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Interview With President Obama's Senior Adviser David Axelrod; Mitt Romney Under Fire For Being Open to Taxing Corporations; Thousands of Children Starving To Death In Somalia; Test of Fastest- Ever Aircraft; 'Strategy Session'

Aired August 11, 2011 - 17:00   ET


WOLF BLITZER, HOST: All right, Brooke.

Thank you.

Happening now, the breaking news we're following -- a new presidential campaign announcement. We've learned when and where Governor Rick Perry will make his White House bid official. And our new poll reveals where he stands in the Republican pack right now.

Plus, the stock market's wild mood swings -- what's behind today's big spike in prices?

And will traders go back to their selling ways tomorrow?

This hour, the bottom line for your investments.

And it's an epic famine, but the fear is universal CNN's Anderson Cooper takes us inside a hospital in Somalia to remind us that dying children and their parents aren't statistics, they're people in pain.

I'm Wolf Blitzer.


But we begin this hour with the breaking news in the Republican presidential race. After weeks of blatant political flirting, the Texas governor, Rick Perry, is now ready to commit. CNN has learned he will make a formal campaign announcement this Saturday in South Carolina.

Let's bring in CNN's Jim Acosta.

He's working this story for us.

And our new poll, Jim, shows he will be very competitive.

JIM ACOSTA, CNN CORRESPONDENT: That's right. He comes in in the top tier in the 2012 field among GOP candidates, Wolf, You're right, Rick Perry, according to a source close to the governor, has told CNN that the Texas governor will be announcing that he's running for president on Saturday. He's going to be doing this not in Iowa, where most of the Republican candidates are right now, at the Ames straw poll. He is going to be at a -- that's a conservative blog -- conference that is occurring in Charleston, South Carolina.

We heard earlier this week that this speech was really designed to make his intentions clear. Now we understand that the Texas governor is going to put aside any doubts. He is running for president.

And you mentioned that CNN poll, Wolf. Take a look at this. He is as close as the Republican Party gets to an un-Romney. He basically comes in almost at the top of the field. Look at Romney at 17 percent. Rick Perry at 15 percent. Rudy Giuliani, who a lot of people think he is not going to get into this race, at 12 percent. Sarah Palin, she may also not get into this race, at 12 percent. And then Ron Paul and Michelle Bachmann come in after that.

And, you know, a lot of people in Washington, Wolf, as you know, are looking at this field as sort of brackets. You have the establishment bracket in Mitt Romney, Tim Pawlenty, Jon Huntsman, people like that. And then you have the Tea Party bracket of Republican Party. That is where Rick Perry figures in. And if he can bump out Michelle Bachmann, Ron Paul, folks like that, he is going to give Mitt Romney a run for his money.

BLITZER: Yes. We're going to have a lot more on this story coming up. He's heading, as you know, to South Carolina, New Hampshire and Iowa this weekend. He wants to upstage some of those other Republicans. Jim, thank you.

Let's get to the stomach churning zigs and zags of the stock market. All three major indices scoring big gains today, with the Dow closing up more than 423 points. Talk about a wild rout -- ride. The Dow has -- was down more than 600 points on Monday, up more than 400 points Tuesday, back down more than 500 points yesterday and now today's 400 plus surge.

Poppy Harlow of CNN's -- CNNMoney is joining us now from the New York Stock Exchange -- Poppy, is there any explanation why this incredible fluctuation is going on?

POPPY HARLOW, CNN BUSINESS CORRESPONDENT: I wish I could give you one, Wolf. I really do. And all the traders down here on Wall Street do, too. I mean, look you had -- you had, as one trader put it, to me, Wall Street on sale today. You saw some buying on the lows today. It was the 11th best day ever for the Dow Industrials. The S&P and the NASDAQ performed even better than the Dow did.

But I want to put this in perspective. If you compare just today and then you look at the past entire week, from last Thursday through today's session, the Dow was still down 752 points. So we've got a long way to go. Today, we'll take the paper gains of about $600 billion, essentially wiping out the losses from yesterday.

The market moved on a relatively good jobs number. It was below 400,000 in terms of those unemployment claims that came it. That was better than expected. We had a very good outlook from a big, important company, Cisco. They said their quarter looks a lot better than they expected. Their shares rose 16 percent. So you had some good news from some big global companies here.

But there's really no rationality, still, to this market. You had bank stocks, Wolf, that were the worst performers yesterday among the best performers today. And the outlook for the banks hasn't changed. So there -- there's no real fundamentals driving this market.

But as I said, traders down here are happy. And they say, look, Wall Street is on sale right now.

BLITZER: Well, are the traders saying what we can expect tomorrow, next week?

Are we going to go through these kinds of wild rides every single day?

HARLOW: Hang on. You need some intestinal fortitude for this one. You need a strong stomach. I mean, they have no idea what they're going in with. What -- what we did see, interestingly, was the market was up more than 500 points today. In the last half hour of trading, we lost more than 100 points off the Dow. So we didn't see that accelerated buying into the close.

I asked some traders down here, look, are you still as concerned as you were yesterday about the situation -- the debt situation in Europe?

Has that changed?

Is that why we're seeing all this buying?

They said no, nothing in Europe has changed. We still don't have clarity on where France and that debt situation stands, whether or not France will be downgraded. There's just the buying going on today.

And as this week has gone, you could be up 500 one day, down 500 the next day.

I will say, Warren Buffett, the -- the famous investor, is weighing in. He told our sister company, Fortune, the lower things go, the more I buy. So if people are following Warren Buffet, maybe we'll have another up day tomorrow -- Wolf.

BLITZER: He's a pretty smart guy, as you know, Poppy.

Thanks very much.

Today's jobs report may have helped pump up President Obama as well as the stock market. He went to Michigan today to talk about the economy and his own frustrations with Congress.

CNN's Athena Jones is joining us now live from Holland, Michigan with more -- Athena, you could see the president was a bit more encouraged and a bit more vociferous today.

ATHENA JONES, CNN CORRESPONDENT: Absolutely, Wolf. The president brought his jobs push here to the battleground state of Michigan. And in the speech he gave earlier at this -- this advanced battery plant, he lashed out at Congress, telling them to stop playing political games, end the gridlock and work together on measures to spur job creation.

And as we found here in the city of Holland, those new jobs can't come fast enough for some.


JONES (voice-over): Holland, Michigan -- a summer playground for tourists with packed cafes and a bustling downtown.

But just blocks away, foreclosed homes dot the streets -- a clear sign many families are struggling to make ends meet. People like Hope McCoy, a single mother who lost her job as an engineer a few years ago.

HOPE MCCOY, UNEMPLOYED SINGLE MOTHER: I was definitely middle class.

JONES: She took another job that paid her half as much and was laid off again. After depleting more than $120,000 in savings, she lost her home and moved in with her eldest son.

She's worried about the slow pace of job growth.

MCCOY: It's just they're not being created nearly fast enough to save, you know, us out here that are -- are floundering.

JONES: President Obama arrived here Thursday, touring a plant that makes advanced batteries for hybrid cars and bringing with him a message of renewal.


JONES: The White House says these new technologies will reduce America's dependence on foreign oil and create jobs -- an issue at the top of voters' list of concerns.

OBAMA: Every day, hundreds of people are going to work on the technologies that are helping us to fight our way out of this recession.

JONES: The president wants Congress to compromise on deficit reduction and to extend the payroll tax cut, pass trade deals and send him a road construction bill to help jump start job growth.

OBAMA: There are more steps that we can take to help this economy growing faster. The only thing keeping us back is our politics.

JONES: Meanwhile, McCoy, with her son Christian back here at the home she lost, is trying to be optimistic.

(on camera): So what was it like just now driving back up?

MCCOY: Well, it was a little bit harder than what I thought it was going to be.

JONES (voice-over): She says she hopes to get back on her feet and have a home of her own again one day.

MCCOY: I don't believe there's a person in this entire town that's been untouched by it. They either know somebody or have a family member that is struggling with the same thing.

Are you OK?


All right, hon.


JONES: And one more thing, Wolf, about the president's speech today. As you noted earlier, he said he was frustrated. He also said there's been a lot of talk in these last few days about how he should bring Congress back from their vacation and put them to wok.

He said the last thing we need is for members of Congress to be spending more time in Washington arguing, that, instead, they should be spending time at home in their districts finding out how fed up voters are -- Wolf.

BLITZER: Yes. He was tough on that point today.

All right, thanks, Athena.

We're going to speak to one of his top political advisers, David Axelrod, shortly.

But let's go to Jack Cafferty right now.

He's got The Cafferty File -- Jack.

JACK CAFFERTY, CNN CORRESPONDENT: As the global economy hangs by a thread, maybe our leaders -- Obama, Congress -- should take some notes from the British and the French.

Yes, the French.

In England, Prime Minister David Cameron cut his vacation short. He called parliament back from their vacation to hold a special session today. They're dealing with the worst rioting and violence that country has seen in decades. And there's no doubt that economic instability and high unemployment are partly to blame.

We have that stuff here, too. Meanwhile, French President Nicolas Sarkozy returned to Paris from the Riviera, from his vacation, to deal with France's own financial crisis. Bank shares are plunging in France and Sarkozy has pledged drastic austerity measures. He's even recalled the French parliament from their vacation to vote on a balanced budget amendment to their constitution.

Hey, there's an idea.

Now, hop across the pond, over here to the United States, where our Congress is on vacation for five -- count them, five weeks -- and President Obama is headed off to his own vacation on Martha's Vineyard.

The only thing of any consequence our Congress has done in the last month or two, failing to stave off the first credit downgrade in American history. And once they got that out of the way, they couldn't get out of the town fast enough.

No wonder they have a measly approval rating of 14 percent.

Meanwhile, President Obama's own approval ratings stink. They're at or very near all-time lows, as he gets ready to try to convince the country that he deserves a second term.

The White House out defending Mr. Obama, of course -- that's their job -- saying that presidents are never really on vacation, that they take their work with them.

Nonetheless, it's all about appearances, isn't it?

Our president and Congress choose to go on vacation, while our country struggles under an economy that is perhaps lurching toward another recession and a debt crisis that no one has been very serious about trying to solve.

And the people would dare to think that our government is disconnected from reality.

How dare they?

Here's the question -- what does it mean when the British and especially the French governments, work harder than Americans?

Go to and post a comment on my blog or go to our post on THE SITUATION ROOM'S Facebook page.

BLITZER: Good idea.

Excellent question.

Jack, thank you.

Mitt Romney and other Republicans are getting tougher on President Obama and his record.

Is the president planning to fight fire with fire?

I'll ask his campaign adviser, David Axelrod, who's standing by live.

And it's supposed to be able to fly to any target in less than an hour -- we'll have the results of a new test of the fastest aircraft ever built.


BLITZER: President Obama certainly has a lot on his plate these days. But he has more to worry about than simply his day job. The Republican presidential race is heating up and so are the attacks against the president.

Let's discuss what's going on with David Axelrod.

He's the senior adviser to the Obama reelection campaign.

David, thanks very much for joining us.


BLITZER: I see you're in Ames, Iowa right now, getting ready for some Republican activity that's going on over there.

AXELROD: Indeed.

BLITZER: But let's talk a little bit about Mitt Romney, arguably the frontrunner right now for the Republican nomination. There was a story in Politico the other day, saying the Obama re-election strategy is going to go right after him. Let me read a line from that article, which I'm sure you saw.

"Barack Obama's aides and advisers are preparing to center the president's reelection campaign on a ferocious personal assault on Mitt Romney's character and business background, a strategy grounded in the early stage expectation that the former Massachusetts governor is the likely the GOP nominee."

Is that true? A ferocious personal assault?

AXELROD: No, here's what I would tell you, Wolf, if you could identify the sources of that story, I would tell you take them out of your Rolodex, because they don't know what they're talking about.

Of course we're prepared for a tough campaign with whomever the Republican nominee is going to be. But it's going to be a tough campaign about records, about vision, and about how we rebuild this economic in a way that restores middle-class economic security. It's not going to be about gratuitous personal attacks. So I would discount that. And let's focus on the real differences between us.

Governor Romney was here in Des Moines today, at the state fair, and he said in response to questions about Social Security and Medicare, corporations are people too, and explaining why he won't close any of these corporate loopholes or tax upper income Americans any more than they're being taxed today. That's a real issue, that's a debate worth having. This other stuff is not.

BLITZER: We're going to get into that later this hour.

Rick Perry, he's going to announce formally this Saturday, the Texas governor, he's running for the Republican nomination. He does have an impressive record in creating jobs in Texas. He could run on that, right?

AXELROD: He'll certainly try to run on that. That record will be examined, and perused. Obviously the oil industry has done very well recently. And that's had a lot to do with what's happened in Texas. But how he's approached that, approached the budgets in Texas, education and some other issues down there, all of that will be part of the discussion.

BLITZER: Who worries you more, Rick Perry or Mitt Romney?

AXELROD: You know something, I get this question all the time. I don't know how to answer it, because I do know presidential politics, I know about campaigns. I know that you don't really know how effective a candidate is going to be until you see them out on the stump, as Governor Romney was today. That's when you get those revealing moments and you learn about how someone is going to be as a candidate. What they stand for and so on. So I don't know that.

But here's what I do know. From what I've seen of these Republican candidates and will see more again tonight in this debate, is not one of them has been willing to step out of the orthodoxy of a party that is now totally in the thrall of its most strident voices. They all prize tax loopholes for corporations, tax cuts for the wealthy above education, above research and development, Social Security and Medicare, they have that in common. So whomever the nominee is, I suspect the debate will center on how we move forward into the future and whether those are the values that we should embrace.

BLITZER: I'm not surprised that the president is getting criticized from the Republicans from the right. I am surprised at the ferocious nature of some of the criticism coming against the president from the left, from Democrats, from liberal Democrats.

Roberts Reich the former Clinton Labor secretary, was here in THE SITUATION ROOM yesterday. Let me play a little clip. Because he seems to be very disappointed in the president.


ROBERT REICH, FMR. CLINTON LABOR SECRETARY: I supported him. But I think right now, by continuing to lead the country to think that this is a deficit and debt crisis, agreeing with, basically, the Republicans. And not standing up, as any president should, right now when the economy is dead in the water, we are losing jobs, a larger percentage of the adult population is really looking for work, out of work, in terms of full-time jobs than we have seen in 30 years-


BLITZER: How worried are you that you may be losing some of that base of the Democratic Party?

AXELROD: First of all, there's a fundamental misapprehension in what the secretary said. The president-obviously, this is the president that pushed for Recovery Act, this is a president whose cut taxes 26 times, mostly on-for the middle class and small businesses. This is a president who thinks every single day about job creation and how we rebuild or economy. He's challenging the Congress right now, as he did today in Michigan, to take a series of steps that would move our economy forward, that would accelerate economic growth that would create jobs. All he said is we also have to deal in the mid- and long-term with our deficit issue, because ultimately that will be a great weight on our economy.

So we need to in the short term deal with this jobs issue, but we have to do it in a fiscally responsible way. Now it is up to Congress to respond to that. And if the Congress-one of the things we hope is that when the Congress is home, and they hear their neighbors, over this break, that they'll come back in a mood to compromise and do the things that are necessary to get this economy moving. The president will challenge them to do that.

BLITZER: A lot of criticism of the president from the Left suggesting he hasn't been assertive enough. Maureen Dowd writing in "The New York Times", an article entitled "Withholder In Chief": "His withholding and reactive nature has made him seem strangely irrelevant in Washington, trapped by his own temperament. He doesn't lead and he doesn't understand why we don't feel led." Were you surprised to read that from Maureen Dowd?

AXELROD: Not really, because Maureen has been writing that same column for probably three years. She wrote that column even as we passed the Recovery Act. She wrote that column when we passed health care reform. She wrote that column after we passed the repeal of "don't ask/don't tell," after we passed the most significant financial reform since the Great Depression, overcoming a furious lobbying campaign by Wall Street. So this has been a familiar refrain of hers.

But the facts every the facts. This president, with the most divided Congress, has done some very, very substantive things in a very difficult time. And is going to continue that fight for middle- class people, to do the things that will restore economic security for the middle class. And you have a Republican array of candidates on the other side who have taken an entirely different tact and sided with Wall Street, with major corporate interests against closing loopholes, against asking wealthy Americans to do a little bit more to deal with our -- to deal with our problems. We're going to have a debate. And it's not going to be about psychology. It's going to be about economics and it's going to be about competing visions for the future.

BLITZER: He's going to continue hi vacation next week as scheduled, right?

AXELROD: His family is going on vacation next week, I think he'd like to join his family. But, you know-and if he goes, and I expect that he will go at some point and join them, you know, he's going to continue working. I heard Jack Cafferty's piece.

I've got to tell you, I've watched this president, from before we took office, deal day and night with these issues, think about them, meet with people, move programs forward to try and deal with problems that have been in the making for a very long time. And he never quits. And he's not going to take a hiatus from that work.

BLITZER: David Axelrod, thanks for joining us from Ames, Iowa. Appreciate it.

AXELROD: Great to be with us, Wolf. Nice to see you.

BLITZER: All right. We'll stay in close touch.

He's the front-runner in the Republican race for the White House, but Mitt Romney is getting an earful from an angry voter in Iowa today. You're going to hear the dramatic exchange. Stand by for that.

Plus CNN's Anderson Cooper is back inside the humanitarian catastrophe in Somalia, a region he last visited almost 20 years ago.


ANDERSON COOPER, CNN CORRESPONDENT: Nineteen years ago, when I was here during the last famine at feeding centers-there's just some shots going off now, and people are running. You hear shooting a lot in Mogadishu. It is very difficult to know exactly where it is coming from, but 19 years ago at a feeding center like this, they would have been using big vats of food to feed people. It wasn't a very effective way to get severely malnourished kids healthy again. Today they use this product, it is called plumping out, it has revolutionize the way malnutrition is treated.



BLITZER: I'm Wolf Blitzer. Here are more stories we're working on for our next hour.

Republican presidential hopeful Mitt Romney getting hammered by conservatives questioning whether he is really against raising taxes. Ahead, the new information that's sparking the debate.

But first, it was the iPhone, then the iPad, now just days after an unprecedented credit downgrade, Apple is soaring to the ranks of most valuable company. We'll tell you why.

And a wild ride on Wall Street. What's behind this dramatic volatility, the likes of which we have probably never seen. Stand by, Richard Quest will be joining us. You're in THE SITUATION ROOM.

But first, a wrenching scene that tugs at all of our hearts, the United Nations now telling us 600,000 children are now on the brink of starvation in Somalia. And in a matter of weeks, the food supply could be gone.

CNN's Anderson Cooper has been bringing us in-depth coverage of this dire catastrophe, and this as soon as his first visit to the region.


COOPER (on camera): In the background you can hear AK-47 shots firing right now. I'm at a feeding center run by the organization CARE, there are about 30 or 40 of these feeding centers run by different organizations all throughout the city of Bidoha (ph). You would almost expect there would be pandemonium here. There's shooting in the distance, people waiting for food, but there is really not. It's in a way starvation seems to suck the life out of you. You see just sit and wait. There's nothing more you can do.


BLITZER: That was Anderson reporting from Somalia 19 years ago. While he might look different right now, it's amazing how similar the scene is there today.


COOPER (voice over): There's so many kids in Mogadishu's Benadir (ph) hospital, the new arrivals are being treated in the halls. There are coughs and cries, you don't hear much complaining. That takes energy, perhaps, and there isn't much of that.

Many children and their families have walked for weeks just to get here. This little boy can barely take any more steps. There's no running water, no electricity. After 20 years of fighting in Mogadishu, there's not much left at all.

(on camera): In a country which is the epicenter of a famine now, there is a catastrophe happening here. You would expect there be more medicine, you expect there be kids to getting fortified milk, or plumping up, but you don't see any of that. Just mothers sitting with their kids, and many of the kids end up dying.

(voice-over): Mothers try to keep the flies at bay. Fathers soothe their sickly kids. The worry, the fear, it is the same the world over. What parent can stand it when their child is in pain?

Many kids are able to bounds back. With quick intervention, they gain weight day after day. For others, however, the malnutrition is too far along.

CNN's Nima Elbagir introduced us to Abdullah Hasan (ph). He lost a daughter. Now his 18-month-old son is sick as well.

(on camera): You must be very worried about your child. How long has your child been sick?

(voice-over): For the last six months he's been ill, he says, "But as the famine has tightened around us, no one has been able to help. So then we came here. And now we're just helpful."

In the corner of the room, Mohammed (ph) and his wife Rugia (ph) sit in silence. Between them, we notice a small pile of cloth. It turns out it's covering the body of their son. His name was Ali. He was just 1 year old.

ELBAGIR: They came up from the area of Helgar-Shabaab (ph), and it was just so difficult to get out, it took them so long to get out, that by the time they arrived, there was nothing anyone could do for him. He died about two hours ago.

COOPER (on camera): So this child has just died?


COOPER: And what will they do with him now?

ELBAGIR: They don't even have enough money to bury him. So they're just sitting here hoping that someone will come and someone -- and, you know, in this situation nobody has any money. But they're hoping that, together -- people try to put money in together when things like this happen, and they can raise the funds, otherwise they have no means of burying him.

COOPER (voice-over): Mohammed (ph) and Rugia (ph) have already lost their two other children. Ali was the only child they had left.

(on camera): What will they do now?

ELBAGIR: They said they don't know. They're just going to -- for them, the most important thing is just to try to find a way to bury the child, and then they're going to try to figure out what they can do from here.

They have nothing. They left their entire family. They left everything in the areas they've come from and they have nothing here. The only reason they took that risk was to save the baby, and now the baby is dead.

COOPER: You've seen a lot of this over the last few weeks.

ELBAGIR: Yes. I mean, Mogadishu is always difficult. Somalia is always difficult. People have been dying here for a while from the violence, the insecurity. But the famine is -- you know, the numbers here are extraordinary. The U.N.'s estimating that nearly a million are going to die if the aid pipeline isn't strengthened, if more funding doesn't come in to sustain the aid effort here.

COOPER (voice-over): The aid effort is under way, but for too many kids it may already be too late. They are not numbers, not statistics. They're boys and girls, names, and with parents, boys and girls who have never had a fair chance at life. Anderson Cooper, CNN, Mogadishu.


BLITZER: And you can certainly catch more of Anderson's excellent reporting later tonight on "ANDERSON COOPER 360" at its new time, 8:00 p.m. Eastern, only here on CNN. And if you want to find out more about how you can help with this enormous crisis in Somalia, go to, and you can impact your world.

A high-tech test that could change the future of travel. Imagine flying from New York to Los Angeles in just minutes. But guess what? Something went wrong.

And this is what she looked like before a chimp attacked and mauled her. Stand by to see what she looked like after a face transplant. We'll show you.


BLITZER: The British prime minister, David Cameron, now saying police waited too long to act after those vicious riot attacks broke out this week in London.

Our Lisa Sylvester is monitoring that, some of the other top stories in THE SITUATION ROOM right now.

What's going on?

SYLVESTER: Hi there, Wolf.

Well, Mr. Cameron is praising the bravery of the officers, but now says it is clear that far too few police officers were deployed and their tactics weren't working. The violence first erupted last week after the death of a black man Cameron says was shot by police. And he insists every contingency is being looked at to ensure order. More than 1,200 people have been arrested in the U.K.

And seven people are dead and more than 35 injured follow back- to-back explosions in northwest Pakistan. The first blast occurred when a bomb remotely detonated near a truck passing by. Minutes later, a teenage suicide bomber blew herself up just a few blocks away. Suicide attacks carried out by women in Pakistan are still pretty rare.

And dramatic video out of China -- take a look at this -- capturing a truck loaded with 20 tons of garlic and on onions overturning in just seconds. A woman was buried under the rubble. The whole things happened so fast, even the camera didn't have a chance to catch it all.

And get this -- the woman, she is alive and well today, with only a few bruises. The driver of the truck also survived. The cause of that accident is still being investigated.

And an amazing transformation more than two years in the making for a woman mauled by a friend's pet chimpanzee. Doctors at Brigham and Women's Hospital in Boston have released the first photos since she underwent a full face transplant in May. This is what she used to look like before being attacked back in 2009. The mauling left her virtually unrecognizable.

What a change from that.

BLITZER: We didn't show the picture of what she looked like after she was mauled, but that recovery is very impressive.

SYLVESTER: Yes, it is. And it just shows you the medical -- how far we have come with medical advances.

BLITZER: Yes. All right.

SYLVESTER: So it's nice to see that.

BLITZER: Thank you, Lisa.

Mitt Romney may be showing a new side to his personality. We're going to talk about a spat he got into at a campaign rally in Iowa today.

And you're going to find out what went wrong with today's test of the fastest aircraft ever launched.


BLITZER: A new test today of the fastest aircraft ever built. It's supposed to be capable of flying in an astounding 13,000 miles an hour. Let me repeat that, 13,000 miles an hour. But today's launch in California did not go as planned.

Let's go out on the scene. CNN's Dan Simon is joining us now from San Francisco.

What happened, Dan?


This is an aircraft designed to go anywhere in the world in less than an hour, from Los Angeles to New York in until 12 minutes. Things were going well. This was the second test mission for this aircraft.

Things were going well until about nine minutes in, when engineers on the ground lost control of the aircraft, they lost communication with the aircraft. This is the same thing that happened when they tried this in April of last year.

The way this works is, this aircraft attaches to a rocket, goes suborbital, into space, gets near the edge of space, and then it's supposed to fly on its own. That exactly -- that didn't really happen today, so it fell into the Pacific Ocean. At least that's what crews are thinking.

No word on when they'll try this again, but at least they were encouraged by some of the data -- Wolf.

BLITZER: And no one on board, obviously.

SIMON: Yes, no one on board. This is an unmanned spacecraft. And this is really an attempt to develop some advanced weapons systems where you can obviously have an aircraft that can deliver its payload really anywhere in the world in under an hour. So that's what really they're hoping for in the future -- Wolf.

BLITZER: Well, if at first you don't succeed, try, try again. Let's see how they do.

All right, Dan. Thanks very much for that.

SIMON: Exactly.

BLITZER: The congressional super committee charged with solving the debt crisis is now in place, but some say it could already by doomed to fail. We're going to talk about it in our "Strategy Session."

Plus, we're just learning that Texas Governor Rick Perry is in fact getting ready to jump into the Republican presidential race this Saturday in South Carolina. So how worried should his opponents, especially Mitt Romney, be?

We're going to get some answers. That's coming up.


BLITZER: The Republican presidential candidate, Mitt Romney, showing off a new side in Iowa today. Listen to this dramatic exchange.


MITT ROMNEY (R), PRESIDENTIAL CANDIDATE: Over the coming decades, going to be able to balance our budget and not spend more that we take in, we have to make sure that the promises we make in Social Security, Medicaid and Medicare are promises we can keep. And there are various ways of doing that.

One is, we can raise taxes on people. That --




ROMNEY: Of course they are. Everything corporations earn ultimately goes to people.


ROMNEY: Where do you think it goes? (CROSSTALK)

ROMNEY: OK. So, number one, you can raise taxes. You can raise taxes. That's not the approach that I would take.

Number two, you can make sure that the promises we make are promises that we can keep.


BLITZER: All right. A good exchange there. Let's talk about it in our "Strategy Session."

Joining us, our CNN political contributor Roland Martin, and Republican strategist Leslie Sanchez. She's the founder and CEO of Impacto Group. That's a communications firm.

Guys, thanks very much.


BLITZER: A tough -- he got into a little fight over there. What did you think of that exchange?

MARTIN: First of all, he should expect a lot more of that. Americans are not particularly happy when you have folks like General Electric not paying any taxes whatsoever, but your average working man and woman, folks who are out of work, having to pay as well.

And so he is going to have to confront that, because he is going to be positioned as the CEO candidate. And so he has to address his history with Wall Street, and also running corporations, buying companies, but laying thousands of folks off.

BLITZER: Yes, General Electric last year making about $14 billion worldwide, $5 billion here in the United States, and not paying any federal income tax because of losses in previous years.

LESLIE SANCHEZ, REPUBLICAN STRATEGIST: Sure. I mean, I think that's how the Democrats are going to frame it.

I think the real issue he's talking about is corporations are made up of people, they are an amalgamation. You raise taxes on corporations, you're going to lower dividends, which affects shareholders, which is our 401(k)s, our pensions, steel workers, everybody else. It deflates wages, the number of jobs that are there, and it actually doesn't help with a pro-growth strategy.

That's what he's trying to say. Did he say it in the best way? No. Does it increase skepticism about people that were already skeptical about Romney? Yes.

MARTIN: But Wolf --

BLITZER: I was just going to say, does Rick Perry's -- he's going to make the announcement jumping into this Republican race on Saturday. Does that -- does he automatically emerge as the major challenger to Mitt Romney?

SANCHEZ: Absolutely. He's a major challenger for everybody, including Barack Obama.

This is the campaign that has been on standby, has the resources. It's been quietly, in many cases, talking to so many of those large donors who are out there. And they are increasingly feeling confident that their big donors are ready and available who were keeping their powder dry, so to speak.

I think there's a lot of momentum. It will take off like a rocket. But the thing people do not understand a lot of times about Governor Perry is he is in it for the long haul. He's a very hard campaigner. He likes retail politics. He will be going door to door, and that's I think what people expect.

BLITZER: He's never lost a race in his life.

MARTIN: He hasn't lost a race.

But, Leslie, I think you're jumping ahead of yourself. Before he begins to challenge President Obama, he needs to get the Republican primary first. And so no doubt, I think, stepping in, he also vaults to the top three, if you will, on the Republican side.

BLITZER: With Michele Bachmann.

MARTIN: Well, look, Michele Bachmann, we'll see what happens with the Ames straw poll. But the most fundamental thing is he still has to run.

And so right now he looks great on paper. I think he will be a strong candidate. I don't think he will be like Fred Thompson was in 2008, Rudy Giuliani in 2008. But again, there's a difference between when you get out there and begin to campaign and then what happens on paper. Huge difference.

SANCHEZ: I think the difference, Roland, that we're talking about is these candidates know where the target is. The target is the economy and the leadership of President Obama.

Yes, there's a primary. We're talking about constituencies and social conservatives and where the -- but he is coming at it with a very strong, proven record in Texas --

MARTIN: No, I understand.

SANCHEZ: -- with the resources, and with a campaign team that has been with him since 1998.

MARTIN: I understand.

SANCHEZ: I talked to his pollster today. They said, should he decide to declare, they are committed, but they are going to be following his leadership.

BLITZER: He's got a lot of rich guys who support him.

MARTIN: Of course. But two former Texans who had tons of money and who flamed out as candidates, former governor John Connally, Senator Phil Gramm. Had tons of money, had the resources, but again, you still have to run.

SANCHEZ: Very true. Anything is possible. But let's look at the positives here.

And it challenges other candidates. He gets 60 percent of Independent voters in the conservative states.

MARTIN: Right. He will be strong. He'll be strong.

SANCHEZ: The Independent voters being big, Hispanic voters being big, working class voters being big.

MARTIN: I'm saying you've got to run first.


BLITZER: Well, he's getting ready to run.

MARTIN: He's getting ready to run.

BLITZER: This weekend he'll be in South Carolina, New Hampshire and Iowa.

SANCHEZ: And Iowa.

BLITZER: He's running.

SANCHEZ: But Wolf, let's learn -- we will learn our lesson of anointing a candidate.

BLITZER: No one is --


MARTIN: But when you say President Obama, ask Senator Clinton. She was anointed the candidate, the inevitable. She didn't win the nomination. You've got to win the nomination first.

SANCHEZ: I think we are far from anointing anybody on the right.


BLITZER: What do you think of this super committee now, this Gang of 12 that some are calling -- at least I'm calling it a gang -- Gang of 12? You can see the pictures right behind us. Six senators, six members of the House.

You think by Thanksgiving they're going to be able to come up with a deal that would pass?

SANCHEZ: I think it's very noticeable with the Gang of 12. There is none of the Gang of 6. And I think that's what people are talking about, is how can we expect -- a lot of skepticism if this is the group that can really have compromise, bring people together, do the $1.2 trillion in cuts. I think there is a lot of skepticism right now, and it would have been nice to see more leadership if Minority Leader Pelosi had been on there, somebody who can really negotiate.

MARTIN: No. First of all, you don't need Boehner, Cantor, Pelosi on Steny Hoyer on this particular committee.

But people have to remember, all it takes is seven votes. OK? And so we assume that six Democrats, six Republicans, there will be no compromise. No.

You do have some hard-liners on this list, but you do have the opportunity for somebody to say, look, I'm not going to sit here and be so hard-lined. I can actually cross the aisle. If you have five Democrats, you pick up a couple Republicans, you've got seven.

BLITZER: I could easily see a situation -- and correct me if I'm wrong -- where you have all six Republicans not budging on raising taxes because they have signed that Grover Norquist pledge, no new taxes. They're not going to raise taxes, but they will make significant spending cuts.

They need one Democrat who's going to cross over and join for a 7-5 vote. Max Baucus, for example, of Montana, could he be that Democrat? He voted for the Bush tax cuts back in 2001, 2003. Could he be that swing vote that would help the Republicans get a 7-5 majority, which would then bring it to the floor and the House, no amendments, no filibusters, and an up-or-down vote?

SANCHEZ: I think that you pointed to the right part of that, and that was the tax cut component. Be looking at a lot of the rates and such, and maybe some of the special loopholes that a lot of special interests have, looking at cutting those kinds of things, something that happened back in the '80s. Those are the kind of reforms I think Republicans and Democrats -- it's very difficult to make, but getting rid of a lot of those loopholes.

MARTIN: But the Republicans cannot keep talking about no tax cuts when the Bush tax cuts did contribute to the deficit. And so, look, the whole point


BLITZER: Could you see that 7-5 scenario?

MARTIN: I see any kind of 7-5 scenario. I don't necessarily see six Republicans saying absolutely nothing in tax cuts. We could sit here and dance all day around it. The CBO says it adds to the deficit. At the end of the day, if they think that they're going to do just --

BLITZER: You think one of those Republicans might break the Grover Norquist pledge?

MARTIN: Look, I think when you have 12 people who have to be grownups, someone has tell Grover Norquist --

BLITZER: So the answer is yes, you can see that?

MARTIN: Absolutely. Because --

BLITZER: Anyone want to guess which Republican would do that?

MARTIN: No. First of all, you can't guess right now because you don't know the dynamics of the negotiation and what happens. I do believe though you will have the Republican who tells Grover Norquist, you are unelected, I am, this is for the good of the country.

BLITZER: All right. We'll know by Thanksgiving, guys.

SANCHEZ: We will.

BLITZER: Thank you.

Jack Cafferty is asking, what does it mean when the British and especially the French governments work harder than America's government? He will be back with "The Cafferty File."

And valuable lessons from Apple for businesses around the country after the high-tech giant's value hits a new high.


BLITZER: All right. Jack is back with "The Cafferty File" -- Jack.

CAFFERTY: So here's the question: What does it mean that the British and especially the French governments work harder than America's?

Dave in Arizona writes, "It means what we knew all along -- unless some special interest is paying those folks to stay around Washington and do their bidding, they do not care about us."

Peter writes on Facebook, "It sounds like they actually want to have solve their problems over there. Our president believes appearing on TV time and again with the same stale message that things are going to get better and we're going to get through this will make it so."

"What's the plan? I don't want to hear the speech again. Interrupt programming when you have something to say, Mr. President."

Ken in Iowa City writes, "History has shown that great civilizations fall when they become complacent. The U.S. government has simply decided it's too big to fail. Instead, they have become fat and lazy to the point that they think reaching for the graphs that corporate America feeds them is exercising their duty to the American people like giant political couch potatoes."

Pat in Missouri, "What would you have them do, stay in Washington and call Congress back into session? To what purpose? What does he need to do about the U.S. credit rating that has not been done?"

I think we've had enough about appearances and need to get back with dealing with reality now. You need to get off his back and let him take a breather while Congress is out of town. Maybe you need a vacation, too."

Hey, there's a good idea.

Ralph in Illinois, "I own a French sailboat, a Beneteau. It's the best in the world. The TGV train goes 357 miles an hour. Seventy-eight percent of all of France's electric power is nuclear. Airbus headquarters is in France."

American sailboats are like RVs on water. Our trains will derail at 70 miles an hour, and most of our electric power comes from coal. The French live longer, they eat the best food, and they drink good wine."

And Larry in Omaha writes, "Is the American government working? I missed it."

If you want to read more on this, go to the blog,, or through our post on THE SITUATION ROOM'S Facebook page, where the quality of the responses is gradually beginning to improve now, and we're happy to see that -- Wolf.

BLITZER: Yes. And I want people to go to my blog as well at our page as well. Today, I write about what's going on in Afghanistan and Iraq, the casualties, the price, the treasure and blood. What's going in Afghanistan and Iraq?

Go to the page and read my blog.

Thanks, Jack.