Return to Transcripts main page


War Games To Say "Keep Out"; New Effort to Revive Peace Plan; $1 Million Reward in Border Guard's Murder; Election Results Expected In Libya; Armstrong Moves To Dismiss Charges; Bush Era Tax Cut Extension; Interview with George P. Bush; Romney's Investments under Attack; Online Shopping

Aired July 9, 2012 - 17:00   ET



Happening now, war games meant to convey a deadly message to the United States and others -- keep out of Syria's civil war.

He has a familiar name and political bloodline that includes two United States presidents and a former governor of Florida. George T. Bush is here in THE SITUATION ROOM this hour to discuss the future of the Republican Party.

And states try a new way of reaching into your bank account and taking away one of the biggest incentives for online shopping.

We want to welcome our viewers in the United States and around the world.

I'm Wolf Blitzer.


We begin this hour with new and alarming developments in the Middle East. Get this, Syria's leader actually blaming the United States for undermining peace efforts in his country. Bashar al-Assad accusing the U.S. of supporting terrorists -- that's his word -- who are fighting to overthrow him. Not only that, the Syrians are conducting war games right now.

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

She's monitoring what's going on -- Barbara, what are you learning?

BARBARA STARR, CNN CORRESPONDENT: Well, Wolf, these are war games that the U.S. is watching very carefully and listening more closely to what is going on.


STARR (voice-over): A show of force from Syria -- new live fire exercises to send the message it can repel a foreign attack along its coast, using ships, aircraft and missile batteries. It comes as Secretary of State Hillary Clinton ratcheted up the rhetoric against the Syrian regime.

HILLARY RODHAM CLINTON, SECRETARY OF STATE: The future, to me, should be abundantly clear to those who support the Assad regime. The days are numbered.

STARR: Even as attacks continue inside Syria, these drills are meant to show the regime is ready to fight.

CEDRIC LEIGHTON, FORMER MEMBER OF U.S. JOINT STAFF: And they're going to use everything that they possibly can in their power to warn other countries away from Syrian air space, the Syrian land mass and the Syrian seacoast.

STARR: It's a message Syria sent last month when it shot down a Turkish fighter jet -- don't get in our space.

These shows of force are happening all over the Middle East right now as tensions rise.

In next door Jordan, Jordanian and U.S. troops conducting weeks of training with nearly two dozen other nations.

In the Persian Gulf, the U.S. Navy has sent the USS Ponce, a warship now turned into a floating base.

And Iran continuing its ongoing weapons tests, warning the world it can control the oil shipping lanes of the Persian Gulf. But Iran, too, is now watching the latest Syrian live fire drills. It's worried its long time ally in Syria is shaky.

LEIGHTON: Without Syria, Iran has some significant strategic challenges that it has to face. And they are very, very concerned that the Syrian regime will not hold.


STARR: But the risk, of course, always is this, and that is miscalculation, with so many military forces out there. And at any moment a training drill, an exercise, can suddenly turn into a firefight -- Wolf.

BLITZER: I know the U.S. intelligence community is closely watching these Syrian war games.

What are they learning, if anything?

STARR: You know, 100 percent, Wolf. That's exactly right. The CIA, U.S. intelligence agencies, the Pentagon, keeping an eye on all of this. What they learn is not just the status of Syrian's -- Syria's weapons, but the status of their forces.

Do they have command and control?

Do they have communications?

Can they muster the forces and get out there and conduct these exercises and really be credible?

Is this really a show of force?

Is it something less than that?

This will help them come to an assessment of how strong Assad's forces really are at this point -- Wolf.

BLITZER: Barbara Starr, thank you.

Despite the Syrian war games, the United Nations peace negotiator, Kofi Annan, came to Damascus today for talks aimed at reviving his peace plan.

CNN's Arwa Damon is watching what's going on.

She's in Beirut -- Arwa, there's been absolutely no progress so far in brokering a peace deal.

Is there any reason for optimism right now?

ARWA DAMON, CNN INTERNATIONAL CORRESPONDENT: No, Wolf, not if you ask the opposition activists, who will tell you that this is effectively deja vu, that what they're hearing coming from Kofi Annan is something of a broken record. You had these meetings with President Bashar al-Assad earlier today, at the end of which he said that the Syrian president had agreed to some sort of a proposal, that he was going to be putting that forward to opposition activists.

But we don't really know the details of it.

What we do know is that Kofi Annan's initial modified plan included, along with those original six points, a -- the formation of some sort of unity transitional government.

Now, President Assad believes that he already has a transitional government in place. The opposition, of course, refuses to negotiate unless the president does step aside, unless those who are responsible for the violence are somehow held accountable.

So, effectively, we're at the same point right now that we were at before this meeting began -- Wolf.

BLITZER: You know, Arwa, the Syrian president, Bashar al-Assad, he's now directly blaming the Obama administration, the United States, for all of the latest turmoil. He did so in an interview with German TV.

I want you to listen to this.


BASHAR AL-ASSAD, SYRIAN PRESIDENT: It's part of the conflict. They give -- they offer the umbrella and political support to those gangs to create this terrorist or to dis -- to destabilize Syria.


BLITZER: I know you're in close contact, Arwa, with the Syrian opposition.

How are they responding to this latest accusation from Bashar al- Assad?

DAMON: Well, Wolf, they're quite frankly not at all surprised. And they continue to be disgusted by what they are hearing coming out from their own president, a president who, of course, they have been trying to remove from power pretty much since the onset of this uprising. The Assad regime has been blaming foreign forces for the unrest, refusing to take on any measure of responsibility for what's taking place, now again pointing finger of blame at the United States for its political backing of the opposition; also in that interview, blaming countries like Saudi Arabia and Qatar, accusing them of providing weapons to the opposition.

So we continue to have this stalemate. Both sides incredibly polarized. And as we've been reporting day in and day out, the violence inside Syria continues. And it is violence that is going to continue until some sort of real plan that all sides can buy into is put into place -- Wolf.

BLITZER: We know that Bashar al-Assad and his regime have a lot of support from Iran.

But what do we know specifically about Iranian military involvement in trying to help Bashar al-Assad survive?

DAMON: Well, there has been quite a bit of conflicting information out there. Some intelligence agencies and analysts saying that the Iranians most definitely are providing weapons, are providing funding to the Assad regime. The U.S. has said that, as well.

There has been, from some members of the Free Syrian Army that I've been speaking to inside Syria evidence that there are, perhaps, military advisers on the ground helping the Syrian government try to stem down -- clamp down on this opposition.

But that is, of course, one of the growing concerns here. The Assad regime continues to rely on, and at this point in time, firmly has the backing of the Iranians. Kofi Annan, in fact, heading there for meetings there, as well, trying to, perhaps, persuade the Iranians to put pressure on the Assad government to at the least -- at the very least adhere to some sort of a cease-fire.

But as long as the Syrian government has the backing of Iran, it most certainly can count on the fact it can enjoy a fairly relative position of power.

BLITZER: Arwa Damon on the scene for us in Beirut, watching all of this, as she always does.

Arwa, thanks very much. Closer to home, the United States announced today indictments and a million dollar reward for the accused killers of a U.S. Border Patrol agent in Arizona. It's a case that's turned into a political piece of dynamite for the Obama administration because a gun found at the scene of Brian Terry's murder came from the so-called Fast and Furious ill-fated gun smuggling investigation.

CNN crime and justice correspondent, Joe Johns, is here in THE SITUATION ROOM watching all of this unfold -- so tell our viewers what happened today.

JOE JOHNS, CNN CORRESPONDENT: Well, Wolf, today in Arizona, the Justice Department unsealed an 11-count indictment that was handed up in November of last year. It named four men who are believed to be on the run in Mexico and two others who are already locked up. Remember, it was December of 2010 that border Agent Brian Terry was killed in a firefight in Arizona.

As you mention, Wolf, his death was the event that launched the investigation of the now infamous federal gun-running operation known as Fast and Furious. And, yes, this is the very same operation that led to a standoff over documents between DOJ and the Capitol Hill, a contempt of Congress citation against Attorney General Eric Holder.

It charges first and second degree conspiracy, murder, robbery, assault on a federal officer and related gun charges. The government says the suspects were allegedly out looking to rip-off drug smugglers when Terry and other border agents spotted them.


LAURA DUFFY, U.S. ATTORNEY FOR THE SOUTHERN DISTRICT OF CALIFORNIA: The indictment alleges that upon entering the United States, these defendants armed themselves. They armed themselves with firearms. And they did so with the intention that they would use those firearms to rob marijuana loads from individuals as they were smuggling them into the United States.


JOHNS: Also, a surprising fact. The government says the agents first fired non-lethal bean bags -- bean bag rounds at the suspects -- before they actually started firing bullets.

The government announced a reward of $250,000 for each of the four men still at large in Mexico, for a total of $1 million. If all four are apprehended and if the suspects were caught in Mexico, the government said they would work to get them extradited to the United States -- Wolf.

BLITZER: Did the Fast and Furious investigation come a -- come up at all during the announcement today?

JOHNS: Yes, in sort of a sideways way. You know, the investigation started. There has been one question that has never been answered -- were the guns from Fast and Furious, that operation involving gun-running, actually found at the scene of the crime?

Were those guns responsible for Brian Terry's death?

At today's news conference, federal prosecutor, Laura Duffy, said it was, in fact, one bullet that killed Terry, but would not say if the ballistics that -- from that Fast and Furious operation actually turned out to be a bullet from one of the guns.

She did note that there were unprecedented atmospherics surrounding this case, clearly talking about the investigations by Congress. But the government has not, she said, been distracted from the job of trying to catch the suspects.

We talked to Republican Congressman Paul Gosar earlier today and he said he thought the timing of the anounment -- announcement -- was politically motivated to, quote, "take the heat off of Attorney General Eric Holder."

Clearly, the investigations and the fighting over this case are likely to go on -- Wolf.

BLITZER: Not likely, they will go on. I'm sure.

JOHNS: I think you're right.


JOHNS: I think you're right.

BLITZER: Thanks very much.

A comprehensive report.

Nature strikes yet another blow right near Washington.


UNIDENTIFIED FEMALE: I can't even tell you what we're feeling. I drove up and said it's got to be a dream, this just cannot be real. We still just are in a state of shock.


BLITZER: That woman's story is just the beginning. Up next, the teenage girls who came only seconds away from a possible tornado.

Plus, President Obama announced a tax cut plan today.

Who will benefit the most?

And two families go to blows right in the middle of a courthouse. We'll explain what this is all about.


BLITZER: Jack Cafferty is here with the "Cafferty File" -- Jack. JACK CAFFERTY, CNN CONTRIBUTOR: Wolf, Mitt Romney is coming under fire from some conservatives when it comes to the economy. Bill Crystal of the "Weekly Standard" says that Romney will not be table to win in November if voters don't think he has a clear plan to fix the economy. Radio host, Laura Ingram, took a swipe at Romney, wondering why he's taking vacations when, quote, "we have a country to save. We?"

The "Wall Street Journal" now owned by Rupert Murdoch says Romney needs to get more specific about how he would do a better job than Obama, quote, "The Romney campaign thinks it can play it safe and coast into the White House by saying the economy stinks and it's Mr. Obama's fault." Now, in fairness to Mitt Romney, some of the griping is coming from conservative corners that weren't too thrilled with him in the first place.

Romney has a plan for jobs and economic growth laid out in his website. And the likely Republican nominee has talked about how he would do things like lower tax rates, lift the barriers for the Keystone Pipeline, curve some regulatory policies that he said have driven up energy costs and repeal Obamacare.

Meanwhile, what about President Obama? With another grim jobs report for June out last Friday, unemployment stuck at over eight percent, job growth remains weak. If unemployment stays where it is or goes higher before November, it might be tough for the president to convince millions of unemployed Americans that he can feel their economic pain.

Plus, the national debt and annual deficits have now spiraled out of control on his watch. A recent CNN/ORC poll shows that Americans are just about split down the middle when it comes to who would better handle the economy. And that's our question.

Whom do you trust more to turn around the economy, President Obama or Mitt Romney? Go to and post a comment on my blog or go to our post on the SITUATION ROOM's Facebook page -- Wolf.

BLITZER: Good question. I think that's the question that will determine who the next president of the United States is going to be, Jack.

CAFFERTY: I think you're right.

BLITZER: I think you're right, too. Thank you.

After enduring almost two weeks of boiling temperatures, millions of people in the Midwest and the east coast finally are enjoying cooler weather today, but the cold front that finally broke the heat wave also set of a new round of some damaging storms. Roz Plater of CNN affiliate, WJLA, shows us what happened just 50 miles south of Washington, D.C.

(BEGIN VIDEOTAPE) ROZ PLATER, WJLA REPORTER: First, take a look at this dance studio. Two of its walls collapsed and its roof was sheered right off. Inside, about two dozen cheerleaders, their teachers and parents.

UNIDENTIFIED FEMALE: We were scared and we were just like praying to God. And hoping that we weren't going to die.

PLATER: The windows blew out, and the teacher ordered everyone to their front of the building.

UNIDENTIFIED FEMALE: She was trying to tape up the window and she saw the funnel start to, and she just told everybody to get in the dance room.

UNIDENTIFIED FEMALE: We weren't that close from it hitting us. Like, we had just stepped foot in there and we saw it just cave in on us.

PLATER: We're told two of the parents were injured as they pulled the kids to safety. The dance studio's roof blew a few hundred feet and landed on a house. The good news, no one was home here. Then about a half block north, the roof of the strip mall was peeled off like a tin can. Office equipments sent flying through the front windows. The Perkins own this battery store.

UNIDENTIFIED MALE: We just started. We just started two years ago. This is something we've been working for, and we just lost it.

UNIDENTIFIED FEMALE: Can't even tell you what we're feeling. I drove up and said it's got to be a dream. This just cannot be real. We still just are in a state of shock.


BLITZER: You heard from Roz Plater of our CNN affiliate, WJLA, here in Washington.

Today, the government announced the lower 48 states just recorded the hottest 12 months since the United States began keeping records. That would be way back in 1895. Our meteorologist, Chad Myers, is joining us from the severe -- CNN severe weather center. Chad, we just saw those stunning pictures of devastation not far from Washington, D.C. Who else is likely to get hit by some storms today?

CHAD MYERS, AMS METEOROLOGIST: Tonight, the focus, just like last night, will be right along where the cooler air, and I use that word relatively. You know, I mean, 10 degrees, 15 degrees cooler is still a boundary between where the hot air is down here, where the cool air is here. So, that's Southern Virginia. That's were there still without power in some spots. In Northern North Carolina, same deal.

People without power, still trying to get the power back on, ten days later at times. People don't take severe thunderstorm warnings I don't think strong enough. I mean, you hear tornado warnings, then you go running, but severe thunderstorms did all of this damage, all of these millions of people that were without power happened because of severe thunderstorms, like we're seeing now.

The winds were 60, 70, and at times 80 miles per hour. So, south of Richmond, that's about the courthouse there. Sea winds about 80 miles per hour later on today as the storms continue to fire and move from east to the west and then a little bit farther down to the south again, even in North Carolina, still seeing this hot, hot air. When you have a 100-degree air, it has so much buoyancy, it wants to go straight up.

When things go straight up, they go bump in the night. They turn into severe thunderstorms. That's what's been happening. Now, the record heat its losing grip on the northeast. That heat is going to be pushed off to the west, all the way into California, into New Mexico, and even into Vegas. A 110 degrees in Vegas today. OK. It's a dry heat, that's still hot -- Wolf.

BLITZER: Very hot indeed. And even though, most of the country is getting a little bit of a break from those triple digit temperatures, Chad. There are still some rather dangerous hot spots out there.

MYERS: Yes. Yes. No question about it. If you're going to -- 127 degrees today in Death Valley. I mean, it's called Death Valley for a reason. But Las Vegas, 115, you can't have a pet or child in the car at that temperature. And Phoenix, Arizona, here you go. This is Los Angeles. There are Phoenix affiliate there, KPNX. Just showed you there Las Vegas. Beautiful skies, but that sun is bright.

And that sun goes right deep into those cars, and temperatures, I'm seeing a couple pictures today. People sent me on Twitter, a 171 degrees inside of a car that they left closed up on purpose. You can't do that to pets, kids, or anybody. Make sure they have all kinds of water and pets have shade as well -- Wolf.

BLITZER: Chad Myers, thanks very, very much. Good reporting as usual.

It's a scene many of us in Washington won't soon forget, an earthquake rattling the region, sending tourists scrambling inside the Washington Monument. Up next, why this is the closest you'll get to see the inside of the very famous landmark in the nation's capitol. The closest you'll see it any time soon.

Plus, states try a new way of reaching into your bank account.


BLITZER: Preliminary election results are expected soon in Libya. Lisa Sylvester is monitoring that and some of the other top stories in the SITUATION ROOM right now. What's going on, Lisa?

LISA SYLVESTER, CNN CORRESPONDENT: Hi, Wolf. Well, early returns are expected today in Libya's first parliamentary elections in more than four decades. Final results may come by the end of the week. About 60 percent of Libya's registered voters cast ballots Saturday. About 3,500 candidates were running for only 200 seats.

And the body of former Palestinian leader, Yasser Arafat, will be exhumed and tested for radiation poisoning. Several days ago, investigators said they found high levels of a radio active substance on some of Arafat's personal belongings. He died at a Paris hospital in 2004 of a brain hemorrhage. Rumors of poisoning circulated then, but Palestinian officials denied it.

And Lance Armstrong says the U.S. anti-doping agency is targeting a big fish to justify its existence. The seven-time Tour de France champion filed suit to have the agency's doping charges against him dismissed. Armstrong has always insisted he never took performance- enhancing drugs. Justice department and prosecutors closed in investigation of Armstrong in February without bringing charges.

And this was the scene inside the Washington Monument last August when an earthquake struck. It caused significant damage to the inside and outside of the D.C. landmark. But now, the National Park Service says the monument could remain closed for repairs until 2014. The cost of repairs is estimated at $15 million.

The national cathedral remains open, although it was also damaged. The restoration is expected to take five to ten years, depending on fundraising efforts -- Wolf.

BLITZER: We all remember that little earthquake we have here in Washington and didn't realize the damage of the Washington Monument was that severe. I feel bad for all the tourists who come to Washington and won't be able to go to the top of the Washington Monument, what, until 2014.

SYLVESTER: 2014 and a cost of $50 million. So, I know you lived through it. I lived through it, Wolf. A lot of people in the D.C. area were a little shook up, literally, at the time, because of all of that.

BLITZER: It could have been a lot worse as my dad used to say. All right. Thanks very much for that.

President Obama outlined a scary proposition for millions of Americans. If the middle class tax cuts aren't kept, your taxes are going to be climbing up. Tom Foreman is breaking down the numbers for us.

And he's young, he's smart, he has a famous last name. Will George T. Bush jump into the political arena? Guess what, he's here in the SITUATION ROOM. He's getting ready to join me next.


BLITZER: President Obama picked a new fight with the Republicans today. During a carefully staged White House event he demanded an immediate extension of the Bush era tax cuts for middle class wage earners, but not for the wealthy.

(BEGIN VIDEO CLIP) BARACK OBAMA, PRESIDENT OF THE UNITED STATES: I'm not supposing anything radical here. I just believe that anybody making over $250,000 a year should go back to the income tax rates we were paying under Bill Clinton. The Republicans say they don't want to raise taxes on the middle class. I don't want to raise taxes on the middle class. So we should all agree to extend the tax cuts for the middle class. Let's agree to do what we agree on.


BLITZER: The Romney campaign's rejection notice came even before the president spoke and let me quote from a statement. "President Obama's response to even more bad economic news is a massive tax increase. It just proves again that the president doesn't have a clue how to get America working again and help the middle class. The president's latest bad idea is to raise taxes on families, job creators and small businesses" -- that statement coming in from the Romney campaign.

You might call today's back and forth a starting point for negotiations between President Obama and congressional Republicans. The way things stand right now, everyone, everyone's taxes will go up at the end of the year unless legislation is passed. CNN's Tom Foreman is joining us now to explain what's going on. Tom, start explaining.

TOM FOREMAN, CNN CORRESPONDENT: Let's talk about the Bush tax cuts, the Bush tax cuts. The Bush tax cuts came to light in the early 2000's driven by a desire among Republicans to give everyone a tax break and it worked. Millions of middle class workers have since saved thousands of dollars, money for houses, cars, consumer goods, food, gasoline, so when the cuts were set to expire in 2010, what happened is they were extended.

Both parties mindful of the recession said we have to keep that money in consumer hands, and President Obama signed that law, but now these things are set to expire at the end of this year, right, in December and that has raised alarm bells all over the land. And here is why. If these cuts expire, look what would happen here. According to the tax policies that an average family, a couple of kids, parents, $75,000 income, their taxes would rise next year $2,600. You can imagine the impact of that on the economy and on Congress and the presidency, both of which are struggling (INAUDIBLE), so neither Republicans nor Democrats want this to happen.

They're not going to let it. However, that's where the agreement ends. Because at this point, what you have is the Republicans with a plan that says let's make these cuts permanent for everyone. That will spur the economy. It will encourage investment. Everyone will get a break in this difficult time, pouring money into the system, that's good. That's what they want. But there is a cost. It would also push up the deficit, which many people are concerned about, keep that ballooning up there.

So let's look at the president's plan, which is somewhat different in all of this. If you look at the president's version of it, he's saying let's keep these cuts for all but the very rich, for any family making less than $250,000 a year let's keep it. That's about 98 percent of the population. He wants the nation's top earners to pay more. He said that would also spur the economy. It would encourage investment, but by making the top earners pay much more, they would also help pay for the government -- Wolf.

BLITZER: So let's talk about the real dollars and cents. How much does he want those people to pay?

FOREMAN: Well, that's an interesting question because if you look at the top two brackets. These are the top two brackets in our country. Now we're talking about these rich people that the president is always mentioning. If you're a family making enough to rise above that $250,000 threshold he mentions, you're paying about 33 percent in taxes. He wants you to pay 36 percent instead.

If you're above that, if you're in the uber (ph) rich territory, say well over a million a year, something like that, you're paying 35 percent. He wants that to go up close to 40 percent. The difference to the government, well, if the Republicans get their way and everyone gets the break the deficit rises about $3.7 trillion over the next decade. If the president gets his way it rises by about $3 trillion. So yes, there is a difference. It's not perhaps the massive difference that both sides try to make it out to be right now.

This really is an awful lot of political posturing, Wolf, if it comes down to it. Yes, there's a difference. Yes, you can make arguments for them. But the real difference may very well be this November and whether or not you're seen as a president of the middle class or a president of everybody or president to the wealthy. That's what they're positioning for -- Wolf.

BLITZER: Yes, all right Tom thanks very, very much, Tom Foreman breaking down the numbers for us. By the way, coming up in our new 6:00 p.m. Eastern hour, we're going to break down the tax cut plan with two former party chairmen, Democrat Terry McAuliffe (ph), Republican Haley Barbour. That's at our 6:00 p.m. Eastern hour, that of course for our North American viewers.

But up next, this hour, George P. Bush (ph), the son of the former Florida Governor Jeb Bush, he's here in THE SITUATION ROOM. I'll ask him this question. Is his dad interested in becoming vice president of the United States among other questions? Plus, two families go to blows in the middle of a courthouse. We're going to explain what this is all about.


BLITZER: It could be said that politics is certainly in George P. Bush's veins. His grandfather, his uncle, they are former presidents of the United States. He's also the son of the former Florida Governor Jeb Bush. George P. Bush is here in THE SITUATION ROOM right now to talk about the future of the Republican Party, his family's role in all of that. He's the co-chairman of Maverick PAC (ph). Tell our viewers what Maverick PAC (ph) is. GEORGE P. BUSH, GEORGE W. BUSH NEPHEW: Maverick PAC (ph) is a federal PAC engaged and focused on reaching out to younger professionals, Wolf, mainly between the ages of 25 and 45 that feel disaffected with the economy with opportunities for small business owners and entrepreneurs, and that are engaged in politics, largely for the first time --

BLITZER: Standing for maverick.

GEORGE P. BUSH: That's correct.

BLITZER: The theory is Maverick is --

GEORGE P. BUSH: Just -- that we're entrepreneurs. A lot of us are small business owners, launching our business for the first time.

BLITZER: Which is Maverick --


BLITZER: Nothing to do with John McCain and Sarah Palin.

GEORGE P. BUSH: No, no --


GEORGE P. BUSH: Nothing ideological.

BLITZER: OK, nothing like that. The latest Gallup poll among Hispanic voters -- I know you're half Mexican, right? Your mom is Mexican.

GEORGE P. BUSH: That's correct.

BLITZER: Your dad is Jeb Bush. Look at this, Hispanic registered voters' choice for president Obama is 65 percent, Romney, 25 percent. Romney has got a problem in the Hispanic community. Why?

GEORGE P. BUSH: He does and I can draw upon my experience in helping out my uncle in 2004 where he established the high water mark within the Hispanic community. And in my opinion I don't think there's really that big of a difference between then and now, in a sense that the values -- the core values of the party still resonate within the community. I think it's about packaging. And so over the course of time I believe a lot of Romney surrogates and what the governor is putting together will have more saliency (ph). I think when we have a full examination of the issues and where people stand especially as it relates to Hispanic unemployment, Wolf. I mean --

BLITZER: You're fluent in Spanish, right.


BLITZER: OK, so are you going to go out there and campaign for Mitt Romney in Spanish? Go to Latino communities whether they're in Nevada, Arizona, Florida, your home state? GEORGE P. BUSH: I'm on the Hispanics (INAUDIBLE) Committee for this cycle and so if he calls me into action as a surrogate speaker, I will do so. I'll serve in whatever capacity he asks me to do. I don't have any specific plans right now.

BLITZER: I'm sure after this interview you're going to be getting a phone call, so don't be surprised when you do. Your dad told Bloomberg's Editorial Board in June -- I'll put it up on the screen -- "Ronald Reagan, George H.W. Bush, that would be your grandfather, would have a hard time, if you define the Republican Party, and I don't, as having an orthodoxy that doesn't allow for disagreement, doesn't allow for finding some common ground."

The suggestion being that maybe the current batch of Republicans so ideological, so engaged with Tea Party rhetoric, if you will, that even Ronald Reagan or George H.W. Bush would not have felt comfortable.

GEORGE P. BUSH: Well I think when it comes down to presidential politics or at a national level it is about building coalitions. In this case the Tea Party has a very strong influence within the party. Ronald Reagan and my dad's quoting of him I think refers to the big 10 theory and I'm a huge advocate of that as it relates to outreach in the Hispanic community or bringing in small business owners that sociologically may not completely agree with where the party platform stands on a lot of issues.

But they're far to the right on fiscal questions. And so, what I love about the party is that it's extremely diverse. And I think what my dad was trying to say is that we need to be the party that is more welcoming. That allows people from various backgrounds to come in, whether they have labels behind their name or not.

BLITZER: When you say the party is extremely diverse I think a lot of people would totally disagree with you on that, but we don't have to get into that right now. Your father, a very, very popular two-term governor of Florida, a lot of folks would like to see him on the ticket with Mitt Romney. Is that, you think, even within the realm of possibility?

GEORGE P. BUSH: I personally don't think so, Wolf. I don't have a crystal ball, and he's not being vetted right now and he's one of the few politicians that does what he says in a sense that he's not actively pursuing a higher office. I think he has a voice within the Republican Party as a conservative especially as it relates to education reform. And I see him working hard on behalf of Governor Romney in some key battleground states. But like me, he's going to do whatever he can when he's called to service this fall on behalf of the governor.

BLITZER: Because I know in Florida especially where he's very well liked, he would probably almost certainly guarantee Romney's carrying Florida if he were on the ticket, but you don't think that's necessarily going to happen.

GEORGE P. BUSH: Well, we'll see. I mean Florida will be a key battleground state. He'll along with Senator Marco Rubio, I think provide a very diverse message on behalf of the Republican Party (INAUDIBLE) like Florida and will represent the governor well when he's outside the state.

BLITZER: Your uncle, former President George W. Bush, we have -- we showed him in Africa last Friday, dealing with cervical cancer of patients on his 66th birthday. Your Aunt Laura Bush was there as well. He's basically just walking into an elevator and said I'm for Mitt Romney. But I haven't seen him out there campaigning for him or doing anything for him. Do you think that's deliberate? What is going on here?

GEORGE P. BUSH: Well it's -- Wolf, there's always the awkward dance. You know every single presidential election cycle, even on the Democrat side those that are running for office as Democrats avoiding the current president. It is just one of those things where I think as an elected official you go out there projecting your own voice and you know you look at Uncle George's record in the last four years really he has focused more on staying out of the realm. That was his assurance to the American people is that he was going to honor the tradition that our presidents take on and that's not getting involved --

BLITZER: He's been helping people in the tsunami in Indonesia, in Haiti and now in Africa, so he's doing important work. I'm going to end this up -- I'm going to show our viewers a little video, 1988. You were a little boy. Take a look at that. You probably remember the Republican Convention in New Orleans in 1988. Let's see a little bit of George P. Bush -- there your family is watching you. They're very proud of you. There he is and you're about to lead the Pledge of Allegiance. You know a lot of people look at you and say you know that was 1988. Now it's -- what are you, 36 years old now.


BLITZER: You want to be a politician?

GEORGE P. BUSH: Well, I'm drawn to public service. Whether it's being an inner city public high school teacher or serving in our nation's military. I've been attracted to politics and right now I don't have any goals that are specific. But I love helping out behind the scenes --

BLITZER: Sounds like a yes to me, so would it be in Texas where you live now? Would you go back to Florida? Where would you want to do some political work?

GEORGE P. BUSH: I was born in Texas and there's a common saying sometimes you get back as soon as you can and that's what I did in going to college at Rice and eventually meeting my beautiful wife in law school. If I were to do this, I would do it in the great state.

BLITZER: All right. We look forward to seeing what's going on. Stay in touch with us.

GEORGE P. BUSH: Absolutely. BLITZER: Thanks very much George P. Bush for coming in to THE SITUATION ROOM.

Mitt Romney has lots of money in offshore bank accounts, but how much does that really benefit him? Erin Burnett has been digging into the numbers. Erin joins us next.


BLITZER: Democrats are hammering at Mitt Romney to explain his offshore bank accounts and release several years of tax returns. Last week a "Vanity Fair" report listed Romney accounts in the Cayman Islands, investments in Bermuda and a Swiss bank account. CNN's Erin Burnett is joining us now. Erin, what are the benefits to these kinds of accounts in general?

ERIN BURNETT, HOST, "OUTFRONT": There are benefits, Wolf. And obviously they're benefits that are really only -- only some of the wealthiest people of this country actually are aware of and can capitalize on. We talked to Daniel Shaviro (ph). He's a professor of taxation at NYU and he said look sometimes people do this for illegal reasons because they want to hide money or illegal activity.

Nobody is suggesting any such thing in Mitt Romney's case, but it could save him a lot of money on taxes. Three things he can benefit from. One, secrecy and clearly he is getting that. No one really knows exactly how much money he has overseas. Also, you can avoid some tax deduction limits, which could be significant. And this third one I want to emphasize Wolf.

It says avoiding tax on some investment income. Well, Mitt Romney has a lot of investment income. As we all know, that's the vast majority of his income. If he has a $100 million IRA and when you look at that, if that were for example be put in the Cayman Islands, he could be saving about half his taxes on it. It would depend exactly what's in it.

Again we don't know, but I simply make this point to say you could save a significant amount of money if you're someone like Mitt Romney. And the bigger question Wolf of course is this. This man is known. He wants to be president for many years, so even if he was saving money, wouldn't he have realized the optics of this didn't look good and gotten rid of a lot of the stuff a long time ago? That really is the main question that's out there.

BLITZER: The Democrats are hammering away. What's the Romney campaign saying about all of this, Erin?

BURNETT: Well they've been very quiet Wolf so far. Romney himself has said in the past he pays every dollar of taxes he owes. We're going to see when he releases more tax returns. As you know he's only released an estimate for 2011 and 2010. A lot of people say look the tax code I think is 62,000 pages long and it's that long for someone who wants to read them all to take advantage of everything that's in it. I think most people would realize if they could do that, they would do it, but obviously this is something that only someone as wealthy and as sophisticated with his money as Mitt Romney would be able to do, and that is obviously an optical problem.

BLITZER: Erin will have a lot more on this story coming up 7:00 p.m. Eastern. That's for our North American viewers. See you then Erin. Thank you.

BURNETT: All right.

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

JACK CAFFERTY, CNN ANCHOR: This sort of fits with what Erin was talking about. The question this hour is whom do you trust more to turn around the economy, President Obama or Mitt Romney?

Reggie writes at least Romney has had some experience in the business world. Let's give him that job to help get the country back on track.

James in Virginia writes I trust the president on this one. He at least has been trying to get something done with no help from Congress. Romney on the other hand has no plan and neither does the GOP. They think Americans are stupid and that we'll vote for them in November. Keep dreaming Willard.

Kimmy in North Carolina writes Mitt, of course. Obama has almost four years. He still doesn't get it. Forty years of working for the first time in my life I have no job because of this economy. Do I blame Obama? You're darn right I do.

Ed in California writes certainly not a guy with a Swiss bank account. Willard is the guy that brings his appetite to the tailgate party but no food. What Obama needs is a dedicated Congress that wants all of America to succeed, not just their big money donors.

Wayne in Virginia says I don't know if Mitt can, but I know that Obama can't. We've seen that for the last 3.5 years.

Carmen writes Jack, the economy will recover slowly over the next four years. Nothing Mitt Romney or President Obama does will accelerator the recovery especially considering the world economic conditions.

And Gary writes Republicans will say and do anything in order to get back into our financial kitchen like a bunch of raccoons.

I like that. Have you ever seen raccoons in a kitchen? If you want to read more about this you go to the blog, or through our post on THE SITUATION ROOM's Facebook page -- Wolf.

BLITZER: Will do. Jack, thank you. Penn State's handling of football player discipline now coming under scrutiny. Lisa is back. She is following that and some of the other top stories in THE SITUATION ROOM right now. What's going on, Lisa?

LISA SYLVESTER, CNN CORRESPONDENT: Wolf, former FBI director Louis Freeh (ph) is looking at e-mails that suggest Coach Joe Paterno preferred keeping disciplinary matters involving football players private. Freeh (ph) is leading an investigation into how the university handled the Jerry Sandusky scandal. Sandusky was convicted of child sex abuse last month and a volatile scene at a Florida courthouse today.





SYLVESTER: Wow. OK. Our affiliate WFTV reports a fight broke out between the family of the victims in a double murder case and the suspect's family. A hearing in the case was canceled and a brawl erupted as you can see in the hallway. The victim's father and the suspect's stepfather were taken away in handcuffs -- Wolf.

BLITZER: Wow, pretty amazing. All right. Thank you Lisa. Up next depending on where you live, shopping online will cost you more and believe it or not, some people aren't very happy about it.


BLITZER: From the convenience one of the best things about online shopping is you almost always pay less. It's because most states don't charge their usual sales tax on Internet purchases, but as Lisa Sylvester reports that's changing and depending on where you live this could cost you.


SYLVESTER: How about an organic green iced tea?


SYLVESTER (voice-over): If you buy anything from a restaurant in Washington, D.C., the sales tax is 10 percent.

UNIDENTIFIED MALE: You can see that sales tax (INAUDIBLE).

SYLVESTER: Buy clothing, books or other goods in the district, the sales tax is six percent. But if you bought something online from a business that doesn't have a physical presence in D.C., the retailer wouldn't ask you to pay a sales tax at all. Neal Osten is with the National Conference of State Legislatures. He says that's costing states $23 billion this year.

NEAL OSTEN, NAT'L CONFERENCE OF STATE LEGISLATURES: Look at California. California has a great deal of problems. This would mean $4.1 billion in revenue for California that they don't have right now. That can mean more teachers. It could mean more police, more firemen.

SYLVESTER: Osten says more and more states are passing laws that would require consumers to pay sales tax on all Internet purchases. But so far online sales companies have been able to get around that because of a 1992 Supreme Court ruling on mail order purchases. That decision said if a retailer doesn't have an actual physical location in the state the retailer doesn't have to collect sales tax.

Legislation in Congress would change that. So say you are in Washington, D.C. and you buy a $20 shirt online from an out of state company who happens to be in California. Well, as of now, you pay zero dollars in taxes. But if this federal bill became law you would have to pay D.C. six percent sales tax and that shirt would cost you $21.20. By the way, taxes go to the state the item is being delivered, not where it's sold. Bricks and mortar retailers say the new federal proposal is only fair.

JASON BREWER, RETAIL INDUSTRY LEADERS ASSOCIATION: All we're asking for is for the government to close this loophole, level the playing field and let everybody compete on price in a free market.

SYLVESTER: But a coalition of Internet companies including eBay and Overstock are lobbying against the federal legislation saying this is going to hit mom and pop operations.

STEVE DELBIANCO: Nothing could be less fair to America's small businesses than forcing them to collect and remit and file sales taxes for nearly 10,000 different jurisdictions across the country.

SYLVESTER: A clause in the Senate bill exempts relatively small retailers with less than $500,000 in annual sales. And what do consumers think? Ian Keran (ph) says he buys everything from clothing to dish soap online.

UNIDENTIFIED MALE: As a consumer I wouldn't be super excited but I also wouldn't be shocked (INAUDIBLE).


SYLVESTER: Now for Americans used to tax free online shopping, well having to pay a sales tax online well that might feel like a tax increase. State governments argue though that it's a tax that should have been paid all along -- Wolf.

BLITZER: Happening now, manhunt for the Taliban who publicly executed a woman, Mitt Romney's private comments about the middle class and scary new sightings of great white sharks.

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