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Norway Under Deadly Attack; Obama: Stop 'Demonizing' on Debt; 'No One Can Bomb Us to Silence'; President Losing Support From The Left; Interview With Senator Bernie Sanders; Ending 'Don't Ask, Don't Tell'

Aired July 22, 2011 - 17:00   ET


WOLF BLITZER, HOST: Thanks very much, Brooke.

Happening now, the breaking news we're following -- a European power center under deadly attack. A massive bombing shakes Norway's capital to its core. This hour, the latest on who may be responsible for the blast and for a shooting at a Norwegian youth camp.

Plus, President Obama urging both parties to dial back the demonizing -- his word -- so they can finally strike a deal on raise the debt ceiling. Ten days before the deadline, one Republican plan gets a firm smack down in the U.S. Senate.

And some surprising new movement in the Republican presidential race. We're going to tell you who's suddenly making a strong impression on potential voters.

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

The breaking news this hour, a city known for peacemaking is reeling in terror. Norwegian leaders holding a crisis meeting tonight, after a deadly bomb attack in Oslo and a shooting at a Labour Party youth camp outside the Norwegian capital. At least seven people were killed in the explosion. At least nine were killed at the youth camp. There has been no official claim of responsibility, but local police say the two incidents are, in fact, linked.

Our Brian Todd is following the latest developments for us -- Brian, what do we know?

BRIAN TODD, CNN CORRESPONDENT: Wolf, officials say the explosion rocked the center of power in Oslo. It occurred very near the prime minister's office and the oil ministry, both of which were severely damaged. The supreme court and the finance ministry are also nearby, as you see our Google Earth map zero in on the area where this occurred.

Now, this appears to have been the first wave in a day of almost unheard of violence in Norway.


TODD: (voice-over): A witness says there hasn't been an explosion like this in Norway since World War II -- a massive midday blast shakes the center of government power in Oslo, causing extensive damage at the prime minister's office. Pictures show several windows blown out.

Officials say Prime Minister Jens Stoltenberg was not in his office at the time and escaped injury. But many others did not.

Also nearby, the Norwegian Supreme Court, the finance and oil ministries.

ASGEIR UELAND, JOURNALIST: All of a sudden, I heard a massive explosion and then saw massive clouds of smoke coming out from -- from the streets around the -- the scene. And gobs were flying around then and people were casting their papers.

TODD: journalist Asgeir Ueland says buildings were damaged as far as five blocks away. In picture after picture, dazed victims are seen bleeding in the street. Experts say the appearance that the government was targeted, the scale of the explosion suggests this was not the work of amateurs.

(on camera): Within minutes of the blast, so many people asked the question, why Norway?

But experts say Norway has much stronger connections to the war on terror than many people realize -- connections which make it a logical target.

(voice-over): Norwegian troops make up part of NATO's force in Afghanistan. Norway is taking part in NATO's bombing campaign against Moammar Gadhafi in Libya. It's one of the countries where cartoons of the Prophet Muhammad were reprinted in a newspaper, causing outrage in the Muslim community. That episode was cited by authorities as a potential issue when, last year, they said they found a bomb making lab in Oslo and accused three suspects of ties to al Qaeda. And experts say the leader of Ansar al-Islam, an extremist group based in Iraq, has been living in Norway, but had a recent tangle with the government.

PAUL CRUICKSHANK, CNN TERRORISM ANALYST: Last week, Norway charged this individual with incitement to violence. And -- and this is -- this is something that's now playing out, it will be playing out in Norwegian courts.


TODD: But Paul Cruickshank and other experts caution there is no definitive link, at the moment, between this bombing and any of those situations.

Meanwhile, a Norwegian official in Oslo tells CNN police are saying a shooting incident at a youth camp run by the ruling Labour Party is probably linked to the bombing. That incident occurred at an island in Northern Norway. This official says police have reason to believe the two incidents are connected, but he would not give details -- Wolf. BLITZER: I know, Brian, U.S. officials are trying to find some answers, as well, right now.

What are you hearing?

TODD: Yes. One U.S. official says this could have been an international attack or it could have originated locally. The official says there had been nothing to lead officials to believe that something was imminent in Norway. They are looking for answers, as well.

BLITZER: All right, Brian.

Thanks very much.

Let's go to Oslo right now.

Joining us on the phone, the Reuters correspondent, Alister Doyle.

Alister, where were you when the initial explosion in downtown Oslo occurred?

ALISTER DOYLE, REUTERS CORRESPONDENT (via telephone): I was here in our bureau, which is about 500 meters from the -- from the prime minister's office, where the -- where the blast went off. This building, we heard a sort of distant thud, which -- which alerted us immediately to it. You know, it sounded -- it sounded more like an explosion, of course, than a crack of lightning or thunder.

And, you know, we immediately sent out my colleague into the streets just to see what had happened.

BLITZER: But you could clearly hear it.

Did you run over there yourself at some point?

DOYLE: I've been out there into the street, yes, afterwards. But the police very rapidly cordoned off the area. I mean the whole place is a -- is -- from about 200 meters down the street from where we are, the whole -- the center of Oslo is now cordoned off. You know, the building has been severely damaged. The -- the bomb went off, apparently, between the prime minister's office and the -- and the oil ministry. It seems to have probably been a car bomb.

BLITZER: So that's the assumption. I mean the pictures of the buildings and the windows that were blown out, the destruction, it reminds me a little bit of what I saw in Oklahoma City in 1995 after that car bombing. I don't know if that's the sense that you get.

But right now, do we have any specific hard information, because there have been some claims of responsibility but I don't know how seriously Norwegian authorities are taking those claims.

DOYLE: Well, the prime minister has been giving a news conference just now, where, a few minutes ago, he says we -- they don't know who -- who has attacked the country. One man has been arrested, however -- a man who was dressed as a policeman in both Central Oslo and, apparently, went out to this island where the shooting was, which is about 40 or 50 kilometers from here and is -- they think is -- may have been the shooter there.

The justice minister says he was a Norwegian citizen.

BLITZER: Does he say that he was a Norwegian citizen of some ancestry or have they gone into specifics like that, someone who may have had some sort of political grudge, shall we say?

DOYLE: They've given no other detail of this man, except to say that he was -- he was Norwegian. There's no indication of, you know, where he -- where he -- if he is -- if he was born here or he immigrated here or whatever.

BLITZER: And the whole -- and as when we -- when we say there were no advanced warnings, you've been there in Oslo. I don't know how long you've been there.

But have there been any heightened security concerns in Norway, at least, in recent weeks or months?

DOYLE: It goes in strange sort of surges. But it, really, I mean this -- Norway is one of the most peaceful societies in the -- in the world. And it's -- it's never had a terrorist attack. And, you know, the prime minister will wander around the streets armed with, apparently, unguarded. Many times you can see government -- cabinet ministers wandering around the streets without any real protection.

There has been hired some protection because of some of these threats, as you mentioned previously, because of Norway's involvement in Afghanistan or Iraq or perhaps the publications of some of these cartoons of the Prophet Muhammad.

BLITZER: Alister Doyle, we'll stay in touch with you.

Thanks very much for helping us.

DOYLE: Thanks a lot.

BLITZER: Alister Doyle is the Reuters correspondent in Oslo.

President Obama spoke out about the attacks in Norway at the White House not that long ago and he condemned the violence.


BARACK OBAMA, PRESIDENT OF THE UNITED STATES: I wanted to personally extend my condolences to the people of Norway. And it's a reminder that the entire international community has a stake in preventing this kind of terror from occurring. And that we have more cooperative together, both intelligence and in terms of prevention of these kinds of horrible attacks.

(END VIDEO CLIP) BLITZER: So what might the United States be able to do to help Norway respond to these doubling attacks?

Let's go to our Pentagon correspondent, Barbara Starr.

What are you hearing over there -- Barbara?

What's going on?

BARBARA STARR, CNN PENTAGON CORRESPONDENT: Well, Wolf, so far, no induction of an official request from Norway for help. But a top counterterrorism official tells me, you should expect to see both countries. They have a very close relationship. Expect to see them share everything they can on intelligence about possible threats and intelligence about the attack.

Where might the Norwegians start to look for the clues?

It will start right on the streets of Oslo. They will look at those buildings, Wolf, with or without U.S. help. They will look at the destruction.

Was that reinforced steel?

Was it reinforced concrete?

How much destruction over how wide an area?

That will help them begin to calculate the size of the bomb, the power of the bomb. And they will get into bomb forensics, if you will. They will look at what kind of material was used, at what kind of accelerate, what kind of fuse. And they will look for clues. Every bomb maker leaves a signature.

Will this be a fuse like a shaped charge that Al Qaeda has used in the past, which directs the blast of a bomb to a particular area?

Will there be signs in the construction of this bomb that Al Qaeda was possibly behind it or any other kind of bomb maker that, very sadly, we have seen operate around the world for the last 10 years?

A lot of work to be done, but officials know how to go about this business. And they will look for clues in all of the wreckage -- Wolf.

BLITZER: And those clues will be critical. It's -- we're approaching 10 years, the 10th anniversary of 9/11 here in the United States. The U.S. has a lot of expertise as a result. And I assume, given the very close U.S. relationship with Norway, all of that will be shared.

STARR: Absolutely. You should expect to see all of it shared. One thing people may not know is that the United States military and law enforcement community maintain a massive database of every IED, every bomb blast that has happened in the war zones of Iraq and Afghanistan and whatever they can learn about any bomb blasts around the world. But those IED blasts, especially in Afghanistan and in Pakistan, may prove to be critical, because again, a bomb maker leaves a signature. Most bomb makers continue to make their bombs the same way until they are either killed or caught.

So they're going to look to see if this matches any of the information that may be in that very classified U.S. database on bomb makers around the world -- Wolf.

BLITZER: All right. When you get more information, let us know, Barbara.

Thanks very much.

And to our viewers, stand by for all breaking news on the deadly attacks in Norway. We're not leaving the story for long.

We are watching other important news, including President Obama. He's trying to pull voters into the debt limit drama, as the clock winds down. We're taking a closer look at where the talks stand right now and the long distance message he's sending Republicans. And the people turn against a powerful and feared state legislator who pushed for the toughest immigration laws the nation has ever seen.

Stay with us.



BLITZER: D-Day in America's debt crisis is fast approaching. But 10 days before the deadline, the House speaker says political leaders are not even close to an agreement to raise the debt limit. A GOP source says Boehner has told Republican lawmakers that the House would have to vote on legislation by Wednesday to meet the deadline. That would mean getting a bill posted for review this Monday.

The Democratic run Senate rejected a controversial plan to reduce the debt favored by House Republicans. The majority leader, Harry Reid, dismissed the so-called "Cut, Cap and Balance" measure as a waste of time and a distraction from further talks.

The speaker, John Boehner, and the House Republicans, met behind closed doors today. But at last word, no talks were scheduled between the Congressional leadership and President Obama.

We're watching closely.

Meantime, the president had plenty to say about the looming debt crisis earlier in the day during a town hall meeting outside Washington in College Park, Maryland.

Let's get to our White House correspondent, Dan Lothian -- Dan, what was the president's basic bottom line message?

DAN LOTHIAN, CNN WHITE HOUSE CORRESPONDENT: Well, Wolf, the president was trying to convey a sense of urgency, while at the same time prodding Republicans to reach some kind of compromise. But he stated the obvious, that this entire process is not easy and that, ultimately, a plan would make everybody, quote, "somewhat unhappy."


LOTHIAN (voice-over): For the first time this month, President Obama stepped outside the White House bubble to make the case for a deal that would raise the debt ceiling.

OBAMA: The United States of America doesn't run out without paying the tab. We pay our bills. We meet our obligations. We have never defaulted on our debt. We're not going to do it now.

LOTHIAN: During a town hall meeting at the University of Maryland, the president dug in on his position that any agreement must include tax hikes on the wealthy.

OBAMA: This isn't about punishing wealth. It's asking people who have benefited the most over the last decade to share in the sacrifice. This isn't some wild-eyed socialist position. I mean, this is a position that's being taken by people of both parties and no party.

LOTHIAN: Republicans insist the Bush tax cuts should be made permanent, even for wealthy Americans. But the president told the audience spending cuts alone can't bridge the divide.

OBAMA: If we only did it with cuts, if we did not get any revenue to help close this gap between how much money is coming in and how much money is going out, then a lot of ordinary people would be hurt and the country as a whole would be hurt. And that doesn't make any sense. It's not fair.

LOTHIAN: When asked this --


LOTHIAN: -- the president suggested that using the Constitution to push the debt ceiling higher without using Congress would be the easy way out.

OBAMA: It would mean all these conversations I've had over the last three weeks, I could have been spending time with Malia and Sasha instead. But that's not how our democracy works.

LOTHIAN: And that's not what his legal advisers have told him is a winning argument.

OBAMA: My challenge then, is, I've got to get something passed. I've got to get 218 votes in the House of Representatives.


LOTHIAN: Now, Democrats and Republicans say that there has been no movement whatsoever in any kind of potential deal, include what we talked about yesterday, Wolf, some $3 trillion in cuts.

But nonetheless, behind-the-scenes, there are these private talks. And as John Boehner himself said, we're in the fourth quarter.

BLITZER: Interesting that he said he's got to get the votes in the House of Representatives. Apparently, he's not as concerned about what would happen in the Senate. The real battle is going to be in the House with those House Republicans.

Any scheduled meetings for this weekend?

Is he going to Camp David?

Is he staying in town?

What do we know?

LOTHIAN: No scheduled meetings that we know of at this point. But we have not yet gotten the president's week ahead, in terms of what he's planning to do.

But as I pointed out, these discussions continue behind-the- scenes. And -- and we wouldn't be surprised if we find out that something would be happening here at the White House or elsewhere.

BLITZER: It's interesting, also, that his lawyers disagree with former President Bill Clinton, who said he could have invoked that 14th Amendment clause to just raise the debt ceiling without any Congressional legislation. His lawyers obviously disagree with Bill Clinton's lawyers on that sensitive subject. Dan, thanks very much.

Well, if you get more information, let us know.


BLITZER: Grover Norquist isn't just a -- isn't a politician, he just may be, though, one of the most powerful figures behind-the- scenes in this entire debt limit debacle. He has pledges from hundreds of Republicans vowing not to raise taxes ever. I'll ask him what will happen if they go back on their word.

And a tour bus crashes in flames in Upstate New York. A soldier on leave comes to the rescue of trapped passengers. It's an incredible story. We'll share it with you.


BLITZER: This just coming in. The prime minister of Norway, Jens Stoltenberg, just spoke out about the deadly attacks in his country.

JENS STOLTENBERG, NORWEGIAN PRIME MINISTER (through translator): This attack was bloody and cowardly. We do not know who attacked us. A lot remains uncertain. But we know many are injured and dead. The next few days will demand a lot from us. We're ready to meet this challenge. I have a message to those who attacked us, a message from the whole of Norway -- you won't destroy us. You won't destroy our democracy. We're a small, but proud nation. No one can bomb us into silence. No one can scare us from being Norway. This evening and tonight, we'll take care of each other. That's what we do best when we're attacked.

BLITZER: We're going to have much more on the breaking news coming out of Oslo, Norway. Stand by for that.

Let's check some other stories that are developing right now.

Lisa Sylvester is working on that -- Lisa, what's going on?

LISA SYLVESTER, CNN CORRESPONDENT: Well, we've got some feel good news for you.

A soldier on leave called a hero after he pulled several people from the burning bus in Upstate New York. The Canadian tour bus and tractor trailer collided, killing the truck's driver. The army sergeant came upon the crash before paramedics got there. Thirty people were injured. The tour bus driver will be charged for having a suspended license in New York State.

And in the middle of the world's largest ocean, an amazing rescue story. A boat ride from one tiny Pacific island to another didn't go exactly as planned. Fifteen people, including six children, wound up on an uninhabited island after their small skiff hit a reef and capsized Tuesday. They were finally spotted after they joined hands to make a huge SOS on the beach. They'll be rescued by the Coast Guard tomorrow.

And college hoops on an aircraft carrier?

That's right. The U.S. Navy will make history this year, hosting the opening game of the NCAA college basketball season on the USS Carl Vinson. Michael Jordan and Magic Johnson, they're the honorary game captains. The ship launched the first wave of air attacks on terrorist targets in Afghanistan after 9/11.

And I'm sure, Wolf, you probably would want a ticket to that game, wouldn't you?

BLITZER: I would. I've been aboard the USS Carl Vinson back in 2005, when it was in the Persian Gulf. We went to Iraq. It's a great ship. It's a huge ship. They've got -- they've got room for a lot of basketball crews.

SYLVESTER: And a lot of celebrities, including yourself.

BLITZER: If they invite me.

SYLVESTER: Well, we'll launch a campaign.

BLITZER: Thanks very much. President Obama says both sides need to give to get a deal on raising the debt limit. But many liberals say he's giving too much. Senator Bernie Sanders tells me why he thinks some of the ideas on the table right now are disastrous. And the Obama administration takes the last big step toward ending the "don't ask, don't tell" policy that banned gays from serving openly in the United States military.


BLITZER: All right, we're following the breaking news out of Oslo, Norway right now. And Reuters is reporting that Oslo police -- police in Oslo say undetonated explosives were found at that -- on that island where those hundreds of -- those kids -- that youth camp, where the gunman fired at the youths, at least 10 people on that island are dead. Most of them, we're told, youths that were expected to go up. Another seven people died in the explosive -- in the explosions, the terror explosions in downtown Oslo, near the government office buildings.

Seventeen so far dead altogether. But we expect that number to go up.

We're watching this story very closely.

We'll go to Oslo live shortly with more. Stand by for that.

Meantime, other news. President Obama says both parties need to sacrifice some sacred cows to reach a deal to raise the nation's debt limit and avoid a financial disaster only 10 days from now. But some members of his own party say he's willing to give way too much on entitlements -- Social Security, Medicare.

Lisa Sylvester is looking into this part of the story for us -- for -- this part of the story for us.

A lot of disappointment from the liberal side of the Democratic Party, at least, as of now.

SYLVESTER: Yes, that's right, Wolf.

You know, some progressives and liberals, they are actually feeling a little betrayed. They didn't think that they would see the day when you have a Democratic president talking about significant cuts to entitlement programs, and some of the president's party are not too pleased.


SYLVESTER (voice-over): Neil Saroka planned on getting a graduate degree in journalism, but when Senator Obama decided to run for president, Saroka put his plans on hold and served as the campaign's media director in South Carolina and Ohio, but as big of an Obama fan as he is, he's prepared to not lift a finger to help the president get re-elected if the White House backs cuts Medicare, Medicaid, or Social Security. NEIL SAROKA FORMER OBAMA CAMPAIGN STAFFER: It's so personal for me, because when we talk about cuts to Medicare, Medicaid, and Social Security benefits, I think of my 90-year-old grandmother in Buffalo Grove, Illinois. She lives on Social Security and any cut to that Social Security check or any rise in her Medicare premiums, that's a direct cut to her -- to what she needs to live on.

You know, it's 101 degrees right now. That means that she's going to be forced to pay more -- or pay more with less. And that's last thing we need to be doing in economic times like this.

SYLVESTER: Saroka now works for the Progressive Change Campaign Committee, a group that delivered to the Obama campaign office 200,000 pledges from former supporters saying, if you touch social programs, we're out. But entitlements are still on the table. Many liberals and Democrats feel President Obama is giving away their sacred cows, while not insisting Republicans concede on tax increases.

REP. RAUL GRIJALVA, (D) ARIZONA: Unfortunately or fortunately, you're going to need Democratic votes to pull a deal together. And to leave us on the sideline, I think, is fiscally not smart and politically not a very wise move.

SYLVESTER: A new CNN-ORC poll shows 54 percent of people disapprove of the way Obama is handling his job as president. Thirteen percent of those believe the president is not liberal enough. The president says he's still pushing for tax increases as part of the shared sacrifice, and the best deal may be a deal that leaves no one satisfied.


SYLVESTER (on-camera): So, is the White House worried about alienating its base? Well, we asked the White House that question and they said, quote, "there are tough choices on both sides that have to be made, and that everyone will have to compromise" -- Wolf.

BLITZER: Yes. A lot of White House officials and Obama supporters think that, in the, end once there's a Republican candidate, the liberal base will have no place else to go. They'll be OK, but that's a risk in terms of enthusiasm in all of this.

SYLVESTER: Right, because they're saying we'll sit at home, we're not going to go out, we're not going to be knocking on doors. Well, that's a big thing for your base.

BLITZER: Certainly is. Lisa, thanks very much.


BLITZER: And joining us now from Capitol Hill, the independent senator from Vermont, Senator Bernie Sanders. Senator, thanks very much for coming in.

SEN. BERNIE SANDERS (I), VERMONT: Good to be with you. BLITZER: Why did you vote today against this cut, cap, and balance legislation that passed overwhelmingly in the House of Representatives?

SANDERS: Because it's a proposal that would make drastic cuts in Medicare, Medicaid, education, Social Security, and every program that has of relevance to ordinary Americans. Look, the deficit is a serious problem, but you don't balance it on the backs of the weak and the vulnerable. You don't back balance it on the backs of children by throwing them off health insurance or substantially cutting back on Social Security benefits.

The way you do deficit reduction and what the American people have said in every single poll is you ask the wealthiest people in this country to start paying their fair share of taxes. You do away with loopholes that corporations are enjoying so that while they make billions in profits, they're not paying a nickel in taxes.

You take a hard look in military spending. You don't do what right-wing Republicans want and that is to savage programs that, in the middle of recession, people desperately need.

BLITZER: Well, the House Speaker John Boehner this morning said you could have made changes. He says it affect your abdicating the Senate Democrats and you, your legislative responsibility. I want to play for you a little bit of what the speaker said. (BEGIN VIDEO CLIP)

REP. JOHN BOEHNER (R-OH), HOUSE SPEAKER: And if they don't like our version of cut, cap, and balance, guess what? That's what the legislative process is for. They can amend it. They can change it. They can send it back over to the House. And frankly, they've got to take action on that bill.


BLITZER: What do you say to the speaker?

SANDERS: Well, we did take action on the bill. I took action on it. I voted against it. It is a disaster. Again, when the richest people in this country are getting richer, but Mr. Boehner is saying sorry, we're not going to ask them to pay a nickel more in taxes, when large corporations make billions of dollars in profits and pay nothing in taxes, Mr. Boehner is saying oh, no, I don't want them to pay any more in taxes.

But when it comes to destroying Social Security and asking an 85- year-old to pay $1,000 a year -- lose $1,000 in Social Security benefits in 20 years, Mr. Boehner thinks that's a good idea. Throwing people off of Medicaid when we already have 50 million people without any insurance, Mr. Boehner thinks that's a good idea.

Well, we have some differences of opinion. Every poll that I have seen, Wolf, says that the American people want shared sacrifice. They do not want to balance the budget on the backs of the elderly, the sick, the children or the middle class. BLITZER: Would you be open to some sort of deal that the president might work out with the House Speaker in order to avoid this August 2nd default deadline, a deal by whereby there would be significant spending cuts right now, but any tax increases would be punted, would be kicked way down the road in order to get it passed? Are you open to that?

SANDERS: No. That would be a disaster. And again, a proposal like that is defying what the American people have said over and over again. Only a small minority of people, apparently, right here in Washington, D.C. thinks that it makes sense to attack Social Security when Social Security hasn't contributed one nickel to our deficit to cut back on Medicare, to cut back on Medicaid, to cut back on education.

I do not support that proposal. And the idea that pushing down the road at some point in the indefinite future maybe will raise some revenue, I think that is absurd and way out of line with what the American people want to see happen.

BLITZER: You know, the president has said publicly, he's open to making some reductions, some significant changes in Medicare, Social Security, Medicaid for that matter, means testing. He's raised that possibility. Changing the cost of living index. Are you with the president on that?

SANDERS: No, absolutely not. And I think, you know, we're getting a whole lot of calls in Vermont. And I suspect members of Congress in the Senate are getting the same calls. You know what, Wolf, go back to the records. Find out what Barack Obama said when he was running for president. And what he said when he was running for president is, John McCain, John McCain wants to cut your Social Security, not me. I'm not going to do it. I'm going to stand with the middle class of this country.

The president should go back and read the speeches he gave when he was running for president. There is a massive, massive amount of disappointment. Let me get back to Social Security. Social Security today has not contributed a nickel to the deficit because it's funded by the payroll tax. It has a $2.6 trillion surplus. It can pay out every benefit owed to every eligible American for the next 25 years.

Why in God's name in the middle of a recession would you cut back on Social Security? This is what the right-wing Republicans have wanted for decades. And it saddens me very much that the president is going back on his promise to the American people and is apparently exceeding to the Republican's request.

BLITZER: Is it too much to suggest that if it is you let me know that you almost feel betrayed by this president?

SANDERS: Well, it's not just me. When somebody runs for office and says I am not going to cut Social Security, and then two and a half years later says, oh, I am going to cut Social Security. It's not just me. I think there are millions of people who think the president said one thing and did another thing. Massive disappointment in this country.

BLITZER: So, what are you going to do about it? Right now, there's a crisis potentially. There could be a default. Interest rates would go up, unemployment would go up, the value of the dollar would go down. That would be an across the board burden on everybody in America.

SANDERS: That's right. No question about it. And it's incomprehensible to me that the Republicans today are holding our entire economy hostage on this debt ceiling issue when during the Bush years, you will recall, when we increased the national debt by $5 trillion, they had no problem about raising the debt ceiling seven different times. Seven times, $5 trillion increase. But right now, the world is coming to an end, they can't do it.

I think the good news is that our good friends on Wall Street who have caused this recession and the big money interests, they know that they're going to lose a whole lot of money also if we default. They're beginning to put pressure on the Republican leadership, and I think they are powerful enough to make the Republicans understand that default is not a good idea.

BLITZER: Senator Sanders, thanks very much for coming in.

SANDERS: Thank you.


BLITZER: And historic day over at the Pentagon. The U.S. military's "Don't Ask, Don't Tell" policy is an important step closer to being officially gone. Some former gay service members though are not all that happy. We'll tell you why. Stay with us.


BLITZER: The Pentagon is putting its seal of approval on the repeal of the U.S. military's controversial "Don't Ask, Don't Tell" policy. The ban on openly gay and lesbian service members could be gone within 60 days. Let's go to our pentagon correspondent, Chris Lawrence. He's got the latest. Historic day today, Chris. What is the latest?

CHRIS LAWRENCE, CNN PENTAGON CORRESPONDENT: That's right, Wolf. About two hours ago, President Obama signed a certification and sent it back to Congress, one of the final steps towards totally eliminating "Don't Ask Don't Tell."


LAWRENCE (voice-over): Gay and lesbian troops will soon serve openly, but some benefits will still be denied.

MAJ. GEN. STEVEN HUMMER, USMC/DADT REPEAL TEAM: The defense of marriage act and existing definition of dependent in some laws prohibit extension of many military benefits to same-sex couples. LAWRENCE: President Obama, defense secretary, Leon Panetta, and chairman of the joint chiefs, Mike Mullen, all signed a document certifying it won't harm Military Readiness.

TOMMY SEARS, EXEC. DIR. CENTER FOR MILITARY READINESS: The fact that a political promise is being carried out by political appointees, the chairman of the joint chiefs of staff and the secretary of defense shouldn't be no surprise to anyone.


LAWRENCE: Officials at the center for Military Readiness say the president used the military to advance a social agenda.

SEARS: President Obama now has complete ownership of what he has now made into a San Francisco LGBT military.

LAWRENCE: And even some gay former service members admit the repeal only means they can apply to get back in the military.

MAJ. MIKE ALMY, FORMER AIR FORCE OFFICER: For the 14,000 that were thrown out like myself or the tens of thousands that were thrown out before "Don't Ask, Don't Tell" became a law in 1993, it really does nothing to help them or any type of restitution.

LAWRENCE: The military has taught nearly two million troops how to work under the new policy, but there were questions on everything, from benefits to housing.

GUNNERY SGT. ANTHONY TAYLOR, U.S. MARINE CORPS: You know, he didn't want to live with his roommate because his roommate came out of closet. That's not a reason to want to switch your room, sir. You know, it needs to be an underlying circumstance more so than just because my roommate is a homosexual.

LAWRENCE: Some gay advocacy groups were invited to sit in on the training.

ALEX NICHOLSON, SERVICEMEMBERS UNITED: I heard a lot of, what if I see somebody holding hands off-base? What if we see, you know, public displays of affection, PDA? You know, are we going to treat it the same?

LAWRENCE: Opposition to reform was highest among combat units and the marines, but some say that will fade with time.

SGT. JONATHAN GARRIGUES, U.S. MARINE CORPS: Whether it was segregation in the past, the Marine Corps moved on, and it's just not an issue today, I think it will be the exact same thing 10, 20 years down the road.


LAWRENCE (on-camera): Now, gay and lesbian service members are being advised not to come out until mid September when the repeal takes full effect. Now, the issue of some troops getting certain housing and transportation benefits while others don't, that is going to take a lot longer to work out, Wolf.

BLITZER: So, some of those gay and lesbian troops who were forced out in recent years, if they apply to come back in, do they automatically be allowed to come back into the military? Or is there some sort of process they have to go through?

LAWRENCE: No, they have to reapply, Wolf. And you know, one of the other issues we've been covering so much is that with the horrible economy that we're in, a lot of troops are staying in. Retention is high. They've got a lot of applicants. So, getting into the military is not as easy as it was, say, you know, five years ago.

BLITZER: Chris Lawrence, thanks very much. Historic day over at the Pentagon.

He's not even in the presidential race, at least not yet, but the Texas governor Rick Perry is almost at the top of CNN's latest poll. He's not the only candidate making waves. Stand by.

And the Norwegian blast, does al Qaeda have a beef with that Scandinavian country? We're asking our experts.


BLITZER: The White House has just announced that the president of the United States will go into the briefing room over at the west wing of the White House at the top of the hour, about 11 minutes from now to make a statement. We don't know what it will be about, but presumably, it will be about the latest negotiations on raising the nation's debt ceiling.

We'll, of course, have live coverage here in SITUATION ROOM at the top of the hour. A little bit more than ten minutes from now, the president is scheduled to go into the briefing room. We'll see what he has to say. We'll see if he takes questions or just makes a statement. Stand by. We're watching it very closely.

In the meantime, let's get to our "Strategy Session." The Democratic strategist, Jamal Simmons, is joining us. He's a principal at the Raven Group here in Washington. Also joining us, Republican strategist, John Feehery. He's the president of Quinn Gillespie Communications. As we await the president, I assume he's got some announcement to make. Maybe, he just wants to put some pressure on the Republicans. Do you have inside information?

JAMAL SIMMONS, DEMOCRATIC STRATEGIST: I don't have any inside information, but the White House has been really be the strong beat about the debt talks and how important it is. We saw the president out earlier in the town hall meeting and putting the pressure on some more. And so, this looks like this is another example of him trying to push these negotiations to a close.

BLITZER: That would be my guess, but what do you think?

JOHN FEEHERY, REPUBLICAN STRATEGIST: A debt deal is good for the president. It's also good for House Republicans.

BLITZER: Well, it's good for the country, too.

FEEHERY: That's good for the country, and I think, that it would be good for the president and to include a deal without tax increases that would actually help spur economic growth. That's good for everybody.

BLITZER: The key phrase, without tax increases. A lot of democrats won't vote for it. We just heard Bernie Sanders. He's an independent, but he caucuses with the Democrats. You know, no tax revenue as they say or tax increases. He's not going along with it.

SIMMONS: Right. Bernie Sanders he and some of the other liberals in the Congress should write and say, you know, if they can get a deal without cutting anything in entitlements and that will be great too, but reality is both sides are going to get something they don't like in this deal, and hopefully, the president and the country will get something that work.

BLITZER: Well, we'll see what the president have to say about nine minutes or so from now, assuming he's on time. Let's take a look at our brand new CNN-ORC poll. Republicans choice for the nominee in 2012. This is just out, this poll. Romney stays on top at 16 percent. But look at this. Texas governor, Rick Perry 14 percent.

Rudy Giuliani is not running. He doesn't look like he's going to run, 13 percent. Same with Palin, 13 percent, Michelle Bachmann, 12 percent. Everybody else in single digits. But all of a sudden, Rick Perry, who we think will run for the Republican presidential nomination, he's doing rather well.

FEEHERY: The fascinating about that poll is all those folks who are not running were doing well. Maybe the lesson here, is don't run until you have to. And I think Perry gets in. He could be a tough front-runner for Romney. He really solidifies the social conservative wing of the party, and I think he knocks out Michele Bachmann. I think he'll be a strong contender.

BLITZER: What do you say knocks out Michele Bachmann?

FEEHERY: Well, listen, Bachmann is falling in the polls already. I think Perry has had a successful career as a governor who can appeal to the social right. Bachmann has a pretty thin record. And I think he supplants a lot of her voters.

BLITZER: He's been governor for a about 10 years in Texas.

SIMMONS: He has been governor for a long time. But you know, Wolf, I just find it very curious that it taken him this long to get into the race. It takes a long time to put a field organization together. It's a long time to get your fundraising network together.

And to be jumping in this race at the end of the summer, just a few months before the first vote in causes is a really long time to wait. And I think, if you want to be president of the United States, you got to run for president of the United States. You can't wait for an opportune moment. These folks have been trying --

FEEHERY: Jamal makes an excellent point. And that's why I think Mitt Romney is still the front-runner. He's done all the organizational stuff he needed to go. He's gotten all his people out there. He's placing a lot of money already. It's hard to start an organization from scratch in two months, and that's what he's trying to do.

BLITZER: You're celebrating this weekend your 40th birthday.


BLITZER: Happy birthday. You got another good cause your working out.

SIMMONS: And we have a good cause. We're working on the Rosa Parks Scholarship Foundation. We've had bunch of people. Lot of celebrities have been tweeting and going on social networks and talking about it. Rosa Parks Scholarship Foundation got an org (ph) where people can give, and hopefully, we think we're going to raise a little bit of money. And some CNN people have helped. People like Alex Castellanos and Paul Begala.


BLITZER: Happy birthday.

SIMMONS: Thank you.

BLITZER: Say happy birthday.

FEEHERY: Happy birthday, Jamal.


BLITZER: All right. Jamal, good guy.

We're going back live to Norway soon. A journalist who was on the scene moments after the blast tells us about the chaos that erupted. Plus, a political tighten on the verge of falling. The all out effort to stop one lawmaker. We're going to see what's going on. Stay with us. Much more coming up.

We're also standing by. The president of the United States will be going into the briefing room momentarily at the White House. We think he's got a statement on the debt ceiling. We'll have live coverage right here on the SITUATION ROOM.


ANNOUNCER: this is CNN Breaking News.

BLITZER: We're standing by to hear directly from the president of the United States. He's getting ready to walk into the White House press briefing room in the west wing and make an announcement, we believe, an announcement on the debt ceiling negotiations. Only 10 days to go before the United States potentially could default on all of its international obligations, its financial obligations.

We're watching very closely to see what's going on. It's a tense moment, obviously. We don't know what the president is going to say, but let's go to our Chief White House correspondent, Jessica Yellin. She's in the briefing room watching what's unfolding. Do we have any indication, Jessica, what the president is about to announce?

JESSICA YELLIN, CNN CHIEF WHITE HOUSE CORRESPONDENT: Wolf, we do know that he is going to be making a statement about the debt talks, and I've been told by a Democrat familiar with debt negotiations that an offer was, at some point, made to Speaker Boehner and the ball in one person's words is in the speaker's court. Negotiators have been waiting -- are waiting to hear back from him.

There has been according to multiple sources, from different parties, a stalemate at some different stages over issues related to taxes and entitlements and how these issues will be worked out. If they're to be worked out as part of this framework of a larger deal, one of the topics that I've heard from some Democrats familiar with debt talks is that during various stages of these negotiations, they are keenly concerned that, at different points, Republicans have walked away from what Democrats perceived as mere deals.

The fact that that topic has come up today, raises my antenna and says that there is some degree of anxiety about the state of this near deal or possible deal. So, we will have to stay tuned and see where this stands, but at this stage, a lot of tension on all sides and a lot of insistence that there is no deal. And so, we will have to see what the president says in just a few minutes, Wolf.

BLITZER: And let's remind our viewers, Jessica, how important this is. The stakes are clearly critical and explain briefly, if you can, to those viewers here in the United States and around the world, why this clock is ticking.

YELLIN: We are just a little over a week away from the date, August 2nd when the United States runs out of money to pay our bills. And at that point, we would start to default and have to make cruel and difficult decisions on where we start cutting back. And, as the president and so many people spelled out, we will either have to cut back on paying people Social Security or paying for various other obligations and we can all see our interest rates go up or various other payments we have to make go up.

And we can see our credit rating slide, and it would have consequences, we're told, for all of us. So, this is something that matters to each person individually and to the politicians in the city because, no doubt, they would get the blame. The blame would go around. So, everybody is trying to figure out a deal, but a deal that would hurt them politically the least.

And, at this stage, it seems that neither side is willing to give quite enough to cut something quickly. And we have been told also, Wolf, that both sides agree at this stage to get a deal. They need some kind of agreement by this Sunday. That's the date. Sunday is the date by which something has to be locked in, Wolf. BLITZER: Stand by for a moment, Jessica.