facing its own political turmoil after it experienced a revolution less than a month ago -- John.

KING: And so, Ivan, let's start there. Then I want to deal with the situation inside Libya. So as the international community says a humanitarian crisis and it is prepared to try to help, what are the most urgent needs right there, where all those people are sitting, waiting?

WATSON: Well, probably just finding these people a place to sleep. We saw thousands of men camped out under blankets in a dust storm right next to the border. And they need tents; they need some kind of housing. The United Nations is coming in; it promises to bring some of these facilities in. The U.N. says that one of the top priorities is air and sea lift out of the country. And they're saying other countries have to step up, in particular, to help Egypt, because Egypt is poorly positioned right now to launch a massive airlift and sea lift of its citizens from Tunisia back to Egypt proper.

KING: And as they come across that border, Ivan, what are they saying about the situation inside Libya, the uncertainty, the violence. Has it abated at all or is it still just as bad as we've heard in recent days?

WATSON: You know several Egyptians have told me about Libyan soldiers robbing them at gunpoint as they've made the hazardous voyage from Tripoli to the Tunisian border. One man, he worked as a hair dresser for a year in a part of Libya. He said that the Egyptian -- the Libyan, rather, soldiers stole his money and then stole his cell phone. Another man saying that his laptop that had four years of work in it, as well as his cell phone, were taken, and that the soldiers destroyed the cell phone on the pavement, right in front of him.

So not only have these people been forced to leave with what meager belongings they can gather into a suitcase or into a duffel bag and stream across the border, not only that, but they don't even have means of communication to tell their loved ones back home in Egypt that they've made it out OK. And we've seen some embassies coming in, the Koreans, the Chinese, the Turks to try to help their foreign contractors, who are working, perhaps, on oil installations there, perhaps on construction sites, working on building trains, railroads in Libya.

They've come in to try to help out. We've seen bus loads of Bangladeshis brought out, other contract laborers, but really the biggest crisis right now is facing these hordes of Egyptians who number in the hundreds of thousands in Libya. We don't know what's happening right on the other side of the border. The UNHCR, they tell us that they're getting no cooperation, no communication, even, from the Libyan soldiers who are still flying the green flag of Gadhafi right on the other side of the Tunisian border gate.

KING: The humanitarian crisis seems to only be growing. Ivan Watson is along the Libyan/Tunisian border -- Ivan, thanks.

WATSON: You're welcome, John.

KING: Still to come, Gadhafi's session with international reporters today leaves little doubt he's ignoring demands that he step down and well plenty of doubt about his grasp of reality.


GADHAFI: No demonstrations at all (INAUDIBLE).


KING: But next, if Gadhafi won't go, will the United States and others use military force to push him out?


KING: Military sources tell us tonight the United States is moving more assets closer to Libya. Up here is the Mediterranean and we're told the guided missile destroyer, the "USS Stout" is up here as is the command and control ship, the "USS Mount Whitney," more powerful assets nearby, down here in the Red Sea. We're told the "USS Kearsarge" is here. That's a Marine amphibious assault ship. You see aircraft -- there are also ships that can come off that boat as well, small boats here and larger, more powerful, the "USS Enterprise" and its carrier strike group also nearby. But are there viable military options? One proposal on the table -- we'll shrink this down so you can see the map -- is to enforce a no-fly zone over Libya. That would keep Gadhafi from using his military air power against his own people, and perhaps prevent mercenaries from flying in. But Secretary of State Clinton says no firm decisions have been made.


H. CLINTON: As we move forward on these fronts, we will continue to explore all possible options for action. As we have said, nothing is off the table so long as the Libyan government continues to threaten and kill Libyans.


KING: Our senior White House correspondent Ed Henry has the latest on the administration's debate about what comes next. And Ed, if nothing's off the table, that means everything's on the table. Is there something that's at the top of the list? Does the administration first and foremost, do they see a viable military option here?

ED HENRY, CNN SENIOR WHITE HOUSE CORRESPONDENT: They see options, John, but not -- you know not just a no-fly zone, maybe air strikes, if not U.S. air strikes, possibly NATO air strikes, which is what you hear a lot of senior officials talking about in private, but two big things have to happen first for them to get there.

Number one, they want to make sure that they get allies on board. They want to make sure they can get either Russia and China endorsing it before the U.N. Security Council or at least abstaining. That could be difficult. But even if that were to occur, secondly, they want to make sure when you talk to senior officials there would be surgical strikes to make sure that it would hit the Libyan government and not hit innocent civilians.

The last thing the U.S. and its allies could use would be a propaganda bonanza like that for Colonel Gadhafi to have the U.S. and its allies hurting, maybe killing innocent civilians. So the bottom line is what I found very telling today, when the U.S. ambassador to the U.N., Susan Rice came out to brief reporters after the president's meeting with the U.N. secretary-general here at the White House, she sort of recoiled when the military option came up, and made it very clear that while it's an option on the table, it's nowhere near the first option.

They're certainly trying diplomacy first, but as we're seeing, while they've had modest success with sanctions before the U.N., this weekend, for example, so far, it's doing nothing to stop the violence. It's still early, but so far the violence continues, and as you suggested, Colonel Gadhafi, as we heard from Ambassador Rice, appears to be delusional about the whole situation -- John. KING: Ed Henry at the White House, difficult choices facing the administration. Let's get some perspective now from our senior political analyst David Gergen, who has advised four U.S. presidents. And David, obviously you don't want to go to the military option, but is there not a risk, if you're going to become more aggressive, more muscular in your rhetoric, saying Gadhafi must go, but if he doesn't go, you need to deliver or else that's an idle threat.

DAVID GERGEN, CNN SENIOR POLITICAL ANALYST: You do, John, want to keep military option as the last resort, but you don't want to take it off the table in this situation. Clearly, the administration would prefer that the Libyan people push out Gadhafi (INAUDIBLE). But you know just in the last 24 hours, there's been a shift and a bounce (INAUDIBLE). Ben Wedeman was saying they may be into a stalemate now between east and west.

And so pressure is mounting on the administration. If it gets into a stalemate and Gadhafi is now using his air power to bomb the facilities and the people in the opposition, and you've got a mounting human toll that's taking place there, a mounting humanitarian crisis, the pressure is rising on the administration to act and to act soon. Sorry -- Senator McCain and Senator Lieberman both pushed him over the weekend from Egypt to be more muscular in a response. And I think the lining up of the ships now is exactly giving him that option. If he decides to use it, then I would say the odds of him using it will go up the longer the stalemate continues.

KING: Senator Lieberman has also suggested, David, perhaps supplying munitions and other support to the opposition forces, the rebel forces opposing Gadhafi. I'm not sure there's a shortage of weaponry in Libya. Our correspondents have said that these opposition forces have taken possession of some of them, but a number of other leading Republican senators tonight saying, whoa, whoa, whoa, slow down. Let's not get that far out ahead -- good idea or a bad idea?

GERGEN: Well, I think that the bombing option is probably a cleaner one than trying to -- everybody, you know if you do this you want to do it from the air, if at all possible. The last thing you want to do is put troops on the ground, American troops on the ground in there. That has all sorts of problems connected to it. But if he -- if Gadhafi is able to hold on to his power by using his air force, then you -- then the NATO, while working through the U.N., may well want to go in and cripple his air force. And you can do that by bombing runs on his airfields, obviously, as well as the no-fly zone.

KING: I want you to stay on that point because I want to walk back over here to the map to show everybody what we're talking about because we've been showing for the last few weeks, as the unrest has moved from Tunisia into Egypt now to Libya and of course other places in the area, but David, if I come in close here and you look, you mention using -- perhaps using military assets for air strikes. Again, there are two ships down here in the Red Sea.

There are two U.S. naval ships up here in the Med, but NATO bases, there are two in Italy. These are the closest facilities, not that far away, Aviana (ph) and La Fazia (ph), two bases in Italy. But David Gergen, if the United States and its allies projected military force in this part of the world, Israel sitting right here, Syria, Lebanon, Jordan, Iraq, Saudi Arabia, Bahrain, what kind of a precedent would that set?

GERGEN: Well John, it's a really, really important question. You know, Susan Rice, I think, as Ed Henry reported, recoiled but Hillary Clinton remembers that her husband used air power and used it very effectively in the Balkans during the 1990s, and it allowed us to get things ended there in a way that I think everybody now looks back upon and says thank goodness we used the air power. So there is some precedent, but John, there's this other interesting question.

If we were to use air power now or any military power, to rescue people against a dictator we hate, what if the day now comes in a place like Bahrain or Yemen when you know people are rising up against a dictator we like and we're called upon to use air power? That is one of the really hard questions here. And why the administration so clearly would prefer not to use military power if it can't, but you know there comes a certain time, if he's butchering his people, where you can't stand back.

And they've got to work through NATO. They've got to work through the U.N. And it also, if you do use it, he's got to -- he wants to say -- the president wants to stay very clearly on the side of the protesters and on the side of democracy. Using power here would send a very, very powerful message in that regard. But it does have these kinds of questions about what kind of precedent it sets. You're asking one of the really important questions.

KING: David Gergen for us, as always, David, thank you for those insights. And still to come tonight, the president's guests at the White House today included several Republicans who want to evict him from that building in 2012. But next, we'll map out the tough policy choices and show how complicated and how much more complicated they are by a Libyan leader who seems disconnected from reality.


GADHAFI: It's al Qaeda. It's al Qaeda. It's al Qaeda, not my people.



KING: Complicating any U.S. or international response to the Libya crisis is the erratic, even irrational behavior of the Libyan leader, Colonel Moammar Gadhafi. For days now we've been showing you images of dramatic, dramatic demonstrations, including in the capital of Tripoli. Well, Gadhafi says his people are not demonstrating against him and that any uprising is being led by Osama bin Laden's al Qaeda organization. Listen to this exchange with reporters from ABC and the BBC.


GADHAFI: They love me, all my people with me. They love me, all.

UNIDENTIFIED FEMALE: But if they do love --

GADHAFI: They will die to protect me, my people. No, no --

UNIDENTIFIED FEMALE: If you say they do love you, then why are they capturing Benghazi and they say they are against you? Why are --

GADHAFI: It's al Qaeda. It's al Qaeda. It's al Qaeda, not my people. It's al Qaeda.



GADHAFI: Al Qaeda, al Qaeda, yes.




KING: Is he delusional, as the White House suggests? And if so, is the first step in any policy debate realizing logic likely won't apply here? Aaron David Miller is a veteran of delicate Middle East diplomacy and Thomas Donnelly is the director of defense studies at the American Enterprise Institute. We've heard terms mad man, irrational, erratic. How do you plot a policy response when you know the person on the other end of the phone, if you will, is unpredictable, if not worse?

THOMAS DONNELLY, AMERICAN ENTERPRISE INSTITUTE: Well, the one thing that's predictable about Moammar Gadhafi is that he fears American power, particularly military power that he's barely survived in the past.

KING: So, use it?

DONNELLY: At least have it as an option and be sure you have enough options to handle whatever situation may come up, if he behaves erratically.

KING: Aaron, now that they have said that he has to go, what if he doesn't? What do we do on day three, day four, day five after that?

AARON DAVID MILLER, FORMER STATE DEPT. ANALYST & NEGOTIATOR: This is a problem. When you talk about Gadhafi slaughtering his own people, when you start to move military naval assets to the Eastern Mid, then you raise your own ante. And the reality is, you hope what's going to happen is you're going to change the calculations of those around him through this demonstration of power. But if you don't, you're left with the same problem.

Who goes in to get Gadhafi in the bunker? That's the essential problem. And the longer this goes on, without American response, the weaker we look.

JOHN: The administration is clearly hoping that freezing assets, the threat of more sanctions, and the threat of the international outrage and the International Criminal Court will have an effect.

Let's listen to Ambassador Rice earlier today at the White House, essentially trying to say, listen, mister, you need to go.


SUSAN RICE, U.S. AMBASSADOR TO THE U.N.: These sanctions and accountability mechanisms should make all members of the Libyan regime think about the choice they have before them. Violate human rights and be held accountable, or stop the violence and respect the Libyan people's call for change. There's no escaping that critical choice.


KING: Now, there may be no escaping that critical choice, but the same woman, within minutes of that, said, he's in fantasy land, essentially, that he's delusional.

So, does it work?

DONNELLY: Well, she's talking to the guys in the bunker with Colonel Gadhafi, and maybe they have a better understanding of what their process --

KING: In Egypt, it was the military. Who is it with Gadhafi, his sons?

DONNELLY: That's one audience, although I wouldn't bet on that. We don't know for sure who we're talking to. We don't have the same kind of eyes that we had with the Egyptian military or others in the Egyptian government. But they'll get the message.

KING: Will they get the message?

MILLER: He may prefer martyrdom over self-preservation, but I can't imagine the kids do. And that's the real calculation right now. Do the kids in the bunker with their future in front of them, the International Criminal Court notwithstanding, want to go down with dad? And the reality is, all of what we're doing is designed, it seems to me, to change those calculations.

Now, maybe he'll leave. That's the virtue of an unpredictable leader. He can always change his mind.

KING: I'm going to walk over here because I want to ask you a question, and you guys can watch him there, but here's Libya. This is what we're talking about here. We've seen what has happened in Egypt, but in recent days, we have had more demonstrations in Bahrain -- a Sunni monarchy, a Shiite majority right across the Persian Gulf from Iran. The administration is hoping they change things, but they're nervous. We've also seen over the weekend demonstrations in Oman, down here -- again, a friendly to the United States emirate here. And, let's be honest, we're not supposed to talk about some things, but there are some critical U.S. intelligence gathering operations right in that area as well. I've visited some of them over the years.

If the United States uses military force here, what is the message to anti-government forces here?

DONNELLY: Well, the question is: do they read it as the United States being in control of the situation or at least keeping abreast of a rapidly developing situation? There are two ways to read this. The question is, will they be believing that the United States is willing to toss over autocrats? And if we can't toss Moammar Gadhafi out of the boat, then who can we toss out of the boat?

So, it's going to be read a variety of ways defending on what the actors bring to the table. But, conversely, a failure to succeed here, if Gadhafi stays in power, one thing that will be read is the United States is weak and that this movement of democracy and political change in the region has hit a pretty big rock.

KING: You wrote today, Aaron, about a coming, perhaps months if not years of whack-a-mole in the sense that these problems or opportunities will pop up in the region and the administration is going to have to take each one at a time. But if you're in Bahrain and you're saying, well, wait a minute, they shot at us, too.

So, do you think, if the United States is going to use military force in Libya, do you think -- again, not being a student of foreign policy -- if you're one of those protesters, do you think, we're going to go out in bigger numbers, when they shoot at us, the United States will have no choice?

MILLER: You are a student of foreign policy.

KING: But they're not.

MILLER: Right.

KING: The demonstrators are not. Will they think -- will they apply some logic and say, if they shot at the Libyans in the United States as they'll go in, let's go out and make them shot at us again?

MILLER: Maybe, but one of the virtues of being a great power is that you can behave. And we've seen it inconsistently and even hypocritically.

So, the question here is not the precedent. The question here is success or failure. If we succeed, the presidential consequences of this won't matter as much. And that's the key. American power is now on the line. And we're going to have to deliver.

KING: Aaron David Miller and Thomas Donnelly, appreciate your coming here tonight. We'll keep in touch in the days ahead. A bit later, an up close look at the one impact of the Libyan crisis here at home, and you know what I mean if you've filled the tank in recent days.

But next, stories breaking since the top of the hour, and a sign the race for the Republican presidential nomination, well, it's about to kick into second gear.


KING: Welcome back. If you're just joining us, here's the latest news you need to know right now.

Moammar Gadhafi tells the BBC and ABC News, quote, "All my people love me." He adds there are no demonstrations against him in Tripoli and vows he will not leave Libya.

The U.S. ambassador to the U.N. says Gadhafi sounds, quote, "delusional."

The Obama administration today approved the first deep water drilling permit in the Gulf of Mexico since the BP oil spill.

A sad note tonight, one of Hollywood's legends is dead. Actress Jane Russell, who was discovered by Howard Hughes and became one of the biggest sex symbols of the '40s and '50s, was 89.

Congress is back at work, just as a new report warns a government shutdown could derail the economic recovery and that Republican budget cuts could slow job growth. The Republicans dispute those numbers.

And Newt Gingrich now plans to attend a faith and freedom forum next Monday in Iowa along with a handful of potential 2012 presidential candidates. And on that note, Newt Gingrich decided to join that forum in Iowa -- let's bring in, Ed Rollins is with us, our CNN political contributor and Republican strategist from New York, Democrat Cornell Belcher here in the room with me.

And, gentlemen, with Newt going out to this forum in Iowa, he has raised the stakes a little bit. He is likely to file an exploratory committee for president, we are told this week.

Here are some of the people that we believe -- we know they're all considering -- in some way believe will run. And here's one point I want to make tonight. He works for the other guys, since June 2008, would have to give that up if he runs. Most people think in the end he won't.

Governor Palin has worked there since January 2010. She would have to give that up, somewhere of the ballpark of $1 million.

If she runs, Republicans are split on the Palin question.

Former Pennsylvania Senator Rick Santorum has been a FOX commentator since March 2007, he, too, would have to give that up if he runs. Most Republicans believe he will run. A lot of questions about whether he will have a big impact.

And here's the former speaker of the House on the FOX payroll since 1999, Ed Rollins, and again, his aides can't answer the question, if he's just exploring. Does that mean he has to give it up?

But I want you to listen, Ed, when I was out at your friend's Ronald Reagan's centennial, out at the Reagan Presidential Library, a remarkable event, I bumped into Newt Gingrich and I talked about his timetable for running and whether Republican voters, especially the new Republicans, after the big wins in 2010, would view him as yesterday's news?


KING: You had been a leader for the Republican Party as a speaker, of course, but there are many who think right now, your goal is to become the leader of the Republican Party as its presidential nominee. Is there a Reagan lesson in how you go about this?

NEWT GINGRICH (R), FORMER HOUSE SPEAKER: Yes, to be very patient and tell you cheerfully that I'll make a decision at the end of February, and that -- and March to your own drummer. I mean, do you realize that you need to do -- Reagan did what he believed in, when he thought it was right. He ran against Jerry Ford and lost very narrowly. He came back at a time when many people thought he was too old. And he ran a campaign his way.


KING: Ed Rollins, of the group that's out there moving around now, Romney, Pawlenty, add in Gingrich going out to this forum in Iowa, is he viewed as a current day new leader of the Republican Party, or is he yesterday's news?

ED ROLLINS, POLITICAL STRATEGIST: Well, he -- it depends on who you talk to. At the end of the day, he's one of the smartest guys you'll ever find. He basically has been combative in the past, but he's also been one of the great intellectual giants of our party, who has driven an agenda, very effectively.

I think you have a softer, gentler Newt. And I think to a certain extent, he has constructed an organization through his various PACs and what-have-you, that can raise the money. They have probably the best communication team anywhere. He can put a campaign on the ground in a week. Nobody else on that list can do that.

Obviously, Mike Huckabee, who I worked for, if he wants to run, he's got a lot of pieces. Romney has a lot of pieces. Sarah Palin's got to kind of start from scratch. But Newt has the mechanism to start right now.

KING: I was talking and e-mailing with a number of prominent Republicans, especially those involved in the money and the organization business, and they say there's no question Romney's running, no question Pawlenty's running. They all believe Newt's running. They all believe Haley Barbour's running.

They don't believe Mike Huckabee is running. Ed Rollins, tell me if you disagree.

And they say they see absolutely no evidence that Sarah Palin is working on the fundraising or the organizational part at this point, which in any other candidate that would say she's not running, they're afraid to do it because of her.

ROLLINS: I disappear -- disappear -- I would like to disappear and not answer this question. Every sign that I have from Mike, and obviously, Mike Huckabee, I talk to him all the time, he's giving it very serious consideration. He's there. He's talking to money people. He's talking to his operatives. He could put it together quite quickly.

Sarah Palin hasn't put an organization together. She's hired a chief of staff. She's starting to look at some media people. My sense is she could put it together pretty quick and raise money.

You know, they begin with the most valuable asset in politics, which is name ID, and I think to a certain extent, I think both of them would be a very credible candidate once they choose to be a candidate.

KING: All right. Mr. Belcher, you're the Democrat in the room. So, anything you're about to say about these guys has to be run through that filter. But if you just look at the top row, if you look at top row, they've got to give up some money. They've got to give up some money.

And in Governor Huckabee's case -- and Ed knows this -- he was the governor of Arkansas. He's not a wealthy man. And he -- I would argue in some ways -- he has the most to lose, because he has a program. The others are commentators. They're not quite a bit. He has an actual piece of real estate on FOX News on the weekends. So, if he gives that up, they'll have to give it to somebody else.

CORNELL BELCHER, CNN POLITICAL CONTRIBUTOR: When I look at that board, and I've got to tell you, I think FOX is more supportive of Republican candidates than the Republican National Committee. I mean, they're bankrolling this. The thing that Ed said that's really important about Newt is that he can put an organization on the ground, just like that. And Ed and I both know how important that is in Iowa.

The problem with Newt is that when he left office, he had one of the highest negative ratings of any politician in modern history. And he's revised -- there's a lot of revisionism going on right now, where he said the other day that, you know, the shutdown wasn't bad. The shutdown, effectively, sort of put Republicans from offense to defense and assured President Clinton of being re-elected. So, he has a lot of issues.

KING: You guys stand by. We'll talk more politics on the other side, including a remarkable meeting the president had the White House. But before you go, you mentioned about Newt Gingrich. Nikki Haley is the new Republican governor of South Carolina. That's state number three -- state number three in the Republican primary calendar. She said this today, according to "The Washington Post," this is about Newt Gingrich: "There was a place and time for him, I think that there is a respect for him that he's been there and done that." Ouch!

We'll be right back.


KING: -- in 2012.


BARACK OBAMA, PRESIDENT OF THE UNITED STATES: I hope today, all of you, feel free to make yourselves at home. For those of you with a particular interest in the next election, I don't mean that literally. So --



KING: You see -- you see that little finger there for somebody.

The president also deliberately stirred partisan divide over a reference for a handful of Republican governors to get tougher with public employees' unions.


OBAMA: I don't think it does anybody any good when public employees are denigrated or vilified or their rights are infringed upon.


KING: And there was this important policy announcement that also has huge political overtones. The president is now backing a change that would allow states to opt out of the new Obama health care law, but only if they come up with a state-based way of covering most of their citizens.


OBAMA: It will give you more flexibility more quickly while still guaranteeing the American people reform.


KING: CNN contributors Ed Rollins and Cornell Belcher are still with us to break down the policy shift and the great political theater.

Ed, I want to go to you first on this health care shift because I find it tactically pretty smart by the Obama White House. Number one, he is vowing to political reality. You have a Republican House. You have 29 Republican governors -- they despise the health care bill, they're suing him, they're promising to block it in the state. So, that's the new political environment.

So, what does he do? He says, all right, I'll let you opt out. So, yes, he has to vow to the pressure. But it also allows him not to look around and say, 29 Republican governors, show me yours.

ROLLINS: Well, he not only did that, he had his White House people today, his health care person, call around to Democrats and say that this could even be better for us. We could make this more stringent, we could get single-payer. We can do some of the things we didn't get from the bill.

So, he's trying to cover both sides. And I think at the end of the day, many of these governors are going to take him up. But it's a choice that they now can have.

The Medicaid side of this thing is very complicated. And at the end of the day, I don't think anybody's going to back away from their suit. And I think, eventually, the Supreme Court will decide whether this mandated stuff can work or not.

KING: And, Cornell, here's another thing -- the president was very political at this appearance today. And again, 29 Republican governors -- he gets it, the president can count. You might not like his policies at home if you're Republican or independent, doesn't like it. But the president can count and his team can count.

Listen to this: not only does he say, all right, fine, I'll give you waivers, you can all get out of my health care plan, but you've got to come up with one of your own if you're going to do that. He also stirs a little fun 2012 talking about Mitt Romney.


OBAMA: I know many of you have asked for flexibility for your states under this law. In fact, I agree with Mitt Romney, who recently said he's proud of what he accomplished on health care in Massachusetts and supports giving states the power to determine their own health care solutions. He's right. Alabama's not going to have exactly the same needs as Massachusetts or California, or North Dakota. We believe in that flexibility.


KING: Cornell, to you first. Which Republican candidate? Will it be Pawlenty, Gingrich, Barbour, who will cut the first ad that has Barack Obama saying, in fact, I agree with Mitt Romney?


BELCHER: All of them may be rushing to make that ad right now. In the South, we call that a "bless his heart" sort of thing. It was very political. It was very well done. And -- but also going what's going on today is that the president also said to the Republican governors, OK, you can do it better. Show me how you do it better. Which was, by the way, what he was asking Republicans and Congress to do several months ago with the health care bill.

KING: So, Ed --


KING: Go ahead. Go ahead.

ROLLINS: There's nothing more unpopular among Republicans than Obamacare. Not only did the president basically just wrap that baby right around Romneycare again. Howard Dean has said the same thing. Obviously, the governor of Massachusetts has said the same thing.

Romney's going to have to spend the next two years trying to differentiate between his program that he's still proud of and Obamacare. And that's a tough, tough road.

KING: Can he?

BELCHER: And really quickly, part of the problem, Ed, is that -- is that you see like Mitt Romney on the national stage when you (INAUDIBLE) nationally. Mitt Romney's a formidable guy, but this sort of thing, this sort of middle-of-the-road sort of accomplishments -- I call them middle-of-the-road accomplishments -- make him very tough to get through a Republican primary or Republican caucus.

KING: But can he do it? Because otherwise, Ed, if it were not for the health care questions, controversy, road blocks, speed bump, whatever it is in the Republican primaries right now, he would be your guy in the sense that the Republican tradition usually is a guy who has been around the track. The guy who's proven he could raise the money, he gets anointed for the next cycle. That would be Romney, if not for health care, right?

ROLLINS: It would be. I mean, he certainly looks the part. He's got a lot of the establishment people behind him. But he's -- you know, he never got his record beat up last time because he got out too quick. And, you know, he was missing almost the entire last year of his four-year term.

The main capital is just getting starting to get explored, the number of jobs it dislocated and the bankruptcy of five of the major companies. So, obviously, he's going to have a rough and tumble road here as the front runner or the supposed front runner.

KING: I was talking to a guy who's helping Governor Romney today. I can't say much more than that or I'd give him away, but who said he's still my guy, but we're being run by committee right now. We needed a general. We need a general. They want --

ROLLINS: That's always been -- hat's always been his style. And he may switch, who knows. You know, he flipped on a lot of things last time. So --



KING: -- Huckabee during the break.

BELCHER: But to be fair, I need to defend --

KING: Defend Romney. He's great head of hair.

ROLLINS: Please do. Please do. Defend him.

KING: Is there no place to run in the Republican primary saying, you know, 95 percent of the people of Massachusetts have health care and, yes, now we have to deal with the costs --

ROLLINS: Unfortunately not in Iowa, South Carolina, or New Hampshire.


BELCHER: That's right. I mean, to me, if you look at what the Tea Party did over this last year, they're the most powerful force in the Republican Party and they're not going to accept it.

KING: All right. Ed and Cornell, thanks. I know both of you could spell Gadhafi, but there's more than one option. We'll sort them out when we come back.


KING: Before we go tonight, let's take a look at how the Libyan crisis is affecting you at home. Look at the price of crude, a bit of spike there. Now crude just shy of $97 a barrel. And that affects you at home when you go fill up the car.

Just in the last eight days, eight days, the price of gas has gone up 20 cents, $3.35 a gallon regular unleaded now the average.

Now, let's end the program tonight with a little bit of a spelling quiz. Excuse me for passing by. Look at these letters here right here. Do you play jumble at home? What do they spell?

Well, they spell Moammar Gadhafi. This is the CNN way of spelling it. This is our style. And I've got a lot of people on Twitter and Facebook say, hey, wait a minute, that's not how you spell Gadhafi. Well, it is how we spell it at CNN.

But "The New York Times" has its own approach. The BBC and Al Jazeera, well, they spell it a little bit differently. FOX News they spell it with an O-A, not a U-A.

And here's how the CIA spells it, this spell the whole name out, the family and the tribal reference in the middle. They start it with a Q. "The New York Post," well, that's Gadhafi with a K. So, do you want to a K, do you want a Q, do you want a G, do you want a Q? We do it this way here. That's the rules. There is a quiz in the morning.

That's all for us tonight. See you tomorrow.

"IN THE ARENA" starts right now.