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New Questions About Petraeus Resignation; Taxing the Rich; Talented, Bright, and Now at Center of Storm

Aired November 12, 2012 - 16:00   ET

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


WOLF BLITZER, CNN ANCHOR: Happening now, new questions about the sex scandal that toppled the CIA director. Why did a Republican congressman know about it before the White House?

Also, new information about the woman at the center of the storm. Her past makes the present all the more shocking.

Plus, a crack, a serious crack in Republican opposition to raising tax rates on the rich. A leading conservative now seems to be opening the door.

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

Intriguing new twists and turns in the scandal that's gripping Washington, indeed the nation and much of the world, the affair that led General David Petraeus to resign as director of the Central Intelligence Agency. We're finding out that at least one lawmaker right here in Washington may have learned of it ahead of the president and there are now questions about the investigation that ultimately led to Petraeus' stunning downfall.

CNN's Brian Todd's been working the story for us and he's been getting some new information.

Brian, tell our viewers what's the latest.

BRIAN TODD, CNN CORRESPONDENT: Wolf, we found out that the House majority leader, Republican Congressman Eric Cantor, may have found out almost two weeks before the president did.

This and other timelines we're following on the investigation have led to some genuine anger over why the White House and other top congressional leaders weren't told sooner.

(BEGIN VIDEOTAPE)

TODD (voice-over): A timeline CNN has put together shows the Republican House majority leader may have known about former CIA Director David Petraeus' extramarital affair before the president did. That's according to aides to Congressman Eric Cantor who tell us he found out from an FBI employee concerned that national security might have been breached as a result of the affair.

Cantor was told on October 27. President Obama didn't find out about the affair until after Election Day. Congressional leaders from both parties are upset that neither they nor the president were informed until late last week.

REP. PETER KING (R-NY), HOMELAND SECURITY COMMITTEE CHAIRMAN: Obviously, this was a matter involving a potential compromise of security. And the president should have been told about it at the earliest date.

TODD: A U.S. official said there was no breach of security as a result of the affair. A Cantor aide says the congressman called the FBI's leadership to report the information he got on October 31.

(on camera): But according to "The Wall Street Journal," the FBI's probe had already been under way for months. "The Journal" says the FBI's investigation began in May when it started looking into e- mails described as threatening sent to a woman CNN has identified as Jill Kelley, a family friend of Petraeus'.

(voice-over): The FBI traced the e-mails back to Paula Broadwell, Petraeus' biographer. And by late summer, "The Wall Street Journal" reports, the bureau had linked Broadwell to Petraeus. That's when "The Journal" says top officials informed Attorney General Eric Holder of the situation.

(on camera): Should he have let the White House know at that point?

TOM FUENTES, CNN CONTRIBUTOR: Well, I think -- my personal opinion is no, because once the White House, once some staffer knows, once various people find out about something, it becomes public almost instantly. You see this all the time.

TODD (voice-over): CNN contributor Tom Fuentes, a former FBI assistant director, says under its protocols the FBI and Justice Department should have kept it inside their circles, unless there was evidence of a breach of security or criminal wrongdoing.

And there was no evidence of either. "The Journal" reports the FBI interviewed Petraeus the week before the election. And NBC News reports the bureau wrapped up its investigation on November 2.

(END VIDEOTAPE)

TODD: We could not get comment from the FBI or the Justice Department on the timelines. So why didn't Congressman Cantor go to top congressional leaders when he got the information on October 27?

A Cantor aide tells us the congressman's information came from one person in one phone call, that it was unsubstantiated and he felt it was up to the FBI to look into it and report to it the appropriate people in Congress when the time was right.

BLITZER: What was the nature of the relationship between Petraeus and this other woman, Jill Kelley, whose name all of a sudden has surfaced? TODD: She is described in just about every account as just a family friend of the Petraeuses. And sources have told CNN that Petraeus himself has said he did not have an affair with anyone else but Paula Broadwell. That's what we know at the moment.

BLITZER: Brian Todd, thanks very much for that.

What makes the story all the more intriguing is the very unusual investigation of the CIA director by the FBI. That probe itself is now being investigated by Congress.

Let's dig a little bit deeper with our chief political analyst, Gloria Borger.

Gloria, this is about as sensitive a subject as you get. The FBI investigating people or some people and the name of the CIA director shows up in this investigation.

GLORIA BORGER, CNN SENIOR POLITICAL ANALYST: It's incredibly delicate.

I spent my day today talking to some former law enforcement official who say people at the FBI are very sensitive to the legacy of J. Edgar Hoover, who, as you know, used to investigate people in other branches of government and use it as a way to blackmail them or gain political power. That's clearly not what was going on here.

But the question that was asked over and over again, I'm told, is how much do you err on the side of notification even when you believe there was no national security breach? In a way, it's easier when you think there's a national security breach because the protocol is pretty clear. You know exactly who you have to inform and what you have to do.

But the question that they were going over, over and over again, is, will there be a concern that we were covering something up, even if there's no evidence of criminal activity? So, you see, what occurred is when the case was effectively closed, then they went to Petraeus' boss, James Clapper, and notified him that the case was closed.

BLITZER: Clapper, the director of national intelligence.

(CROSSTALK)

BLITZER: I know that the respective chairmen of the Intelligence Committees, Dianne Feinstein, Senate Intelligence Committee, Mike Rogers, the House Intelligence Committee, the ranking minority members, they're very upset they weren't informed about a months-long investigation by the FBI, an investigation that included word that the CIA director himself was somehow involved.

BORGER: Senator Feinstein, who's the chairman of the Senate Intelligence Committee, is clearly very upset about this. They believe that there's a relevant section in the National Security Act which says that they should have been informed. That, however, may not be as clear as some members of Congress are saying. So she wants to know why she wasn't told about this sooner. And I think when -- I spoke with her last Friday, Wolf, and she learned about it kind of the way we learned about it. But I also...

BLITZER: She learned about it from the media.

BORGER: Right.

(CROSSTALK)

BLITZER: There were media inquiries coming in to her office, like Mike Rogers, the chairman of the House Intelligence -- they both had queries coming into their offices from the news media.

BORGER: Right. But she has an even larger concern, and her larger concern is General Petraeus' trip to the Middle East, presumably Benghazi.

(CROSSTALK)

BORGER: There's a report on that that she has not seen. And there are questions about whether General Petraeus' mistress knew something about that report that the chairman of the Senate Intelligence Committee does not know.

And if that's the case, I think there's going to be a lot of anger on Capitol Hill. So she's just concerned that she has the most accurate, up-to-date information that she should have as chairman of the Intelligence Committee. And that would include General Petraeus' report, if there is one, from the Middle East.

BLITZER: Now, just because he's resigned as director of the CIA, that doesn't mean he's off the hook as far as potentially testifying before the Intelligence Committees and other committees about what he knew, when he knew it, about the killing of the U.S. ambassador and three other Americans at the Benghazi consulate.

BORGER: I think Senator Feinstein, while she's not going to have him testify publicly on the hearings that start on Thursday, as far as we know right now, she said that's not going to occur, it's very clear to me that she does think, I have been told, that she needs to hear from him at some point, whether that comes in a closed hearing or not, at some date certain.

They need the answers to the questions about Benghazi, separate from everything else that's going on in General Petraeus' life. I think they still want those answers. And while the acting director is certainly going to testify and is certainly qualified to testify, I think they'd like to hear about General Petraeus' trip to the Middle East.

BLITZER: It's still pretty shocking to me, but I don't know what you're hearing, that there's an investigation that's going on for months and months and months. And the CIA director is somehow involved and the president of the United States doesn't know about this?

That's amazing to me. It's shocking to me that either the FBI director, Bob Mueller, the CIA, or the Justice Department, attorney general, Eric Holder, nobody bothers to tell the president?

BORGER: It's a question of, if this is not a national security matter, if it's a question of General Petraeus having a human drama going on in his life, does the president need to know?

What's surprising to me, Wolf, is that after General Petraeus was interviewed by the FBI, why he didn't take it to his boss personally. Why did he not go to the director of national intelligence himself at that particular point and say, I need to talk to you about X, Y or Z that's going on? Because as far as we know, Clapper, the DNI, was only informed on November 2.

BLITZER: Yes. What a story.

BORGER: I think, Wolf, there are just a lot of unanswered questions that I'm hoping we will get answered the next few days.

BLITZER: Eventually, I'm sure we will. May take a while.

(CROSSTALK)

BLITZER: Thank you.

Before the scandal exploded, she was just known as Petraeus' biographer, but also clearly an admirer. We're digging into Paula Broadwell's past.

(BEGIN VIDEO CLIP)

PAULA BROADWELL, AUTHOR, "ALL IN: THE EDUCATION OF GENERAL DAVID PETRAEUS": I'm not a spokesperson for him. And if, you know, showing the role model to other people in the world or other readers is a repugnant thing, then I'm sorry.

(END VIDEO CLIP)

(COMMERCIAL BREAK)

BLITZER: He's a public figure whose rise through the ranks of both military and government has certainly been well-documented. Less well known is the woman in the scandal surrounding General David Petraeus. Her name, Paula Broadwell.

And CNN's Pentagon correspondent, Chris Lawrence, has been looking into her background.

Chris is joining us now.

What are you finding out, Chris?

CHRIS LAWRENCE, CNN PENTAGON CORRESPONDENT: Well, David Petraeus cultivated a lot of really smart people around him. Paula Broadwell certainly fit that bill.

Petraeus was an avid runner. Paula Broadwell competed in an Ironman triathlon. A longtime friend says when Petraeus looked back at the affair that cost him his career, he reflected that Paula Broadwell's relationship with him had some element of possessiveness. But that's not part of what initially attracted the two.

(BEGIN VIDEOTAPE)

LAWRENCE (voice-over): A longtime friend of David Petraeus says years in the war zone had left him isolated. Petraeus didn't have anyone on his level he could talk to candidly. So when Paula Broadwell came along -- quote -- "He enjoyed her company. She was an attractive gal and they had things in common."

Another officer who knows both echoes that thought.

BRIGADIER GENERAL JAMES "SPIDER" MARKS (RET.), CNN MILITARY ANALYST: She's a very bright -- she worked for me, as you know. She's an incredibly talented, very bright, creative, mentally fit and, let's be frank, very attractive young lady.

LAWRENCE: Some journalists criticized Broadwell on Petraeus' biography, calling it a soft and glowing portrait of the general.

PAULA BROADWELL, PETRAEUS BIOGRAPHER: I'm not in love with David Petraeus.

LAWRENCE: Broadwell defended herself on CNN.

BROADWELL: Well, this project started as my dissertation about three years ago. And I was working with General Petraeus virtually, doing interviews via email, and occasionally running with him and interviewing. And when he was selected by the president to replace General McChrystal in the summer of 2010, I decided the time was right to turn it into a book.

LAWRENCE: In high school, she was Paula Kranz, elected student council president and class valedictorian. She was an all-state basketball player and a homecoming queen. She graduated West Point and introduced herself to Petraeus while she was working on her PhD at Harvard.

Petraeus is known for his competitive jogging and Paula Broadwell started running with him while working on her book. She also traveled to Afghanistan with him. And an adviser who observed them together in Afghanistan says, some Petraeus staffers couldn't understand why she got such unprecedented access to the general.

(END VIDEOTAPE)

LAWRENCE: In fact, some of these military staffers who had worked with Petraeus for years just could not come to grips with the fact that he was spending so much time with Broadwell. They also complained that she dressed inappropriately on occasion, wearing tight skirts and other things that might be inappropriate. But the adviser I spoke with who saw both of them in Afghanistan says a lot of this was pure jealousy, that Paula Broadwell was not the only woman there in Afghanistan at ISAF headquarters who dressed the way she did. She did not stand out in that regard, in his opinion. He also says some of the time together was cultivated by Petraeus and that's how you got to know him.

He said, "When I went to Afghanistan, I asked people, 'You know, how do I get Petraeus to trust me, to get into that inner circle?' They all told me, 'You've got to go running with him. That's where he does his business'" -- Wolf.

BLITZER: Interesting stuff. Chris, you point out she is a graduate of West Point. She was a U.S. Army officer for 10 or 15 years, active duty, is that right? Retired at the rank of, what, major?

LAWRENCE: That's all correct, Wolf. In fact, I spoke with a former Army officer who knew both of them. And he described Paula Broadwell as a fantastic officer, incredibly smart and very, very capable.

BLITZER: Chris Lawrence, thanks very much.

Before now, she certainly wasn't a household name but Paula Broadwell is fairly well-known in some military and national security circles. This past summer in July, she posed a question at an Aspen Institute security forum in Aspen, Colorado, that I was moderating.

Here's what she asked the head of the U.S. Special Operations Command, Admiral William McRaven.

(BEGIN VIDEO CLIP)

BROADWELL: Thank you for your service, sir. And, Wolf, you've done a wonderful job tonight. I admire your role in this -- in moderating.

My question is about women in the military. And I know, as you alluded, women serve on cultural support teams in Special Operations command. But as you also know, the 1994 ground combat exclusion policy was recently relaxed earlier this year, opening up 14,000 more positions to women in infantry or combat support rules.

ADM. WILLIAM MCRAVEN, CMR., U.S. SPECIAL OPERATIONS COMMAND: Right.

BROADWELL: And 4,000 in the Navy as well. And there's a pilot program with the Marines to allow women into the infantry. But a lot of resistance in the Army to allowing women in our infantry and ranger school. What are your thoughts on increasing women's role in combat and the eventuality as women as Navy SEALs?

MCRAVEN: Yes. Frankly, what we've seen, at least in my time in the military and over the last ten years is the phenomenal job that women do everywhere we put them in terms of a military job. (END VIDEO CLIP)

BLITZER: We're going to have a lot more on this story coming up. More information coming forward later here in THE SITUATION ROOM. Stand by.

We'll also have a check of the day's other top story -- including this -- a stumbling-block with potential dire consequences for the United States. There are signs some Republicans are rethinking their opposition to raising taxes on the rich.

(COMMERCIAL BREAK)

BLITZER: There's more evidence today that Syria's civil war is spreading into neighboring countries.

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

What do you have?

LISA SYLVESTER, CNN CORRESPONDENT: Hi, there, Wolf.

Syrian aircraft bombed a rebel held town and a crossing point on the Turkish border today. Opposition activists say a number of civilians were killed and many Syrians fled into Turkey for safety.

Meantime, Israel says it has returned fire into Syria after stray mortar fire landed in the Golan Heights. It's the second time in 24 hours that Syrian shells have hit Israeli-held territory.

And back here in the U.S., the death toll from superstorm Sandy has now reached at least 113. Nearly two weeks after Sandy ravaged the Northeast, more than 160,000 customers in 10 states still have no electricity. In New York and New Jersey, signs of recovery this morning with tunnels reopened and improved train and ferry service.

And the man behind "Sesame Street's" adored puppet Elmo is taking time off after denying he had an inappropriate relationship with a teenage boy. A 23-year-old man says he was 16 when he had a relationship with the puppeteer, Kevin Clash. "Sesame Street" says it found the allegations unsubstantiated by granted Clash leave so that he may take action to, quote, "protect his reputation."

And after 50 years, James Bond is still setting records. The action thriller "Skyfall" which debut over the weekend posted the biggest box office opening ever for the Bond series. It's grossed a massive $87.8 million in its first three days. Actor Daniel Craig stars as 007 and, guess what? Our own Wolf Blitzer makes a cameo appearance playing himself.

I just wanted to say Bond, James Bond.

BLITZER: No. I'd say Blitzer, Wolf Blitzer.

I actually went to see it Saturday night. SYLVESTER: Oh you did go to see it?

BLITZER: I actually like it a lot. It was really good.

SYLVESTER: I have not had a chance to see it but I talked to friends who have seen it said and they were saying really good things about it.

BLITZER: I was a brilliant Wolf Blitzer. I mean, I got into that character. I studied that character. Spending a few years trying to study how to play Wolf Blitzer in a James Bond movie.

SYLVESTER: It's difficult.

BLITZER: It was really exciting for me because when I was a young teenager, I was an usher at the old North Park Theater in Buffalo, New York, and "Goldfinger" was playing. I saw it 32 times. So, I was a little guy at the North Park Theater watching James Bond. And now I have a cameo appearance.

SYLVESTER: Did you ever think you would be in a James Bond movie?

BLITZER: No, no.

SYLVESTER: Imagine that. Pretty cool (ph). It was very nice.

BLITZER: The whole thing was great, too.

SYLVESTER: So, that is reason enough. Besides Daniel Craig, that is reason enough to go to see the movie.

BLITZER: First of all, it was a great movie. It has kept my interest, 2 1/2 hours long, movie. But it's definitely worth the $11 I spent to go see it.

SYLVESTER: Sounds great.

BLITZER: Excellent. Thank you.

A looming financial disaster for the United States -- does the so-called fiscal cliff now have Republicans rethinking their opposition to raising taxes on the wealthy? We have details of what one leading conservative is now saying.

(COMMERCIAL BREAK)

BLITZER: As you know, the United States has been hurtling towards what's been dubbed the fiscal cliff. In the beginning of the New York, we'll see painful tax increases and drastic spending cuts across the board, military and domestic spending, unless Congress and the White House can reach a deal on cutting the deficit.

CNN's senior congressional correspondent Dana Bash reports there are signs of movement in this deeply entrenched battle line.

(BEGIN VIDEOTAPE)

DANA BASH, CNN SENIOR CONGRESSIONAL CORRESPONDENT: Wolf, talks will begin in earnest this week to avoid the fiscal cliff at the end of the year. And both sides are coming to the table trying to sound as agreeable as possible, positioning themselves to blame the other if things fall apart, since independent analysts say that would drive the economy back into a recession.

(voice-over): The halls of the Capitol, eerily quiet as Congress commemorates Veterans Day. But this stillness will soon be replaced by frenzy to avoid the fiscal cliff. Public posturing, however, is well under way.

SEN. PATTY MURRAY (D), WASHINGTON: We can't accept an unfair deal that piles all of this on the middle class and tells them they have to support it.

SEN. SAXBY CHAMBLISS (R), GEORGIA: You do have to have revenues on the table. But that does not mean raising taxes.

BASH: But there are new cracks in that GOP pledge. Conservative commentator Bill Kristol.

BILL KRISTOL, EDITOR, WEEKLY STANDARD: It won't kill the country if we raise taxes a little bit on millionaires. It really won't, I don't think. I don't really understand why Republicans don't take Obama's offer to freeze taxes for everyone below $250,000 -- make it $500,000, make it a million. Really?

BASH: He doesn't get a vote. GOP Senator Bob Corker does.

SEN. BOB CORKER (R), TENNESSEE: We know there has to be revenues. And I think -- look, I haven't met a wealthy Republican or Democrat in Tennessee that's not willing to contribute more, as long as they know we've solved the problems.

BASH: Still, even if Republicans agree to raise taxes on wealthy Americans, there is still a big divide over how to do that. Democrats pledge to let Bush era tax rates for families making $250,000 or more expire at the end of the year, go from 35 percent to 39.6 percent to get nearly $1 trillion in deficit reduction.

SEN. CHUCK SCHUMER (D), NEW YORK: If someone can show another plan that doesn't do that, we look at -- we could look at it, but no one's shown one because I think it's mathematically impossible.

BASH: Republicans say what they're open to is closing tax loopholes and eliminating some deductions. So far, the president and House speaker have gone out of their way to sound conciliatory, which sources in both parties tell CNN is all about positioning themselves to look reasonable. But each man faces unique pressure from within his own party.

In the Senate, for example, several Democrats facing reelection in two years are from red states and may be reluctant to vote for tax increases. On the GOP side, Boehner has a caucus full of Republicans who signed a pledge sponsored by Grover Norquist not to raise taxes and he isn't budging.

GROVER NORQUIST, PRESIDENT, AMERICANS FOR TAX REFORM: The problem is not that the peasants aren't sending enough money into Washington. We need to reduce the total spending and we do need more revenue.

(END VIDEOTAPE)

BASH: According to Norquist's Web site, 236 House members signed his pledge not to raise taxes. That's all but six House Republicans. But as CNN first reported on this program last week, House Speaker John Boehner used a post-election conference call with rank-and-file Republicans to plead for patience, to give him running room to negotiate with the president who, after all, did just win reelection. Mandate or not -- Wolf.

BLITZER: Dana Bash, thank you. Let's discuss what's going on in our "Strategy Session." Joining us are CNN contributors, the Democratic strategist, Donna Brazile, the Republican strategist, Alex Castellanos.

That Bill Kristol comments, go ahead, raise the taxes on the wealthy, maybe more than $250,000, maybe $1 million a year. He says, what's wrong with that? Half of them voted for Obama anyhow in Hollywood, he makes that point.

ALEX CASTELLANOS, REPUBLICAN CONSULTANT: Well, I think the big thing is Republicans want to plant as much seed corn into the economy, put as much money into the economy now so it grows.

Possible but, Wolf, here's how the Republicans in the House are looking at this thing. I've talked to a few of them this week. And this is not about a deal to raise taxes. We already have a deal to raise taxes. When these tax cuts expire, taxes will go up for everybody. So the bank has been robbed. What we're talking about is a deal to get some of the money back. So --

BLITZER: But no one wants the taxes to go up for the middle tax, for people making less than $250,000 a year. Everyone agrees they should have the current tax rate, shouldn't go back to the level it was before the Bush tax cuts went into effect.

CASTELLANOS: What I'm saying here is that this is not about Republicans supporting a deal to raise taxes. This is about Republicans supporting a deal to stop this. There's already a deal to raise taxes, to undo as much of it as possible.

I think you're going to see a lot of Republicans, Bill Kristol, in Congress, saying, hey, we'll take as much as we can get here. So yes, I think there's common ground to get something done in the House.

BLITZER: Let's say the Republicans take Bill Kristol's advice and go along with the president, raise the tax rate for the wealthy from 35 to 39.6 percent, which it was during the Bill Clinton administration. Will the Democrats -- and you know the Democrats in the House and the Senate and the president go along with these serious cuts in spending, in entitlements, for example, Medicare, Social Security, Medicaid, all those spending cuts that the Democrats usually hate.

DONNA BRAZILE, DEMOCRATIC STRATEGIST: First of all, I want to tell my friend, Dana, I do believe the Democrats have a mandate. A mandate to govern in a very balanced way. But we don't have to sit around for the next two years and listen to the Republicans whine and complain about tax cuts going up. President Obama extended the Bush tax cuts for two years. He's put forward a grand bargain. Republicans rejected had.

The Democrats defeated 16 Republican incumbents last week. And so I think the House Democrats will be in a position to work with Mr. Boehner to try to get the votes. Mr. Boehner has never been able to deliver the votes without Miss Pelosi and the Democrats coming to the table and delivering those votes.

So I think the Democratic position is to come up with a fair and balanced proposal to not raise taxes on the middle class and to not sit back and listen to the Republicans talk about robbing the banks when the Bush tax cuts robbed us --

(CROSSTALK)

BLITZER: Here's the question, Donna.

BRAZILE: Robbed us and raise the debt.

BLITZER: Will the Democrats go along with cuts in entitlement spending?

BRAZILE: You know, I don't know, Wolf. I will be up on Capitol Hill on Thursday. I want to hear from them. I don't want to tell them what to do because I do believe they have a mandate from the American people to basically put everything on the table and to come up with a balanced approach and not listen to the nightmares the Republicans are offering.

BLITZER: Go ahead.

CASTELLANOS: So Donna has a point and I think a lot of Republicans agree with Barack Obama on this. But it's the Barack Obama who said when the economy's weak, you don't raise taxes on anybody, which is why he extended the Bush tax cuts for two more years. But that's not the point. I think you'll find Republicans sincere about doing something on the taxes, coming to table. If Democrats are serious about the thing that's going to ruin the country, which is spending without end.

What we're doing now, Wolf, government has become this mechanism that allows all of us to take more of each other's money than any of us can afford.

(CROSSTALK)

BLITZER: What do you think, Donna, of the idea of instead of using the $250,000 income as a threshold, do what Chuck Schumer, the Democratic senator from New York, floated, $1 million, only people earning more than $1 million a year would get a tax increase?

BRAZILE: I think that's a symbolic number. we're talking about 98 percent of the American people under $250,000. Ninety-seven percent of small business owners on the $250,000 a year.

The one thing the Republicans fail to remember because they cannot do math. They didn't have enough math last week to understand the electoral college nor of course the popular vote.

Here's the math. Under the Bush tax cuts, we've lost trillions of dollars, trillions of dollars in revenues. Our deficit is problematic because of both the trillions of dollars in lost revenue including the Americans who want us to get them back to work as well as spending. But spending under this president is the lowest it's been since President Eisenhower.

CASTELLANOS: Lord. No one is going to believe spending under this president --

BRAZILE: I'm sorry, Alex, you just -- I'm telling you guys.

CASTELLANOS: You know what the debt is?

BRAZILE: You guys got math problems.

CASTELLANOS: $16 trillion from $10 trillion and spending has been the lowest?

BRAZILE: And the reason why, Alex --

CASTELLANOS: Donna. Donna has got a fever. You better check.

BRAZILE: Look -- no, no, I got -- I got --

(CROSSTALK)

CASTELLANOS: The girl's burning up.

BRAZILE: You want to rub my tummy, you'll get in trouble.

(LAUGHTER)

You'll get in trouble, be careful, now, baby, because I am hot. But hot in that cool kind of way.

CASTELLANOS: But seriously, we know that when it goes from $10 trillion to $16 trillion that that's --

BLITZER: The national debt he's talking about.

BRAZILE: Wolf, but take --

CASTELLANOS: That's not --

(CROSSTALK)

BRAZILE: It's Alex --

CASTELLANOS: And that's -- listen, Donna, in terms of coming to a deal, that is what scares Republicans.

BRAZILE: President Obama -- President Obama put the wars --

CASTELLANOS: There's no serious effort to do something about spending.

BRAZILE: Unlike the Republicans he put the war spending on the books so that now that was included in the deficit. But part of our deficit is driven by the fact that we're not raising revenues. People are not working. That's why we have to get people back to work.

CASTELLANOS: And what Republicans would say, Donna, is that there's a difference --

BRAZILE: It's not just spending.

CASTELLANOS: I think what Republicans would point out, Wolf, is there's a difference between --

BRAZILE: Spending on what, Alex?

CASTELLANOS: There's a difference between raising taxes and raising revenues. A lot of times when we've raised revenues on very productive elements of society, in other words, the people that are creating a lot of jobs, businesses --

BRAZILE: Be careful with that 47 percent, we got tired of that, too.

CASTELLANOS: -- the economy shrinks and you get less tax revenue. That happened, for example, when you started taxing --

BRAZILE: People want to go back to work.

BLITZER: Yes -- no. I think the point --

(CROSSTALK)

BLITZER: Hold on a second, guys, because we have a lot more to talk about. I think the point he's trying to make, though, if the economy grows at 2 percent, you get a certain amount of revenue coming into the government, the IRS. But if it grows at 4 percent or 5 percent, people have better jobs, they're making more money, then there will be an increase in tax revenues as well.

(CROSSTALK)

BRAZILE: We want to get --

CASTELLANOS: Growth first. Put growth first. That's the answer. BRAZILE: We want to put -- we want to put jobs, jobs first. We grow the economy by giving people work. We will also raise revenue that way.

BLITZER: Stand by, guys. We're going to continue this conversation.

Also a top adviser to Mitt Romney's presidential campaign says Republicans are, quote, "scaring the heck out of immigrants." Does the future of the Republican Party hinge on changing perceptions among Latinos? More of the "Strategy Session." Donna and Alex, they're ready, after the break.

(COMMERCIAL BREAK)

BLITZER: Let's get back to the "Strategy Session." Donna still here, Alex is still here.

Listen to Carlos Gutierrez. He was the commerce secretary during the Bush administration, Hispanic American, speaking on "STATE OF THE UNION" yesterday here on CNN, talking about the Republicans and Hispanics.

(BEGIN VIDEO CLIP)

CARLOS GUTIERREZ, FORMER COMMERCE SECRETARY: So we should be leading comprehensive immigration reform. We should be leading the Dream Act, not the military Dream Act, students as well. We should be getting rid of things like English as the official language of government.

We have to be welcoming immigrants. This is like we're competing for investment capital. We're also competing for human capital. And our party is scaring the heck out of them.

(END VIDEO CLIP)

BLITZER: "Our party is scaring the heck out of them." You're a member of that party, too. You're Hispanic American. Has he got a good point? Republicans need to do some work to win over Latino voters?

CASTELLANOS: See?

BLITZER: Yes, I agree.

CASTELLANOS: Yes. I think -- I think we do. And that was a wake-up call this election, Wolf, that the -- you know, the country is changing. This has been a country of immigrants. You know, at some point, all of us came here from somewhere. And so a country with open arms and a big heart, yes. Now that doesn't mean we can't defend our border and we can't have legal ways to come here.

Look, Republicans in Congress -- this past year passed the STEM Act, which is science, technology, engineering and math. Get brains over here from other countries and keep them. We took off caps. How many from this country and that country. And both those things were bipartisan. So I think you're seeing now another step forward where Republicans are ready to go to the table. And -- 20 years from now, we're going to be hanging "help wanted" signs on our border.

Population here is not growing. If we're going to keep this economy growing, if we're going to pay for Social Security, if we're going to pay for all these benefits we have, we need a growing economy with -- you know, again, a country of immigrants needs to remain what it is.

BLITZER: Because everyone has got to be involved. There was once, once upon a time, when all of us remember, there was a coalition, Ted Kennedy, John McCain, President Bush, he tried to get comprehensive immigration reform, all of them worked really hard. Didn't exactly work out.

Now Chuck Schumer, the Democrat from New York, Lindsey Graham, the Republican from South Carolina, they are trying right now. They've got a serious proposal out there to recreate that coalition. Is it going to go anywhere?

BRAZILE: I hope so. Look, the Republicans have been AWOL, AWOL, on comprehensive immigration reform since 2007. I think President Obama should reach out to President Bush so that he can help recruit more Republicans to help him. President Obama's committed to comprehensive immigration reform.

I looked the other day, 90 percent of Hispanics have parents or grandparents who immigrated to the United States from another country. That's the reason why the Republicans should be afraid. They should go out there and help us -- no.

CASTELLANOS: They don't have to be afraid.

BRAZILE: Well --

BLITZER: How much of a blunder was it --

(CROSSTALK)

BLITZER: For -- when he was running for the Republican nomination, Mitt Romney talked about self-deportation, because that turned off a lot of folks out there.

CASTELLANOS: I think self-deportation is what President Obama did when he's cratered the economy and kept it struggling. There are no jobs for people to come here to get.

Wolf, we need to --

BLITZER: You can't exactly blame the president -- he inherited a pretty bad economy.

(CROSSTALK)

CASTELLANOS: Pretty bad mess, but you know what? He's also deported more illegal aliens than any president in American history. BRAZILE: Executive order came back. Come on.

CASTELLANOS: But you know what, Democrats are winning -- but Democrats are winning the Hispanic vote, why? And it's not just tone. It's because of the approach you take. That this is a country for everybody.

BRAZILE: Absolutely.

CASTELLANOS: Not one group or another group. But this is a country for everybody. That's who the Republican Party has always been. We just need to remember who we are.

BRAZILE: And Mitt Romney embraced SB-1070, that Arizona law, that was -- that also alienated Hispanic voters.

BLITZER: I think this train is leaving the station pretty quickly. I wouldn't be surprised, 2013, comprehensive immigration reform is signed into law by the president of the United States. Lindsey Graham is at the signing ceremony, Chuck Schumer obviously is there.

BRAZILE: And Donna Brazile. Last name Brazile, I'm for immigration.

BLITZER: Yes.

(CROSSTALK)

BRAZILE: One thing -- I have to say one thing, Wolf. Twenty- eight Hispanics will be in Congress this coming term, 113th Congress, including another Hispanic in the United States Senate, Ted Cruz. That's another reason to celebrate.

BLITZER: All right, guys.

CASTELLANOS: A Republican.

BRAZILE: We'll take him.

BLITZER: Thanks very much.

Graphic and disturbing images of civil war atrocities and the raising new questions about Syria's forces. Whether the West can trust them. Arwa Damon is on the scene for us.

(COMMERCIAL BREAK)

BLITZER: United States is declaring support for a new formal alliance between Syrian opposition groups. The factions have united as the national coalition forces of the Syrian revolution with a common goal of ousting the president, Bashar al-Assad.

CNN's senior international correspondent Arwa Damon is in Beirut, she's got details.

What's the latest that you're hearing over there, Arwa?

ARWA DAMON, CNN SENIOR INTERNATIONAL CORRESPONDENT: Well, they're most certainly beginning to get critical international recognition. If we just take a quick look at the leadership of this new coalition at its head, a Sunni, a former imam who is known to be very moderate, preaching a message of unity. One of his deputies, a prominent Damascus businessman who is very instrumental in bringing these various groups together, and a woman who is very known for advocacy of women's rights.

And perhaps most important is that all three of these individuals leading this coalition have street credibility inside Syria. All three were detained during this current uprising at some point in time. And all are well-known opposition figures. But this is still at this point, Wolf, just a very first step towards really building a unified coalition that the international community, the United States, is comfortable dealing with, is comfortable providing funding to, Wolf.

BLITZER: Arwa, there are very deep concerns, as you know, about whether the West can control the rebels, the Syrian rebels. You have a report showing some very graphic video of atrocities allegedly conducted by both sides and it may be disturbing to some of our viewers. Tell us what you -- what you have.

DAMON: And this is just one of the many reasons why it is so critical for this coalition to be recognized, to be able to move forward because the situation in Syria, Wolf, is spiraling out of control. And again, we have to warn our viewers that what they're about to see is incredibly disturbing.

(BEGIN VIDEOTAPE)

DAMON (voice-over): This is video from Homs shot earlier this year. Rebel fighters crawl through holes they smashed in walls, and find an entire family killed by regime forces, they say. A woman's body lies on the floor. In the room next to it bodies crowded into a corner. The slaughtered child's face a mask of fear.

More dead are in the bathroom. A small voice whimpers from another room. A child comes into view crawling over a body. He's the only survivor.

The Assad regime has always maintained it is simply targeting foreign-backed terrorists seeking to overthrow the government. But there are a horrifying stream of daily videos, none of which can be independently confirmed by CNN, alleging to show atrocities carried out by regime forces that the opposition claims show no mercy. Not even to those already dead.

Here what appeared to be Assad fighters dragging a man's body up into a truck. And in this video, corpses are used for target practice. Images like these a norm in Syria.

And now a growing number of videos alleging to show similar war crimes carried out by rebel fighters. This video is said to have been shot in the town of Harem in Idlib Province. One clip is especially disturbing. What appeared to be rebel fighters curse as they fire. The man, unarmed, is gunned down.

In the next clip a detainee is walked past the body. This is said to be from the town of Saraqeb, the men on the ground alleged Assad fighters cry out. Their pleas met with a volley of gunfire.

Defected Judge Talal Housham, head of the Free Syrian Judicial Council, blames these actions on the ruthless tactics of the government.

"These are isolated incidents carried out by individual revolutionaries. The regime tactics are what created this radicalism," he tells us from his base in Turkey. "A person who has had their entire home destroyed with their entire family inside, has had their entire killed will naturally become radicalized."

While the council has set up makeshift courts in some rebel- controlled parts of the country, Housham admits that they can't control or monitor every single person. Still, he says, "This is not a reflection of the revolution. Our revolution is about justice, equality and rule of law."

Things that are sadly too often among the many casualties of war, especially one as brutal as Syria's.

(END VIDEOTAPE)

DAMON: And that, Wolf, is just one reason why it is so critical to bring about an end to the fighting there, not to mention the ongoing humanitarian crisis, the refugee populations growing in the neighboring countries and the ongoing daily death toll -- Wolf.

BLITZER: Arwa Damon, watching what's going on in Syria for us. Thank you. Arwa, very, very disturbing information.

Other news we're following an extra marital affair with national security implications at the highest levels. We're getting new information about the sex scandal swirling around retired General Petraeus.

Plus thousands of dollars found hidden in an unlikely place.

(COMMERCIAL BREAK)

BLITZER: New findings today about autism and its possible link to a mother's infections during pregnancy.

Lisa Sylvester is back, she's monitoring that and some of the other top stories in the SITUATION ROOM right now.

What do you have, Lisa?

LISA SYLVESTER, CNN CORRESPONDENT: Wolf, there's a new study in the "Journal of American Academy of Pediatrics" that finds little evidence that mild infections make a difference but it suggests a child might be at risk for developing autism if the mother had the flu or prolonged episodes of fever, or if she used various antibiotics. The Centers for Disease Control and Prevention recommends that pregnancy women get flu shots.

And you may have want to double-check those dusty old books and magazines before you throw them out at the dump. A Massachusetts man who collects them to make art, he has stumbled upon an old book stuffed with more than $20,000 in cash. He says he's trying to find the rightful owner and will give it six months.

And in Port St. Lucie, Florida, a high school senior with cerebral palsy walks in public for the first time. This is an amazing story and for a very good reason. Hakam Daley was nominated for homecoming king and he made his way down the football field to pick up his crown. The very Daley beat up football stars and some of the other popular kids for this big honor.

And you've got to love a story like that. Just absolutely terrific, so hats off to the school and to the community, Wolf.

BLITZER: Good work indeed.

Lisa, thank you.

You're in "THE SITUATION ROOM." Happening now, new questions emerging about the timeline of an affair that brought down a decorated CIA chief. Just how long was it going on? Was national security ever at serious risk?