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CIA Director Resigns; President Obama's Economic Agenda

Aired November 9, 2012 - 18:00   ET


WOLF BLITZER, CNN ANCHOR: And happening now: scandal at the CIA. The spy chief, David Petraeus, resigns, admitting to an extramarital affair. We have new information about an FBI investigation.

Plus, President Obama lays out a framework for compromise with Republicans to avoid an economic crisis in a matter of weeks.

And after Mitt Romney's loss, some Republicans warn their party needs to stop living in the past. I'm Wolf Blitzer. You're in THE SITUATION ROOM.

We're learning more about the stunning resignation of the CIA director the retired Army General David Petraeus. It turns out the FBI was in fact investigating the extramarital affair that prompted General Petraeus to step down.

Let's go to our intelligence correspondent, Suzanne Kelly.

Suzanne, we know the FBI was investigating Petraeus. Give us the background.

SUZANNE KELLY, CNN INTELLIGENCE CORRESPONDENT: Yes, Wolf, we know The FBI's counterintelligence unit which is based here in Washington was investigating whether or not to see if there was a potential security risk because of this reported affair, because we now know of the affair, and whether or not Petraeus could possibly have been blackmailed as a result of this.

The person that gave us this information also went to say that Petraeus was not being investigated for possible wrongdoing, however, it looked as if he may put himself in a vulnerable spot where of course they information could have been exploited and possibly used against him.

BLITZER: The ramifications of this right now are pretty enormous. There's an acting director that has now been named. Walk us through how this -- and I know you have good sources over there at the CIA in Langley. I'm sure that people have been shocked by this.

KELLY: Yes, I think that's almost an understatement, if it could be.

Just people didn't see this coming. Not only did they not see it coming, but it comes out a few days after an election. And the reason, I think, is the thing that people are sort of reeling now, they just didn't see someone like David Petraeus with his reputation, professional reputation, military background, someone really who is out there as a man of honor and integrity would have participated in something like this and certainly that it would not have come out this way, that the revelation that he indeed was having an affair would have come out and led to him stepping down from his post.

There is quite a bit of shock over in that neighborhood. I will tell you though in terms of the CIA, of course, the director is a politically appointed position. The person who now President Obama has asked to step in as the acting director is Michael Morell. He's a career intelligence officer, been with the agency for some 32 years, so there have been a number of different directors, I think some five in the last eight years, something like that.

So the agency itself won't be too affected in terms of the work by this movement. They're under the direction now of Mr. Morell. But the shock I think will take a lot longer to wear off.

BLITZER: Tons of questions that remain to be answered.

Suzanne Kelly, thanks very much.

President Obama had nothing but praise for David Petraeus in a statement saying he accepted his resignation.

Kate Bolduan is here. She's got more on this part of the story.

KATE BOLDUAN, CNN ANCHOR: It's an understatement that there are so many lingering questions, Wolf. A lot of questions about the timing of all of this.

For more, let's go to our White House correspondent, Jessica Yellin.

Jessica, I know you have been working your sources at the White House. What are you learning this evening?


I can confirm that administration officials were indeed shocked by this development and I'm told by multiple officials that this is exactly what it is. I know that sounds like an absurd thing to say, but it is not in any way a cover for any other sort of story. The general is in no way taking a fall for some other event that we're not discovering or reporting on, that he is indeed stepping down because of an extramarital affair that was coming out and we're not going to uncover anything else in the coming days.

This is a man with whom the president has developed not a close or intimate relationship as friends, but they have a healthy working relationship. As you know, the general was brought in first when General McChrystal left during the Afghanistan, just before the Afghanistan surge, and he stepped into these shoes, taking almost in a sense a demotion to do it, and really filled a role for the president when he needed it, and delivered for him in Afghanistan, and then a second time was called upon to fill Panetta's role at the CIA last year, and has done that again, twice came and filled when the president called for him to do so.

He takes sometimes weekly meetings with the president and attends his NSC principals meetings. They see each other regularly, and I'm told have healthy respect for one another. This is a person the president has, you know, a lot in common with. They're both Ivy League graduates, they're both highly competitive people.

And it's somebody with whom the president expected to have a long working relationship. The bottom line here, Kate, is no one saw this coming.

BOLDUAN: Sure seems like it, Jessica Yellin at the White House for us this evening.

He is one of the few people in Washington that consistently won praise from both sides of the aisle.

BLITZER: Graduate of West Point, Ph.D. from Princeton. He turned 60 years old this week. On Wednesday was his birthday.

David Petraeus was due to testify before Congress next week about the deadly attack on the U.S. Consultant in Benghazi, Libya. Now the acting director, Michael Morell, will appear instead.

David Ignatius of "The Washington Post" has written extensively about the intelligence community. He's about as well-informed a journalist as there is out there.

First of all, David, what do you make of this? Were you stunned like I was?

DAVID IGNATIUS, COLUMNIST, "THE WASHINGTON POST": It was a shocker when the word first began to trickle out about this at midday today.

It was one of those stories that you just thought, whoa, can that be so? And there was a period of several hours of chasing it and trying to confirm it.

I think what's striking to me, first off, Wolf, is the situation that we see, we read about in books, where a person who -- this is really the most prominent military officer of his generation, commander of troops in Afghanistan and Iraq, caught up in something that is so human, that is so much a part of ordinary life. So there is kind of an epic tragic dimension to it on a personal level.

In terms of the CIA, as your earlier reporting suggested, from a standpoint of country, it's lucky that there's some real continuity. Michael Morell was acting director when Petraeus took the job 15 months ago. He is back in that position today as acting director. He has the confidence of the White House. He is well-known and liked by the NSC.

There was even talk that in a second Obama term, Michael Morell he might be brought over to the NSC staff in a top position. So he is somebody that I'm sure the president and the administration will be comfortable with.

BLITZER: What do you make, David, of this now fact that we have confirmed that the FBI was actually investigating the director of the Central Intelligence Agency and this affair that CIA Director Petraeus has now acknowledged? It's pretty extraordinary.

IGNATIUS: It is pretty extraordinary.

In a way, I think that was the inevitable other shoe to drop in this story. Somebody's personal life, even a senior key official like the CIA director, would not force a resignation unless there was some other issue going on, and the FBI investigation suggests there was concern about counterintelligence and vulnerabilities.

We will learn I'm sure more, probably more than we want to know about every detail of this in the coming days. But it was clear that there was some additional reason beyond the personal error of judgment that Petraeus cited in his letter.

BLITZER: Do you have any reason at all to believe that the timing of this announcement was at all connected with his scheduled testimony next week before the Senate Intelligence Committee about the killing of Ambassador Stevens and three other Americans at the U.S. Consultant in Benghazi?

IGNATIUS: I have no reason to believe that, Wolf, and I have some reason to think otherwise.

Petraeus had endorsed the decision the CIA made last week on the eve of the election virtually to release the detailed timeline of what happened in Benghazi. And that was something that I think the White House was a little uncomfortable with. The CIA decided to go ahead with it. I know that had Petraeus' blessing.

So I don't see -- as much as people try to weave conspiracy theories that tie the two events together, I don't see it.

BLITZER: Do you think the acting director, Michael Morell, will be named the permanent director or will be nominated by the president for confirmation or the president will look for some other candidates?

IGNATIUS: I'm very curious about that. I think with any job like this, you do a talent search to see what your possibilities be.

But I think that Morell would be an interesting choice. First, in these agencies, it's good for morale if career people have a chance to rise to the top. One of the most successful, celebrated CIA directors in history was Richard Helms, who rose from the ranks, who was a case officer in Europe during World War II, who rose in the ranks of the clandestine service, and finally became CIA director.

It's interesting that Director Petraeus hung a portrait of Richard Helms, career CIA officer, in his reception area where he would greet journalists and other visitors who came to talk to him. So there's an example of a career person who ended up being a distinguished director. They may look at Michael Morell, although he's not an operator, he's an analyst, as that kind of career person and think of him for the top job.

BLITZER: When you say not an operator, an analyst, you mean not a clandestine officer, as opposed to an analyst at the CIA.


IGNATIUS: Exactly. When I say operator, I mean operations officer.

BLITZER: I believe Bob Gates was an analyst for a long time and he wound up being secretary of defense, as you well know.

IGNATIUS: He was secretary of defense and a highly celebrated one.

I would think, Wolf, that one person that President Obama would turn to right now and ask for advice would be Bob Gates. The two of them developed a close relationship, and I would think the president would have been on the phone maybe over the last few days saying, Secretary Gates, what do you think? What about the agency, what about morale? What is the right direction to turn?

And Obama is lucky to have people of that quality to turn to.

BLITZER: He certainly is.

All right, thanks very much, David Ignatius from "The Washington Post."

Two other names we have been hearing, Jane Harman, the former U.S. congresswoman, the Democrat, she was on the House Intelligence Community for a long time. She runs the Woodrow Wilson Center For Scholars now. And John Brennan, the president's homeland security adviser, who worked in the CIA for several decades. He rose up the ranks at the CIA as well. But we will see what the president decides.

BOLDUAN: Clearly becoming top of his list, because it's not something he wants to leave unfulfilled, but many questions still remain on how it all unfolded.

It's quite a lot for President Obama to deal with just days after his reelection. When did he know about David Petraeus' affair? We will talk about the political implications ahead.

Also facing the president, the fiscal cliff. The president says he's willing to compromise to prevent a looming economic crisis, but how much?


BLITZER: The president of the United States held a news conference. It wasn't actually a news conference. He spoke a little bit. He will hold a news conference, we're told. And you can bet he will be asked about the CIA director's resignation and when he learned that General Petraeus had an extramarital affair.

BOLDUAN: Definitely will be a big question at that press briefing.

BLITZER: Once he holds a news conference.

BOLDUAN: Once he holds it, which will be coming up next week.

A big announcement like this though just days after an election is the kind of thing that raises a few eyebrows and has a lot of shall we say conspiracy theorists.

BLITZER: Yes, a lot of information that we don't know about a lot of questions.

Gloria Borger is here, our chief political analyst.

You had a chance to speak with the chair of the Senate Intelligence Committee, Dianne Feinstein. I'm assume she has been briefed on what is going on.


And she was as shocked as everyone else in Washington. And the first thing she pointed out to me was that this is really a personal tragedy, as she put it. She said -- let me quote this to you -- "People are going to say he's a scapegoat for Benghazi, and that is absolutely false."

She said this has absolutely nothing to do with Benghazi, that this is a personal tragedy, and she also said to me -- and it's a question you have been discussing throughout SITUATION ROOM -- her question is, why was this so sudden, why the timing of this right now?

And as this story unravels, I think we will begin to get some answers about why he went to the president and why he did is so suddenly, because after all she has those hearings coming up next week at which now the deputy director has to testify, instead of General Petraeus.

BOLDUAN: That's what I wanted to ask you about. So Feinstein is holding a hearing where Petraeus is supposed to be testifying next week, a closed hearing about what happened in Benghazi, the killing of Ambassador Stevens and three other Americans.

He's also supposed to be testifying on the House side. But now the acting director will be stepping in to testify. How will this resignation, do you think, how could it possibly affect the investigation? It comes at a really bad time.

BORGER: She said it's not going to affect it at all. Basically she said we're going to hold some very tough hearings, at least three of them and we're going to know, and this is a quote, "We're going to try to figure out who did what, when, and what was missing."

So the fact that Petraeus is not there deeply saddens her. Dianne Feinstein is a huge fan of General Petraeus'. She's sorry that he's gone, but she believes that Mike Morell will be able to answer the questions they need to get answered. So it will not stop the congressional investigation. But it was surprising to her as the chairman of the Intelligence Committee that this would happen so quickly.

BLITZER: This is just another headache that the president doesn't need right now. He will lose his secretary of state, his secretary of defense, the secretary of the treasury. I don't think he was expecting the CIA director to leave.

BORGER: Right. Sometimes, it makes you wonder why they run for second terms, because all this stuff happens. He has the fiscal cliff, Wolf.

We spent the first part of the day listening to the president talk about the fiscal cliff. Then this happens with the CIA director, and there is always a lot of turnover at the beginning of a second term. People get burned out after four years. Secretary Hillary Clinton has not kept it a secret that she intends to leave. This is something clearly the administration has been planning on.

The Petraeus departure however is something they were not planning on. So, that is one more headache they just have to resolve.

BLITZER: Gloria, thanks very much.

BOLDUAN: Thanks so much, Gloria.

Speaking of the fiscal cliff, President Obama's calls for compromise with Republicans is not easing fears on Wall Street that an economic crisis may be around the corner -- a report on the markets ahead.



BLITZER: President Obama is taking his reelection as a mandate for action. And we're going to talk about his call for compromise to keep the nation from plunging off the so-called fiscal cliff. What might a deal with Congress look like? Stand by.


BLITZER: President Obama says voters have sent a clear message that they won't tolerate dysfunction in Washington anymore.

BOLDUAN: And just days after his reelection, he is urging Republicans to work with him to avoid potentially disastrous automatic spending cuts and tax hikes in the new year. Listen here.


BARACK OBAMA, PRESIDENT OF THE UNITED STATES: I'm not wedded to every detail of my plan. I'm open to compromise. I'm open to new ideas. I'm committed to solving our fiscal challenges. But I refuse to accept any approach that isn't balanced. If Congress fails to come to an agreement on an overall deficit reduction package by the end of the year, everybody's taxes will automatically go up on January 1, everybody's, including the 98 percent of Americans who make less than $250,000 a year.

That makes no sense.


BLITZER: Let's talk about the dangers of the so-called fiscal cliff, and the possibility of compromise, we hope.

We're joined by Stephen Moore of "The Wall Street Journal" editorial page. He's the former president of the conservative Club for Growth. Also, Steve Rattner, the former adviser to President Obama on the auto industry bailout, formally, long, long time ago, wrote for "The New York Times" as well.

All right, guys, thanks very much for coming in.

Steve Moore, first to you. Is there room, based on what you're hearing, the nuances from the president and the speaker right now, for a compromise over the next six weeks?

STEPHEN MOORE, SENIOR ECONOMIC WRITER, "THE WALL STREET JOURNAL": I do think compromise is going to be reached, Wolf, no question about it.

Nobody wants to dive off of this fiscal cliff. But I didn't think the president's little talk today, his speech, was all that conciliatory. When I talked to some Republican sources on the Hill after the speech, they said it sounded, it seemed more like a club than an olive branch.

There are two things the Republicans are not going to go along with. One is raising those tax cuts. And the second is Republicans say if we don't do the fiscal cliff, and we suspend those spending cuts, at least we want in place some kind of an agreement in place that we will cut the spending later. We will not just let this debt keep going up year after year.

BLITZER: As you know, Steve Rattner, the president repeatedly insists he wants to raise the highest income brackets, folks making more than $250,000 a year, from the current 35 percent rate to what it was during the Clinton administration, 39.6 percent.

The Republicans, you just heard Steve Moore say, that's unacceptable, you can have the wealthy pay more taxes, but not by raising that rate.

So, is there a compromise?

STEVEN RATTNER, FORMER ADVISOR TO PRESIDENT ON AUTO BAILOUT: I think you heard the president say in the clip you just showed that he is open to compromise, open to new ideas, as long as they meet his principals, which is that the wealthy bear the burden of this increased revenue. And that the plan be balanced between increased revenue and restraining spending. And I think there are many ways to accomplish that that will satisfy both speaker Boehner and the president.

KEILAR: And Steve Moore, one of the things the president also said today, while they worked towards tax reform, they work towards a larger deal, one thing that Congress should agree to right now, is to pass the extension of the Bush era tax cuts for the middle class.

But, do you think that place well into the strategy? My thought is that you are going to say no.

STEPHEN MOORE, WALL STREET JOURNAL EDITORIAL BOARD: Look, I don't think Republicans are going to go along with that. I think they don't want a separation of the tax cuts for, you know, the wealthy and the tax cuts for the middle class. And so, that's where I think you get the stair down. I think that's where the, you know, Republicans say no deal. And then the question, does the president take that to the people and bash the Republicans over the head or make another deal.

I want to make one other point, if I can about this. All of this kind of what heated rhetoric about the perils of the quote "fiscal cliff." Look, you know, nobody wants to go over this fiscal cliff, but it is so important to remember that we have another cliff that's pretty important in this country, and this is pretty paralysis and that is this enormous national debt that is growing by over a trillion dollars a year. And the problem with just saying we're not going to do the fiscal cliff, is OK, what are we going to do about this enormous debt.

KEILAR: So, let me ask you then, one thing some Democrats are saying is maybe we just go over the cliff because we will inherently get a deficit reduction that everyone is talking about even though it could be very hard on the economy. Are you sayings that an option?

MOORE: Are you asking me?

KEILAR: Yes, Steve.

MOORE: I think look, some Republicans are saying the spending cuts are what we wanted. But look, I don't think that's going to happen. I just don't think there's going to be news enormous tax increases or enormous cuts. I think they will reach an agreement, but I think the ball is a little in President Obama's camp and he has to at least spend a little bit for the Republican wishes.

BLITZER: What do you think about the delinking? The president would like to delink, Steve Rattner, the continuing the tax cuts for 98 percent of the American families out there go ahead and pass that, but the Republicans want to hold that basically as leverage to make sure that the highest income brackets are not increased from 35 to 39 percent.

RATTNER: That's what Republicans want to do, you can call it leverage, you can all it holding it hostage, but that is exactly the Republicans' strategy. There's absolutely no reason not to extend the tax breaks for the 98 percent of Americans who both sides agree are not going to be affected by - should not be affected by this. And one other comment on what Steve Moore just said when he keep saying the presidents that to bend, the president has to stop this in a club and all that, I would turn that right back around to the Republicans, they laid down markers, they have laid down absolutes. I don't think this is a situation in which absolutes are called for. This is situation in which compromises falls for both sides need to show flexibility.

MOORE: I agree with that entirely, Steve. And you know, look, both speaker Boehner and Mitch McConnell, the minority leader, have said in the last few days we are willing to put tax revenue increases on the table. That's a pretty big compromise on Republicans that have been staunchly anti-tax in the past.

So, I do - I agree with you, Steve. I do think Republicans have to bend a little bit. But this is a situation where you have to meet in the middle. One thing the Republicans say is look, Two years ago we did get a deal where we extended all those tax cuts for everybody for two years because President Obama himself said, look, the economy is too weak for a tax increase.

Well, Steve Rattner, what's different today than two years ago. The economy is weaker today than when President Obama did this in 2010?

RATTNER: I think we can certainly talk about when all of these deficit reduction measures took effect because the economy is so week. But you and I would both agree and I think our viewers would agree that we cannot, as you just said, sustain trillion dollar deficits. We now have a lever; we now have called it a club pot, a lever pot, a cliff, whatever you want.

We have an almost unique moment in time where Congress has to do something. And I think if we let this moment pass without having meaningful deficit reduction, whether it is a year from now or not, I'm open to discussing that. I think we will deeply regret it.

BLITZER: We're out of time, guys. But very quickly to you Steve Moore, I have no doubt personally with the president and the speaker in the room they can work out a deal, can the speaker bring along the tea party members out there, his Republican caucus? Can he bring others along to make this happen?

MOORE: It's tough, I mean, it's only a two or three week session, and I agree with Steve Rattner. The problem is there's not a whole lot of time, you know, to get this thing resolved. And I have been in Washington for 20 years. What they normally do in this kind of a situation is they punt on second down.

BLITZER: That's what they might be doing this time.

Steve Rattner, Steve Moore. Guys, thanks very much for coming in.

MOORE: Thank you. RATTNER: Thank you.

BLITZER: CNN's national security contributor, Fran Thompson is about to join us to offer her personal insights on this breaking news we have been following about general David Petraeus, the director of the CIA. He resigns today acknowledging an extra marital affair. Fran knows him very well from her work on the CIA's external advisory board and from the time she was President Bush's homeland security advisor.


BLITZER: Get some more knowledge after this bomb shell word that the CIA director, David Petraeus has resigned because of an extramarital affair.

Our national security contributor Fran Thompson knows General Petraeus quite well, has worked with him over the years. She is the member of the CIA's external advisory to media board, I should say. You must have been stunned by this.

FRAN THOMPSON, CNN NATIONAL SECURITY CONTRIBUTOR: I was stunned by it. I mean, I think most of the folks at the CIA and in the military that I have spoken to. People were surprised with it.

BLITZER: I guess the moral factor at the CIA, they see this happening and I can only imagine their very, very upset with it.

THOMPSON: Absolutely. But look, let's put thin on context, right? These are people who dealt with the death of their colleagues at coast base. And so, in a broader context they'll move on from this. I mean, it's upsetting, I think people - it is fair to say people are embarrassed that it would sort to reflect some way on the CIA. They are going to move on and whey will move on quickly.

BLITZER: It's now taking on a new level with confirmation that the FBI actually launched an investigation into this extramarital affair to see if there any potential compromise of national security.

THOMPSON: That's right, Wolf. And as we have talked, right, there are certain things the FBI does. They will look at e-mails. They will look at all sorts of information, especially that exchange between general Petraeus and whoever the woman is. So, yes, no question that they would have done a very comprehensive investigation, ensure themselves there was no leak of classified information. And there was no bridge of national security.

KEILAR: Well in light, when you know that was an FBI investigation underway, we are also hearing that David Petraeus submitted his letter of resignation to the president yesterday. Would that have been the first time that President Obama was learning about this extramarital affair, about what was going on especially in light that there was an FBI investigation?

THOMPSON: Absolutely not. So, there's a process by which of course, in the rare circumstance that the FBI has got to open up a counter intelligence or even a criminal investigation of a member of the cabinet or a senior member of the investigation, in this case, because it was the intelligence community and likely went to the director of national intelligence, Jim Clapper, who would have had an obligation to inform someone at the White House. Because of course, if there was a national security problem, this is someone who is regularly in the company of the president, most than likely, the White House chief of staff would have been notified or the national security advisor perhaps my successor John Brennan.

BLITZER: And so, right now, if you take a look at the Benghazi investigation, he was supposed to testify next week, I think you were helping him get ready for that, he's not going to testify, Mike Morell, the acting CIA director will now testify. But he does have still as an obligation despite resigning to cooperate in the investigation to make sure that Congress, the oversight committees and the American public knows exactly what happened.

THOMPSON: Absolutely. And look, I think what we have seen even from the tone of general Petraeus' letter to resigning to the president is the consummate professional. I have no reason to think that he would not make himself available. He would not cooperate with the Congress and the administration on the Benghazi investigation. The CIA obviously had a role there in Benghazi. And I expect that if there is information, it should by and large be able to be communicated by Mike Morell. But I have no reason to think that if David Petraeus was called up (INAUDIBLE).

KEILAR: And you've known him for a very long time. You know him better than probably anyone -- many people. But where do you, maybe it's too soon to be asking this as we are just turning this news, but where do you think he goes from here? I mean, this is a man who had such a distinguished military career, is well liked and respected by people on both sides of the aisle; this is not the way to end your public service career.

THOMPSON: It's not the way to end your public service career. But because, for all of the reasons that you speak of, I expect David Petraeus is going to be just fine. He is going to have board opportunities. He has going to have speaking opportunities or he can write a book. I think that he will have many opportunities. He may not -- look, there's been some talk that he wanted to lead an academic institution. They may have a lower tolerance, Princeton or another university, given the way he's left. But I don't think that - I think that if he wants to do other things in the private sector, he is going to have many opportunities.

BLITZER: In normal circumstances he would have been a lock for the president. He went - he is a graduate of Princeton University where they lock for that presidency.


THOMPSON: Yes, President Clinton, Newt Gingrich, they all go on. They do just fine.

KEILAR: Good point. BLITZER: Let's see what happens.

All right, thanks very much, Fran, for doing that.

The second guessing goes on about the reasons for Mitt Romney's defeat. We are going talk about the state of the Republican Party and whether it's stuck in the past.


KEILAR: Right now Republicans are awash in theories about why Mitt Romney lost the presidency.

BLITZER: Some party members are raising concerns that the GOP is stuck way, way in the past.

Let's bring in our CNN contributor, the former Bush speech writer, David Frum. He has written a brand new e-book entitled "why Romney lost."

So, what's the answer, David? Why did Mitt Romney lose?

DAVID FRUM, CNN CONTRIBUTOR: He did not lose because just because of a bad campaign or defects as a candidate. Let's start with this fact. Since 1988 there have been six presidential elections. The Republican Party has won the majority of the vote in exactly one of them. Now, you look at the period from 1968 until 1988, there were six presidential elections and two, the Republicans won five of those elections, and over the whole six, including the defeat, averaged 52.5 percent of the vote, so a majority party from 1968 to 1988, a majority party no more since 1988. And in a year like 2010, when the republicans did well I 1994, they do well because the electorate drops. It is only 40 percent that come out in those off years. And in 2010, just to dramatize this, the Republicans did great in 2010, but 35 percent of the voters were over the age of 60. Only 15 percent of the voters in 2012 were older voters.

BLITZER: Here is what you write in the book. I will put it up in the screen. After the 2008 election, such calls for rethinking were shelved in favor of the back to the basics message of the tea party. But now, post 2012, it's time to return to the path of reform and rethink what Republicans and conservatives explored in the latest Bush years. What were they exploring?

FRUM: They were exploring new ideas about how to raise middle class incomes. They were exploring new ideas about how to be responsible about the environment and are there ways using markets to deal with the problem carbon emissions. They were exploring the problems of a society where upward mobility seems to have slowed for a lot of people.

The basic problem we had with the tea party since 2008 is the Republicans are recycling ideas from the 1980s. And what those ideas were for was how to stop the Soviet Union, how to stop inflation, and how to raise productivity. And those ideas worked. But there is no more Soviet Union. There is no inflation and productivity is doing great. What is not doing great are the incomes of people in the middle class.

We have nothing to say about healthcare. We have everything to say about taxes.

KEILAR: And David, I have to play you something you said in an interview this morning and get your reaction.


FRUM: The problem with Republican leaders is they are cowards. The conservative followership has been policed, exploited, and lied to by the conservative entertainment complex.


KEILAR: Policed, exploited, lied to by a conservative entertainment complex. Explain that point, what are you talking about here?

FRUM: Let me start with that dramatic fact. There is a college in New Jersey that does these surveys. People that watch FOX News end up knowing less about the world around them, the people who watch no news at all.

If you start with a basic question like did taxes go up or down in the Obama years? They are going to go up later, but for now they are going down. Did we spend a trillion dollars a year on welfare? No we don't, but if you watch a lot of these networks, you get the idea that we do. That you can't begin to think intelligently about world around you because you don't even have the basic factual where with all. And where leaders are trapped, of course the leaders of the Republican Party, the congressional leaders, they do know the truth. But they can't act on it because they have followers who have been given a completely false impression of the state of the world. And that makes effective leadership (INAUDIBLE).

BLITZER: Are you talking about Monmouth College in New Jersey?

FRUM: I'm sorry, blanking on it.

BLITZER: They just polls there, I don't know it you are talking about it. But, what are you talking about when you refer to the conservative entertainment complex? What is that mean?

FRUM: Well, that means that there is a big industry of cable, famous FOX network, talk radio and Web sites that don't do a clear division between the job of informing people and the job of entertaining people, that turn news and information into a sub set of show business. And look, there's a market for it, and it could be very entertaining to watch and it gets people excited. But, when it actually becomes the main way people understand the world around them, it gives them a false sense and then it traps their leaders.

One of the things that prevented - it sounds very dramatically in the election. Mitt Romney pivoted to the center only in the last month of the election. He began to do quite well. But, he couldn't - he was not allowed to do it before and even when he pivoted to the center, he only did it on form. He couldn't do it on policy, because the people around him were so certain that President Obama was doomed.

I started work on my book six weeks ago. It just seemed obvious to me that President Obama was not doomed. He probably was going to win. And that information that was available to me was available to the much smarter people who predicted it the wrong way.

KEILAR: (INAUDIBLE). Did you write this in 24 hours?

BLITZER: I want to write two books, why Romney lost, why Obama lost, you would have gone with either book. But obviously, you suspected Romney would lose.

The book is "why Romney lost." It is an e-book.

David, thanks for doing it. Thanks for writing it.

FRUM: Thank you.

BLITZER: A boy who dreamed of becoming a professional soccer player. That dream shattered by the violence in Syria. His dream now, to come to America. Arwa Damon has a Special Report.


BLITZER: A desperate new escape from Syria's civil war. More than 8,000 refugees arrived in turkey over a 24-hour period. The Turkish foreign ministry official says they were fleeing fierce fighting near the Syrian border towns. Syrians of all ages are living with the scars of war.

We have a Special Report right now from CNN's Arwa Damon. I want to advise you it contains pictures some viewers find disturbing.


ARWA DAMON, CNN SENIOR INTERNATIONAL CORRESPONDENT (voice-over): Like many other boys his age, 11-year-old Abdulrahman wanted to be a professional soccer player when he grew up. But like so many others in his homeland of Syria, the violence shattered his dream.

ABDULRAHMAN, SYRIAN AMPUTEE (through text): There were fighter planes and there was a rocket that and I went to see what was going on and another rocket hit.

DAMON: He doesn't say much beyond that. At times, simply nodding or smiling sweetly in response or seemingly lost in his memories. Tears Omar can't control fall silently, the thoughts of what his baby brother endured are too much for the 21-year-old.

OMAR, ABDULRAHMAN'S BROTHER: Mom woke me up. Up immediately. What's happening? She said Abdulrahman went out and the airplane is circulating above and you need to get him back to the house.

DAMON: Omar was too late. He found his brother in the hospital. OMAR: Once he saw me, he shouted, Omar, shouted with all his strength. When I got closer, I saw his leg. He just yelled. I started crying for around five hours.

DAMON: Abdulrahman's leg was amputated in a makeshift field hospital, the basement of a mosque.

OMAR: After he woke up, just saying I was crying. (INAUDIBLE). He said please don't cry. If you love me, don't cry.

DAMON: And that is when Omar made Abdulrahman a promise that he would walk again.

OMAR: He started to hang on to that idea. So, I'm going out and he get saying to me, when are we leaving? Yes, because every time the firing jet comes, he says, when are we leaving? We should leave.

DAMON: Omar is now an expert at changing his brother's bandages. He started to save money for a prosthetic, but realized that it was going to take too much time. He began asking around and a group of visiting Egyptian doctors told him about the global medical relief fund, a small U.S. NGO dedicated to helping children badly injured in disaster and war zones.

Its founder, (INAUDIBLE) was quick to respond. But first, the brothers have to get to Turkey. A car drove them as close to the border as it could. The driver's last words, you're on your own now.

Omar's arms were aching as he carried his brother and their three bags across the muddy field. The brothers eventually made their way to Ankara in Turkey, but the boys don't have passports. Their visas to U.S. were denied and now, they're waiting to see if the state department will grant them humanitarian parole.

For Omar, watching his brother suffering is agonizing.

OMAR: He had nightmares and sometimes daydreams, bad daydreams. The one thing he's going to get this time, I think is to be aware, to grow up, his mind. He is not a child anymore.

Arwa Damon, CNN. Ankara.


KEILAR: If you want to help Abdulrahman and other Syrian refugees, you can go to

Such a tough story, Wolf.

BLITZER: Hope people do because there are a lot of refugees, little kids that are suffering, men, women, that have parent.

KEILAR: I mean, it is clearly a difficult story to tell, but such an important story that we don't hear.

BLITZER: Grateful to Arwa. KEILAR: Yes.

BLITZER: This sharing with our viewers.

That's it for us. Thanks very much for watching. Erin Burnett "OUTFRONT" starts right now.