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JOHN KING, USA

Let Down by NATO; Humanitarian Aid; Is Gadhafi Going?; Ray LaHood Interview; Paying the Bills

Aired April 18, 2011 - 19:00   ET

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


CANDY CROWLEY, GUEST HOST: Thanks, Suzanne. I'm Candy Crowley. John King is off.

Tonight the White House is defending NATO, even though the Libyan rebels say people in the key city of Misrata have been let down by the alliance. An opposition spokesman tells CNN that after heavy fighting this weekend, pro-Gadhafi forces started shelling Misrata Sunday, using mortars, cluster bombs and splinter shells that scatter lethal shrapnel.

The rebels say at least two dozen people in Misrata have been killed and more than 100 wounded in the past two days. But at the White House today, presidential spokesman Jay Carney says the U.S. has no plans to change its posture regarding NATO.

(BEGIN VIDEO CLIP)

JAY CARNEY, WHITE HOUSE PRESS SECRETARY: We have a great deal of faith in NATO's ability to fulfill its mission. I would point to you that as, you know the last 24 hours have been -- there has been a dramatic increase in the number of planes sorties flown by NATO planes as the weather has cleared.

(END VIDEO CLIP)

CROWLEY: A little bit ago I spoke with CNN senior international correspondent Ben Wedeman who had just returned to the opposition stronghold of Benghazi.

(BEGIN VIDEOTAPE)

CROWLEY: Ben, you've just come back from Misrata. We heard that that city was pounded by Gadhafi forces over the weekend. There are complaints from rebel forces that NATO was basically quote, "taking the weekend off." What did you hear there and what did you see there in terms of the military situation?

BEN WEDEMAN, CNN SENIOR INTERNATIONAL CORRESPONDENT: Well, we didn't see any NATO ships offshore. And certainly there was no sign of any NATO planes in the air. Many residents told me that they know very well where Gadhafi's forces are, and they'd be happy to share that information with NATO. But we've heard this complaint not only in Misrata, but in this part of country as well that the tempo of airstrikes is very unpredictable. Sometimes there will be days when there are no airstrikes. Other -- the other day for instance I was in Ajdabiya on Friday and we heard some fairly intense bombing. So the people in the eastern part of the country in Misrata are expecting more from NATO. They just say they're not getting it -- Candy.

CROWLEY: And let me -- I know you've been looking into the humanitarian crisis in Misrata and that seems to be getting worse by the day. Give us sort of the snapshot of that.

WEDEMAN: Well the real crisis is in things like medicine and medical equipment. We were on this ship that took in bottled oxygen which is in dire short supply there. On the other hand the city -- sort of the city council is fairly well organized. They say they have enough flour, cooking oil and rice to last for two months, but it's basic things like diapers for children they've run out of, but by and large, I'd say they've managed the situation remarkably well given the fact that they're surrounded on three sides by Gadhafi's forces who are we're told fairly randomly shelling the city on a daily basis -- Candy.

CROWLEY: Can you tell, Ben, from what you know or from what you've seen -- and this may be beyond the scope of what you saw there. Are there Gadhafi forces inside the city? Is this a block by block battle? Or are Gadhafi's forces trying to get into the city?

WEDEMAN: Well they certainly do occupy parts of the city. It's a fairly sprawling metropolis that goes on for quite a while. What we're told by the fighters in Misrata is that their focus is to try to cut off the port, because once the port is cut off, no more weapons will get through, no more medical supplies or food or anything will get through. So the main focus is to cut the port off, surround the city altogether and do the same sort of thing they did in Zawiya, slowly street by street subdue the place, and, of course, what happens after that many Libyans simply don't want to contemplate.

CROWLEY: Ben Wedeman in Benghazi for us now, just back from Misrata, thank you so much, Ben.

(END VIDEOTAPE)

CROWLEY: A top U.N. humanitarian official is also in Benghazi today after talking over the weekend in Tripoli with members of the Gadhafi regime. The takeaway from those meetings, no guarantees the violence in Misrata will end. CNN's Reza Sayah joins us now from Benghazi. Reza, the U.N. humanitarian chief has been pressing the Gadhafi regime to allow humanitarian aid to get into Misrata and other conflict zones, any headway on that?

REZA SAYAH, CNN CORRESPONDENT: Well, she did say she made some progress, but it's not clear at this point, Candy, if that progress is going to translate into real help to the people who need it in Misrata. Valerie Aimous (ph), the U.N.'s humanitarian chief, was in the opposition capital of Benghazi today. She told reporters she met with regime officials last night in the capital of Tripoli, and she said regime officials agreed to allow the U.N. to open up a humanitarian office in the capital of Tripoli.

This is something the U.N. had been asking for. She said she's going to open this office as soon as possible. She didn't say when that was going to happen, and it's not clear at this point what they're going to be able to do out of this office. She also talked about Misrata and really what she told us gave us an indication of how far behind the U.N. is when it comes to getting real help for the people who need it.

She said, beyond information coming from news reports and aide agencies he U.N. had very little idea of what's happening on the ground in Misrata and that's why she said she asked officials again for a one-time needs assessment, for them to allow the U.N. team to go in there and conduct the needs assessment. Again short on details, not clear when that's going to happen, and not clear when the actual help is going to get there after this so-called needs assessment. So it appears that they made some progress, but it's slow progress, certainly doesn't keep up with the pace of the hostilities and the number of people who need help from there.

CROWLEY: Sounds like the words are in the right direction, but we haven't yet seen the action on Gadhafi's part. Let me ask you NATO airstrikes generally seem to have been successful against Gadhafi's forces in eastern Libya. Why have they not been as successful, why are we hearing so many complaints out of Misrata about NATO, for instance, not being there over the weekend?

SAYAH: These airstrikes, Candy, are -- as we hear gunshots behind us, hopefully a celebratory one. These airstrikes are very effective when it comes to taking out tanks in heavy weaponry, in artillery that are in open areas, in an open desert, in open highways, which is what the situation is on the ground here in eastern Libya.

It's very different in western Libya, in Misrata where you have regime tanks and heavy weaponry in heavily populated civilian areas. NATO has come out and said the regime is using human shields, placing these tanks and these troops next to homes, next to places of worship even, so obviously these types of tactics are extremely difficult, sometimes impossible for warplanes to tackle from way up in the air. And when the options are limited, the options right now appear to be airstrikes, there's really not much you can do in an urban area like Misrata.

CROWLEY: Reza Sayah in Benghazi for us tonight. Thanks so much, Reza, appreciate it.

CNN's Frederik Pleitgen is in the Libyan capital of Tripoli tonight keeping an eye on what Gadhafi's government is up to. Fred, there are reports the Obama administration is looking for another country that would give refuge to Gadhafi if he leaves Libya -- if is an awfully big word there. Do you see any signs that this is a man that is about to leave Libya, or is it even open to the idea of opening up his government to put more people input into it?

FREDERIK PLEITGEN, CNN CORRESPONDENT: Not even close, Candy. I mean the signals that we're getting from the Gadhafi government as we speak to government officials on background is that they say there is absolutely no indication that Gadhafi is either going to step aside or even relinquish any of his power at this point in time. Certainly that's also what the Gadhafi regime is saying in public.

Last Thursday his daughter, Aisha Gadhafi, came out at a demonstration at Gadhafi's compound in central Tripoli, about 3,000 protesters were there, and she held a big speech saying it was an absolutely outrageous idea to think that Gadhafi was going to step aside at any point in time. Of course on that same day we saw him driving through the city in a convoy sticking out of the sunroof, pumping fists to his supporters.

So certainly there really aren't any indications that he's willing to relinquish power. Now the other thing that I'm hearing from government officials on background here in Tripoli is that they actually feel more secure in their position right now than they did for instance three weeks ago, when the rebels were advancing.

At this point in time, from Gadhafi's point of view, on the eastern front, the front there seems to be fairly stable, at least the rebels aren't advancing to anywhere close to where it could be dangerous for Moammar Gadhafi. In Misrata, there is sort of a situation where there's a lot of fighting going on, but there's not really any big territorial gains that are being made there. So it seems like at this point in time, the Gadhafi government and Gadhafi himself are trying to sit this thing out and wait to see how much resolve NATO actually has -- Candy.

CROWLEY: Fred, I know you went today to look at a neighborhood in Tripoli where apparently there had been big anti-Gadhafi demonstrations that were then crushed by pro-Gadhafi forces. Tell us what you saw.

PLEITGEN: Well yes, the Gadhafi government and the minders that they send with us here, they've been trying to prevent us from going into that neighborhood and it's called Tajura (ph) and apparently there were some very large scale demonstrations there over the past couple of weeks. And certainly we did see the remnants of those when we got there. We came into the neighborhood.

There was still a lot of graffiti on the wall, which seemed to be anti-Gadhafi graffiti, which had been painted over. There was also massive security there on the ground with checkpoints, people being controlled, and clearly you could tell that people were actually -- absolutely terrified to speak with us. We tried to speak to a couple; many didn't want to speak at all.

Some men said that they love Gadhafi and that they're glad that things have been coming back to normal. But they did acknowledge that there had been some very big demonstrations there, that there had been shooting on the streets there. You could clearly see that something big had been going on. Now this is of course something where the Gadhafi government has always said that there weren't really any big protests here in Tripoli.

That the situation was under control, clearly that's not totally the case. And clearly, there seems to have been a massive crackdown by the Gadhafi government on the people who are protesting in that part in Tajura (ph), which is a place that for a long time had a lot of anti--Gadhafi sentiment in that neighborhood -- Candy.

CROWLEY: In Tripoli for us tonight, Fred Pleitgen. Thank you so much.

Later we'll be talking with former CIA Director General Michael Hayden about Moammar Gadhafi and the Obama administration. But straight ahead what are your spring break plans? We want to check in with Transportation Secretary Ray LaHood to discuss concerns about air traffic controllers falling asleep on the job.

(COMMERCIAL BREAK)

CROWLEY: So far this year, we have seen seven reports of air traffic controllers falling asleep on duty. Today, top government officials start a nationwide -- started a nationwide tour of airports carrying a message they hope is loud and clear. It absolutely has to stop. One mistake is one too many.

Joining us now is the U.S. Secretary of Transportation Ray LaHood. Thank you so much, Mr. Secretary. Listen, I guess stepping back from this, you all have changed the schedules. You all are having these heart-to-hearts with air traffic controllers. I think you'll agree that, you know to have to tell them that they shouldn't fall asleep, probably is -- should be a given.

But nonetheless, I understand you know what you're doing now. I think a lot of people are back here saying, why -- this didn't just start. It may have started in the public mind. But this has been going on for a while. Why wasn't it addressed sooner?

RAY LAHOOD, TRANSPORTATION SECRETARY: Well, I just found out about it, Candy, and when I found out about it I was outraged. I called it ridiculous behavior. I called it unconscionable for these controllers to be falling asleep. Every one of them has been suspended. There are investigations now going on right now with each one of these controllers.

As soon as we found out about it, the first one was Washington National Airport. The controller was suspended and we put another controller in the control tower. And we've done that in other control towers. I've been on this job two and a half years, as soon as I heard about this, we have taken steps.

CROWLEY: I guess not you -- I'm not actually speaking to you in general why you -- you're the transportation secretary and the FAA is underneath it, but it seems to me that somebody somewhere at a tower, at the FAA -- I know you switch the heads of the FAA too. But you know this didn't just start. Things like this don't just all of a sudden, there's some epidemic of controllers falling asleep. And it's a little disconcerting to wonder what the heck else is going on out there that hasn't been addressed?

LAHOOD: Well look that's why the administrator and the head of the controller's union are traveling the country this week started in Atlanta today. They'll be all over the country over the next week talking to controllers, trying to find out if there is something systemic about this, trying to find out about workplace rules, trying to find out if extending the rest one hour, which is what we've done over the weekend is long enough, and really trying to talk to controllers, but also talking to them about personal responsibility. Part of it is personal responsibility, showing up, doing your job, and doing it as a well rested controller.

CROWLEY: You have preliminarily extended the amount of time a controller has to be off work from eight hours to nine. If a controller drives half an hour home, and drives half an hour back, conceivably he has eight hours inside his home before he might have to come back for a shift. You would have to assume that that controller walked in the house and went to his bed and went to sleep, got eight solid hours and got up again and went home. You know that doesn't happen. Does it seem to you that nine just isn't going to do it?

LAHOOD: Well if it doesn't do it, we'll increase it. That's --

CROWLEY: And common sense wise when you think about it.

LAHOOD: Well, controllers are the ones, I believe that thought that eight would be enough, and that's why it was included in their contract, and we talked to the head of the controller's union, and they went to nine. And they agreed to go to nine.

If nine's not enough, we'll do more. But what we expect controllers to do is when they leave the job, and they need rest, and it needs to be a good amount of time to get the kind of rest to come back and work another shift, they should be doing that, like anybody would. Like any public service employee would be doing charged with the safety of people flying around in airplanes and guiding them in and out of airports.

CROWLEY: I guess I wonder just whether nine hours to you makes common sense that someone would -- I mean for instance, you could work a 6:00 a.m. to a 2:00 p.m. shift, so you're up at 6:00 a.m., and on the job at 6:00 a.m. and then come back for the 11:00 p.m. overnight.

LAHOOD: Well what we've done is we've made sure the controllers don't try and switch out so they can get a long weekend. We changed the scheduling and we've also put more supervisors on early in the morning and late at night, to make sure the controllers are doing what they are supposed to be doing. But again, Candy, we came to an agreement with the controllers ongoing from eight to nine and after talking to controllers around the country, actually talking to people in the control towers, if nine doesn't seem to be enough, obviously, we would do more.

CROWLEY: Let me talk to you, April 1st, a five foot hole ripped open in the ceiling of a Southwest plane and I think I thought at the time, holes just don't open up in a plane. There had been stress on that plane for some time. Why wasn't it caught in an inspection? It has to have been a process before you get up in the air and suddenly a five foot hole comes open in the top -- LAHOOD: Those planes have been inspected and they have been determined to be worthy to fly, safe to fly, so they're back in service. But the NTSB is continuing its investigation, and Boeing is also doing the same. So if there is some weakness that was created by these planes -- these type of planes that fly short hauls, so to speak or short flights, and they're up and down and you know there's quite a difference between that and the long haul, I think that we'll find that out, but for now, these planes are safe, and they are back in service, but the investigation continues.

CROWLEY: So -- but don't you think there was a sign of this? I mean, I don't know how long it takes a plane to deteriorate, but it does seem to me that it didn't just one day a big hole showed. That there had to have been signs of stress on that plane that weren't caught by an inspection. You know that there was an inspector general report in December --

LAHOOD: Right.

CROWLEY: -- that said that you all were way behind in inspections.

LAHOOD: Right.

CROWLEY: And so that's just what makes me wonder whether "A", it's getting any better in terms of the frequency of inspections. You were a couple of years behind, I think, sometimes in inspections.

LAHOOD: Right -- right --

CROWLEY: Is this an outcome of that?

LAHOOD: Yes, these inspections go on, on a regular basis by mechanics, when they look at planes. Pilots look at planes before they fly them. They walk around. They take a look at the plane to see if there's any --

CROWLEY: Not the roof.

LAHOOD: Yes, no, I know -- I know -- to see if there's any deficiencies, but mechanics they go up there and they look at the planes. The point is this. This investigation will hopefully show us that maybe these planes need to be inspected more frequently. Maybe there is some kind of a flaw, and hopefully working with Boeing, we can figure out what that is. But for now, the people that have inspected these planes believe that they're safe to fly.

CROWLEY: Let me move you to gas prices, simply because that's on everybody's mind.

LAHOOD: Sure, of course.

CROWLEY: And I know the president has long term energy plans, he wants to trade to make more fuel efficient cars. He wants to invest in clean energy and other forms of energy. Right here, right now when folks are paying $4 in some states, approaching it in other states, and we have predictions of $5 a gallon. What kind of relief is there? Is there any sort of relief the federal government in the short term can do for people paying this kind of money for gas?

LAHOOD: Well the president's instructed the Interior Secretary, Ken Salazar, to really start looking at more opportunities for drilling our own oil.

CROWLEY: That's kind of long term.

LAHOOD: Well I know, but to begin to see if we can start issuing permits so some of this can really begin and with perhaps a more refining capacity. But look, Candy, I mean you've hit it on the head. We're all feeling the effects of this. The second most expensive item in a family's budget is the cost of gasoline to fill up the car.

And when you see people, where it takes $100 to fill up their SUV, that's a lot of money and so the point is, we feel the pain of the American people. We know this is a huge, huge problem for people, a huge financial problem. The president knows that. That's why he's been talking about it.

That's why we've all been talking about it. I wish I had a simple answer. I wish we had a silver bullet, but we're trying as hard as we can to do everything we can. But this Middle East disruption has caused a spike in crude oil and in gasoline prices.

(CROSSTALK)

CROWLEY: So in the short term, and by that I mean, you know a year from now, there's not going to be another refinery online. There's not going to be -- I mean just in the short term, you have to go and suck it up at the pump, basically, is what you're saying?

LAHOOD: Well we're going to continue working with car manufacturers on more battery powered cars, and certainly biofuels that obviously save gasoline. We're obviously -- Secretary Vilsack is promoting that. We're promoting alternatives, but this is a tough time for families, we realize that. The president realizes it, and we're doing -- all hands are on deck to try and find some solutions to this.

CROWLEY: OK. Is there something out there you would like to see, federal gas tax? It's not much when you look at a $50 tank fill up --

(CROSSTALK)

LAHOOD: Yes, I've never really heard that discussed at the White House. We're just -- we're just all hands are on deck to really try and find a solution to this.

CROWLEY: OK. Ray LaHood, thank you so much for joining us.

LAHOOD: Thank you, Candy. Of course, thank you.

CROWLEY: I appreciate it. Today is Tax Day -- if you didn't know that you're in trouble. You had three extra days to file this year and the deadline is just a few hours away. Later this hour we'll let you know just how much the first family paid and made in 2010.

And looking ahead to 2012, will he or won't he, Donald Trump keeps us guessing and tuning in.

(COMMERCIAL BREAK)

CROWLEY: Top Republican Party leaders keep saying Donald Trump is not a serious presidential candidate. Just today the president of the Conservative Club for Growth dismissed him as just another liberal. The trouble is the latest CNN poll among Republican voters shows Trump tied with Mike Huckabee at the top of the 2012 presidential pack. Each with 19 percent, so serious or not, Trump seems to be for real.

We want to talk it over with Republican strategist Alex Castellanos, Democratic strategist Maria Cardona and CNN senior White House correspondent Ed Henry is at his post. Ed, I want to just talk real quickly about the debt. We have this S&P forecast -- it's not a rating, but an S&P forecast for the U.S. now downgraded.

We're not looking -- they're a little worried that the U.S. is not going to pay its debts. I'm wondering if the president has any plans to go out and explain to the American people what's at stake here, because I'm not entirely clear that either party has done a good job explaining to folks what's at stake.

ED HENRY, CNN SENIOR WHITE HOUSE CORRESPONDENT: Well, I think you're right, Candy, and that's why one speech that the president gave last week at George Washington University received well by some is not going to cut it. They realize that here at that White House and that's why he is in fact going out on the road later this week.

He's going to be in California, town hall meeting be at Facebook headquarters trying to engage the public through social media, et cetera, but also stopping in Reno, Nevada for another event. Obviously Nevada one of those many swing states in 2012, so there will be politics, no doubt. But also gives the president an opportunity to engage voters in key states on what's really at stake here. Because again, one speech at George Washington University is not going to be enough.

CROWLEY: You know when I talked to folks, they say, no, particularly economic folks -- they say you don't understand what will happen if we don't do something about the debt and the yearly deficit. I just don't think that message was gotten out there.

ALEX CASTELLANOS, REPUBLICAN STRATEGIST: I'm not sure I would agree, Candy. I think it's gotten out among the American people. I don't think it's -- I think we ought to have an education course on math for the people in Washington. We just had the biggest political transformation in 50 years. Democrats got kicked out of Congress. Republicans took over. Republicans gained -- 18 percent gain in the Senate. And President Obama's ratings are in the toilet because of the deficit, so Americans basically understand you can't keep spending more than you take in; at some point the reckoning comes due. They understand we're taxing our children.

We can't even tax ourselves enough to pay this debt. We're not passing that debt along to the next generation. The American people are incensed and outraged about this. I think Washington could use a couple of more speeches, but I don't think you have to sell the American people that spending more than we take in is something that they don't understand.

CROWLEY: Maybe what I'm talking about here is sacrifice because you ask people what they want to do, and they say oh, cut foreign aide.

UNIDENTIFIED FEMALE: Yes.

(CROSSTALK)

MARIA CARDONA, DEMOCRATIC STRATEGIST: That's exactly right, Candy. And I think that part of the problem is, is that we haven't explained it that well, and I think that we have some opportunities coming down the line, the president going out to talk about the importance of what he talked about in his budget speech, I think, is going to be the beginning of that, but also the upcoming debate on the debt ceiling is going to be another incredible opportunity to make sure that the American people understand how important --

(CROSSTALK)

CASTELLANOS: I think the exception again because having explained it that well, it's how to keep the thing that we've got now spending too much going, not -- the same -- it's kind of preserving the status quo, when you have more people working for government in the United States than had you working in manufacturing and mining and a bunch of other industries combined. When you have -- you know you're making government's economy bigger and the American's people working economy smaller. That's the real problem.

(CROSSTALK)

CARDONA: I completely agree with you. But it's also a question of priorities. You can't look seniors in the face and say I'm going to pay you $6,500 more when you're giving trillions of dollars in tax cuts to the rich.

(CROSSTALK)

CROWLEY: -- too far out -- I want to turn to you another subject because here we are talking about money in the U.S. in you know dire straits basically. Spending now so far about $600 million on operations in Libya. I spoke with Donald Trump about this. And he had an interesting take on where we might want to go get this money. Take a listen. (BEGIN VIDEO CLIP)

DONALD TRUMP, CEO, TRUMP ORGANIZATION: The Arab League is so wealthy, they have so much money. They have cash pouring out of their ears. And they tell us, we're a debtor nation, they tell us to go in and take out Gadhafi, because we don't like him. Why aren't they paying us? Why aren't they paying us?

When they said that, we should have said, "We'll go in, but we want $5 billion." We've already spent $1.5 billion on fighting Gadhafi. We want $5 billion right now and we'll go in.

And you know what? That's peanuts for them. They'd give you a check in two seconds. They go boom, boom, boom. Thank you very much. But we don't have the mentality that even thinks to ask for it.

(END VIDEO CLIP)

CROWLEY: OK, Ed Henry, rather than get into the suggestion, let me ask you, if you think the White House looks at Donald Trump as any kind of serious threat, maybe not as a presidential threat, but at putting some of these things out here, some of the things he's saying about the president.

ED HENRY, CNN SENIOR WHITE HOUSE CORRESPONDENT: I've detected at least privately, you're not going to say too much publicly. But privately, they love this idea. He's talking about birthers. That's what the president last week blurted out, "Oh, by the way, I was born in Hawaii, folks," at a fundraiser in Chicago, because they realize every time Donald Trump talks about that, it may raise -- some conservatives may like him, but independent voters are turned off by that.

And then he's on your program yesterday, Donald Trump, talking about how his is bigger than Mitt Romney, he's talking about his bank account, of course -- and is taking pot shots at one of the leading Republican candidates. They love that inside the White House. And the more Donald Trump wants to do it, they say, God bless him.

CROWLEY: Before I ask you all about this, but I have to say, if there is a populist -- there's a populist tone to the things he says. If you say to people, wait a second. Why don't we ask the Arab League to pay us for some of this money that we're spending? They go, you know what, that's a great idea.

ALEX CASTELLANOS, CNN CONTRIBUTOR: It's hard for me and most Republicans to take Donald Trump seriously as a presidential candidate. He's been all over the board and you never know which way his hair will blow on an issue. But he represents something serious. I think you're exactly right about that.

There is no pro-Trump movement. There is an anti-Washington movement that he's captured the spirit of. America is angry at both parties here. Republicans are even angry at Republicans. They want to roll a hand grenade under Washington's door and just start over. And Donald Trump has captured that and represents that. Now, that's a long way from having the spotlight on what you're not is not how you have a long lasting presidential campaign. At some point, the spotlight moves to what you are.

CROWLEY: Maria, I mean, I think there is something to, can he be president? Well, that's, you know, that's one question. But does he capture something?

MARIA CARDONA, DEMOCRATIC STRATEGIST: I absolutely think he captures something, especially because, I think, on the Republican side, you don't really see anybody coming out and capturing the imagination of the Republican Party and the conservatives. And we see that Donald Trump has now become the darling of the birther movement.

We all know that that is an important conservative sector to be able to get on your side during the nomination. I think for the nomination --

CROWLEY: Which is why Donald Trump hurts the Republicans.

CARDONA: It's possible.

CASTELLANOS: He does right now in the short term. But, you know, Maria's right about one thing, we haven't had that emergence of leadership on the Republican side yet. But that's why we have campaigns.

One of the laws of politics is the law of the gauntlet. And that is that campaigns don't pick candidates, they make candidates. These presidential campaigns are tough. They test these guys. Some of them become stronger and rise to become national contenders.

Donald Trump is emerging in the vacuum now before that happens on the Republican side. He'll be history in six months.

CROWLEY: Let me ask you, Ed, a wrap-up question. So, real quick here. Who do you think the Obama re-election campaign looks at as a big threat, if anyone?

HENRY: Well, right now, they're sort of saying, look, we're surprised. They say in private, that not very many Republicans have really put more than a toll into the water. And so, they're frankly confused in saying, we're not sure who we are, you know, to be most worried about.

I think Alex is right, though, about Trump tapping into sort of the anti-Washington spirit that Barack Obama, as you know, tapped in in 2008. Now, he's the incumbent. And they do have to look wearily, whether it's Trump or whoever grabs that mantle. But, so far, other than Trump, no one has really been that aggressive. So, so far, they're not that worried.

CROWLEY: Ed Henry, Maria Cardona, Alex Castellanos -- thanks for joining us.

CARDONA: Thank you so much. CROWLEY: Coming up, the latest news, headlines, including the devastation left by deadly tornadoes across 12 states this weekend.

(COMMERCIAL BREAK)

CROWLEY: Welcome back.

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

The death toll from last week's tornado outbreak has reached 45. The National Weather Service today confirmed at least 97 tornadoes hit 12 states over a three-day period from Thursday to Saturday.

President Obama's spokesman says there's been no change to his travel schedule because of the storms. Today, the president welcomed the Air Force Academy football team to the White House. As we mentioned, starting tomorrow, he takes his economic message to Virginia, California and Nevada.

The week got off to a bad start on the financial markets, the Dow Industrials, the NASDAQ and the S&P 500 all lost more than a full percentage point. It's a case of Washington's political gridlock hitting you in the wallet.

To help us understand why this happened, CNN Money's Felicia Taylor joins us from New York to explain.

OK, Felicia, what so rattled the Dow?

FELICIA TAYLOR, CNN BUSINESS NEWS CORRESPONDENT: Well, it's this issue of uncertainty. And we just don't have the answers yet as to whether or not, you know, the players in Washington are really going to come together and effectively get a budget deal and get their fiscal house in order.

This was just basically a warning shot to the parties in Washington that they have to get something done and get something done soon. What's most significant about this is that we're taking a long term view about this. The S&P wants to se some significant implementation by 2013, that's a couple years from now, in the middle of that, we got an election coming up as you well know, in 2012.

So, basically what they said is you need to get this done and you need to get it done sooner than later -- because as compared to our other, quote-unquote, "AAA peers," we are on a warning sign right now, and that has to change. Otherwise, the rating will be downgraded.

Keep in mind, this was just an outlook. From stable to negative was on an outlook. We haven't actually been downgraded. We maintained that AAA credit rating in the United States.

CROWLEY: So, basically what happened was the S&P said, gee, the forecast for the U.S. economy has now gone from stable to negative.

TAYLOR: The negative, yes. CROWLEY: Now, we understand that that affects the political argument. In fact, we saw a lot of press releases about it today.

But what does -- what does it mean in reality? Does anything change? I mean, it scared the markets and all of that. But it's just a forecast, right?

TAYLOR: It's a forecast, but it injects uncertainty into the marketplace. I mean, what if we actually did see a downgrade on U.S. debt. That raises interest rates. That makes it much difficult for the economy to recover. It would hit the stock market as you saw it happen today. Initially, we had about a 240-point drop.

It's the idea that the economic recovery isn't in place as it should be. And nor are the players in Washington allowing it to happen.

You can't forget that we had something called quantitative easing, which is the stimulus plan that the Federal Reserve has put into place to buy up bonds in the marketplace. That is kept in terms of some people's opinions. The stock market propped up for such a long time that without it, we could be in real trouble. That's something we're going to be talking about coming up in June when the FMOC is alleging going to start -- to wind that program down.

So, this just puts uncertainty in the marketplace that they knew was there. I mean, let's face it, traders and investors know that the politicians haven't come out with a budget deal as of yet. But the fact that the S&P is recognizing it, and, quote-unquote, "putting it in black and white," makes it an entirely different deal.

This is now on the table as a concern and a major red flag.

CROWLEY: So, how does the forecast go back to stable since it might take them a while to get a debt deal? And do the markets just continue to fall until then? Or tomorrow are they back to normal?

TAYLOR: Well, therein lies the good news. I mean, we saw the markets as I said, you know, drop about 240 points in the morning hours. But by the end of the day, we have recovered some grounds.

So, the truth is, from traders that I spoke to on the floor, hopefully, this is a one-day event. Is it going to be underlying the marketplace sentiments for months to come? Possibly. The next couple of years? Absolutely.

You can see that being played out in Europe. It's still underlying sentiment in the European stock markets as well. And it will continue to do the same thing in the United States.

Do I think tomorrow there'll be another fallout? Probably not and probably not to the extent we saw today if there was.

The rest of this week we're really going to be concerned with earnings, a lot of the big name companies on the Dow are going to be reporting. We need to see forward guidance from those companies that actually is positive, and showing that there is corporate responsibility in the marketplace. And hopefully that will lead to some employment and numbers increasing down the road. That's good news for the marketplace, and good news for Washington.

CROWLEY: So, my guess is, we'll talk to you later in the week. CNN's Felicia Taylor, thanks so much.

TAYLOR: Sure.

CROWLEY: Just how much is Moammar Gadhafi's staying power turning into an embarrassment for the U.S. We're about to discuss it with the man who used to run the CIA.

(COMMERCIAL BREAK)

CROWLEY: We are coming up on two months since President Obama started calling for Libyan leader Moammar Gadhafi to step down -- not only is Gadhafi still in charge, a top U.N. official who met with members of the regime this weekend said she received, quote, "no guarantees" at all that the violence would cease.

Can or should the U.S. do more to get rid of Gadhafi?

I am joined by the former head of the CIA, retired General Michael Hayden.

So, let me put that to you.

GEN. MICHAEL HAYDEN, FORMER CIA DIRECTOR: Sure.

CROWLEY: I mean, it seems to me that just in terms of the optics, that for every day Moammar Gadhafi remains in charge, for every day he's on the streets in an open air car waving, for everyday he's bombing a city, it diminishes both NATO and U.S. stature.

HAYDEN: Well, I mean, when this all began and it was couched genuinely in humanitarian terms, I think those of us who looked at it realized that in addition to whatever humanitarian mission we're going to carry out, this was, in addition, our intervening in a civil war, that we have picked a winner, that we had to stay in it until that outcome was guaranteed. And if we didn't, then we would suffer the consequences of being the loser. And I think that's where we are now.

We've got a very uneasy equilibrium that the battlefield is not shifting very much, and here we are looking at our options as to what more could or should we do?

CROWLEY: And what are the options?

HAYDEN: They're not good, they're quite limited. It's kind of more of the same, hoping that the regime fractures.

But, you know, I've been thinking lately, we talk a lot about who are those guys, and we're talking about the opposition. You know, do we want to arm them? We don't know their true identities, what are their future plans and so on. But I've come upon a new question in the past week or so -- given the staying power of loyalist forces, I'm not talking about Gadhafi and his family, I'm talking about forces in the field. It's been a month now that they've been out there under attack more or less from NATO airpower. They're still there. They're still fighting at least in a disciplined way, in terms of aborting and evading NATO airpower.

What's motivating them? Who are those guys and why are they still there?

CROWLEY: And one of the things that we've seen over the course of the past couple days are reports that the U.S. and others are looking for some place for Gadhafi to go.

HAYDEN: Right.

CROWLEY: Some place apparently in Africa. Do you see signs that -- is this contingency planning? Do they know something we don't know?

HAYDEN: Frankly, Candy, several weeks ago, actually we're talking on this network, I pointed out that Secretary of State Clinton has often said Gadhafi must go. And I was always waiting for the rest of the sentence, must go where? And I think suggested at that time, we had to give him an exit through which he could slither and go off- scene. It looks as if that's now under serious consideration, and we're looking for a place to which he can slither be off-scene and truly must not be involved in the future of Libya.

CROWLEY: So, it's more like, before we present some plan saying, OK, you can get out of dodge, you can take your family with you. So, it's part of bargaining that hasn't started because it doesn't seem to me that he's in mood to bargain.

HAYDEN: I think that's right. And you saw the interview from his son, Saif al-Islam, who was quite defiant, actually quite confident in the staying power of the regime.

CROWLEY: One of the things that I also wanted to talk about was Syria. You and I have had some off-camera discussions about it. First, there's a "Washington Post" report that starting in the Bush administration, when we broke off relations with Syria, that money was and is still being apparently funneled to Syrian opposition through various groups of Syrian expats in places like London. Is that true?

HAYDEN: It's very difficult for me to comment on any specific operations or programs. But in general, I think it's well known that we have spent money abroad for the purposes of supporting democracy in democratic movements.

CROWLEY: So, it wouldn't be unheard of?

HAYDEN: I wouldn't be shocked if that were true.

CROWLEY: So, talk to me a little bit about Syria, because it seems to me that the U.S. has been very careful in its language about what's going on in Syria.

HAYDEN: Actually, it's really remarkable. Everyone has been very careful in their language about Syria. So, we have demonstrations. They don't seem to be going away. They seem to be getting traction.

I think we're well short of a tipping point, however, in which we see the kind of events that we may have seen in Tunisia or in Egypt. But let's just assume we have this movement that looks as if Iran's ally, Bashir al-Assad, is going to be ousted from power. That's a serious matter for the Iranians.

I wouldn't be at all surprised, in fact, I would confidently predict they would try to intervene with the tools they have available to prevent that from happening. I mean, just in that arc I described, geographically, Syria is absolutely critical for Iran extending its influence to Lebanon and to Hezbollah.

Now, if Iranians intervene, I don't think the Sunni states, particularly the Saudis, could stand that. And I think we could imagine one branch and sequel of a possible future where Saudis would then intervene against Iranian intervention and all of this starts to look like Lebanon in the 1980s in which we have a proxy civil war.

CROWLEY: Because we don't want that. So, in some ways, we little bit want Assad to say there. But, in other ways, obviously, he's not been helpful in the Middle East peace process, so someone else would be better.

HAYDEN: He's not been helpful. It may be the case of a devil you know. And he's not been helpful but he's been stable. Syria has not looked like Lebanon. Syria has not looked like Iraq. It has at least been stable, so you can see why there's some inertia inside of Syrian society. It doesn't quickly go out and support the people in the streets, although their issues are the same issues -- perhaps even worse than we saw in Egypt, Tunisia and elsewhere.

CROWLEY: When you look at U.S. interest in the Middle East and I know in general we're interested in the Middle East, but if you look at what's going on, if I'm sitting in Illinois or Missouri or some place, what am I most worried about in terms of the U.S.? What worries you the most in that whole tableau of change?

HAYDEN: Well, if I'm sitting in Missouri and I'm looking at my near-term interest, I'm looking at our deficit. I'm looking at the fear of overextending U.S. resources in yet another area of the world. I'm looking at the price of oil and how much gasoline is costing me.

But people who are paid to worry about the future have to look at this through perhaps different lenses. And in here, you got movements in the Middle East that are frankly unprecedented, that look a bit like maybe the Prague spring of the late 1960s or maybe even like the revolutions we saw in Europe in 1848, in the middle of the 19th century. It's not going to be the same after this is done. And there, for long-term American interests, one wants to try to at least shape, broadly shape, what the outcomes might be -- supporting and fostering what we view to be positive outcomes and pushing back against negative outcomes.

CROWLEY: And just quickly because we've also talked about this off camera and I found interesting. Egypt -- it started in Tunisia but "Egypt was the big, big headline. Mubarak out of power.

What do you make of the steps Egypt has taken so far towards transforming itself to a more representative government?

HAYDEN: Sure. I mean, there's no reason for despair. I mean, there could be a very bright future for Egypt. But when you look at what's going on now, personally, I fear they're going too fast. They've already had the referendum on the constitution. They're going to have elections in the early fall. We have seen this happen elsewhere in the Palestinian territories where elections came in front of establishing all of those other things you need.

CROWLEY: People we didn't want elected.

HAYDEN: Exactly right. So, that's one thing.

There's another element, too. There's a bit of a looking back as opposed to looking forward. Maybe a stronger era of populism as opposed to the development of democracy. So, you see an awful lot. And, look, this is perfectly understandable and maybe just, but there's an awful lot of public energy to do something about President Mubarak and his family -- again, the populist strain -- as opposed to taking on the very difficult work about the future, how do we build institutions that stay in Egyptian democracy for the long-term.

CROWLEY: It turns out the revolution was the easy part.

(CROSSTALK)

HAYDEN: Absolutely.

CROWLEY: Thank you so much, as always.

HAYDEN: Thanks.

CROWLEY: We appreciate it.

It's Tax Day and President Obama's newly released form shows he's taken one heck of a pay cut. We have the numbers and they're still big -- on the other side.

(COMEMRCIAL BREAK)

CROWLEY: You have until midnight to get your tax returns in the mail. The first and second family beat this year's extended deadline. And this afternoon, the White House released their tax forms for everyone to see.

The president and first lady reported an adjusted gross income of $1.7 million. Pretty good but it compares with $5.5 million they reported for 2009. The two-thirds drop in their income is a result of declining sales of the president's books. The first family donated $245,000 or 14 percent of their income to 36 different charities. They paid a shade under $454,000 in federal taxes.

That is more than Vice President Joe Biden and his wife made in 2010. The Bidens adjusted gross income $379,000. Their federal tax bill was $86,000.

And that is all from us tonight.

"IN THE ARENA" starts right now.